Eurozone inflation eases after fresh data from France, Germany and Italy showed further cooling in prices ahead of the euro area CPI report due on Wednesday. As a result, the figures reduced the chance of an ECB rate hike in July, according to the source article.
The session stayed calm, with no major market moves reported. However, inflation data from the three largest eurozone economies led the day’s developments.
A Reuters report cited by the source said recent inflation trends had eased pressure on the ECB to raise rates in July. Still, the report said a case for a move could emerge if June inflation data turned out badly.
Eurozone Inflation Eases Before CPI Data
The source article said Wednesday’s eurozone CPI report now looks less likely to bring an upside surprise. That view followed the softer readings from France, Germany and Italy earlier in the day.
Therefore, a July ECB rate increase looked very unlikely in the source account. The article linked that view directly to the latest national inflation figures.
ECB policymakers Lane, Sleijpen, Nagel and Wunsch also commented on inflation. According to the source, they said the sharp drop in oil prices should help inflation and did not give a timeline for the next rate hike.
ECB Officials Signal Caution on Timing
Taken together, their remarks pointed to a pause in July, the source article said. Meanwhile, it said policymakers could still consider a rate hike in September if needed.
The article added that waiting would give the ECB more data over the summer. That, in turn, could help officials make a better decision later.
Later in the day, attention was set to shift to the United States. The source said US Job Openings were expected at 7.295 million, compared with 7.618 million previously.
It also said US Consumer Confidence was expected to rise to 94.4 from 93.1. Meanwhile, the source linked that expected gain to the end of the US-Iran war and lower energy prices.
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