Eurozone flash headline HICP rises strongly by 3.2% YoY vs. 2.9% estimates

Eurozone flash headline HICP rises at a stronger pace of 2.9% YoY, as expected

Annual Harmonized Index of Consumer Prices (HICP) in the Eurozone, as measured by changes in the prices of a representative basket of goods and services in the European Monetary Union, rises at a faster pace of 2.9% in July, as expected, against 2.8% in June. On a monthly basis, the inflation data rises 0.2% after declining 0.1% in June.

Eurozone's annual core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – also grows at a faster pace. The underlying inflation data arrives at 2.5% YoY, while it was expected to remain steady at 2.4%. Month-on-month core HICP remains flat after a 0.2% growth.

Market reaction

The initial response by the Euro (EUR) towards the inflation data appears to be slightly negative. As of writing, EUR/USD trades 0.1% lower at around 1.1517.

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.