• Economic confidence 95.0 vs 94.0 expected
• Prior 93.5; revised to 93.7
• Industrial confidence -7.7 vs -7.2 expected
• Prior -8.0; revised to -7.9
• Services confidence 3.2 vs 3.0 expected
• Prior 2.2; revised to 2.6

That reflects a decent bounce in economic sentiment in the euro area, as per the survey by the European Commission. The good news here is that we are seeing better developments on the inflation front from the previous month. That as the respondents are feeling more positive on the US-Iran outlook with lower oil prices to boot.

Consumer inflation expectations are seen dropping to 34.0 from 40.4 in May, with selling price expectations falling to 22.3 from 26.7 previously.

Overall, it points to a slightly better mood but it’s too quick to say that the worst is behind the euro area economy at this stage.

The inflation outlook remains tricky as the Strait of Hormuz situation isn’t exactly going back to pre-war conditions. As such, policymakers will still be guarded against stagflation risks as the status quo drags on for longer.

This article was written by Justin Low at investinglive.com.