Eurozone: Upward momentum in inflation - TDS

According to analysts at TD Securities, HICP for the Eurozone was on top of consensus at 1.2% y/y, while core CPI posted a rare upside surprise at 1.1% y/y (mkt 1.0%), although only barely, with a more precise reading of 1.053% y/y.

Key Quotes

“The details show the upward momentum was led by the services sector, as services inflation jumped from 1.0% y/y in May to 1.6% y/y in June. We don't get a more detailed breakdown until the final figures are released in a couple of weeks, but this is likely related to higher holiday/travel costs, which would probably reverse in July.”

“We don't get the flash HICP print for July until after the next ECB meeting on 25 July, so today's stronger print reduces the odds of a "shock and awe" ECB outcome of an immediate rate cut at that meeting that some analysts are started to look for.”