MNI: Euro Area HICP Dips to 1.2% in April; Core......>

MNI: Euro Area HICP Dips to 1.2% in April; Core HICP Falls Sharply to 0.7%

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Flash estimate provided by Eurostat Thursday reported inflation likely came in

at 1.2% in April, down from 1.3% in March and below the market's no change

forecast. More surprising, however, was the 0.3pp slide in core HICP to 0.7%

y/y. While the flash estimate only provides a basic breakdown of the numbers, it

was clear that services was the main culprit, dragging on both HICP and the core

measure. Services prices were up 1.0% y/y after a 1.5% rise in March, enough to

offset higher food and energy prices and drag down overall HICP. We suspect the

services slide was attributed at least in bulk to this year's earlier Easter,

which would have generated a negative base effect across Easter core-services

like transport, package holidays and hotels and restaurants.