Expect a bullish bias from the eurozone flash IPC readings from April later today.

[ad_1]

The Easter Bunny comes out again with some tips this year

Euro area core data on the Easter dates of this particular yearForexLive

The simple analogy here is that when Easter falls at a later date in April, it tends to reinforce inflationary pressures for the month itself. On the other hand, if Easter falls at the end of March or the first days of April, inflationary pressures in April tend to soften.

So, why is this the case?

This is due to the fact that Easter holidays tend to drive up prices due to increased demand for items such as package holidays, airline tickets, restaurants and hotels. And this is clear from what we have seen in recent years, as stated above.

The only reservation in the table above is for the year 2015, when Easter fell on April 5th. Before Eurostat came back on its inflation data earlier in February of this year, the core CPI in April 2015 had been observed only at +0.6. % year-on-year, which was similar to March 2015.

Therefore, I would categorize this data point as an anomaly rather than a trend break. In addition, we have already seen the effects of the report on Saxony earlier this week and this should be enough to explain why we expect the core CPI of the euro area to increase to +1, 0% year-on-year compared to + 0.8% in March.

If this were the case, I would expect the results to exceed expectations but, remember, we must not forget that any stimulus due to Easter seasonality does not tend to have a sustainable impact on sustainable inflation in the region. So, in the grand scheme of things, this does not justify a more hawkish ECB unless we see the May and June readings keep pace with the rise today.

[ad_2]

Source link