EQUITIES: EuroStoxx Weakness Highlights Corrective Cycle

Of note:

EURUSD 1.91bn at 1.1525/1.1555.

USDJPY 1.15bn at 159.00.

EURUSD 10.34bn at 1.1500/1.1600 (thu).

USDJPY 1.24bn at 159.00 (thu).

USDCNY 6.7580 (1.01bn).

EURUSD 1.1bn at 1.1550 (fri).

USDJPY 1.7bn at 159.00 (mon).

• EURUSD: 1.1500 (762mln), 1.1525 (445mln), 1.1545 (330mln), 1.1550 (921mln), 1.1555 (218mln), 1.1600 (870mln).
• GBPUSD: 1.3525 (327mln).
• USDJPY: 159.00 (1.15bn), 159.50 (396mln), 159.75 (455mln), 160.00 (431mln).
• AUDUSD: 0.7050 (559mln).
• NZDUSD: 0.5825 (404mln).

Italy HICP was confirmed at 2.9%Y/Y in the final July reading by Istat as it eased from 3.0% in June and 3.2% in May. Core HICP (ex-energy and unprocessed food) was revised a tenth lower to 1.6%Y/Y (1.7% flash, 1.5% Jun, 1.8% May) for a softer acceleration than initially estimated. It was driven by core goods and processed food although the latter won't feed through to Eurozone-wide core HICP with Eurostat core methodology also exclduing processed food. 

• The revision lower on Istat's core measure is attributable to a -0.4pp revision to processed food, alcohol and tobacco, now 0.4%Y/Y (0.5% Jun, 0.8% May), and -0.1pp to core goods, now 0.6%Y/Y (0.5% Jun, 0.6% May) - which looks mostly due to a 0.3ppt downward revision in clothing/footwear while furniture was unrevised.
• Istat's definition of core inflation differs from Eurostat's (which excludes energy, food, alcohol and tobacco), so only the softer core goods aspect will feed in Eurozone-wide core HICP.
• Services HICP, meanwhile, was unrevised and steady at 2.5%Y/Y (2.5% Jun, 2.7% May). Additional services details are available, with the largest move under this aggregate being services related to transport (1.9%Y/Y vs 2.6% Jun), alongside 0.1ppt accelerations in both housing and communication services. Miscellaneous services decelerated to 1.9%Y/Y from 2.6%, noting a small weight here.
• The 0.1ppt slowdown in headline HICP was still mostly driven by decelerations in non-core components, however energy HICP did see a notable 0.7ppt upward revision to 11.7%Y/Y (12.9% Jun, 12.0% May). This looks to be in line with a 0.7ppt upward revision to the housing/water/fuels ECOICOP division (note transport was unrevised).
• Offsetting this, unprocessed food HICP was revised down 0.3ppt to 3.6%Y/Y (4.4% Jun, 5.5% May), which, alongside the aforementioned 0.4ppt downward revision to processed food, alcohol and tobacco helped FAT inflation down to 1.4%Y/Y (1.8% flash, 1.8% Jun) for a decent slowdown.
• In terms of ECOICOP 2 divisions, the largest revisions from flash were seen in housing, water and household fuels (7.2%Y/Y vs 6.5% flash, 7.3% Jun, erasing almost all of the initial deceleration), food and non-alcoholic beverages (1.3%Y/Y vs 1.7% flash, 1.8% Jun), and clothing and footwear (0.9%Y/Y vs 1.2% flash, 0.8% Jun), with more modest revisions elsewhere (July final details and weights in tables below).
• Eurozone-wide final July inflation data is due Weds 19th August. Ahead of that we will see Spain Thurs 13th and France Fri 14th.
• German final HICP (released earlier today) was unrevised at 2.8%Y/Y (2.3% prior), with the details showing little signs of indirect effects from higher energy prices. More detail in our bullet here