SMM News: may 3, Eurostat released euro zone inflation data for April. Figures released on the same day showed that eurozone harmonic CPI rose 1.7 per cent in April from a year earlier, above market expectations of 1.6 per cent and a previous value of 1.4 per cent.
In addition, the core harmonic CPI in the eurozone rose 1.2 per cent year-on-year in April, higher than the expected 1 per cent and the previous value of 0.8 per cent.
Eurozone PPI rose 2.9 per cent in March from a year earlier, less than 3 per cent of expectations and previous values, while month-on-month growth was negative by 0.1 per cent, below expectations and positive growth of 0.1 per cent.
The euro fell 0. 06% in the short term after the data, but the overall market reaction was muted.
In terms of specific data, rising energy prices contributed a lot to the better-than-expected performance of eurozone CPI in April. Eurozone energy prices rose 5.4 per cent in April from a year earlier, up from 5.3 per cent in March, making April the biggest rise in energy prices so far this year.
Inflation in the services sector also rose 1.9 per cent from a year earlier, up from 1.1 per cent in March. Food, alcohol and tobacco rose 1.5 per cent from a year earlier, down from 1.8 per cent in March, while prices of non-energy industrial products rose 0.2 per cent from a year earlier, up from 0.1 per cent in March.
Earlier, Germany, the euro zone's largest economy, also released its own CPI data for April. The data showed that Germany's CPI growth in April was better than market expectations and previous values. But the eurozone's CPI is still a long way from the ECB's 2 per cent target.
On Wednesday, April 10, the European Central Bank issued its latest interest rate resolution, keeping key interest rates unchanged, in line with market expectations.
The ECB's main refinancing rate is 0%, which is expected to be 0%, compared with the previous value of 0%. The ECB's marginal lending rate is 0.25%, which is expected to be 0.25%, after a previous value of 0.25%. The ECB deposit facilitation rate is-0.4%, expected to be-0.4%, and the previous value is-0.4%.
The ECB statement did not mention targeted long-term refinancing operations (TLTRO).
The euro has not changed much since the resolution was issued.
Today, the European economy is suffering from internal and external problems: the growth rate of the euro zone slowed gradually after peaking in 2018 and returned to the long-term trend line; Italy, an important economy in the euro zone, is in a technical recession, and its economic situation is regarded by international investment banks such as Goldman Sachs as the biggest economic risk in the euro zone.
Externally, the tariff war between Europe and the United States may be imminent, Brexit will be difficult to extricate itself from the deadlock, and the latest IMF report will lower the global economic growth forecast, which will also bring more uncertainty to the policy of the European Central Bank.
With regard to the ECB interest rate meeting, the market expects the ECB to maintain its current negative interest rate policy, but the market expects that the ECB's judgment of the economic situation may change. In particular, there may be harsher warnings about growth and inflation expectations.