Slower consumer price growth in a major Eurozone economy has likely fuelled another decline in the inflation rate for the whole currency area, which may placate concerns among monetary policy hawks ahead of interest rate cuts expected in the months ahead.
An economists’ poll predicted that headline annual inflation in the euro area slipped to 2.5% last month from 2.6% in February in what would be a third straight decrease. Price growth jumped to 2.9% in December on base effects largely connected to German energy subsidies.
Core inflation is forecast to have continued its steady fall in March with a one-tenth slip to 3.0%, which would be its eighth consecutive slowdown.
Inflation moves higher in parts of Southern Europe
Consumer price growth in the Eurozone’s four largest economies often foreshadows the result for the currency area, and the signs from preliminary data so far have been mixed. France, the second-largest euro area economy, said Friday that annual EU harmonised inflation last month dropped to 2.4%, which was well below expectations of 2.8% and February’s 3.2%. Things were different in Italy, the currency area’s third-largest economy. Also reporting Friday, it said annual EU inflation rate rose 1.3% from 0.8%. And consumer price growth in Spain, the Eurozone’s fourth-largest economy, increased to 3.2%, short of the 3.3% estimate but well above the 2.9% from February, according to a report last week.
During Tuesday afternoon’s trading session in Europe, data from Germany, Europe’s biggest economy, is expected to show a drop in March EU-harmonised inflation to 2.4% from 2.7%.
In a note, Capital Economics warned that holiday timing may affect the latest batch of price growth data. “Easter usually falls in April, but this year it arrives at the end of March,” Capital Economics noted. “The HICP data published by Eurostat are not adjusted for calendar effects, so the timing of Easter can have a significant impact on inflation.”
The impact is largely from prices related to travel and sightseeing. “The past three years in which Easter fell in March were 2008, 2013 and 2016. In those years, Eurozone services inflation rose by an average of 0.3 percentage points in March, almost entirely due to tourism-related prices.” The effects of Easter are expected to linger until May.
A bump on the road to interest rate cuts
A slower pace of decline for price growth will likely embolden some of the monetary policy hawks at the European Central Bank, but the next steps from rate-setters – lower borrowing costs – seem clear.
With the ECB leaning toward rate cuts, TD Securities downplayed the importance of this month’s price data. “EZ and German inflation data will be released unusually late this month due to the Easter holiday. This, coupled with clear ECB guidance for a June cut, means that there will be relatively less focus on the data this month. While base effects will continue to guide y/y inflation lower, the early date for Easter adds some upside (but temporary) pressure on the data.”
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data_array.logs = data.logs;
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function check_channel_status(data) {
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function check_channel_status_response(data) {
postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
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function join_publisher_channel(data) {
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socket.send(msg_string); }
postMessage({action: 'PublisherChannelJoined' });
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function session_static_info(msg) {
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function connect_to_distributor(msg) {
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socket = new WebSocket("wss://ws.livesquawk.com/ws"+distributor_server);
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case 'server_assignment_response': server_assignment_response(data); break;
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function session_info_interval() {
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logging_interval = setTimeout(session_info_interval,logging_interval_time);
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connect_to_assigned_server();
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postMessage({ action: 'VisibleConsole',console_string: "Connected to server "+assigned_server });
console.log("Connected to server "+assigned_server);
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case 'reconnect': postMessage({ action: 'VisibleConsole',console_string: "Reconnected" }); break;
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case 'new_tweet':
case 'new_latest_news':
case 'delete_report':
case 'add_report':
case 'add_ref_doc':
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case 'calendar_insert':
case 'calendar_delete':
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case 'BroadcasterStopped':
case 'added_cme_report':
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socket.onerror = function(event) {};
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console.log('Socket Closed');
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data.action = data.type;
postMessage(data);
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data_array.remote_ip = data.remote_ip;
