EUROPEAN INFLATION: Downside Surprise Possible As EZ Headline HICP Tracks Betwee

 MNI’s current tracking of Eurozone-wide June flash HICP indicates a non-negligible risk of a downward surprise on the headline print. 

• After incorporating the German and Irish HICP data released today, the EZ-wide release tracks between 2.4% and 2.5% Y/Y. 
• Austria and the Netherlands (~9% of the EZ HICP basket) are yet to report flash estimates, so may be decisive in determining whether headline inflation prints below consensus on a rounded basis at 2.4% Y/Y.
• Rounding effects from national-level data may also play a role.
• It is difficult to track the progress of core/services/NEIG HICP, due to the lack of detail in national-level releases. 
• However, the general sense is that services HICP is likely to remain sticky (at or above 4.0% Y/Y), while core goods should see some further disinflation. This should enable core HICP inflation to moderate slightly – in line with consensus expectations.