The data from the German states suggests that the increase in inflation at the start of the year is lower than expected so that partly offsets the pressure for a rate rise.

Private consumption is likely to remain weak.

That will probably keep the ECB waiting until September, rather than going for a rate rise, as a done deal, every quarter.

We'll see strong increases in consumption towards the end of the year because of the VAT effect. The World Cup will also play a role.

The labor market situation won't dramatically improve and oil prices are still a problem. Relatively weak consumption is one of the reasons why the German economy won't gather a lot of speed this year.

German manufacturers have rather good support from the orders side. In addition, they reduced their debt and financing conditions have improved.