Euro area inflation is continuing to base - ANZ

Euro area inflation was a touch stronger than expected in June, at 1.3% y/y, with core inflation at 1.1% y/y which suggests inflation is continuing to base.

Key Quotes

“Within the index, services inflation, which accounts for 45% of the index, rose 1.6% y/y. The data hint that euro area inflation is continuing to base but remains a long way short of target. It is evidence that the ECB’s policies are being successful, but not evidence that an early withdrawal of stimulus is needed. The data complemented the tone of Draghi’s speech earlier in the week that deflationary risks are abating and reflationary forces are emerging.”