Euro Zone Producer Price Index - Economic Data Preview
The Euro Zone Producer Price Index is expected to have declined for the eighth consecutive month in March, showing wholesale inflation fell at an annual pace of -2.9%, the most in over 22 years. The release implies forthcoming downward pressure on consumer prices (the headline inflation gauge) as lower production costs are passed on via cheaper finished goods. Indeed, a survey of economists conducted by Bloomberg suggests CPI growth will come to a standstill by the end of June. Overnight index swaps suggest the market is pricing in an 88% probability that the European Central Bank will cut interest rates to a record-low 1% when policy is announced later this week.