Europe: Inflation data softening – Deutsche Bank

Sandeep Kanihama FXStreet Contributor

According to analysts at Deutsche Bank, we did get a bit of a wakeup call yesterday was with the inflation data in the UK.

Key Quotes

“Indeed core CPI missed fairly materially (+1.9% yoy vs. +2.1% expected) and fell two-tenths from May, while headline CPI (0.0% mom vs. +0.2% and +2.4% yoy vs. +2.6% expected) also came in softer than what both the market and BoE expected.”

“Sterling immediately dropped post the data and touched an intraday low of $1.301 (-0.80%) before paring a bit of that to close at $1.3069, albeit still the lowest since last November.”

“A BoE rate hike next month was not quite a dead cert and that inflation data perhaps adds a bit of a curveball. That said other data in the UK has been fairly solid of late and the market continues to price in a slightly greater than 80% change of a hike next month.”

“Meanwhile the core CPI print for the Euro area also came in on the softer side at +0.9% yoy, a one-tenth of a percent downward revision from the flash reading. However that masked what was really just a bit of rounding as the actual difference between the flash and final print was only 0.02%.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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