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BUBA SA Again Underscores Sticky Services Inflation

EUROPEAN INFLATION
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The Bundesbank's estimate of seasonally-adjusted German CPI suggests core momentum accelerated in July. Although the respective momentum measures (3MMA) remain below recent highs, upticks in the sequential comparison again underline services stickiness.

  • Overall core inflation increased to 0.26% M/M (vs 0.17% in June; and 3.2% annualized) per Buba, and services inflation to 0.35% M/M (vs 0.18% in May; and 4.3% annualized).
  • Manufactured goods ex-energy meanwhile moved further away from the deflationary territory where the category printed two months ago, in a tentative sign that the supply-side pressures projected ahead of the release might start to come into play here. The category came in at +0.17% M/M (vs +0.09% in May, and +2.1% annualized).
  • Regardless of the upticks in the sequential comparisons, respective 3-month moving averages remained below May highs - suggesting that the narrative of continuously accelerating services momentum from a couple months ago is broken. Nevertheless, the data suggests that price pressures specifically in the services category continue to remain sticky.

MNI, Bundesbank

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The Bundesbank's estimate of seasonally-adjusted German CPI suggests core momentum accelerated in July. Although the respective momentum measures (3MMA) remain below recent highs, upticks in the sequential comparison again underline services stickiness.

  • Overall core inflation increased to 0.26% M/M (vs 0.17% in June; and 3.2% annualized) per Buba, and services inflation to 0.35% M/M (vs 0.18% in May; and 4.3% annualized).
  • Manufactured goods ex-energy meanwhile moved further away from the deflationary territory where the category printed two months ago, in a tentative sign that the supply-side pressures projected ahead of the release might start to come into play here. The category came in at +0.17% M/M (vs +0.09% in May, and +2.1% annualized).
  • Regardless of the upticks in the sequential comparisons, respective 3-month moving averages remained below May highs - suggesting that the narrative of continuously accelerating services momentum from a couple months ago is broken. Nevertheless, the data suggests that price pressures specifically in the services category continue to remain sticky.

MNI, Bundesbank