The latest round of consumer price data from Eurozone member countries show that inflation picked up in April but not quite to the extent analysts had expected.

Germany

German annual inflation as measured by the Consumer Price Index (CPI) rose 1.3% during the month of April compared to 1.0% in the prior month, according to the country's statistics office.

The rise in consumer prices was in line with expectations and confirmed the preliminary estimate released late last month.

Compared to the prior month, CPI fell -0.2% in April.

In European Union harmonized terms (HCPI), prices rose 1.1% on the year, above March's 0.9% but well below the European Central Bank's target of just under 2% over the medium term.

While still considered to be dangerously low, the pick-up in prices for the Eurozone's largest economy suggests that the finalized reading for the entire region will also confirm a small pick-up.

Spain

The pick-up in prices was more significant in Spain, where the HCPI rose by an annual 0.3% compared to a -0.2% contraction in the prior month. Nonetheless, this was widely expected.

France and Italy

However, the harmonized CPI (annual) for France, released on the same day, was one decimal point lower than expected at 0.8% as was the Italian HCPI, released on Tuesday, at 0.5% compared to the 0.6% expected.

Overall, consumer prices appear to have picked-up but not at the pace that was expected.

If the Eurozone's CPI for April is revised lower from the preliminary estimate of 0.7%, it would add more pressure for the ECB to announce new monetary stimulus.

A report by The Wall Street Journal on Tuesday showed that the Bundesbank was open to measures such as a cut to the main lending rate, a cut to the deposit rate, or the purchase of packaged bank loans if needed, especially if ECB staff inflation projections for 2016 were lowered.

ECB President Mario Draghi said last week that he was "comfortable" with making such a decision in June's policy meeting.

The Eurozone's final CPI reading for April will be released on Thursday.

JP

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