Overview
- Senior ECB officials including Isabel Schnabel, Philip Lane and François Villeroy de Galhau have signalled that a rate increase at the June meeting is likely as energy-driven price pressures broaden beyond petrol into other goods and services.
- The Bank of Japan’s new underlying inflation gauge showed 2.8% year‑on‑year inflation in April, a reading above the BOJ’s 2% goal that has strengthened market bets on a near‑term BOJ rate rise.
- Australia’s April headline CPI fell to 4.2% because of a temporary fuel excise cut while trimmed‑mean core inflation rose to about 3.4%, leaving the Reserve Bank of Australia data‑dependent but wary of further hikes.
- The ECB has raised its 2026 inflation projection to roughly 2.6% and warned that prolonged disruptions through the Strait of Hormuz could push inflation much higher and create second‑round effects via wages and business price‑setting.
- Markets have repriced yields and rate paths, non‑bank financial sectors have been flagged as vulnerable by the ECB, and households and firms face higher transport, freight and construction costs that could slow growth and squeeze living standards.