Euro-Zone March HICP inflation decelerated to just 0.6% y/y from 1.2% y/y in February. This was below our median of 0.9%, but not a total surprise, after Spain yesterday reported a negative inflation rate for March. There is no breakdown with the preliminary number, but base effects from energy prices are a key driving factor and for now we agree with the ECB that deflation risks are limited, but with growth forecasts revised down sharply, the ECB must make sure that inflation expectations don’t deteriorate.