The euro area outlook suddenly looks a bit less stagflationary. Against a backdrop of sharp retracement in crude oil prices, the recent data flow points to a degree of economic resilience and limited signs of broadening inflation pressures. On inflation, the headline rate eased from 3.2% to 2.8% Y/Y in the flash estimate for June, comfortably below the consensus expectation (3.0%). The energy component slipped back (from 10.8% to 8.7%) on falling pump prices, as expected. But there were also signs of broad-based easing beyond energy. The services rate decreased by 0.3pp to 3.2%. Disinflation in the food component ... (full story)