Flash euro area HICP inflation likely at 0.2% yoy for May

Flash euro area HICP inflation is expected to print at 0.2% yoy in May on higher energy prices. Oil prices rose rapidly in March and remained range-bound in May. The pass-through effect was expected in the April data didn't materialise, so May is likely to show a large pick-up, say Societe Generale. This has already been evident in the flash releases from Spain and Italy last week, both of which came in higher than expected due to the energy component. 

"Less movement in the other components is expected, as the effect of the Easter holidays should have passed. The core inflation is likely to print at 0.7% yoy", according to Societe Generale. 

In April, euro area inflation was 0.0% yoy, up from -0.1% yoy in March on higher prices in the goods, services and energy components.Services prices contributed negatively due to the effect of the Easter holidays. Societe Generale expects euro area HICP inflation to average 0.4% in 2015 and 1.5% in 2016, while the core metric should remain stable at 0.7% in 2015 and 1.1% in 2016.