MNI Eurozone Flash Inflation Review – June 2023

EXECUTIVE SUMMARY

Eurozone June HICP was 0.1pp below consensus estimates in the flash data cooling by 0.6pp to +5.5% y/y. This was the lowest since January 2022, before the inflationary effects of the Russia-Ukraine war.

• Core also was 0.1pp lower than expected, however ticked up to +5.4% y/y (vs +5.3% in May). Stronger services inflation drove this increase, quickening from +5.0% y/y in May to +5.4% y/y in June. This uptick had largely been foreshadowed by yesterday's German data.
• Overall, the flash report cemented market expectations for a 25bp ECB rate hike in July. However developments this summer in "sticky" inflation areas including services will go a long way to determining whether there will be a further hike in September as is currently priced in.
• Our review of June's preliminary Eurozone inflation data includes breakdowns and analysis of the national inflation prints, and some sell-side reactions.

FOR FULL PDF ANALYSIS:

Jun2023EZCPIFlashRreview.pdf