European Central Bank (ECB) Vice President Luis de Guindos said on Thursday that inflation expectations in the eurozone were "quite anchored," as reported by Reuters.
"Fragmentation goes beyond sovereign spreads, affects household loans," de Guindos added. "If inflation starts to decline, yields on government bonds will start to stabilise."
Market reaction
EUR/USD recovered modestly but continues to trade deep in negative territory. As of writing, the pair was down 0.3% on the day at 1.0410. Meanwhile, the Euro Stoxx 600 Index is down more than 1.5%, showing that safe-haven flows continue to dominate the financial markets.