data_array.username = data.username;
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playing = true;
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session_info.platform = data.platform;
session_info.player_version = data.player_version;
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session_info.delay_target = data.delay_target;
session_info.session_email = data.session_email;
session_info.remote_ip = data.remote_ip;
session_info.php_session_id = data.php_session_id;
session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
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function start_log() {
var session_start_date = new Date();
session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
var session_start_date_string = session_start_date.getDate() + " " + months[session_start_date.getMonth()] + " " + session_start_date.getFullYear();
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session_info.jitter = data.jitter;
session_info.packet_loss = data.packet_loss;
session_info.effective_latency = data.effective_latency;
session_info.mean_opinion_score = data.mean_opinion_score;
session_info.restarts = data.restarts;
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data_array.mean_opinion_score = session_info.mean_opinion_score;
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data_array.session_id = session_info.session_id;
data_array.php_session_id = session_info.php_session_id;
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data_array.restarts = session_info.restarts;
data_array.threshold = 0;
data_array.curr_delay = session_info.curr_delay;
data_array.session_length = session_info.session_length;
data_array.date = current_time;
data_array.webrtc_protocol = session_info.protocol;
data_array.ping_time = session_info.ping_time;
data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
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socket_emits++;
if (socket_emits == 100) { socket_emits = 0; }
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- Annual headline reading forecast at 2.5% (prior 2.6%)
- Core rate expected at 3.0% (prior 3.1%)
- Inflation forecast to decline in Germany
- Data due Wednesday at 09:00 GMT / 11:00 CET
By Eric Culp, European Editor
LiveSquawk News
@EricCulpLS
2 April 2024 | 08:30 GMT
Slower consumer price growth in a major Eurozone economy has likely fuelled another decline in the inflation rate for the whole currency area, which may placate concerns among monetary policy hawks ahead of interest rate cuts expected in the months ahead.
An economists’ poll predicted that headline annual inflation in the euro area slipped to 2.5% last month from 2.6% in February in what would be a third straight decrease. Price growth jumped to 2.9% in December on base effects largely connected to German energy subsidies.
Core inflation is forecast to have continued its steady fall in March with a one-tenth slip to 3.0%, which would be its eighth consecutive slowdown.
Inflation moves higher in parts of Southern Europe
Consumer price growth in the Eurozone’s four largest economies often foreshadows the result for the currency area, and the signs from preliminary data so far have been mixed. France, the second-largest euro area economy, said Friday that annual EU harmonised inflation last month dropped to 2.4%, which was well below expectations of 2.8% and February’s 3.2%. Things were different in Italy, the currency area’s third-largest economy. Also reporting Friday, it said annual EU inflation rate rose 1.3% from 0.8%. And consumer price growth in Spain, the Eurozone’s fourth-largest economy, increased to 3.2%, short of the 3.3% estimate but well above the 2.9% from February, according to a report last week.
During Tuesday afternoon’s trading session in Europe, data from Germany, Europe’s biggest economy, is expected to show a drop in March EU-harmonised inflation to 2.4% from 2.7%.
In a note, Capital Economics warned that holiday timing may affect the latest batch of price growth data. “Easter usually falls in April, but this year it arrives at the end of March,” Capital Economics noted. “The HICP data published by Eurostat are not adjusted for calendar effects, so the timing of Easter can have a significant impact on inflation.”
The impact is largely from prices related to travel and sightseeing. “The past three years in which Easter fell in March were 2008, 2013 and 2016. In those years, Eurozone services inflation rose by an average of 0.3 percentage points in March, almost entirely due to tourism-related prices.” The effects of Easter are expected to linger until May.
A bump on the road to interest rate cuts
A slower pace of decline for price growth will likely embolden some of the monetary policy hawks at the European Central Bank, but the next steps from rate-setters – lower borrowing costs – seem clear.
With the ECB leaning toward rate cuts, TD Securities downplayed the importance of this month’s price data. “EZ and German inflation data will be released unusually late this month due to the Easter holiday. This, coupled with clear ECB guidance for a June cut, means that there will be relatively less focus on the data this month. While base effects will continue to guide y/y inflation lower, the early date for Easter adds some upside (but temporary) pressure on the data.”