Eurozone Inflation Eases as Energy Prices Decline

Eurozone Inflation Eases as Energy Prices Decline

The consumer price inflation rate in the Euro Area was confirmed at 5.5 percent in June 2023, the lowest level since January 2022, mainly due to a decline in energy prices.

However, the core rate, which excludes volatile items such as food and energy, picked up to 5.5 percent, above a preliminary estimate of 5.4%, remaining close to a recent peak of 5.7 percent and supporting the view that ECB policymakers are likely to continue raising rates in the upcoming months.

Energy prices tumbled 5.6 percent versus -1.8 percent in May), while prices rose at a softer pace for both food, alcohol and tobacco (11.6 percent vs 12.5 percent) and non-energy industrial goods (5.5 percent vs 5.8 percent).

On the other hand, services inflation picked up to 5.4 percent from 5.0 percent. On a monthly basis, consumer prices advanced 0.3 percent in June.

Elsewhere, construction output in the Eurozone edged 0.1% higher from the previous year in May of 2023, slowing from the upwardly revised 0.4% increase in the previous month.

The annual decline in building activity remained constant from the previous at 0.3%, while the growth of civil engineering activity slowed to 2.7% from 4.6%. On a monthly basis, construction edged 0.2% higher.

Euro zone bond yields fell again on Wednesday after data showed British inflation cooled more than expected in June, adding to signs that price pressures are easing globally.

Germany’s 10-year bond yield, the bloc’s benchmark, went as low as 2.285% after the data was released, its lowest since June 2. It was last down 5 bps at 2.299%.

Meanwhile, Italy’s 10-year yield was last down 5 bps at 3.962%, after touching its lowest since June 27 at 3.94%. Yields move inversely to prices.

Global bond yields have fallen sharply over the last week since a lower-than-expected U.S. inflation print sparked hopes that central banks will not have to raise interest rates as high as previously expected. #Eurozone Inflation Eases as Energy Prices Decline Nigerian Treasury Bills Yield Rises to 7%