In the Eurozone last week, inflation data estimates and July’s unemployment data were released,
Euro area annual inflation is expected to reach 2.0 percent in August 2018, down from 2.1 percent in July 2018, according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, energy is expected to have one of the highest annual rates in August at 9.2 percent compared with 9.5 percent in July, followed by food, alcohol & tobacco at 2.5 percent, stable compared with July. Services are forecast to be 1.3 percent, compared with 1.4 percent in July and non-energy industrial goods at 0.3 percent, compared with 0.5 percent in July.
Markets focused on inflation data, in particular, because it could affect the decisions of the European Central Bank (ECB). Although the data was slightly below market expectations, it was in accordance with the ECB’s target.
The ECB will announce interest rate decisions on Sept. 13 in Frankfurt where President Mario Draghi will hold a press conference.
The euro area’s seasonally-adjusted unemployment rate was 8.2 percent in July, stable compared with June 2018 and down from 9.1 percent compared to July last year. This is the lowest rate recorded in the euro area since November 2008.
The European Union’s unemployment rate was 6.8 percent in July 2018, down on a monthly basis from 6.9 percent in June 2018 and from 7.6 percent year-on-year compared to July 2017. This is the lowest rate recorded in the EU since April 2008.
Eurostat estimates that 16.82 million in the EU were unemployed in July 2018, out of which 13.38 million were in the euro area. Compared with June 2018, the number of unemployed decreased by 82,000 in the EU and by 73,000 in the euro area. Compared with July 2017, unemployment fell by 1.949 million in the EU and by 1.368 million in the euro area.
In July 2018, the unemployment rate in the United States was 3.9 percent, down from 4.0 percent in June 2018 and from 4.3 percent in July 2017.
-The week ahead
This week, markets will follow the speeches of European Central Bank officials and the visit of Chancellor Merkel to the Frankfurt Stock Exchange. In addition, Euro area Quarter 2 GDP data will be released.