We are hearing more concerns about inflation not just inflation risk from Euro area officials. Germany has its core PPI heading lower and the headline as well but not in a clear cut way. Also the declines are slow and energy prices are still threatening. Germany has not had its year/year PPI core rate below 2% since April of 2006 when it rose by 1.8%. The Bundesbank has been issuing such warnings especially Weber. Today Austrian CB president Liebscher says that the harmonized CPI is ‘striking me with concern.’ At the same time groups like the German engineering Association warn of the impact of a too strong euro on the economy. These very clear, well founded, and completely opposite concerns put the ECB in a tough spot.