The Eurozone’s preliminary Consumer Price Index (CPI) for July shows a yearly increase of 2.0%. This is the same as the previous month and slightly higher than the expected 1.9%. At the same time, the Core CPI, which excludes unstable items like food and energy, increased by 2.4%. This figure is unchanged from June and above the forecasted 2.3%. These numbers indicate steady inflation in the Eurozone, according to Eurostat’s latest data released on August 1, 2025. The Core CPI remaining at 2.4% supports economic evaluations ahead of the European Central Bank’s September meeting.

Implications For The European Central Bank

The latest inflation data for July shows core prices are stable, remaining at 2.4%. This suggests that the European Central Bank may keep interest rates unchanged at their September meeting. The steady inflation situation eases any immediate need for them to make changes. The ECB has maintained its main interest rate at 3.50% since its last increase in March 2025. This new data backs their cautious approach, especially since recent German ZEW Economic Sentiment figures revealed a surprising drop in confidence. With Europe’s economic engine slowing down, the central bank has another reason to pause. For those trading interest rate derivatives, this means the likelihood of a rate hike in the near future is very low. We can expect short-term interest rate futures to reflect this stability, making bets on higher rates riskier. It may be a good time to explore strategies that profit from a lack of changes, as the situation is likely to remain clear until September.

Impact On The Markets

This stability should also keep market volatility down. The VSTOXX, a key indicator of Eurozone stock market volatility, has declined, dropping from over 20 in spring 2025 to around 16 last week. Selling options to gain premium could be a suitable strategy as we expect a quiet period. Regarding the euro, the ECB’s pause puts it in a stable position against other currencies. For instance, recent US inflation data also showed a slowdown, which eases pressure on the Federal Reserve to increase rates further. This suggests that the EUR/USD pair may trade within a narrow range in the coming weeks, providing opportunities for range-bound derivative strategies. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now