Euro area HICP inflation was flat at 0.0% MoM in July and held steady at 2.0% YoY, in line with the ECB’s target but slightly below expectations of 1.9% YoY.

• Core inflation was -0.2% MoM and 2.3% YoY, unchanged from the previous reading of 2.3% YoY for the last three months.
• Services inflation accelerated to 3.1% YoY from 3.0% YoY, with a strong 1.0% MoM gain.
• Non-energy goods prices fell -2.4% MoM, but despite the sharp decline, the annual rate accelerated 0.3 ppts to 0.8% YoY.
• Food, alcohol & tobacco inflation accelerated to 3.3% YoY (from 3.1%) driven by processed food (+2.7% YoY) and alcohol/tobacco.
• Energy prices fell -2.5% YoY (vs -2.7% YoY in June) and dropped -0.2% MoM.