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Eurozone March Inflation Confirmed at 1.5%
World Economy

Eurozone March Inflation Confirmed at 1.5%

Eurozone core inflation was higher than initially forecast, the European Union’s statistics office said on Wednesday, while confirming its estimate for the headline figure.
Eurostat confirmed inflation in March in the 19 countries sharing the euro slowed down to 1.5% year-on-year from a four-year high of 2% recorded in February, Reuters reported.
But core inflation, which excludes volatile prices of energy and unprocessed food and which the European Central Bank monitors closely, was revised up to 0.8% year-on-year in March from an earlier estimate of 0.7%. The core figure remained, however, lower than the 0.9% recorded in February.
On a monthly basis, headline inflation was 0.8% in March, in line with market expectations, while core inflation was 1.2% higher, below the average forecast in a Reuters poll of 1.3%.
The revised core data may slightly strengthen the hand of those who support winding down the ECB monetary stimulus, although inflation remains below the central bank’s target of inflation close but below 2% over the medium term.
The ECB has slashed interest rates into negative territory and adopted a bond-buying program worth €2.3 trillion ($2.46 trillion) to counter the threat of deflation and revive growth in the 19-member currency bloc.
Overall inflation was lower primarily because energy prices rose by only 7.4% year-on-year from 9.3% in February. In its earlier estimates, Eurostat said energy prices went up 7.3% in March.
The statistics office confirmed prices for food and tobacco went up by 1.8% in March, from a 2.5% increase recorded the previous month.
In the services sector, the largest in the eurozone economy, prices rose by 1% in March, from 1.3% in February.
Meanwhile, fund managers are rushing into eurozone equities and shunning US stocks as fears over political risks breaking up the currency area fade days ahead of France’s election, according to a major survey of global money managers.
Bank of America’s monthly fund manager survey revealed the fifth biggest rotation from US to European stocks since the start of monetary union in 1999 this month. Markets have also turned cool on US stocks amid rising concerns that President Donald Trump’s ambitious plans for corporate tax cuts will not be realized this year.
“Investors are showing love for Europe and scrambling out of US equities, as the majority find US stocks overvalued and perceive a risk of delayed tax US reform,” said Michael Hartnett, chief investment strategist at BAML.

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