Key insights
- German inflation eased to 2.7% in May, below expectations, but core inflation accelerated to 2.5%. This divergence, ahead of Eurozone inflation data and an ECB meeting, suggests persistent underlying price pressures. While headline inflation is cooling, the rise in core prices could prompt the ECB to maintain a hawkish stance or delay rate cuts, potentially impacting global interest rate expectations and risk appetite, indirectly influencing US markets.
Investing.com -- German inflation slowed to 2.7% in May from 2.9% in the previous month, according to preliminary data released Friday by the national statistics office.
The reading came in below the 2.8% forecast by analysts polled by Reuters for the EU-harmonized consumer price index.
Core inflation, which excludes volatile food and energy prices, rose to 2.5% in May from 2.3% in April.
The German data precedes the euro zone inflation release scheduled for Tuesday. Inflation in the bloc is expected to reach 3.3% in May, up from 3.0% in the previous month, according to economists polled by Reuters.
The European Central Bank maintained interest rates at its meeting in April. A further increase in inflation could prompt the bank to take policy action next month.
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