Preliminary data shows easing price pressures in France, Germany, and Italy, reducing urgency for ECB rate hikes.
Preliminary inflation data for June revealed cooling price pressures in France, Germany, and Italy, the Eurozone’s largest economies. French inflation eased, while German states reported further declines in inflationary trends, though services inflation in Italy remained sticky, only marginally lower than prior months.
The data follows mixed signals from ECB policymakers, with some suggesting a July rate hike remains possible on a negative inflation surprise. However, recent trends have alleviated immediate pressure for action, as energy price retreats and muted labor market dynamics weigh on inflation expectations.
Markets showed little reaction in early trading, with gold consolidating near $4,000 and FX markets awaiting key US labor and inflation reports later this week.