The market consensus for the European June inflation numbers is very soft, both seasonally adjusted and relative to the developments seen in June over the past 5 years.

It seems like the bet on a soft transportation category (car insurance and the likes) is the major reason behind the weak EUR-flation consensus numbers, but there is a statistically solid case to bet on the upside here, even a potentially large surprise to the upside. We see risks clearly tilted in that direction.

Our nowcast of a 0.28 MoM in June in Transport is incredibly soft relative to typical patterns, but we are still not able to get as low as the consensus inflation numbers.

Chart 1: Nowcasts for the Euro-zone HICP