Euro area CPI slips in April, alongside sharp drop in 'core' inflation
Inflation in the single currency are came off sharply last month amid a sharp slowdown in service sector prices.
According to a preliminary estimate from Eurostat, the Eurozone Consumer Price Index slipped from a 1.3% year-on-year clip in March to 1.2% for April (consensus: 1.3%).
The main culprit was a drop in the rate of services inflation from 1.5% to 1.0%, which dragged the 'core' rate of CPI down by three tenths of a percentage point to 0.7% (consensus: 0.9%).
Energy price gains on the other hand accelerated from the 2.0% pace obsrrved in March to 2.5%, while prices of non-energy industrial goods picked-up from 0.2% to 0.3%.
Food, alcohol and tobacco inflation also rose more rapidly, advancing by 2.5%, up from 2.1% in March.
By 1058 BST, euro/dollar was higher by 0.33% a 1.19894, alongside a dip of two basis points on the 10-year German bund yield.
At the shorter-end of the interest rate curve, the two-yaer yield was off by one basis point to -0.58%.
Despite Thursday's data, Florian Hense at Berenberg emphasised that April's low readings on services and core prices were chiefly the result of negative base effects due to Easter falling later in the year in 2018 than it did in 2017.
Hence, services prices had boosted both headline and core inflation in March but detracted from readings for last month, he said.
Indeed, Florian's forecasts called for headline CPI to bounce back to 1.5% in May on the back of crude oil price gains and perhaps as far as 1.8% during the summer months, before falling back towards 1.5%.
Core CPI meanwhile was likely to end the year at 1.2% or 1.3%.
Nevertheless, protracted trade tensions were a risk, he said.
"If the trade tensions escalate much further for much longer, the economy suffers worst than just a temporary slowdown and core inflation fails to edge up over the course of the year, the ECB may delay the end of its asset purchases and the first rate hike by 3-6 months."