This site uses cookies

To give you the best possible experience, the GAM website uses cookies. You can read full information of our cookie use here. Your privacy is important to us and we encourage you to read our privacy policy here.

OK
False 89296e94-2af0-4bb7-9c03-54f68de273da

Inflation prints remain contained

Wednesday, March 31, 2021

Euro area inflation as measured through the flash consumer price index (CPI) estimate showed a 1.3% year-on-year advance – slightly below the consensus estimate of a 1.4% advance. Price pressures came through in fuel costs which have seen a 200% increase in the oil price against this time last year, when prices collapsed as the pandemic started. This base effect in inflation popping in the short term is as expected but it is unlikely to persist beyond a few months, in our view. The European Central Bank (ECB) has stressed that it will continue to look through the modest inflation increases in the short term, viewing it as a temporary aberration rather than a medium-term move to a higher inflation threat level. Equities and bonds have been reacting slightly manically over the last few months on inflation expectations moving sharply higher and as long as these prints remain contained, it will help limit their collective neuroses.


Important legal information
The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is no indicator of current or future trends. The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice. Reference to a security is not a recommendation to buy or sell that security. The securities listed were selected from the universe of securities covered by the portfolio managers to assist the reader in better understanding the themes presented. The securities included are not necessarily held by any portfolio or represent any recommendations by the portfolio managers.