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Jun Inflation Preview: Pulling Back On Energy

ITALY DATA

Italy (17% of EZ HICP) – 1000UK Wed 28 Jun - BBG Consensus:

  • HICP: 6.8% Y/Y (8.0% prior) / 0.1% M/M (0.3% prior)
  • NIC: 6.7% Y/Y (7.6% prior) / 0.3% M/M (0.3% prior)
  • Headline Y/Y is seen dipping from a surprisingly strong 8.0% Y/Y in May with energy inflation set to fall sharply on base effects, and food prices potentially also lower.
Recap of May's data: Despite the stronger-than-anticipated Italian HICP print, the bulk of the inflationary pressures continued to follow a downwards trajectory. Cooling energy prices accounted for the bulk of the May deceleration, followed by softer slowdowns in industrial goods and food/alc/tobacco. Harmonised services inflation held steady. Sticky services inflation has been largely foreshadowed by higher prices charged in recent PMI data.

Some sell-side analyst takes:

  • JPMorgan:-0.4% M/M, 6.0% Y/Y, HICP: 6.4%
  • Goldman Sachs: 6.7% (from 8.0%) with core -0.1pp to 5.0%. Significant declines in energy inflation (-6.8pp to 4.7% Y/Y) on base effects; softer unprocessed (-0.5% M/M) and processed (+0.3% M/M) food prices.

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