Flash German HICP inflation to print at 0.6% yoy

June Flash German CPI is expected to print a tick lower than in May at 0.6% yoy. On the details, more of the same is expected with the energy component again providing the biggest pull for the headline number as gasoline prices continued to rise (1.1% mom) according to the European Commission weekly oil price bulletin data. 

In May, the energy component explained half of the quickening in headline inflation. Energy prices inflation rose from -5.9% yoy to 5.0% yoy, adding 10 bp to headline inflation. 

The food component rose from 1.1% yoy to 1.4% yoy in May, adding 3 bp. On the core components, non-energy non-food goods price inflation was unchanged at 0.9% yoy while services prices quickened from 1.4% yoy to 1.5% yoy, adding 6bp to the headline figure. 

"We expect the prices paid for services to fall back a bit in June after their big jump in May which should also keep a lid on the headline figure. Looking ahead, we expect German HICP inflation to average 0.5% in 2015 and 1.7% in 2016, while the core metric should remain stable at 1.2% in 2015 and 1.4% in 2016",says Societe Generale.