German inflation is expected to accelerate in May and fluctuate around slightly higher levels, according to the Bundesbank monthly report published Wednesday. The report stated "overall, there are still risks to the fundamental disinflation process"' and "wage growth has been stronger than expected" leading to price pressure on services potentially persisting for longer. Negotiated pay increased 6.2% in the first quarter according to the Bundesbank which may prove a slight blow to the ECB as it decides on a follow up cut to June and if inflation is slowing enough to do so. -UBS
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