Breaking: Eurozone Preliminary HICP inflation declines to 6.9% YoY in March vs. 7.1% expected

The annualized Eurozone Harmonised Index of Consumer Prices (HICP) came in softer at 6.9% in March vs. February’s 8.5%, the latest data published by Eurostat showed on Friday. The market expected the inflation gauge to drop to 7.1% in the reported period.

The core HICP dropped to 5.7% YoY in March when compared to 5.7% expected and 5.6% recorded in the February clip.

The Euro area inflation data is released a day after Germany’s annual HICP for March, which rose by 7.8%, beating 7.5% estimates while following a 9.3% advance seen in February.

Note that the European Central Bank’s (ECB) inflation target is 2%.

Investors closely scrutinize the bloc’s HICP figures to revaluate the ECB rate hike expectations. Markets are now pricing an 88% probability of a 25 basis points (bps) ECB rate increase in May.

more to come ...