MNI: EUROZONE DATA: Flash HICP (Jul 2019)............>

MNI: EUROZONE DATA: Flash HICP (Jul 2019)

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- As expected by the markets, EZ HICP infl moderated by 0.2pp in Jul to 1.1% -

its weakest rate since Feb 2018

- Core infl (HICP ex. energy, food, alcohol & tobacco) fell slightly faster than

anticipated, easing back to 0.9% from 1.1% in Jun

- ... as services price growth eased by 0.4pp to 1.2% y/y

- As well as the decline in core, the headline rate was also driven lower by a

sharp fall in energy inflation - from 1.7% in Jun to just 0.6% in Jul

- However, gains in infl in other categories limited the headline drop

- Non-energy indust goods prices grew by 0.4% y/y in Jul (up from 0.3% in Jun)

- ... while food, alcohol & tobacco prices rose by 2.0% on the year (following a

smaller gain of 1.6% in Jun)

- Core inflation should continue to fluctuate around the 1% mark this year...

- ... far short of the ECB's comfort zone and a key motivation for the expected

easing of monetary policy in Sep