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Euro area inflation nudges up in July, keeps the pressure on the ECB

Euro area headline CPI rises to 2.9%, core inflation ticks up to 2.5%; market odds for September ECB hike climb to 66%.

· Source: investinglive.com

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Summary

Eurozone inflation surprised to the upside in July, with both headline CPI (+2.9%) and core CPI (+2.5%) beating expectations. The concern isn't energy alone—services inflation accelerated to 3.3% and monthly rates show broad-based pressure. Market pricing has shifted: September rate-hike odds moved from 64% to 66%, and traders are now pricing ~38 bps of total hikes by year-end with another ~52 bps before mid-2027. This data keeps the ECB under pressure despite hopes for a summer pause.

HomeEuro area inflation nudges up in July, keeps the pressure on the ECBEuro area inflation nudges up in July, keeps the pressure on the ECBNewsJustin Low8 hours agoBoth headline and core annual inflation climb higher on the monthJuly preliminary CPI +2.9% vs +2.9% y/y expectedPrior +2.

8%July preliminary core CPI +2.5% vs +2.4% y/y expectedPrior +2.

4%Headline annual inflation in the euro area is seen climbing slightly in July to 2.9%, moving above the 2.8% estimate in June.

However, the more concerning development is a further nudge up in core annual inflation too. That is seen moving up to 2.5% in July from the 2.

4% estimate in June.So, it's not just a case of energy prices moving up as being the culprit here. The breakdown for July shows:Food price inflation +1.

2% vs +1.5% priorEnergy price inflation +10.0% vs +8.

5% priorServices inflation +3.3% vs +3.2% priorOf note, the monthly rate shows a strong push up in both energy prices (+2.

4%) and service prices (+1.1%) while food prices were flat.All in all, it's a signal to the ECB that they can't quite rest on their laurels when they return from the summer break in the months to come.

If the trend keeps as it is in August, another rate hike in September looks to be well on the cards at this rate.Looking to market pricing, traders are seeing ~66% odds of a rate hike in September next. That is just a mild step up from ~64% earlier this week.

By year-end, traders are still pricing in ~38 bps of rate hikes with ~52 bps of rate hikes priced before the middle of 2027.ADVERTISEMENT - CONTINUE READING BELOWText SizeTagsEURAdd as a preferredsource on GoogleMost PopularBarkin: Rate decision still a "close call"EURUSD bounces higher and back toward key retracement targetEuropean indices close the day and the week mostly higher. AUDUSD retraces some of the gains seen yesterday.

What next for traders?Nikkei: US Treasury Department tells traders, prepare for potential additional interventionUSDCAD buyers reverse the declines from yesterday. MA resistance looms above.

Fed's Logan: Favors a rate hike as inflation is not on a sustainable course Univ. of Michigan Consumer confidence final for July 55.2 vs 54.

0 estimateUSD moves higher as employee benefits rise and so do yields. Canada May GDP 0.3% versus 0.

2% expectedADVERTISEMENT - CONTINUE READING BELOWBest in 2026SponsoredGeneral Risk WarningBest Futures Brokers in USA for 2026: Detailed ComparisonBest Prediction Market Platforms in 2026: Detailed ComparisonBest Prop Firm in 2026: Detailed ComparisonBest Forex Brokers in 2026: Detailed ComparisonBest Online Brokers in the US 2026: Detailed ComparisonADVERTISEMENT - CONTINUE READING BELOWADVERTISEMENT - CONTINUE READING BELOWTelegram CommunityGain Access

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