European Central Bank (ECB) official and Governor of the Bank of Portugal, Santos Pereira, stated that there are currently no second-round inflation effects in the Eurozone, addressing concerns during the European trading session [1]. Pereira emphasized that both headline and core inflation levels are significantly lower than those experienced during the 2022 energy shock [1]. He also noted that prices of other goods show no signs of de-anchoring inflation expectations at this time [1].
Pereira specifically addressed France, advising the country to cut its deficit and debt, and to pursue reforms and fiscal prudence [1]. This guidance comes in the wake of a massive sell-off in French bonds, which has been attributed to heightened fiscal concerns [1].
Despite Pereira’s remarks, there was no immediate market reaction in the Euro (EUR). As of the time of reporting, EUR/USD was down 0.62% to near 1.1190 [1].
No forward-looking statements or analyst opinions were provided in the source article [1].
CONCLUSION
ECB’s Pereira has ruled out current risks of second-round inflation effects and called for fiscal discipline in France following a significant bond sell-off. The Euro showed no immediate reaction to his comments, with EUR/USD trading lower. Market participants appear to remain focused on fiscal developments in France.