Still Broad Range Of Expectations For July Inflation

At 1000 BST we receive flash July HICP prints for the Eurozone and Italy. At the time of release, we will have had flash HICP readings for 64% of the EZ (Germany, France, Spain and the Netherlands).

• The data received currently points to a EZ headline HICP of 5.2% Y/Y. However, the median expectation for Italy HICP (17% of EZ HICP) is 6.5% Y/Y. If this were to occur, then EZ headline HICP may come in closer to 5.5% Y/Y (i.e. flat vs June), with modest upside risk given the expected higher inflation rates of smaller EZ nations. EZ Core is seen decelerating to 5.4% (vs 5.5%).
• On the EZ surveys: uncertainty over the Italian outturn may be resulting in an unusually wide range of updated expectations for the EZ print: BofA sees 5.3% headline / 5.2% core; Daiwa 5.2% / 5.3% core; Goldman 5.4% headline / 5.5% core.
• Thus far, the main point of note was the larger than expected headline HICP print for Spain, at 2.1% Y/Y vs 1.4-1.6% Y/Y expected. The CPI core print (ex-energy/unprocessed good) also accelerated to 6.2% Y/Y (vs 5.9% Y/Y in June).
• Elsewhere, German figures have generally come in line with expectations, while France headline HICP came in a touch below expectations at 5.0% Y/Y.