GERMAN DATA
The German national flash March HICP print came in below consensus at 2.3% Y/Y (vs 2.4% cons, 2.7% prior) and 0.6% M/M (vs 0.7% cons, 0.6% prior). The downside surprise was telegraphed somewhat by the state-level CPI this morning.
- Headline, core and major sub-component inflation all fell in line with MNI's tracking estimates based on the state-level data.
- National flash CPI was 2.2% Y/Y (vs 2.2% cons, 2.5% prior) and 0.4% M/M (vs 0.5% cons, 0.4% prior). Core CPI (excluding food and energy) was 3.3% Y/Y (vs 3.4% prior).
- Of the major sub-components, services CPI accelerated to 3.7% Y/Y (vs 3.4% prior), while goods CPI moderated to 1.0% Y/Y (vs 1.8% prior).
- Food CPI decelerated on the back of favourable base effects, at -0.7% Y/Y (vs 0.9% prior), while energy CPI remained in deflation at -2.7% Y/Y (vs -2.4% prior).
- Taken alongside an acceleration in Italian services inflation last week, Eurozone-wide services HICP inflation (released tomorrow at 1000BST/1100CET) may see another month hovering around the 4.0% Y/Y mark (has been exactly 4.0% in each of the previous 4 months).
- This stickiness in services inflation may prompt the ECB at next week's meeting to tone down expectations of a June rate cut.
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