Italy Back In Deflation With Lowest CPI Print In History; European Inflation Lowest Since 2009

Curious why European bond yields tumble to fresh new lows day after day (with the explicit backstop of the ECB of course, which makes fundamental analysis of sovereign solvency an irrelevant matter)? Then look no further than Italy, where as the chart below shows, not only has the economy "filled the gap" of its economy as tracked by its EU-Harmonized CPI, but at an August print of -0.2%, this is the lowest print in history, worse even than the brief -0.1%, flirt with deflation recorded just in the aftermath of the Lehman crash.

But it wasn't only Italy: as Eurostat also reported today, Euroarea inflation also dropped once again, touching 0.3%, down from 0.4% a month ago, the lowest print October 2009.

 

... driven lower by plunging energy costs:

 

Finally, concluding the trifecta of terrible data was European unemployment, which remained at 11.5%, just shy of its all time high.

 

Finally, the worst news: youth unemployment across the Old Continent remains at stratospheric levels, and in fact is rising in several places such as Spain, where it just rose to 53.8% and Ireland, up to 25.1%.

 

Good luck Mario, surely this time QE will finally work.

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