According to analysts from Danske Bank, Eurozone inflation in April decline as expected due to the timing of Easter. They expect a rebound in core inflation to 1.0% in May.
“Euro area headline inflation fell back to 1.23% y/y in April, driven by a dip in core inflation to 0.72% (compared to 1.03% in March), while energy and food price inflation both accelerated to 2.55% and 2.45%, respectively. A decline in core inflation was widely expected due to the differing timing of Easter.”
“We think the ECB will see through this temporary inflation dip and focus on the trend in the underlying inflation pressures and whether core inflation rebounds above 1.0% in May. This will also be crucial for whether the next change in the forward guidance will come in June (as markets expect) or July (as we expect).”
“But despite the pick-up in wage growth, core inflation has shown only a marginal upward trend since the beginning of the year.”
“A temporary increase in headline inflation in the coming months is likely because of energy price inflation, but we expect the underlying price pressure to stay subdued going forward. Although we look for a rebound in core inflation to 1.0% in May, our view remains that core inflation will rise only very gradually during 2018, averaging 1.1% before accelerating to 1.4% in 2019 on the back of rising wage growth and service price inflation.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.