ECB's Kazaks says can't yet see full impact of Iran war on inflation, and the situation is a bit worse than the ECB's baseline scenario

Kazaks' comments suggest the ECB is closely monitoring inflation pressures stemming from geopolitical events, particularly the Iran war.

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Context

His observation that the situation is worse than the baseline scenario indicates potential for upward revisions to inflation forecasts, impacting policy expectations and market sentiment across eurozone assets. Traders should consider how this may influence rate paths and risk sentiment in fixed income and currency markets.

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