Slumping eurozone inflation heaps pressure on ECB

More pressure was heaped on ECB president Mario Draghi to act as eurozone inflation fell to 0.5%, down from 0.7% in April.  The markets had been expecting little change from April.  Eurozone Bond yields jumped up on the news as the low figure makes almost certain that the ECB will announce a move to negative interest rates and raises hopes that further stimulus measures will be considered in the forward looking statement to be announced on 5th June. The 10-year Gilt yield was also dragged upwards by eurozone yields and recovered from their recent low of 2.65% to stand at 2.70%.