Breaking: Eurozone Preliminary Inflation surges 8.1% YoY in May vs. 7.7% expected

The annualized Eurozone Harmonised Index of Consumer Prices (HICP) soared by 8.1% in May vs. the previous reading of 7.4%, the latest data published by Eurostat showed on Tuesday. The consensus forecast was for a reading of 7.7%.

The core figures arrived at 3.8% YoY in May when compared to 3.5% expectations and 3.5% booked in April.

The Euro area figures are reported a day after Germany’s annual inflation for May hit a record high, arriving at 8.7% while beating expectations of 8.0% following a 7.8% increase reported in April.

The bloc’s HICP figures hold significance, as it helps investors assess the European Central Bank’s (ECB) monetary policy normalization path.

Key details (via Eurostat)

“Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in May (39.2%, compared with 37.5% in April), followed by food, alcohol & tobacco (7.5%, compared with 6.3% in April), non-energy industrial goods (4.2%, compared with 3.8% in April) and services (3.5%, compared with 3.3% in April).”

EUR/USD reaction

EUR/USD seems unfazed by the upbeat Eurozone inflation figures. The spot is shedding 0.45% on the day, currently trading at near-daily lows of 1.0723.

The index reached a new all-time-high, making a compelling case for aggressive ECB rate hikes, as the price growth continued to broaden.