Eurozone: Core and headline inflation to hold steady in July at 1.1% y/y and 1.3% y/y - TDS

Analysts at TDS are looking for core and headline inflation of Eurozone to hold steady in July at 1.1% y/y and 1.3% y/y, respectively as it does look like underlying inflation may be firming ever so gradually, although the appreciation of the EUR does leave that trend at risk.

Key Quotes

“The nearly 3% appreciation that we’ve seen in the NEER since the beginning of June is consistent with shaving around 0.3ppts off the ECB’s medium-term HICP forecasts, so this is something that the ECB will be watching increasingly closely into the September meeting where fresh forecasts will be presented. Further downgrades to the inflation forecast would make it tough to justify tapering at this juncture.”