The News
Eurozone inflation fell and manufacturing output rose in March, according to data released Tuesday, in a positive sign for Europe’s economy ahead of fresh US tariffs.
The eurozone’s annual inflation rate fell for the second month in a row to 2.2% while manufacturing output rose for the first time in two years: S&P Global’s Purchasing Managers’ Index (PMI) rose to 48.6, nearing the 50 mark that indicates growth.
US reciprocal tariffs — due Wednesday — could disrupt progress, however: “A significant part of [the PMI growth] may have to do with the front loading orders from the US [...] which means some backlash is to be expected,” an economist told Reuters.
A trade war could deter the European Central Bank from cutting interest rates further, with “Trump-led inflation ticking up not only for the US but also for Europe,” a rates strategist told the Financial Times.