Eurozone next week: CPI and Ifo - Danske Bank

Next week, data to be released in the Eurozone includes CPI and the Ifo survey. According to analysts from Danske Bank, headline inflation is set to tick lower in August, while underlying inflation continues its move upward.

Key Quotes: 

“In the euro area, the HICP figures for August are due for release on Friday. In July, headline inflation reached 2.14% y/y, the highest level since 2012 and just above the ECB’s target. We expect the August print to decrease slightly to 2.08% y/y as the positive contribution from energy prices has peaked. While headline inflation developments are still primarily driven by the food and energy component, core inflation remains muted at 1.07% y/y in July – a level it has been fluctuating around since the beginning of 2017. We expect the August figure to edge up marginally to 1.12% y/y in line with the recent trend of gradually rising underlying inflation pressures, not least driven by accelerating negotiated wage growth (1.8% y/y in Q1 18). Note that German CPI figures are already released on Thursday.”

“Ifo expectations for August are due out on Monday. In line with the recent signals from ZEW and PMI, we look for a stabilisation in the index, also as the immediate threat of tariff measures has receded somewhat.”