Free Trial

EUROPEAN INFLATION: MNI Tracks Small Upside Risks To July Flash Headline HICP

EUROPEAN INFLATION

Eurozone headline HICP tracks at 2.5-2.6% Y/Y after incorporating the already-released national inflation data. This suggests slight upside risks to the 2.5% Y/Y Bloomberg consensus.

  • It is more difficult to track core HICP, as not all countries report the ex-energy, food, alcohol and tobacco metric in the flash releases. 
  • However, following yesterday’s German and Spanish data (alongside Belgium and Ireland), Morgan Stanley and Barclays flagged the risks of a 2.9% Y/Y core outcome (vs 2.8% cons). 
  • A small upside surprise should not meaningfully dissuade the ECB from delivering a 25bp cut at its September meeting, particularly after Eurozone Q2 preliminary GDP growth (at 0.3% Q/Q) was below the ECB’s June projection of 0.4% (albeit still above analyst expectations of 0.2%).
  •  However, the underlying details of the Eurozone-wide HICP print may still prompt markets to reassess whether year-end cut pricing (at 58bps) is too stretched at this stage.  

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.