Eurozone: Focus remains on inflation – Danske Bank

Research Team at Danske Bank points out that in the euro area, focus remains on inflation with the release of the aggregate figure. 

Key Quotes

“We expect headline inflation decline to 1.6% in March, from 2.0% in February, driven partly by a fall in core inflation from 0.9% to 0.7%. If this core inflation figure is correct, it will be the lowest since April 2016. However, our estimate of a decline is due mainly to the early timing of Easter in 2016, causing low inflation in volatile package holiday prices in March this year.”

“Added to the lower core inflation, the latest decline in the oil price together with less support from base effects in energy prices is also likely to have driven headline inflation lower, although energy price inflation should still have a considerable positive contribution to inflation. Finally, food price inflation has surprised on the upside recently, due mainly to cold weather in the winter months, but should not have continued and we look for a lower contribution in March.”