Breaking: Eurozone Preliminary HICP inflation drops to 5.3% YoY in July vs. 5.3% forecast

According to the data published by Eurostat on Monday, the annual Eurozone Harmonised Index of Consumer Prices (HICP) rose 5.3% in July vs. a 5.5% rise seen in June. The HICP inflation gauge met expectations for a 5.3% increase.

The Core HICP inflation steadied at 5.5% YoY in July, compared with June’s 5.5% increase. Markets had predicted a 5.4% clip.

On a monthly basis, the old continent’s HICP dropped 0.1% in July vs. +0.3% reported in June and an unexpected slowdown from the 0.3% raise expected. The core HICP inflation came in at -0.1% in the reported month, as against the 0.4% registered in June.

The European Central Bank’s (ECB) inflation target is 2.0%.

The bloc’s HICP inflation data have a significant impact on the market’s pricing of the ECB interest rate path. Markets are currently pricing a 75% probability of a rate hike pause by the ECB in September.

The European Central Bank’s (ECB) inflation target is 2.0%.

The bloc’s HICP inflation data have a significant impact on the market’s pricing of the ECB interest rate path. Markets are currently pricing a 75% probability of a rate hike pause by the ECB in September.

Key details (via Eurostat)

“Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in July (10.8%, compared with 11.6% in June), followed by services (5.6%, compared with 5.4% in June), non-energy industrial goods (5.0%, compared with 5.5% in June) and energy (-6.1%, compared with -5.6% in June).”

EUR/USD reaction

The shared currency is shrugging off mixed Eurozone inflation data. EUR/USD is picking up bids to trade near intraday highs of 1.1037, up 0.10% on the day, as of writing.