Commenting on slowing Eurozone inflation in marked contrast to the US and UK, Jesús Cabra Guisasola, Associate at Validus Risk Management, said: “June CPI numbers for the Eurozone came in line with the market consensus (1.9% YoY) and lower compared to May (2.0%). Additionally, the Core CPI also slowed down to 0.9%, in marked contrast to the recent surprise prints in both the US and UK.

“Unlike the US and UK CPI data which helped initiate a move towards a more hawkish tone, these numbers will continue to support the ECB’s ultra-loose monetary policy in the coming months, as Chief Economist Lane already signalled that the September meeting would be too soon for a tapering debate.

“So far the market reaction has been muted. However, the euro has come under some downside pressures in recent weeks, with the currency depreciating against the dollar from $1.22 to below the $1.19 level.”