| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | Switzerland | Trade Balance | July | 2.53 | | 2.42 |
| 09:00 | Eurozone | Construction Output, y/y | June | 2.3% | | 0.1% |
| 09:00 | Eurozone | Harmonized CPI ex EFAT, Y/Y | July | 3.7% | 4% | 4% |
| 09:00 | Eurozone | Harmonized CPI, Y/Y | July | 8.6% | 8.9% | 8.9% |
| 09:00 | Eurozone | Harmonized CPI | July | 0.8% | 0.1% | 0.1% |
EUR weakened against most of its rivals in the European session on Thursday after data confirmed the Eurozone’s CPI hit a new record high in July.
Final estimates from Eurostat showed that consumer price inflation accelerated to 8.9% y/y in July from 8.6% y/y in June. This was in line both with its preliminary estimates and economists’ forecasts and marked the highest inflation rate on record.
Surging inflation is seen as a serious challenge for the ECB, as it is forced to hike rates just as a recession looms in the region.
Commenting on the eurozone’s inflation situation, the European Central Bank’s (ECB) executive board member Isabel Schnabel said that the inflation outlook had changed fundamentally since the ECB’s unexpected July decision to hike interest rates by 50 basis points. This statement was interpreted by markets as the fact that she supports another bigger rate rise in September, despite growing recession worries. In Schnabel’s opinion, a technical recession in the region is likely, especially, if energy supplies from Russia are disrupted further. However, she suggested that the recession would only dampen the price pressures, but it won’t be enough to return inflation to the ECB’s target of 2% in the medium term.