PLN: Core CPI Miss and Narrowing Polls Pressuring Zloty
EURPLN (+0.4%) has traded on the front foot through Friday's session, with the break of the week's e...
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MNI: US MAR INDUSTRIAL PROD -0.3%; CAP UTIL 77.8%
- MNI: US MAR INDUSTRIAL PROD -0.3%; CAP UTIL 77.8%
- US FEB IP REV TO +0.8%; CAP UTIL REV 78.2%
- US MAR MFG OUTPUT +0.3%
BONDS: Incremental Fresh Session Lows For TY Futures Before Bonds Stabilise
Post-data reaction and fresh session highs for crude see TY futures register an incremental session low, before finding a base as crude pulls back from best levels and e-mini futures edge lower, allowing Bund and gilt futures to find support before bears can test session lows.
EUROZONE DATA: Easter Timing Weighs On Services Inf, Other Components Sticker
The March pullback in Eurozone services inflation was heavily impacted by the timing of Easter, with non-travel/tourism related categories looking firmer. While this won’t stand in the way of a 25bp cut on Thursday, it may add tension within the Governing Council around how far into the 1.75-2.25% neutral range the ECB can go. For now, growth risks related to tariffs and associated uncertainty clearly dominate the ECB’s reaction function, but services stickiness adds risk to sub-2% policy rate forecasts.
- Annual services inflation was 3.45% Y/Y, versus a 3.42% flash and 3.68% in February).
- Package holiday inflation was 0.87% M/M, corresponding to a 2.92% Y/Y rate (vs 7.94% prior). That’s likely due to the timing of Easter, which fell in March last year but is in mid/late-April this year. Accommodation services (4.11% Y/Y vs 4.64% prior) and airfares (-4.54% Y/Y vs 1.52% prior) also eased, also driven by Easter-timing effects.
- Meanwhile, other services categories were stickier. Services related to recreation and personal care, excluding package holidays and accommodation ticked up to 3.72% Y/Y (vs 3.65% prior), while communication, housing and miscellaneous services inflation also rose on an annual basis.
- In the latter category, we note that insurance inflation re-accelerated to 8.78% Y/Y, from 7.77% in February and 8.04% in January.
- The ECB’s seasonally adjusted services inflation index was revised up 0.03pp to 0.30% M/M in March, after incorporating the final Eurostat data from this morning (NSA monthly services inflation was revised to 0.44% vs 0.41% flash). That’s then the fourth consecutive month that sequential services inflation has rounded to 0.3% - almost 4% on an annualised basis.
