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30 Jun 2014
Today's EMU inflation data suggests CPI should stay below 1% for a while - BNP Paribas
FXStreet (Łódź) - According to BNP Paribas economist Clemente de Lucia, the fact that Eurozone headline CPI was stable in June at 0.5% could mean that this year inflation would remain below 1%, averaging 0.6% and rising slightly above 1% next year.
Key quotes
"Inflation was stable at 0.5% in June according to Eurostat flash estimates. The fall of food prices (-0.2% y/y) offset the slight increase of energy and core inflation."
"By country, inflation accelerated in Germany to 1% while it eased further in Italy and Spain."
"Going forwards, we expect inflation to remain weak and below 1% for a while and averaging 0.6% this year and being only slightly above 1% next year."
After just launching a package of measures in June and having just revised downward its inflation projections, we do not expect the ECB to embark on further actions in July. As stressed by President Draghi, several quarters will be needed to assess the effects of these measures on the real economy."
"Yet, probably the ECB will signal that it is ready to embark on further actions, such as broad asset purchases if needed. Conditions, however, has to drastically deteriorate before we can see the ECB doing this."
Key quotes
"Inflation was stable at 0.5% in June according to Eurostat flash estimates. The fall of food prices (-0.2% y/y) offset the slight increase of energy and core inflation."
"By country, inflation accelerated in Germany to 1% while it eased further in Italy and Spain."
"Going forwards, we expect inflation to remain weak and below 1% for a while and averaging 0.6% this year and being only slightly above 1% next year."
After just launching a package of measures in June and having just revised downward its inflation projections, we do not expect the ECB to embark on further actions in July. As stressed by President Draghi, several quarters will be needed to assess the effects of these measures on the real economy."
"Yet, probably the ECB will signal that it is ready to embark on further actions, such as broad asset purchases if needed. Conditions, however, has to drastically deteriorate before we can see the ECB doing this."