MNI Eurozone Inflation Preview – April 2025

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Energy Pullback To Outweigh Potential Services Re-Acceleration

• The Eurozone April flash inflation round sees Spain kick off proceedings on Tuesday (April 29), before France, Germany, and Italy follow on Wednesday (April 30). With much of Europe closed for Labour Day on Thursday (May 1), the Dutch and Eurozone-wide releases come on Friday (May 2).
• MNI consensus is for the core rate to accelerate slightly to 2.5% (vs 2.4% prior), with the late timing of Easter potentially adding upside risks to travel-related services components. However, a pullback in energy prices is expected to more than offset this dynamic, helping headline HICP ease to 2.1% Y/Y (vs 2.2% prior).
• More stringent-than-expected US tariff policy and a dovish April decision has resulted in a dovish tilt for near-term ECB policy expectations. A 25bps cut at the next meeting in June is now fully priced in ECB-dated OIS, and there is 64bps of easing priced through December. That’s almost a full 25bp cut more than what was priced at the beginning of this month, prior to the US’s reciprocal tariff announcements.