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🇪🇺❗️Cable FX Macro Weekly Note: EU August Flash CPI

July headline consumer prices came in line with market expectations at 5.3% Y/y, this was unchanged from the prior. The core figure is now at 5.5% Y/y and remains close to its record high of 5.7%. The measure excluding energy and food came in unchanged on the month and rose by 6.6% vs the prior year, services prices accelerated to 5.6% Y/y from the prior 5.4% to post the second consecutive month of increases. Bloomberg measures of core inflation extended the trend lower in July, EU super core CPI is now at 5.8% Y/y from the prior 6.1%, core prices excluding clothing and travel eased to 5.0% from 5.2%. The desk at Morgan Stanley noted an increase in the probability of a September rate hike pause from the ECB, however, it added that the decision is now hanging from next week’s inflation data. Morgan Stanley said that the September hike is now less likely and would require an upward surprise in eurozone inflation data. EU August flash inflation print will be released on Thursday's session.


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