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Mixed signals emerged from euro area PMI data regarding the impact of energy prices, according to Frederik Ducrozet. While industrial supply chains are experiencing significant shocks that are affecting output prices, Ducrozet points out a more limited effect on prices charged in services. The service sector pass-through appears modest, with some impact observed in Germany but none reported in France.
Earlier this year, Frederik Ducrozet noted that most euro area inflation data was collected before the Middle East conflict in February, which impacted price readings at the time. He later observed a sharp rise in European consumer inflation expectations, even as company views remained contained. These previous trends offer context for the mixed signals in the latest PMI data.