German August Hicp inflation was confirmed at -0.4% MoM and 3.3% YoY, after 0.7% and 3.5% in July. The national CPI rate was confirmed at -0.3% MoM and 3.1% YoY, after 0.6% and 3.3% in the previous month. The breakdown, which was available for the first time, confirmed that the drop over the month and the deceleration in the headline rate was mainly due to lower energy prices. Transport costs, which include petrol, dropped 1.8% MoM and the annual rate declined to 4.7% YoY from 5.8% previously. Without a renewed acceleration in oil prices it seems inflation has peaked now. However, the annual rate remains far above target the there still is the risk of second round effects from high wage demands. The IG Metall has called for a pay rise up to 8% and the ECB will be watching the upcoming wage negotiations very carefully.