Services HICP At 4.0% Y/Y For 5th Consecutive Month

Eurozone March flash headline and core inflation both printed below consensus on a rounded basis, in line with MNI’s tracking based on the national data released over the past week.

• The release includes several strong NSA M/M readings across key categories. The ECB’s seasonally adjusted series (released later today) should provide a better indication of actual sequential pressures in March, though previously noted calendar effects may skew the interpretation somewhat.
• Headline HICP was 2.4% Y/Y (vs 2.5/2.6% cons, 2.6% prior) and 0.8% M/M (vs 0.6% prior). On an unrounded basis, headline was 2.44% Y/Y and 0.76% M/M.
• Core HICP was 2.9% Y/Y (vs 3.0% cons, 3.1% prior), below 3% Y/Y for the first time since March 2022. On an unrounded basis, core was 2.946% Y/Y and 1.10% M/M.
• As telegraphed by some of the major Eurozone countries’ data (e.g. Germany, Italy), services inflation remained sticky, printing at a rounded 4.0% Y/Y for the fifth consecutive month. A full analysis of the role that calendar effects related to the Easter weekend timing will have to wait for the final release on April 17.
• Non-energy industrial goods continued to moderate on an annual basis to 1.1% Y/Y, but saw a notably strong 1.9% M/M reading (although again, not seasonally adjusted).
• Food and energy inflation behaved as expected, with the former pulled lower by base effects (unprocessed food inflation was -0.4% Y/Y in March) and the latter seeing negative base effects continue to fade (energy HICP was -1.8% Y/Y vs -3.7% prior).
• At a country level, annual HICP fell in 9 countries, and was the same or higher in the remaining 11.