Euro Area core inflation fell for the 7th straight month, data from Eurostat showed earlier, but missed expectations of a larger fall. EU core inflation is now at the lowest level in two years.
Today’s release did little to shift interest rate expectations. Markets continue to forecast around 90 basis points of cuts this year – three or four 25bp cuts – with the June 6th meeting seen as the most likely starting point. A cut at this meeting would mean the ECB being the first major central bank to cut rates, leaving the Euro at risk of falling further.
