Eurozone May CPI is due on Tuesday, and forecasts point to headline and core inflation rising to 3.2% year-on-year from 3.0% in April, and to 2.4% from 2.2%, respectively. The balance of risks is tilted lower after an unexpected slowdown in German inflation, while the broader picture suggests the data are staying close to the European Central Bank’s March baseline rather than its stress cases. In that baseline, headline and core CPI average 3.1% and 2.2% in Q2, versus 3.6% and 2.3% in the adverse scenario, and 4.1% and 2.4% in the severe scenario. Rates pricing also leaves little room for surprise, with the swaps ... (full story)