ABN AMRO: Fall In Eurozone Core Inflation Should See Pause

ABN AMRO write “the first estimate for eurozone inflation in August showed that the headline rate stabilised at 5.3%, but that the core rate declined to 5.3%, down from 5.5% in July.”

• “The outcome of the August inflation report, combined with the publication of a number of economic data releases, as well as business surveys for July-August, that underline the weakness in the eurozone economy, will probably convince the ECB that it can refrain from hiking at the September Governing Council meeting.”
• “Although the ECB will present this as a pause rather than the peak in rates, we think the rate hike cycle is already behind us.”