Eurozone Preliminary HICP inflation falls to 2.5% YoY in June, as expected

The Eurozone Harmonized Index of Consumer Prices (HICP) rose 2.5% in the year through June, a tad slower than a 2.6% growth registered in May, the official data released by Eurostat showed Tuesday. The market forecast was for a 2.5% increase in the reported period.

The Core HICP inflation dipped to 2.8% YoY in the same period, against May’s 2.9% increase while meeting the estimated 2.8% print.

On a monthly basis, the bloc’s HICP rose 0.2% in June vs. a 0.2% increase in May. The core HICP inflation came in at 0.3% MoM in the same period, compared with a 0.4% growth seen previously.

The European Central Bank’s (ECB) inflation target is 2.0%. The old continent’s HICP inflation data have a significant impact on the market’s pricing of the ECB's second interest rate cut.

Key details from the Eurozone inflation report (via Eurostat)

“Looking at the main components of euro area inflation, services is expected to have the highest annual rate in June (4.1%, stable compared with May), followed by food, alcohol & tobacco (2.5%, compared with 2.6% in May), non-energy industrial goods (0.7%, stable compared with May) and energy (0.2%, compared with 0.3% in May).”

EUR/USD reaction to the Eurozone inflation report

The Euro remains unfazed by the mixed Eurozone inflation data. EUR/USD is trading 0.18% lower on the day at 1.0171, as of writing.

(This story was corrected on Tuesday at 9:09 GMT to say that "the Eurozone Harmonized Index of Consumer Prices (HICP) rose 2.5% in the year through June, a tad slower than a 2.6% growth registered in May,"not higher than)