Eurozone Inflation Edges Up as Markets Eye ECB Hike in September

The Eurozone's inflation rate has ticked up in France and Spain due to rising energy costs, particularly motor fuels. According to early August readings, headline inflation rates rose to 2.7% year-over-year in France and 4.5% year-over-year in Spain.

Core inflation fell in both countries, indicating limited second-round effects from the Iran war that began six months ago. Market expectations have priced in a 25-basis-point ECB hike in September, with almost one additional move thereafter.

The US saw July headline PCE inflation print at 3.7% year-over-year versus 3.6% consensus, while core PCE came in at 3.3% year-over-year and 0.2% month-over-month. Revised Q2 GDP held steady at 1.5% SAAR, with private consumption, imports, and the price deflator all lifted.

Germany's Ifo index improved, with the current assessment at 88.5 (87.0 consensus; 86.6 prior) and expectations at 89.1 (87.5 consensus; 86.6 prior). Next week's focus includes nonfarm payrolls at 65k versus 55k consensus.