German CPI inflation rebounded a little more strongly than expected in May rising to 1.7% YoY from 1.1% YoY. Risks to the Eurozone reading to be published on Friday look to the upside. The drop down to 1.2% YoY in April is likely to rebound above the 1.4% YoY current consensus estimate. Further ECB stimulus is not yet imminent.
That being said, economic newsflow remains soft. German unemployment jumped by 21k in May, its largest jump since early 2009. Meanwhile Eurozone credit data revealed another contraction in lending to the corporate sector in April. The outstanding stock of loans to corporates fell by EUR17k, loans to households were essentially flat at EUR1b. on the month.
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Commonwealth Bank