Both consumer and core prices in the euro area eased in March, increasing the likelihood that the European Central Bank will cut interest rates in June, ending the rapid tightening cycle of recent years.
Consumer price inflation in the euro area was 2.4% in March, down from 2.6% in the previous month, but steady growth is expected as food, energy and industrial product prices all contributed to the decline in headline prices. It was contrary to what I said.
Meanwhile, data released by the EU's statistics agency Eurostat showed core inflation fell to 2.9% from 3.1%, below expectations of 3.0%. Diego Izcaro said a fall in headline inflation in March “could raise expectations for a rate cut later this month,” but that “the stickiness in service prices means that the ECB will not start its easing cycle in June.” “We will await further evidence of moderation in wage growth.” , S&P Global Market Intelligence Economist.
Meanwhile, the Institute for Supply Management released a report Monday showing U.S. manufacturing activity increased modestly in March after 16 consecutive months of contraction.
Meanwhile, data showed the ISM Manufacturing Purchasing Managers Index rose to 50.3 in March from 47.8 in February, in contrast to analysts' expectations of 48.4. A number above 50 indicates that the economy is in expansion territory. The production index rose from 48.4 to 54.6, while the new orders index rose from 49.2 in February to 51.6 in March. A rebound in manufacturing has improved the economic growth outlook, but rising raw material prices indicate that commodity inflation could accelerate in coming months. The main reason for last year's slowdown in inflation was deflation of goods.
Finally, Wednesday's private opinion poll showed that activity in China's services sector expanded as expected in March, as the Chinese government's continued efforts to strengthen liquidity and stimulate domestic demand contributed to growth. This is because. Caixin services sector PMI rose to 52.7 in March from 52.5 in February. This is the 15th consecutive month that this score shows an increase in service activity. Although the expansion rate was high, it was still lower than the average for long-term series.
The pace of new business expansion was the fastest since December last year, mainly due to improvements in underlying demand and efforts to increase new orders. It also rose for the first time in three months, boosting business confidence on hopes that new product lines, expansion plans and higher customer budgets will lead to higher sales.
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