ECB official warns of upside inflation risks despite temporary energy price relief from US-Iran ceasefire talks.
Oil futures climbed $1 at the start of the week as geopolitical tensions between the US and Iran showed signs of easing. The two nations agreed to halt strikes and resume ceasefire talks in Qatar on Tuesday, though underlying risks remain due to differing interpretations of the accord and a non-functional hotline.
ECB Executive Board member Isabel Schnabel highlighted persistent inflation risks in food, goods, and services, advocating for further rate hikes. The warning contrasts with the temporary relief in energy prices from the US-Iran truce, underscoring mixed signals for monetary policy.
Early FX markets reflected cautious optimism, with traders monitoring developments in the Hormuz Strait amid fragile diplomatic progress.