MNI Eurozone Inflation Preview – May 2026

Energy Price Feedthrough Still In Focus

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EXECUTIVE SUMMARY

• The Eurozone May flash inflation round is spread across two weeks, with all of the ‘big 4’ countries scheduled for Friday, May 31 before the Dutch and bloc-wide prints follow on Tuesday, June 2.
• The release will be the third since the Iran war began. The April report saw tentative evidence of higher energy prices feeding through to some food and core goods components (“indirect effects”), but these dynamics remain relatively contained for now. That said, forward looking indicators point to building pressures in the coming months, keeping risks to underlying inflation metrics (which thus far remain well-behaved) skewed to the upside. 
• The magnitude of indirect effects in the May round will help inform ECB Governing Council member’s opinions on the risks of “second round” effects further down the line (alongside incoming survey data). 
• The few analyst previews we have seen expect an uptick in headline inflation to ~3.2-3.3% Y/Y in May, led by services (around 3.3% Y/Y) and energy (11.4-11.9% Y/Y) components. The services uptick is expected to be driven by volatile components and those sensitive to the timing of Easter, with more benign developments in “underlying” categories.
• ECB-dated OIS price ~60bps of hikes through year-end. For now, market pricing remains closely correlated with energy prices and broader sentiment around the US-Iran ceasefire progress. A June hike is almost fully priced and appears locked in, particularly after comments from Lane and Schnabel this week.