Euronext 100 index is in focus on Friday after Eurostat (Statistical Office of the European Union) said inflation in the region hit a new high in June.
Senior euro zone economist reacts to the CPI print
Headline inflation, as per Eurostat, was up 8.6% on a year-over-year basis. This compared to 8.5% expected and 8.1% in the prior month. According to Maeva Cousin – Senior Economist at Bloomberg:
Measures deployed by governments to stem the impact of households from surging commodity prices are failing to break the wave. As Moscow tightens its grip on gas supplies, there may be more gains to come.
CPI climbed into double digits in Spain for the first time since 1985. On the flip side, inflation was down 0.5% in Germany on a month-over-month basis. Experts, however, attribute the decline to new government subsidies and do not see it as a sign of peak inflation.
What to expect from the ECB this month?
The European Central Bank (ECB) is expected to raise rates later in July followed by another hike in September that will lift the main rate back into the positive territory for the first time since 2014.
Still, a possible “recession” is yet to become a prominent narrative in the euro zone. According to ECB President Christine Lagarde:
We are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum.
Euronext 100% is down more than 15% for the year.
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