Jamie Searle at Citi writes that "the 1.8%.....>

EGBS: Jamie Searle at Citi writes that "the 1.8% level for 5y5y euro HICPxT was

always going to be a stern test" because this level has provided the peaks

several times over the past few years".

- "Core inflation edged up to 1% in January, but there is still no clear

uptrend."

- "Our net supply measure also correlates to 5y5y inflation and pointed to 1.8%,

but no more."

- the oil price is part of the story but there are limits that the relationship

between oil prices and 5y5y inflation is "fickle". Citi also see limited room

for gains.

- Searle adds that there are potential drivers for an extended rally but these

are risks more than reality i.e. a trade war escalation, a material increase in

"euro inflation hedging flows from Dutch pension funds with improved funding

positions (assuming equities remain buoyant)".