HYBRIDS: TotalEnergies (TTEFP: Hyb A2/A-/Au) NC29 Too Wide ?

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Eurozone core inflation prices fell 0.12% M/M in May according to the ECB’s seasonally adjusted data, after rising 0.45% in April. Unsurprisingly, services drove the pullback, with prices falling 0.17% M/M after a 0.70% increase in April. Core goods inflation was 0.06% M/M (vs -0.02% prior).

• As implied by the country-level NSA data over the past week, the services softness was largely a function of unwinding Easter effects. However, the extent of the SA and NSA deceleration from April’s levels could suggest more broad-based disinflation in non-travel-related categories. We’ll have to wait for the final release on June 18 to see whether that was the case.
• Attempting to correct for Easter effects, average monthly seasonally adjusted services inflation between March-May was 0.27% in 2025. That’s below the 0.41% seen in 2024 and 0.37% in 2023, providing further evidence that underlying disinflation is progressing.
• 3m/3m core inflation momentum eased to 2.70%, after 2.87% in April and 2.37% in March. Services momentum fell to 3.95% from 4.10% prior.
• Referencing the NSA data, JP Morgan write: “That core inflation in May (2.3%oya) undershot the March level (2.4%oya) may be linked to an additional distortion. The late Easter also comes with a late Pentecost this year, which also impacts short holidays in some countries (skewed towards June rather than May). This effect is smaller than the Easter effect but can be significant”.

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