ECB: Downward CPI revision to complicate communication strategy - BBH

The ECB meets next week, and today's downward revision to March CPI can only complicate its communication strategy, according to analysts at BBH.  

Key Quotes

“Headline inflation stood at 1.3% y/y in the final reading, down from 1.4% in the preliminary report, but up from 1.1% in February.  The core rate was flat at 1.0%, where it was throughout Q1 after being steady at 0.9% in Q4 17.”

“The euro briefly poked above $1.24 yesterday to record the high for April, but the gains were not sustained, and the euro returned to $1.2340 today.  The 20-day moving average is seen near $1.2330.  There are several large option expires today that may also serve to keep the euro range-bound.  Consider that there is a roughly 525 mln euro strike at $1.23 that may protect the lower end of the range, while a 504 mln euro strike at $1.24 may cap the upside.  Note that there is almost 560 mln euros struck at $1.2340 that also will be cut today.”