Credit Suisse note that Eurozone......>

EUROZONE DATA: Credit Suisse note that Eurozone core inflation is running at

1.2% in the four months to July - it has accelerated lately.

- CS believe that "core inflation will likely remain at current elevated levels,

but the scope for further rises over the next six quarters is limited"

- Most of the recent rise of inflation has been linked to external factors and

will continue to push inflation higher. They refer to core goods prices and

transport related service costs in particular.

- But, domestically generated inflation pressures are not there: wage pressure

and non-tradeable goods price growth is muted. 

- They conclude that "On our estimates, core inflation should average 1.1% in

2017 and 1.2% in 2018. This is below the ECB June projections of 1.1% and 1.4%,

respectively."

- With core inflation running a higher level, Credit Suisse are looking for the

ECB to taper in the Autumn but because of little upward momentum, the removal of

stimulus happens very gradually.