07:36 AM EDT, 09/30/2024 (MT Newswires) -- The main focus this week in the eurozone is on inflation in September, said Daiwa Capital Markets.

Eurozone flash inflation for September is slated to be released on Tuesday, at 5 a.m. ET.

Given Monday's "soft" German and Italian data as well as the "significant" declines in France and Spain last Friday, the bank expects the headline eurozone HICP rate to drop 0.4ppt to 1.8% year over year, which would be the first sub-target reading since June 2021.

The decline this month will be led by energy as gasoline and heating gas oil prices were trending in the first three weeks of the month down between 3.5-4.5% month over month. But with services inflation also set to moderate and core goods inflation to remain subdued, Daiwa sees core inflation to also ease 0.1ppt to a five-month low of 2.7% year over year.

In Italy, HICP inflation fell 0.4ppt to 0.8% year over year, and Germany's regional numbers suggest that headline inflation will fall below 2% year over year for the first time since February 2021 -- probably down 0.2ppt to 1.8% year over year on the HICP measure.

National inflation figures from Ireland and Portugal due Monday will also provide a guide to the eurozone figure, added the bank.