According to the first estimate, euro area CPI inflation eased from 2.7% Y/Y to 2.6% Y/Y in March. The consensus was looking for a stronger decline, to 2.5% Y/Y. While there are no details yet available, the upward surprise was probably due to petrol and heating oil prices. Also in Italy, CPI inflation continued to surprise on the upside of expectations. In March, Italian inflation jumped by 2.5% M/M, while the annual rate rose from 3.4% Y/Y to 3.8% Y/Y. The consensus was looking for a slight slowdown, to 3.3% Y/Y. The peak in euro area inflation is likely behind us, but the slowdown is going very slowly. As a result, inflation will probably remain above or the ECB’s target this year (as the ECB signalled at the March press conference), partly due to the stubbornly high oil price.