MNI: GERMANY JUL IFO BUSINESS CLIMATE INDEX 87

Spanish May PPI was -4.6% Y/Y NSA (vs a one tenth downwardly revised -6.7% prior). On a 3m/3m NSA basis, PPI also remained in deflation at -3.8% (vs -4.1% prior).

• Excluding energy, PPI rose 0.4% Y/Y (vs 0.0% prior) and 0.5% 3m/3m (vs 0.6% prior).
• Consumer and capital goods PPI each moderated to 0.4% 3m/3m in May (vs 0.7% and 0.8% prior respectively), while intermediate goods rose a touch to 0.5% (vs 0.4% prior).
• The recent development in core goods pipeline pressures (see chart) suggests non-energy industrial goods HICP disinflation should stall in the coming months.
• This is supported by the uptick in industry expected prices in the May EC business survey.
• Spanish flash June inflation is due on Friday, with analysts expecting a slight moderation in HICP to 3.5% Y/Y (vs 3.8% prior).