In the Tuesday session, the DAX is at 13,027, up 0.27% on the day. On the release front, German and eurozone CPI releases matched their estimates. ECB President Mario Draghi will speak at an ECB event in Frankfurt.
German Final CPI dropped to 0.0% in April, down from 0.4% a month earlier. Eurozone inflation indicators also pointed downwards. Final CPI edged lower to 1.2%, down from 1.3% a month earlier. Eurozone Final Core CPI followed a similar trend, dropping from 1.0% to 0.7%. If inflation levels continue to soften, the ECB will have to consider extending its stimulus scheme, which is scheduled to run until September. Germany will release additional inflation numbers on Friday.
Bank of France Governor Francois Villeroy de Galhau raised some eyebrows on Monday after making hawkish comments about ECB interest rates hikes. Villeroy said that the ECB could soon provide additional guidance on the timing of a rate hike. In its last rate statement, the ECB said that any rate hikes would occur ‘well past’ the wrap-up of the stimulus program, which is slated to end in September. Villeroy stated that ‘well past’ could be a matter of quarters, rather than years. Investors snapped up euros on Monday after Villeroy’s comment, but the euro failed to hold onto these gains and ended the Monday session with small losses.
