ECB's de Cos: Risks to eurozone inflation outlook remain on upside and have intensified

The European Central Bank Pablo Hernández de Cos is crossing the wires and has said that there are risks to the eurozone inflation outlook that remain on the upside and have intensified, ‘, particularly in short term’.

de Cos has stated that the risks include lasting deterioration of the economy in the eurozone, and persistently high energy & food prices.

''The ECB stands ready to adjust all instruments to ensure inflation stabilises at 2% medium-term target.''

Meanwhile, the comments follow the last meeting where the ECB announced its new Transmission Protection Instrument (TPI), which will let it buy bonds from indebted countries such as Italy to cap any excessive rise in their borrowing costs, helping limit financial fragmentation within the eurozone.

At 1.1027 vs. the greenback, the euro is under pressure as the week moves along with the prospect of another Russian gas supply cut. Russia said on Monday it would cut gas flows to Germany via the Nord Stream 1 pipeline to 33 million cubic metres per day (bpd) from Wednesday. That is half of the current flow, which is already only 40% of normal capacity. Additionally, risk-off sentiment has sent a bid into the US dollar, while US equities are pulled lower following a profit warning from retail giant WalMart which said it would slash prices to reduce inventory. EUR/USD is down 0.89% at the time of writing.