Eurostat reported that annual inflation in the euro area was -0.3% yoy in February 2015, up from -0.6% in January.
The largest upward impacts to euro area annual inflation came from restaurants & cafés (+0.12 percentage points), rents (+0.11 pp) and tobacco (+0.07 pp), while fuels for transport (-0.64 pp), heating oil (-0.19 pp) and telecommunications (-0.06 pp) had the biggest downward impacts.
For the March flash reading, the energy component is likely to continue its mild rebound as prices at the pump continue to rise, while the food component should also provide some upward pressure to the headline number.
Services- and goods price rises should peter out a bit which should lead to a lower core figure.
"We expect HICP inflation to average around 0.1% in 2015 and 1.3% in 2016 while the core gauge should average 0.7% in 2015 and 1.0% in 2016", said Societe Generale in a report on Tuesday.
