Core Inflation Cools Off in Europe, Against Expectations

As we mentioned yesterday, inflation has been increasing in Europe this year, which was unexpected since the restrictions and lock-downs continue in certain states, while services and the economy in general are still in recession.

The Spanish and German CPI (consumer price index) reports yesterday were positive as well, suggesting that we might see higher CPI figures from the Eurozone today. The headline CPI YoY didi jump to 1.3% in march from 0.9% in February, but the core CPI which is more important ticked lower instead. The Euro has turned bearish again, with EUR/GBP hitting our take profit target on our sell signal. Below is the CPI inflation report from the Eurozone:

The readings are lower than estimated, though the headline still reveals an uptick from February to March. But if you strip out higher energy prices, the core reading is seen lower so that still doesn’t convince of much higher price pressures in general. As such, there isn’t much here that will get the ECB off their seats to take notice.