Commenting on inflation in Europe, Jesús Cabra Guisasola, senior associate at Validus Risk Management, said: “German inflation has accelerated to the fastest pace since the early 1990s, with the headline jumping to 7.8% (vs 7.6% expected). In Spain, after almost posting double digits numbers in March, the headline (inflation) came in lower in April (8.4% vs 9.8%).

“After coming out from the French election and thinking that Macron’s victory over Le Pen would give some relief to the Euro, we continue seeing the currency under pressure, with EUR/USD trading below the $1.05 mark on the back of further escalation between the EU and Russia around energy, and concerns among investors around the prospect of the Eurozone.

“These inflation figures will put further pressure on the ECB to exit stimulus and start hiking interest rates to mitigate this historical inflation. The market has moved quite rapidly to price an aggressive hike cycle from the ECB which could start in July with a 25bps increase.”