Broad-based Deceleration In June Core Metrics

As with France and Spain earlier today, Italian flash June HICP printed in line with consensus. Headline HICP was 0.9% Y/Y (vs 0.8% prior) and 0.2% M/M (vs 0.2% prior)

• Core HICP (ex-energy, food, alcohol and tobacco) moderated to 2.1% Y/Y (from 2.2% prior), with both non-energy industrial goods and services HICP seeing disinflation. This was expected by UniCredit coming into the release.
• Services HICP, which showed signs of stickiness in the French and Spanish prints, ticked a tenth lower to 3.1% Y/Y (vs 3.2 % prior). The breakdown of services components available from the CPI data (not HICP) show a broad-based deceleration all components other than housing.
• Non-energy industrial goods inflation was 0.5% Y/Y (vs 0.7% prior), though we expect this disinflation to stall in the coming months based on survey evidence from the European Commission.
• Unprocessed food inflation fell sharply in June, while processed foods ticked up a touch. Energy base effects continued to fade but remained in deflation at -8.6% Y/Y (vs -11.7% prior).