CPI reached 2.2%, exceeding expectations
EU GDP surpassed 1.5% expectations, reaching 2% in the quarter, according to Eurostat.
Among the EU countries where data is available in Q2 2021, Portugal rose 4.9%, the highest increase compared to previous quarter.
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The Consumer Price Index (CPI) is a measure that examines the weighted average price of a basket of consumer goods and services, exceeding analyst expectations by 2.2% and 0.2%.
The news comes amid concerns about inflationary pressures and potential impacts around the world.
Commenting on EU GDP and CPI, Hesús Cabra Guisasola, Associate at ValidUS Risk Management, said: The strongest rebound comes from southern countries as the economy continues to lift restrictions for the summer season. Furthermore, the eurozone CPI numbers rose at 2.2% in July, exceeding the market expectations of 2.0%. However, the core CPI was lower than a month ago, alongside most predictors, 0.7% vs. 0.9% in June. ”
Like the Fed, Guisasola does not expect today’s news to force the ECB to change its stimulus package aimed at boosting the EU.
“Nevertheless, these figures do not expect to change the ECB’s plans to continue supporting the economy with favorable funding conditions for the coming months. Recently, institutions have been working to recover from the pandemic. This is because it signals the local community a “long road.” Additionally, the central bank has recently changed its inflation targets by making CPI above or below the 2% level as needed. ”
According to Guisasola, the dollar has lost ground against the euro in the past as the Fed took the Dovish tone.
“In the Forex market, the dollar depreciated against the euro on a recent day after the Dovish tone from the Fed and the disappointing second quarter GDP numbers from the US announced yesterday.
Eurozone inflation fell in June amid declining oil prices, data released last month.
EU-wide inflation fell 0.1% from 1.9% between May and June.
This figure coincided with the European Central Bank’s inflation target target, but it reached nearly 2%.
