Inflation-Linked Weekly: Unimpressed by Core Inflation

Eurozone May inflation rose to 3.19% but slightly missed forecasts, while PPI data suggests limited near-term pass-through to consumer goods. The report argues market inflation fixings for late 2026 are too high compared to energy futures and the bank's moderate core inflation scenario.

Key Takeaways

• 1.Eurozone inflation in May reached 3.19% YoY, but the print was slightly below bank forecasts due to weaker tourism-related services.
• 2.Granular PPI data shows no imminent acceleration in consumer goods costs, suggesting that second-round effects from energy shocks remain progressive and limited.
• 3.The analysts maintain a divergence from market fixings for H2 2026, arguing that market participants are disregarding energy future curve backwardation.

Table of Contents

• EUR inflation analysis
• PPI figures still show no imminent consumer price increase
• Our take vs market pricing
• EUR inflation strategy
• US inflation analysis
• Inflation trade recommendations
• EUR and FR Inflation forecasts
• Eurozone HICP contributions
• EUR, next HICP-CPI releases
• EUR linker auctions
• US TIPS Analytics
• Recent inflation publications

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