European inflation estimates takes centre stage today for macro traders, especially after slightly weaker German inflation numbers last night

European inflation estimates takes centre stage today for macro traders, especially after slightly weaker German inflation numbers last night. The markets feels inflation should grew at an annualised rate of 0.7%, which is still woefully below the central banks forecasts. If you look at EUR/USD the pair dipped to 1.3643 on the German CPI print, but has since reclaimed the 1.37 handle and traders seem to be happy to trade around this pivot. It's worth pointing out that a Reuter's poll out yesterday showed 26 out of 78 economists felt the ECB would cut its refinancing rate by five to twenty five basis points, while only six out of seventy three economists felt they would cut the deposit rate (the rate charged to banks to hold funds with the ECB). I still like shorts here, but short EUR/GBP is looking like the better trade.