Eurozone consumer price inflation was reported at 0.5% year-on-year in May, down from 0.7% in April, and lower that the 0.7% expected by economists. Core inflation is seen at 0.7% year-on-year, down from 1.0% in April.
As Thursday's all-important ECB policy announcement draws near, the data were amongst the last that might have been able to avert some form of policy easing by the central bank, but the continued fall in inflation makes some kind of action all the more likely, analysts say.
"The guessing game will begin after the data as to what the ECB will actually do, from the likely options of a main refinancing rate cut, negative deposit rates, an LTRO extension, and full quantitative easing," says Hantec Markets market analyst
By mid morning Tuesday the
"European markets started the day on a negative note as investors find little value after recent gains," says Spreadex Financial Sales Trader Lee Mumford.
Eurozone unemployment data will have done little to ease price and growth concerns at the ECB. The headline rate of Italian unemployment remained stable at 12.6% in April, while the youth unemployment rate in the troubled economy rose to 43.3% from 42.9% in March. A slightly better picture in Spain saw a 111,900 drop in the number of people unemployed in May, while across the whole Eurozone the headline rate ticked down to 11.7% in April from 11.8% in March.
The euro actually rose a little against the dollar in the wake of the low eurozone CPI print, as it did on Monday in the wake of a weak German print, suggesting that some amount of policy easing at Thursday's meeting is already priced in by the markets. Indeed, the euro has been the worst performing major currency since the last ECB meeting, when action this time around was first hinted at, falling almost 3% from
"The rally in the euro was nothing spectacular, but it does make me question exactly what the markets have priced in ahead of the ECB meeting on Thursday," says
The Nationwide house price index has shown further strong gains, rising 0.7% month-on-month in May, ahead of expectations for a 0.6% rise, while on an annual basis, prices rose by 11.1%, faster than the 10.9% expected.
"The Kantar data represents a continuum of recent trends with the limited assortment discounters gaining share at a rapid rate whilst Tesco in particular looks to be the big loser," said
Tesco shares are down 1.3%, Morrison is down 1.1%, and Sainsbury's is down 1.0%.
Plumbing and heating product supplier Wolseley leads the few gainers in the
Still to come Tuesday, after the disastrous release on the US ISM manufacturing PMI on Monday, that saw two market-moving revisions, the New York ISM index for May is due at
Ahead of the US opening bell, futures trading currently indicates that markets there will follow
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