[MARKET ANALYSIS] EZ Flash HICP underscores the ECB's wait-and-see approach

The EZ Flash HICP series for March underscores the ECB's wait-and-see approach, as while the headline lifted markedly from the prior, the upside was to a lesser extent than consensus. Furthermore, the internals show that, for now at least, the Middle East price shock remains confined to the energy space, as the core measures actually moderated from the prior across the board. As such, a marginal dovish reaction was seen across the EUR and Bunds. However, this was minimal in nature and has largelly pared, with Bunds still off earlier highs and EUR/USD holding just in the green on the day. In terms of pricing, a very slight dovish adjustment was seen. But, as above, the narrative remains one of waiting for further data around the duration of the energy shock, the extent of any second round effects as they emerge, what that means for inflation expectations and then the growth/broader economic implications of this.