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EU DATA RECAP: VERY STRONG CORE INFLATION Euro Zone flash estimate of inflation rose 7.5% Y/Y, matching consensus. However, the core figure printed notably above expectations at 3.5% compared to the 3.2% expected. As such, this will further fuel expectations that the ECB will begin to raise interest rates from July, where current market pricing is near fully priced in for lift-off. Meanwhile, Euro Zone Q1 GDP came in line at 5% Y/Y with a slightly softer than expected quarterly figure 0.2% vs 0.3% expected. That said, this is unlikely to deter the ECB from stepping up its plan to normalise monetary policy. Market reaction to the data has been muted given that the figures are unlikely to notably move the needle for the near term outlook for ECB policy. Keep in mind that the bigger focus has been on Fed policy with markets positioning themselves ahead of next week’s meeting