A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.



Eurozone inflation pressures reach 28-month high

Inflation pressures in the euro zone have risen to a 28-month high, suggesting prices may rise faster than in recent months, an indicator designed to forecast cyclical trends showed on Friday.

The Eurozone Future Inflation Gauge (EZFIG), published by the Economic Cycle Research Institute, rose to 97.4 in July from 96.6 in June.

"With the EZFIG climbing further in its latest reading, euro zone inflation may bottom out in the months ahead," said Lakshman Achuthan, the ECRI's chief operating officer.

European Central Bank President Mario Draghi announced a stimulus programme on Thursday to buy asset-backed securities and covered bonds in the latest attempt to revive the flagging euro zone economy and boost inflation.

Annual inflation fell to just 0.3 percent in August according to a flash estimate, well below the ECB's target of just under 2 percent and what it terms the "danger zone" of 1 percent.


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