After a sharp decline in May (from 2.7% Y/Y to 2.4% Y/Y), German CPI inflation stabilized in June. According to the first estimate, German CPI was flat compared to the previous month and the annual rate stayed unchanged at 2.4% Y/Y, while the consensus was looking for an increase to 2.5% Y/Y. The details show a mixed picture as prices of clothing & shoes, food and transportation fell sharply, while prices of alcohol & tobacco, leisure & entertainment and hotels & restaurants rose significantly in June. On Thursday, euro area CPI inflation is expected to pick up slightly from 2.7% Y/Y to 2.8% Y/Y, providing further evidence for the ECB to raise rates at the meeting next week, but the lower than expected German figure suggests that a downward surprise for the euro zone CPI reading is not excluded.