Inflation in the eurozone jumped from 1.9% in February to 3% in April. Gas prices have doubled, shipping costs from Asia have risen by 25%, and diesel is more expensive for all trucks. Since the war in the Middle East began in late February, costs have been climbing. 📈
🔍 What’s happening?
Two months after the conflict began on February 28, prices are rising again across Europe. Harmonized inflation rose from 2.6% in March to 3% in April in the eurozone. In France, the increase is even more pronounced: from 1.1% in February to 2.5% in April.
Marcegaglia, a major Italian steel group, is already facing €4 million in additional monthly costs. The doubling of gas prices at two of its plants, combined with rising shipping and diesel costs, is weighing on its bottom line. For Emma Marcegaglia, who leads these 7,800 employees, the impact remains limited to 2% of costs. But if the conflict drags on, the situation changes completely.
💡 Why does this matter?
This rise in inflation directly impacts household purchasing power and corporate margins. We’re still far from the 10% peak expected by the end of 2022, but the trend is concerning. Gas and oil, having nearly doubled in price, have triggered a domino effect across all sectors: energy, transportation, and heavy industry.
For traders, this means downward pressure on the EUR/USD if the ECB has to raise rates while the economy slows down. European cyclical stocks, particularly in manufacturing and logistics, will suffer if this trend persists. The comparison with 2022 is on everyone’s mind: back then, it took months for inflation to subside.
📊 Our view
For us, this is an orange alert, not yet red. The shock is real but manageable for now.
The difference from 2022? Companies have learned to absorb some of these increases. Marcegaglia is absorbing 2% in additional costs, not 10%. Strategic gas reserves are better stocked than in 2022. But everything depends on the duration of the conflict: if energy prices remain high for another three months, we’ll slip into a painful scenario. The ECB, which was aiming for a comfortable return below 2%, will have to revise its plans. On the French side, the AMF is already monitoring the impacts on energy-sensitive issuers. Christine Lagarde has warned: everything depends on the incoming data.
We believe the EUR/USD will remain under pressure as long as geopolitical uncertainty persists. For French traders: prioritize hedging on commodities and remain cautious on long EUR positions until inflation truly stabilizes.
✅ Key takeaways
- Eurozone inflation at 3% in April, up from 1.9% in February
- Gas prices doubled, shipping costs up 25%, diesel prices rising since late February
- Impact manageable for now but depends on the duration of the conflict
- Expect pressure on EUR/USD and European cyclical stocks
What do you think? Are you already hedging your energy exposure, or are you waiting to see how things play out?
🔎 See also
For more insights, check out all our economic analyses on ActuTrading Economy 📈
Source: Eurostat data, Marcegaglia press release
