Eurozone inflation to slip back down to 1.5% y/y in May - TDS

Analysts at TDS are looking for Eurozone inflation to slip back down to 1.5% y/y in May (mkt 1.5%) as the Easter effects fall out of the equation which is well below the ~1.75% rate that the ECB had forecast in March.

Key Quotes

“With core CPI falling back down to 1.0% y/y, we don’t think that the Eurozone is anywhere near a place yet where the ECB can declare a convincing upward trend in underlying inflation, leaving us increasingly convinced that next week’s ECB meeting will see the forward guidance remain unchanged. With German inflation having come in softer than expected yesterday, that should help to keep a lid on some of the more hawkish sentiment from that region.”