MNI Eurozone Inflation Insight, Jul'23

EXECUTIVE SUMMARY

Eurozone July flash headline HICP printed 5.3% Y/Y and -0.1% M/M (vs 5.5% Y/Y and -0.1% M/M prior), roughly in line with expectations. But core HICP was 5.5%, unchanged from June, and a touch above expectations of 5.4%.

• Monthly core HICP and services inflation remained steady at a high rate, but MNI calculations indicate that momentum across all key inflation components fell in July.
• Overall the July report leaves a September ECB hike in the balance, with too little disinflationary progress for comfort, but leaving enough ambiguity about the persistence of price pressures to reconsider further tightening.
• Our review of July's preliminary Eurozone inflation data includes breakdowns and analysis of the national inflation prints, and some sell-side reactions.

FOR FULL PDF ANALYSIS:

Jul2023EZCPIReview.pdf