Eurozone: EC meeting and inflation – Danske Bank

According to analysts from Danske Bank, the key event in the Eurozone next week will be the European Council meeting. Regarding data, EZ June inflation is due, they expect the annual rate at 2.0%.

Key Quotes:

“In the euro area, the key event next week is the European Council meeting on 28-29 June. Several topics will be in focus: migration, Brexit, security and eurozone reforms are on the agenda. Migration will be one of the hottest topics, especially following the pressure on Merkel from her CSU coalition partner to find an EU-wide solution to migration problems.”

“We will also closely follow what stance the new Italian government will take on the topics.”

“On Friday, the June HICP figures are due for release. Headline inflation has surprised to the upside in May reaching 1.9% y/y driven by higher oil prices. This also has led the ECB to revise up its inflation forecast for 2018 to 1.7% (from 1.4%) in its new saff projections.”

“We expect the June figure at 2.0% y/y, but emphasise that headline inflation will only remain at this level for a few months before declining back to around 1.5-1.6% as the energy price base effects wear off. We expect core inflation to remain unchanged at 1.1%.”