Euro deflation eased in March as the flash estimate for HICP inflation increased to -0.1% y/y from -0.3% y/y in February. The HICP inflation print was in line with consensus expectations, but core inflation surprised on the downside as it declined to 0.6% y/y in March from 0.7% y/y in February. “The figure released today supports our view that the negative impact from the decline in the oil price will fade and that inflation will increase sharply later this year. Even with an unchanged oil price at the current low level, we expect headline inflation will turn positive at the end of the year, as positive base effects will support energy price inflation.” – said Danske Bank in a report on Tuesday

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