EU-wide inflation will decrease by 0.1% from 1.9% from May to June
Eurozone inflation fell in June amid declining oil prices, data released on Wednesday.
The EU overall inflation rate has fallen by 0.1% from 1.9% between May and June.
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This figure coincided with the European Central Bank’s inflation target target, but it reached nearly 2%.
“In addition, CORE CPI has slowed to 0.9%, significantly contrasting with recent surprising prints in both the US and the UK,” said Hesús Cabra Guisasola, associate at ValidUS Risk Management.
Slowing inflation in the eurozone is a stark contrast to the US and the UK.
“Unlike US and UK CPI data that helped to launch a move towards a more hawkish tone, these numbers will continue to support the ECB’s ultra-loose monetary policy in the coming months. The tapering debate will soon be for.”
In individual countries, Germany’s annual inflation rate was 2.1%, down 0.3% since May. Spain held the same at 2.4%, while France and Italy increased by 0.1%, respectively, up by up to 1.9% and 1.3%, respectively.
“So far, market responses have been muted. However, the euro has been under pressure from several shortcomings in recent weeks, with the currency depreciating from $1.22 to under $1.19 against the dollar. I did,” Jessu Cabra Gisasora said.
Last week, the Bank of England predicted that inflation would exceed 3%, exceeding its “temporary period” target.
“The economy will experience a temporary period of strong GDP growth and CPI inflation beyond its target. After that, growth and inflation will recede,” the Financial Policy Committee said.
“The decline in the Eurozone CPI should bring some mitigation to the market given its impact on ECB thinking. Nevertheless, the market is behind and travel inventory is once again feeling the UK heat.” said Joshua Mahony, senior market analyst at IG.
“European stocks are behind early in today’s trade, and another match of Sterling’s weakness gives the FTSE 100 little opposite momentum.”
