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Nick Kounis, an analyst at ABN AMRO explained that the early July inflation data from Germany (stable at 2.1%), Spain (steady at 2.3%) and Belgium (which edged up to 2.2% from 2.1%) suggest that eurozone inflation was likely also stable.  

Key Quotes:

“This would also be in line with the consensus, for an unchanged rate of 2%.”

“However, looking at the details, it looks as if the risks to the consensus forecast for eurozone core inflation (a rise to 1% from 0.9%) are skewed to downside.”

“Indeed, we expect core inflation to have remained unchanged. We think underlying inflationary pressures remain weak and that core inflation will likely rise more slowly than the ECB expects in the coming quarters.”