Flash August German HICP inflation to print at 0.1% yoy

Flash German HICP is expected to remain unchanged at 0.1% yoy in August. In the month of July, the country's HICP inflation remained unchanged at 0.1% yoy while the national measure slowed one tick to 0.2% yoy. The energy component fell from -5.9% yoy in June to -6.2% yoy (cutting 3bp) while a more considerable drop was observed in the rate of food price increases, which fell from 1.0% yoy in June to 0.4% yoy (cutting 5bp) in July. 

On the core details, the services component recovered to 1.1% yoy in July (adding 10bp), driven by an increase in net rents exclusive of heating expenses, road passenger transport, hairdresser services and other services for personal care and catering services in restaurants and cafes. Prices of goods remained unchanged at 0.7% yoy in July.

German HICP inflation is expected to average 0.3% in 2015 and 1.5% in 2016, while the core metric should average 1.1% in 2015 and 1.4% in 2016, estimates Societe Generale.