EUR traders – heads up for CPI data due from the Eurozone Wednesday


Eurozone preliminary (flash) inflation data for March is due at 0900GMT on 4 April 2018 

  • Along with February unemployment (expected 8.5%, prior 8.6%)  

CPI previews via:


  • We expect euro area “flash” headline and
    core HICP inflation to increase to 1.4% and 1.1% respectively in
    March, but we flag downside risks to the former 

TD Securities:

  • The timing of the Easter holiday presents a challenge to CPI forecasts, but we believe that underlying inflation trends are weak, as the German data showed on Thursday. The euro area print should reinforce just how far away the ECB is from achieving its inflation target, and consequently we expect a very gradual policy tightening, with a 6- month taper and first hike in 2019 Q3.


The ECB expects the inflation rate to hover around 1.5% in the further course of 2018, while we envisage an inflation rate above 2% in the summer. Already in March, the rate is likely to jump by 0.4 percentage points to 1.5%, mainly due to weather and calendar effects as well as energy prices.

  •  Inflation in the euro area should surprise some market participants in the coming months.

In March the rate will probably rise at a stronger rate than expected by the majority of economists. We expect a leap from 1.1% to 1.5% (consensus: 1.4%). There are three main contributory factors:

  • (1) Calendar effect: This year, the rise in prices for package holidays and accommodation will be in March, not April as in 2017, due to the early Easter. Consequently, the inflation rate for services related to package holidays and accommodation will probably rise from 2.1% to around 5%, which would push up the core inflation rate from 1.0% in February to 1.2% in March (consensus: 1.1%). The effect on the overall inflation rate is estimated at 0.1 percentage points.
  • (2) Weather effect: The unusually cold weather in March means that fresh fruit and vegetables will be harvested later this year than in 2017. Accordingly, the decline in prices for these products associated with the domestic harvest is also delayed. As a result, the rate of price increases for fresh food should pick up temporarily in the coming months. In March, this will add 0.1 percentage points to inflation.
  • (3) Energy prices: In March 2017, energy prices fell by 0.8% on the previous month. This year, they are likely to have climbed by about ½%. Consequently, the rate of increase of energy prices picked up from 2.1% to 3½%. This alone will push the inflation rate up by almost 0.2 percentage points in March. While the first factor will only move the inflation rate in the near term, the energy price trend in particular should continue to drive inflation well into the summer. We expect the inflation rate to reach its peak this year in the summer at a good 2%.

(bolding mine … disparate thoughts indeed though Comerz seem focused on headline while the others on underlying)

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