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EUROPEAN INFLATION: EZ Headline HICP Tracks Close To 2.5% Y/Y

EUROPEAN INFLATION
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 Eurozone headline HICP tracks in line with consensus after incorporating the Dutch and Austrian data released this morning.

  • With 92% of the region-wide basket now having reported, consensus estimates for headline at 2.5% Y/Y appear intact.
  • As of yesterday, there was a non-negligible risk of a downward surprise in headline, but we noted that the Dutch and Austrian data would be decisive in determining whether this would be realised.
  • Dutch flash HICP was 3.36% Y/Y (vs 2.68% prior), while Austria was 3.2% Y/Y (vs 3.3% prior).
  • 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.
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 Eurozone headline HICP tracks in line with consensus after incorporating the Dutch and Austrian data released this morning.

  • With 92% of the region-wide basket now having reported, consensus estimates for headline at 2.5% Y/Y appear intact.
  • As of yesterday, there was a non-negligible risk of a downward surprise in headline, but we noted that the Dutch and Austrian data would be decisive in determining whether this would be realised.
  • Dutch flash HICP was 3.36% Y/Y (vs 2.68% prior), while Austria was 3.2% Y/Y (vs 3.3% prior).
  • 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.