Final Euro area July inflation to confirm flash estimates at 0.2% yoy

The flash estimate of euro area HICP inflation in July was stable, in line with consensus at 0.2% yoy. Core inflation rose to 1.0% yoy in July vs 0.8% yoy in June, above the expectations of 0.9% yoy and the consensus estimate of 0.8% yoy. 

"The energy component dipped from -5.1% yoy in June to -5.6% in July, cutting 5bp from the headline. Along with energy, the food (including alcohol and tobacco) component also proved to be a drag as it fell from 1.1% yoy to 0.9% yoy, cutting 4bp from the headline figure", says Societe Generale. 

The non-energy industrial goods component increased from 0.3% yoy in June to0.5% yoy in July, adding 5bp. The prices paid for services rose from 1.1% yoy to 1.2% yoy in July, adding 4bp.

"Looking ahead, euro area HICP inflation is expected to average 0.3% in 2015 and 1.5% in 2016, while the core metric should remain stable at 0.8% in 2015 and 1.1% in 2016", added Societe Generale.