The Day at a Glance | March 30 2021

The Top

Inflation in Germany set at 2% during March, boosted by energy prices.

10-year Treasury Bond in the United States reaches its highest level since January of 2020 (1.77%) prior to Biden`s economic plan presentation.

Confidence in the European economy recovers to its highest level since the start of the pandemic (101 vs 96 e. Mar).

Economic environment

Inflation in Germany accelerated to its highest level in over two years during March, boosted by a rise in fuel prices. The Consumer Price Index reached an annual rate of 2% (vs. 1.6% Feb.) after a 5% increase in energy prices. Several temporary factors occurred simultaneously and led to an important rise in prices in Europe`s largest economy: The end of temporary cuts to the added value tax, a rise in the country`s minimum wage and changes in the composition of the basket of goods. On top of this, there has been an increase in oil prices, which has boosted inflation at a global level since the start of 2021. The Bundesbank expects that energy prices will boost inflation in the following months and some market agents forecast levels between 3% and 4% annually halfway through the year; even though the rebound is expected to be temporary and not sustained. The ECB expects the European price index to increase to 2% this year before returning to 1.2% in 2022.