UniCredt Research: ECB can remain in a wait-and-see mode
According to the Eurostat flash estimate, eurozone headline inflation eased to 0.4% yoy in July from the previous 0.5%, hitting a new cyclical low. The core rate remained at 0.8% yoy. Today's CPI data have no material implications for next week's ECB meeting. There is no doubt that headline inflation remains well below the ECB's comfort zone, and probably slightly weaker than the ECB had projected in June.
-However, with core inflation remaining relatively resilient at just below 1% and showing signs of stabilization, the ECB can remain in a wait-and-see mode while assessing the effectiveness of the policy measures announced in June. A potential further (moderate) easing in headline inflation next month is unlikely to change this picture.
