Rising momentum in the Eurozone economy have triggered speculations that the European Central Bank (ECB) would not only taper its QE programme soon but also lift interest rates by the first quarter of 2018.
The problem with this is that stronger economic growth has so far not translated into higher inflation and as ECB president Mario Draghi noted in the March governing council meeting, rising headline inflation mainly reflected "strong increase in annual energy and unprocessed food price inflation, with no signs yet of convincing upward trend in underlying inflation".
The final readings of Eurozone consumer prices proved Draghi's prescience. After climbing to a positive annual rate since June last year to a high of 2.0% in February, headline CPI inflation eased sharply to 1.5% in March on the back of, yes, slowing energy prices.
Moreover, the still low core inflation reading - 0.9% annual rate in December, January and February - went even lower to 0.7% in March, the slowest reading in 11 months.