Let's get right into it.

Omicron impact short-lived

The services activity readings for the French, German, and overall Eurozone reports were all solid and signified a solid rebound in February as the impact of the omicron variant spread begins to subside. If anything, that just reaffirms that any dent to economic conditions and outlook optimism is one that is short-lived. That bodes well for how the trend should look like in the months ahead but perhaps, with one caveat..

Price pressures continue to pose a problem

While it may not be a surprise as one should likely only expect price pressures to perhaps ease in the latter stages of the year. But the elevated prices caused by supply shortages isn't going to help if they are passed on to consumers down the road. Some remarks from the Eurozone report earlier:

"The easing of supply constraints recorded during February also helped moderate manufacturers’ input cost inflation. Although average prices paid for materials rose sharply again, the rate of increase was the slowest since March of last year. However, service sector input cost inflation accelerated to a record high reflecting rising wages and soaring energy costs. The resulting overall rate of input cost inflation seen across both sectors rose to the second-highest on record, surpassed over the past 24 years only by that seen last November.

"Average prices charged for goods and services rose at the sharpest rate yet recorded by the survey as firms increasingly sought to pass persistent higher cost inflation on to customers. A record high rate of inflation in the service sector was accompanied by a near-record rate in manufacturing."

That is something to be wary about in case it becomes a bigger problem in the months ahead. In turn, it will create further pressure on the ECB to act some time during the course of the year in order to try and address the issue.