EUROPEAN INFLATION: French Inflation Pressures Remain Soft
Sep-12 2025 07:40
French inflationary pressures remain soft. Final August HICP inflation confirmed flash estimates at 0.83% Y/Y (vs 0.94% prior), while CPI inflation was 0.88% Y/Y (vs 1.00% prior).
- Services inflation eased in August. A pullback in airfares (-0.04% Y/Y vs 7.66% prior) was offset by a rise in package holidays (8.78% Y/Y vs 1.88% prior), but other transport categories also decelerated relative to July. More “underlying” services components such as insurance also eased (but remain elevated). Trends in the likes of rents, medical services and catering services were steady.
- Core goods inflation pulled back thanks to a softening in clothing inflation to 1.25% Y/Y (vs 1.91% prior).
- We estimate 55% of HICP ECOICOP subcomponents have annual inflation rates below 1% Y/Y. Meanwhile, only 20% of components have annual inflation rates above 3%.
- Summary of key sub-components on a CPI basis:
- Services: 2.14% Y/Y (vs 2.14% flash, 2.49% prior).
- Manufactured goods: -0.32% Y/Y (vs -0.33% flash, -0.23% prior)
- Food: 1.60% Y/Y (vs 1.61% flash and prior).
- Energy: -6.21% Y/Y (vs -6.23% flash, -7.22% prior).
- INSEE’s seasonally adjusted headline CPI series rose 0.01% M/M in August, but 3m/3m momentum ticked up to 2.54% (vs 1.84% prior).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BUNDS: ING Wary Of Higher Long-End Yields & Steeper Curves
Aug-13 2025 07:36
ING believe that “the long end will remain susceptible to yield increases”.
- “10s30s is testing the highs of 2021 again, but more common when the ECB rate cycle bottomed were curves of 60bp and beyond. Also, the underlying swap curve is still some 20bp away from the highs of 2021”.
- They still expect “further pressure to materialise for (ultra-) long-end rates from German fiscal policies as well as the ongoing transition of Dutch pension funds to the new defined contribution system. And that is on top of any bearish impulses that could still come from outside the Eurozone”.
EUROPEAN INFLATION: Spain Final July HICP Confirms Flash, Airfares Push Up Core
Aug-13 2025 07:32
Spanish final July HICP confirmed flash estimates at 2.70% Y/Y (vs 2.27% prior), while the monthly reading was revised up a rounded tenth to -0.3% (-0.34% unrounded, vs -0.4% flash). Excluding energy and unprocessed foods, HICP accelerated a touch to 2.34% Y/Y (vs 2.22% prior).
- As indicated in the flash release, there was a rise in electricity inflation (17.30% Y/Y vs 9.00% prior) which pulled the energy component higher in July. Energy HICP was 2.97% Y/Y (vs -0.77% prior).
- Elsewhere, services inflation ticked up to 3.63% Y/Y (vs 3.42% prior). This was mostly driven by a rise in airfares (international flights inflation was 13.61% Y/Y vs 3.46% prior), and to a lesser extent medical services, recreation and culture and accommodation inflation.
- Non-energy industrial goods pressures remain subdued, easing to 0.15% Y/Y (vs 0.29% prior).
- Unprocessed foods fell to 7.76% Y/Y (vs 8.45% prior), but remain elevated. Processed foods, alcohol and tobacco ticked up to 1.32% Y/Y (vs 1.20% prior).
- The proportion of HICP subcomponents with annual inflation rates above 5% rose to 18%from 15% in June, the highest since March 2024.
BUNDS: Full reversal in the German 30yr Yield
Aug-13 2025 07:24
- Long end Germany Buxl lead the bounce to keep moving away from Yesterday's low.
- The German 5/30s printed a 98.28 high on the Cash Open, but now seeing some flattening bias, falling towards 96.00.
- That part of the Curve was trading around 94.57, when the 30yr Yield printed a 14yr High.
- The 30yr Yield is fading back to the July high it broke Yesterday, Buxl futures was trading around 115.38.
(Chart source: MNI/Bloomberg Finance LLP).
