Link Securities | Eurostat published on Friday that, according to the preliminary estimate, the Eurozone consumer price index (CPI) rose 0.6% in the month of April compared to March, slightly more than the 0.5% expected by the FactSet consensus of analysts.
On a year-on-year basis, the eurozone CPI rose 2.2% in April (2.2% in March), also above the 2.1% projected by analysts. As for the main components of inflation in the euro zone, the services sector recorded the highest annual rate in April (3.9% versus 3.5% in March), followed by food, alcohol and tobacco (3.0% versus 2.9% in March), non-energy industrial goods (0.6% versus 0.6% in March) and energy (-3.5% versus -1.0% in March).
The core CPI, which excludes food, alcohol and tobacco prices and energy prices, rebounded 1.0% in the eurozone in April relative to March, while year-on-year it rose 2.7% (2.4% in March), slightly above the 2.5% expected by analysts.
Assessment: we do not believe that the rebound in core inflation in April, driven especially by the new acceleration in the year-on-year growth rate of services and non-energy industrial goods prices, has pleased the members of the ECB’s Governing Council, as it implies that the disinflationary process has come to a halt in April, which could condition further cuts in the region’s benchmark interest rates, which the markets take for granted.
