The German inflation rate fell to 2.2 percent in March, according to preliminary figures from the statistical authority Destatis.
This was in line with the average forecast among analysts and can be compared with 2.3 percent in February.
The EU-harmonized inflation measure for Germany fell, according to Destatis, to 2.3 percent, down from 2.6 percent in February. Expectations had been for a decline to 2.4 percent, according to Bloomberg.
Affects Swedish mortgage rates
How inflation develops in the eurozone's largest economy is a crucial factor when the ECB makes decisions about interest rates going forward. The ECB's interest rate decisions, in turn, affect the Swedish Central Bank's room for maneuver when it comes to interest rates – and thus Swedish mortgage rates.
The ECB's inflation target is 2 percent, and it is still unclear what the ECB will do in its next interest rate decision, which is due on April 17.
The market expects the ECB to make two cuts this year, and the probability of the next cut coming at the April meeting is 85 percent.
Some economists who monitor the ECB expect a third cut, with the last one in the series in July.
German retail trade increased unexpectedly
From Spain and France, unexpectedly weak inflation figures for March were already reported last week, while the price increase rate is creeping up in Italy due to higher food and energy prices.
On Tuesday, a comprehensive inflation report for March for the entire eurozone is expected from the EU's statistical office Eurostat.
Before Monday's German inflation figures, Destatis presented a report on the morning that showed that German retail trade increased by 0.8 percent in February compared to the previous month.
The increase was unexpected. Analysts had on average expected an unchanged level.
In annual terms, the increase was 0.5 percent, which was as expected.
