EUROPEAN INFLATION: Services Upward Revision Flattered By Rounding, 3-Year Low
Aug-20 10:01
Eurozone final July HICP inflation was revised marginally higher, to 2.04% Y/Y (vs 2.02% flash, 1.99% prior). Core inflation was 2.31% Y/Y, up from 2.29% in the flash and 2.31% prior, driven by services being revised up to 3.15% Y/Y (vs 3.13% flash, 3.32% prior).
- This means the 0.1pp services upward revision on a rounded basis (to 3.2% Y/Y) is less material than it may appear on first sight and it compares with 4.0% Y/Y from July 2024. On a rounded basis, services was now "only" the joint lowest since March 2022.
- Non-energy industrial goods inflation was upwardly revised to 0.76% (0.75% flash, 0.52% prior). Some national-level data suggested that this comes amid less material or changing seasonal patterns on summer clothing sales.
- Energy deflation meanwhile was also trimmed to -2.39% Y/Y (-2.46 flash, -2.59 prior).
- Headline excluding tobacco printed 1.97% Y/Y in the final release.
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OUTLOOK: Price Signal Summary - S&P E-Minis Trend Needle Points North
Jul-21 09:52
- In the equity space, S&P E-Minis traded high last week resulting in a fresh cycle high. The climb confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position highlighting a clear dominant uptrend. Sights are on 6381.50, a 1.764 projection of the Apr 7 - 10 - 21 price swing. Key support is at the 50-day EMA, at 6101.83. Support at the 20-day EMA is at 6246.73.
- A bull cycle in EUROSTOXX 50 futures remains in play and recent weakness appears corrective. Support to watch is 5281.00, the low on Jul 1 and 4. A clear break of this price point would strengthen a bearish threat. Recent gains have exposed key resistance and the bull trigger at 5486.00, the May 20 high. It has been pierced, a clear breach of it would resume the medium-term bull cycle that began Apr 7 and open the 5500.00 handle.
DUTCH T-BILL AUCTION RESULTS: 2.5/3.5-month DTCs
Jul-21 09:40
| Type | 2.5-month DTC | 3.5-month DTC |
| Maturity | Sep 29, 2025 | Oct 30, 2025 |
| Amount | E1.74bln | E1.29bln |
| Target | E1.0-2.0bln | E0.5-1.5bln |
| Previous | E1.21bln | E1.39bln |
| Avg yield | 1.935% | 1.923% |
| Previous | 1.905% | 1.900% |
| Bid-to-cover | 1.55x | 1.43x |
| Previous | 2.05x | 1.67x |
| Previous date | Jul 07, 2025 | Jul 07, 2025 |
STIR: J.P.Morgan Recommend Tactical GBP Forward Curve Flattener
Jul-21 09:32
J.P.Morgan recommended tactical fronts/reds SONIA curve flatteners (3Mx1Y/15Mx1Y) late on Friday.
- This recommendation is based on “RV dislocation (1Y/1Yx1Y SONIA now looks 6bp too steep on a relative basis vs. 1Yx1Y SONIA)” and their view that last week’s data “doesn’t warrant the BoE shifting to a faster easing pace than the current quarterly pace”.
