German CPI misses forecasts in July
German consumer prices for August printed below forecasts, possibly foreshadowing a lower-than-expected print on a reading on 'core' euro area inflation due the next day.
The rate of advance in CPI in the Eurozone's largest economy was unchanged at up by 2.0% year-on-year, according to preliminary data from the Office for Federal Statistics.
Versus July prices were ahead by 0.1% on the month.
Economists had penciled-in rises of 0.2% and 2.0%, respectively.
In terms of annualised rates of change, price gains for goods and energy accelerated in comparison to the prior month, with their year-on-year rate of change climbing from 2.4% and 6.6% to 2.7% and 6.9%, respectively.
However, the pace of service price increases slowed from 1.6% o 1.4%.
Food price gains also slowed, from a 2.6% rise year-on-year in July to 2.5% for August.
Furthermore, on a harmonised basis, the year-on-year rate of change in headline CPI declined by 0.2 percentage points to just 1.9% (consensus 2.1%).
Commenting on Thursday's data, Claus Vistesen at Pantheon Macroeconomics said: "We think lower energy inflation will depress the headline rate in coming months, to about 1.7% at the end of the year, but we think the core rate will rise to a trend of about 1.5%.
"[...] Given the sensitivity of the Eurozone headline to rounding, we are on alert for a dip in tomorrow's advance core print to 1.0%, though it will be a very close call. This wouldn't change the trend, but it would probably move the market, sending the euro and bond yields lower."
Fabio Fois at Barclays Research was of a similar view, reiterating his forecast for a below consensus print on headline euro area consumer prices of 2.0% year-on-year, versus a reading of 2.1% for July.
Nevertheless, Fois's forecasts were also calling for a reading on 'core' euro area CPI of 1.1%, unchanged from the month before.
He was also expecting French and Italian CPI figures due out the next day to reveal a slower rate of advance in headline inflation.
Eurostat was set to release its Eurozone CPI report at 1000 BST on 31 August.