France’s preliminary CPI for July increased by 1.0% year-on-year, matching expectations. The previous figure also stood at +1.0%.<\/p>\n
The Harmonised Index of Consumer Prices (HICP) rose by 0.9% year-on-year, surpassing the anticipated 0.8%. The prior HICP reading was also +0.9%.<\/p>\n
Service price inflation remains a noticeable concern, though the overall data is not expected to influence the European Central Bank’s current outlook.<\/p>\n
This French inflation number doesn’t change the big picture, but it does confirm what we’ve been watching closely. Services prices are refusing to cool down, which is a key issue for the European Central Bank. The overall number was expected, so there is no immediate shock to the market.<\/p>\n
Looking back, this fits the pattern from the June 2025 Eurozone inflation data, which came in at 2.3% and prompted the ECB to pause its rate-cutting cycle. Germany’s preliminary July inflation also just printed at a stubborn 2.5%, reinforcing the idea that the fight isn’t over. The ECB, which holds its deposit rate at 2.75%, is likely stuck for now and will watch to see if this trend continues into the August data release.<\/p>\n
For interest rate markets, this means the chance of an ECB rate cut in September is probably getting smaller. We should expect short-term rate futures, like the December 2025 \u20acSTR futures, to edge slightly lower as traders price out further easing. This reinforces a “higher for longer” rates view for the rest of the year.<\/p>\n
This persistent inflation gives the Euro some support against currencies like the US dollar, where the Federal Reserve is signaling a more stable policy outlook. We could see traders buying short-term call options on the EUR\/USD to position for a potential grind higher. The market may have gotten too comfortable pricing in ECB cuts that are not coming as quickly as hoped.<\/p>\n
For equities, this is not great news as stubborn inflation and higher rates can squeeze company profits. We might consider buying protective puts on the Euro Stoxx 50 index as a hedge against a market pullback. The memory of the high inflation we saw back in 2022 and 2023 means any sign of its return will make investors nervous.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" France’s CPI rose 1.0% in July; HICP exceeded expectations at 0.9%, with service inflation persisting.<\/p>\n","protected":false},"author":62,"featured_media":17023,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=27773"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17023"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=27773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=27773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=27773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}