According to the provisional data, inflation evolved much as expected in April. An unchanged CPI on the month put the annual inflation rate at 1.6 percent, matching its final outturn in March and still short of the rates seen in late 2017.
The flash HICP was a little softer, recording a 0.1 percent monthly dip that reduced its yearly rate from 1.5 percent to 1.4 percent. This supports the view that the early Easter played a role in the jump in March.
Somewhat ominously, the stability of annual CPI inflation this month was largely due to energy, where the rate climbed 0.7 percentage points to 1.2 percent, and food, which saw a 0.5 percentage point spurt to 3.4 percent. The rises here effectively offset a surprisingly sizeable 0.3 percentage point fall in services from 1.8 percent to 1.5 percent. Overall goods inflation moved up from 1.4 percent to 1.6 percent while rent, excluding utilities, was steady at 1.6 percent.
Today's German results will provide only limited underpinning for the overall Eurozone inflation rate (flash April data due Thursday) and, more importantly, they will also increase the risk of a renewed slowdown in the underlying rate. If confirmed, the ECB will not be happy.