“Good news” on inflation: ECB’s Nagel sees no second-round effects

Joachim Nagel, European Central Bank (ECB) Governing Council member and Bundesbank President, expressed confidence on Tuesday in the global economic outlook despite geopolitical tensions in the Middle East.

According to comments reported by Reuters, Nagel said the global economy remains “on a growth path” despite the Middle East crisis.

On inflation, the ECB policymaker welcomed the easing in core and services inflation. He added that he is not seeing second-round effects on inflation.

Nagel also commented on recent foreign exchange interventions involving the Japanese Yen (JPY). He said he would have welcomed coordination on these interventions and noted that the use of the Euro (EUR) in US and Japanese interventions was discussed at the Group of Twenty (G20) meeting.

Key takeaways

The global economy is on a growth path, despite the Middle East crisis.
Easing in core and services inflation is good news, I am not seeing second-round effects on inflation.
I would have welcomed coordination on yen intervention.
Euro use in US/Japan interventions was discussed at the G20.

Market reaction

The Euro (EUR) showed little reaction to Nagel’s comments. EUR/USD trades around 1.1590 at the time of writing on Tuesday, down 0.24% on the day.