Eurozone: Upside surprise in June inflation – Nordea Markets

Anders Svendsen, analyst at Nordea Markets, notes that Eurozone’s headline HICP inflation was 1.2% y/y in June in line with consensus, probably not enough to ease concerns at the ECB.

Key Quotes

“Core inflation surprised to the upside with an increase to 1.1% y/y. French HICP inflation surprised on the upside too.”

“Euro-area core inflation rebounded to 1.1% y/y in June which was slightly above consensus (1.0%) and well above our expectations at 0.9% y/y. Headline HICP inflation came in at 1.2% y/y, in line with consensus.”

“The main driver of higher core inflation was services prices, but even though services price inflation appears strong on a year-over-year basis, with 1.6 % for the Euro-area, it stayed within the 0.0-0.25%-range month-over-month and seasonally adjusted, indicating no acute change in services price inflation dynamics, as we would expect from a continued healthy labour market.”