Inflation data across the Eurozone printed slightly higher than expected in May, but are unlikely to alter the ECB’s monetary policy decision on Thursday.
Near term, there may be some upside risk to energy prices, although earlier oil price rises have reversed significantly in recent weeks, with Brent Crude easing from above $90/barrel at end-April to under $82 by end-May.
More importantly, the sharp rise in wages across the Eurozone in recent years, which has underpinned services inflation, appears to be moderating sharply.
Thus, with the ECB now about to embark on a cutting cycle, the attention has turned to the pace of policy easing.
