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Services Play Key Role In Above-Consensus HICP Outlooks (1/2)


The following analysts are above consensus on the 5.3% Y/Y core Eurozone August HICP measure (and the 5.1% headline):

  • HSBC: Core 5.5% Y/Y, Headline 5.4% Y/Y: Inflation is evolving over the summer as we had expected with room for volatility due to clothing sales. Energy base effects and industrial goods disinflation to depress headline HICP, but momentum looks to be continuing to pick up in services, especially in tourism-related ones.
  • Deutsche: Core 5.4% Y/Y, Headline 5.5% Y/Y
  • SocGen: Core 5.4% Y/Y, Headline 5.3% Y/Y. M/M headline 0.6% vs -0.1% prior: Weaker goods inflation to drag down core, while services are boosted by technical factors. The basket reweighting that has amplified travel inflation is likely to only add 0.05pp to core in Aug, vs 0.3pp in July. On headline, higher oil / refinery margins will add 0.5pp to headline, with French electric prices adding 0.06pp -together offsetting negative energy base effects and declining utility prices elsewhere and a 5th consecutive decline in food inflation.
  • SEB:Core 5.4% Y/Y; Headline 5.2% Y/Y: Core numbers have come down with abating price pressure in goods being more evident. For services, strong demand but also seasonality, add volatility making it difficult to set the underlying trend completely. Looking ahead: Core will move roughly sideways before turning markedly lower starting in September. We see abating monthly price movements, but the y/y numbers are also affected by strong base effects.

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