Eurozone: Inflation to likely increase to 1.8% y/y in April – Danske Bank
|The research team at Danske Bank points out that today, the euro area flash inflation figure is due for release and following the decline in headline inflation to 1.5% y/y in March, DB look for an increase to 1.8% y/y in April (revised from 1.7% after higher German and Spanish data yesterday).
Key Quotes
“In line with the fall in March, this is due mainly to the early timing of Easter in 2016, which is causing volatility in prices of package holidays. This is also reflected in core inflation, which we estimate will increase to 1.0% y/y in April from 0.7% y/y in March. Looking beyond the Easter volatility, we expect headline inflation to decrease below 1.5% y/y, as the support from the oil price fades, while core inflation should also be back around 0.8-0.9% y/y.”
“ECB's Survey of Professional Forecasters is also due for release. The longer term (five-year) inflation expectations in the survey have been stable at 1.8% over the past year.”
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