Inflation also remains stubborn in the Euro Area, where preliminary August readings suggested the yearly headline CPI rate was stuck at 5.3%. Core prices decelerated a couple of ticks to 5.3% y/y, but not enough to provide much comfort to the ECB. Meantime, producer prices fell 0.5% in July, deepening the yearly contraction to 7.6%, suggesting consumer prices should temper in the coming months.
WTI oil prices gained almost 8% last week as supply cuts continue to bite. Extreme weather, particularly the landfall of Hurricane Idalia in the U.S., also provided a boost. As of Tuesday, WTI is trading above $87/bbl on news that Saudi Arabia will extend output cuts, and continues to add upside risk to the short-term inflation path.