The final revision of Germany’s [B]Consumer Price Index[/B] is set to confirm that inflation fell -0.1% in May to bring the annual pace of price growth to a standstill for the first time in at least 17 years. The adjusted version of the metric using a harmonized EU methodology is set to show an even more ominous result, confirming that the annual pace of German inflation shrank -0.1%, the first negative outcome since the creation of the Euro. The onset of deflation in the Euro Zone’s largest economy is a scary prospect for the single currency: if expectations of falling prices become entrenched, Germany may find itself treading water for longer than expected as consumers and businesses wait for the best possible bargain and perpetually hold off on spending and investment; the massive weigh of Germany as driver of economic growth for the Euro Zone as whole means that the bloc’s performance will remain subdued as well, pushing expectations for higher interest rates farther out into the future to hurt the European unit against UK and US counterparts. Indeed, overnight index swaps show traders are pricing in expectations that the Fed and the Bank of England will deliver 100 basis points in rate hikes over the next 12 months while the European Central Bank lags behind with just 61bps in the same period.