German inflation reached 3.3% with energy up 14.9%. Do energy headlines push you to trade the headline or wait?

Destatis confirmed on 13 October that German consumer prices were 3.3% higher than a year earlier, with energy prices up 14.9% and core inflation at 2.4% (German report). Energy headlines are dramatic, and they are the kind of news that makes traders feel they must act immediately.

Headline inflation is driven by energy, and energy moves quickly. Core inflation is slower and more useful for the medium term. Acting on the headline is easy; acting on the core requires patience.

We would like to hear how you cope with a headline that is dramatic but may not last:

• When a headline number jumps, do you wait for the core figure before you act?
• What is your pause before you trade a news release, and how long is it?
• Have you traded an energy-driven headline and then watched it reverse?
• Which number do you write on your plan before the release, so you are not guessing afterwards?

Energy inflation explained explains how energy moves into headline prices.

Destatis's core figure stayed at 2.4% from July to September, which suggests the rise is concentrated in energy. The energy component rose 14.9% on the year, against 10.5% in August. Do you check the core figure before you act on a headline, and how long do you wait?

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