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Analysts at Nomura explained  that the US has experienced three successive months of higher headline CPI inflation.

Key Quotes:

“Then with the surge in oil prices since April, greater inflation risks have become another justification for the market to price an aggressive Fed.”

“Meanwhile, euro-area inflation has disappointed. But this could soon come to end; our monthly forecasts, which incorporate changes in commodity prices, currency moves and survey data, all suggest that the euro area should see a big rise in headline inflation in the May release – it could rise by a substantial 0.5%.”

“The US should have also, but by a smaller amount.”

The May euro-area CPI data will be released on 31 May. Also, we have euro-area PMI data on 23 May which would give us an indication of any bounce in euro-area growth data and hence the persistence of the inflation shock.”