Good morning.

As regards this morning's economic data releases, inflation rose in France, Italy, and Spain, surpassing (as expected) the ECB’s 2% target--particularly in the latter two economies (3.3% and 3.6%).

This has reinforced market expectations for a June interest rate hike.

The policy challenge is complicated by another data release this morning showing that the French economy contracted, driven by weaker consumption and investment.

#economy #ecb #europe #france #italy #spain #inflation #markets