Annual inflation in the euro area is projected to reach 2.0% in June 2025, a slight increase from 1.9% in May, according to a flash estimate released by Eurostat, the statistical office of the European Union.
Among the main components of euro area inflation:
The modest rise in headline inflation brings the euro area closer to the European Central Bank’s target, while the continued decline in energy prices offers some relief to households and businesses facing broader cost pressures. The steady increase in service prices indicates persistent underlying inflation within the region, an element the ECB will closely monitor as it considers its monetary policy stance in the coming months.
Eurostat will publish detailed final inflation figures for June later in July.
Source: Eurostat
Easing oil prices and retreating Treasury yields (around 5.23% ) provided some relief to financial markets as improving US-Iran diplomatic prospects reduced immediate inflation concerns.
Hawkish Federal Reserve meeting minutes reinforced expectations for another rate hike this year, pushing Treasury yields higher and supporting the US dollar.
Oil inventories are nearing depletion, increasing supply risks and supporting prices. Aramco estimates less than 6 billion barrels remain after over 1 billion barrels were drawn this year, while the IEA is preparing a 100-million-barrel release. The US 10-year Treasury yield stabilized near 5.31% on Wednesday, close to 24-year peaks, as markets awaited the Fed's minutes.
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