Eurostat said May CPI rose 3.2% YoY, up from April’s 3.0% and in line with the
median forecast. Core CPI excluding food and energy accelerated to 2.5%, above
expectations, while services inflation jumped to 3.5%. Markets price a June ECB
hike — the first since Sept 2023. Officials appear to have concluded they cannot
keep waiting and should act promptly to counter spillovers from the Middle East
conflict.