Eurozone Preliminary HICP inflation edges higher to 2.6% YoY in July vs. 2.4% expected

The Eurozone Harmonized Index of Consumer Prices (HICP) rose at an annual rate of 2.6% in July after recording a 2.5% growth in June, the official data released by Eurostat showed Wednesday. The market forecast was for a 2.4% increase in the reported period.

The Core HICP climbed 2.9% YoY in July, at the same pace as seen in June while coming in above the estimated 2.8% print.

On a monthly basis, the bloc’s HICP showed no growth in July vs. June’s 0.2% acceleration. The core HICP inflation came in at -0.2% 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 July (4.0%, compared with 4.1% in June), followed by food, alcohol & tobacco (2.3%, compared with 2.4% in June), energy (1.3%, compared with 0.2% in June) and non-energy industrial goods (0.8%, compared with 0.7% in June).”

EUR/USD reaction to the Eurozone inflation report

The Euro pays little heed to the mixed Eurozone inflation data. EUR/USD is trading 0.7% higher on the day at 1.0822, as of writing.