ECB’S STOURNARAS: WE ARE BETWEEN ECBS BASELINE AND THE ADVERSE SCENARIO REGARDING THE ENERGY PRICES

ECB Governing Council member Yannis Stournaras indicated the eurozone is navigating between the central bank’s baseline and adverse scenarios for energy prices, reflecting heightened uncertainty around inflation and growth trajectories. This stance underscores the sensitivity of ECB policy path to energy-driven inflation repricing and its potential to prolong elevated rate differentials if supply-side pressures re-accelerate. Energy markets, particularly EU power and natural gas, remain vulnerable to policy responses that could indirectly influence demand through growth-dampening monetary tightening. Simultaneously, eurozone sovereign yields and the EUR/USD exchange rate are exposed to shifts in forward guidance tied to energy-driven macro risks. Traders will watch the upcoming ECB staff macroeconomic projections and the September 12 policy decision for revisions to inflation forecasts and tone on terminal rate duration.

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