Eurostat releases its flash estimate of euro area consumer price inflation on Tuesday, with economists expecting headline inflation to remain close to the European Central Bank's 2% target. The data will be the final major price reading before the ECB's July Governing Council meeting.

National releases from Germany, France, Spain and Italy due earlier in the week will feed into the bloc-wide estimate. Analysts at Deutsche Bank and ING have projected headline inflation in a range of roughly 1.9% to 2.1%, with core inflation, which strips out energy and food, easing slightly toward the mid-2% area.

The ECB cut its deposit rate to 2% in June 2025 and has signalled that policy is now near a neutral setting. President Christine Lagarde has repeatedly said the central bank will take decisions meeting by meeting and remains data-dependent, with no pre-committed path on rates.

A reading in line with expectations would strengthen the case for the ECB to hold rates steady at its next meeting, allowing policymakers to assess energy prices and trade tensions. Energy costs remain a watchpoint after Qatar and major suppliers urged the European Union this week to revise its methane rules over supply concerns.

Lagarde told reporters after the June meeting: "The disinflation process is well advanced, and we are in a good place," signalling caution against further easing while inflation sits near target.