ECB's Lagarde welcomes US-Iran deal as energy tensions ease
European Central Bank President Christine Lagarde welcomed the preliminary US-Iran agreement, citing potential for the reopening of the Strait of Hormuz. She emphasized that while the diplomatic progress is a positive signal, significant issues regarding uranium enrichment remain unresolved.
Bundesbank cautions on inflation outlook
Joachim Nagel, president of the Bundesbank, tempered market enthusiasm regarding the deal's impact on inflation. Nagel stated that the eurozone faces a delayed effect, as restoring oil supplies to pre-conflict levels will require several months.
Market participants currently anticipate a long-term resolution, driving oil prices down by approximately 5%. However, with eurozone annual inflation reaching 3.2% in May—surpassing the ECB’s 2% target—Nagel reaffirmed that all monetary policy options remain on the table for the July 22-23 Governing Council meeting.
The parties involved are scheduled to sign a memorandum of understanding in Geneva on June 19, a move that could normalize shipping routes through the Strait of Hormuz.
Translation by Iurie Tataru
