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Deutsche Bank comments that despite recent declines in Oil and Euro inflation swaps, ECB chief economist Philip Lane warns that earlier energy shocks will still feed through to prices. Markets remain fully priced for a second ECB rate hike this year after last week’s move, a backdrop that has coincided with a modestly firmer EUR/USD.
Lane flags lingering inflation effects
"Nevertheless, even as oil prices have come down again, there were still warnings about the inflation shock."
"For instance, ECB chief economist Philip Lane warned that inflation was still in the pipeline, given “four months of elevated energy prices”."
"He also warned that “There’s going to be indirect effects on food, on goods, on services this year and into next year.”"
"So even with oil prices coming down again, markets are still fully pricing in a second ECB hike before the end of the year, following on from last week’s move."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)












