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EUROZONE DATA: Underlying Inflation Metrics Continue To Ease In August

EUROZONE DATA
Data BulletEurozoneBulletGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

The ECB’s underlying inflation metrics continued to progress towards 2% in August, but the data won’t be enough to shift expectations away from a gradual (i.e. quarterly) pace of rate cuts. 

  • The 10/30% trimmed mean, weighted median and supercore measures all decelerated on an annual basis in August, and have been steadily falling towards 2% over the past few months.
  • The headline and core PCCI metrics (the ECB’s preferred measure of medium-term underlying inflation pressures) ticked up a tenth each, but only to 2.0% and 1.9% respectively.
  • The dynamics of underlying inflation - one of the three central determinants of the pace/magnitude of the ECB’s easing cycle - have been developing favourably for some months now.
  • However, the trajectory of domestic inflation (which mostly represents services inflation) is the main obstacle to a faster cutting cycle. This measure expected to hover around 4% for the rest of this year.
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The ECB’s underlying inflation metrics continued to progress towards 2% in August, but the data won’t be enough to shift expectations away from a gradual (i.e. quarterly) pace of rate cuts. 

  • The 10/30% trimmed mean, weighted median and supercore measures all decelerated on an annual basis in August, and have been steadily falling towards 2% over the past few months.
  • The headline and core PCCI metrics (the ECB’s preferred measure of medium-term underlying inflation pressures) ticked up a tenth each, but only to 2.0% and 1.9% respectively.
  • The dynamics of underlying inflation - one of the three central determinants of the pace/magnitude of the ECB’s easing cycle - have been developing favourably for some months now.
  • However, the trajectory of domestic inflation (which mostly represents services inflation) is the main obstacle to a faster cutting cycle. This measure expected to hover around 4% for the rest of this year.