Euro-area inflation cooled slightly in June, matching the flash estimate:
headline MoM -0.1%, led by energy disinflation (-1.8%). Energy YoY inflation
fell to 8.5% from 10.8% in May. Food inflation slowed to 1.5% YoY (from 1.9%)
and services to 3.2% (from 3.5%), leaving core inflation on a downward path. The
print reduces near-term upside inflation risk and gives the ECB greater
flexibility to wait before adjusting policy over the summer. Key risk: renewed
Middle East tensions could lift oil and gas prices, raising summer price
pressure and increasing the chance of second-round effects.
