Eurozone CPI Slows to 2.8%, Bolstering ECB Pause Case

Eurozone inflation cooled more than expected in June, with headline CPI falling to 2.8% y/y and core to 2.4%, well below forecasts and strengthening expectations the ECB will hold rates steady. The softer print follows hawkish comments from Isabel Schnabel on 28 June calling for further hikes despite lower oil prices, then a more cautious stance from Joachim Nagel on 30 June who said it was too early to decide on additional tightening. The broad-based decline, led by energy and services, reduces immediate pressure on the central bank after its June 25 bps rate hike to 2.25%.