EUR-flation watch: Spain is the dovish hawk
The preliminary European inflation numbers will be released during this week, while Germany has decided to postpone the release until after Easter.
We are leaning dovish relative to consensus, but due to VAT increases in Spanish electricity markets, it will not look like an outright home-run for disinflationistas in March either unless markets decide to focus on the TAX-constant HICP rates.
Numbers in short:
Spanish HICP (Wednesday) -> Consensus 1.4%, Steno Research 1.26% MoM
French HICP (Friday) -> Consensus 0.6% MoM, Steno Research 0.46% MoM
Italy HICP (Friday) -> Consensus 1.4% MoM, Steno Research 1.43% MoM
Germany HICP (Tuesday next week) -> Consensus N/A, Steno Research 0.47% MoM
Chart 1: Steno Research model nowcasts for major Eurozone economiesÂ
We see relatively soft numbers out of Germany and France, while Spanish numbers will look hot due to electricity VAT adjustments. June cut is ON..
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