French and German CPI numbers may not lead to much change in ECB communication.

We don’t expect today’s regional figures or Friday’s Eurozone-wide flash CPI estimate to justify a change in the ECB’s narrative at next week’s policy meeting.

The recent speech by ECB President Christine Lagarde at the EU Parliament confirmed that the ECB is still looking for more conclusive evidence before acting on sanguine disinflation expectations. That likely includes waiting for wage data for the first quarter, and we suspect the likelihood of a rate cut before the June meeting is low.

We expect some pressure on EUR/USD after US PCE figures today.