Euro area inflation remained low in June, just as we expected. Flash headline inflation printed at 0.5% y/y in line with our estimate and unchanged from May. Core inflation edged slightly higher to 0.8% from 0.7% in May.
After last week’s higher than expected numbers from Germany, there might have been some expectations of a higher numbers in the markets.
Highest annual inflation was seen in services sector where prices increased by 1.3% y/y, faster than in May. Energy prices had a small positive effect (+0.1%), whereas food, alcohol and tobacco prices came down (-0.2%). Non-energy industrial goods prices were unchanged.
After the significant easing package from early June, the ECB is unlikely to react to an expected low inflation print this Thursday. We expect no new measures, but the ECB can provide some more flavor on the already announced TLTRO-operations.
Nordea