Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Eurozone inflation slowed sharply in May, preliminary data from Eurostat showed, with the headline rate dipping to 6.1% from 7.0% in April. Core inflation slowed more than expected by analysts, offering encouragement for the doves on the ECB looking to slow the speed of policy tightening in coming months.
Core inflation, the easiest way to gauge the underlying inflation the ECB's Governing Council is focused on, fell to 5.3% from 5.6% in April. Economists had been looking for a fall to 5.5%. Service sector inflation also slowed, dipping to 5.0% from 5.2% in April. Although the slowdown in prices was broad-based, energy inflation was a driver of the headline number, dipping to -1.7% y/y from 2.4% last month.
The slowing inflation will make the case easier for the Governing Council's doves and -- given no sharp uptick in coming months -- could pave the way for a peak rate below 4%. (MNI SOURCES: Most At ECB See 4% Rate As Only Outside Chance)
One note for the hawks in Thursday's data was the continued strength in the labour market, with April unemployment rate at a record low 6.5%.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.