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Eurozone Inflation at a fresh high 9.1%, ups pressure on ECB

EUROZONE DATA
MNI (London)

EUROZONE AUG FLASH CPI +0.5% M/M (FCST +0.4%); JUL +0.1% M/M

EUROZONE AUG FLASH CPI +9.1% Y/Y (FCST +9.0%); JUL +8.9% Y/Y

EUROZONE AUG FLASH CORE CPI +0.5% M/M, +4.3% Y/Y (FCST +4.1%); JUL +4.0% Y/Y

  • Following forecasts beats from Germany, Spain, France and Italy, the Eurozone aggregate August CPI has risen 0.1pp higher than initially anticipated, accelerating from +8.9% y/y in July to +9.1% y/y in the August flash.
  • The month-on-month uptick of +0.5% on both the headline and core figure implies another strong increase, despite headline prices almost stalling at +0.1% m/m in the previous month.
  • The strongest rates were recorded again in Eastern European countries, with Estonia (+25.2% y/y), Lithuania (+21.1% y/y) and Latvia (+20.8% y/y) taking the lead. Economic reliance on trade with Russia will likely underpin this data.
  • As such, the market is now pricing 67bp, as the probability of a 75bp hike at the September 8 meeting becomes significantly larger despite recessionary fears looming.


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