Just a few days after gas supplies resumed, Gazprom announced that it would reduce the supply volume through the Nord Stream 1 Baltic Sea pipeline. Interest rate speculation is supporting the euro on the foreign exchange market.
After the announced reduction in gas supplies by the Russian state-owned company Gazprom, gas prices rose significantly on Monday. The relevant European future rose by around twelve percent to 179 euros per megawatt hour. Just a few days after gas supplies resumed through the Baltic Sea pipeline Nord Stream 1, Gazprom will reduce supplies to just around 20 percent from July 27. Another turbine had to be taken out of service for maintenance, the company said as a reason. Fears of delays in Ukraine’s swift resumption of grain exports pushed wheat prices higher. On the Paris Matif exchange, a ton of wheat rose by more than two percent to 325 euros. The trigger for the increase was the Russian attack on the port facilities in the Ukrainian city of Odessa. This leads the grain agreement between the two countries to absurdity, said analyst Tobin Gorey from the Commonwealth Bank. The euro continued to stabilize. The common currency rose up to 0.5 percent to $ 1.0257. According to analysts, many investors no longer expected the US interest rate to rise by a full percentage point, but rather by 0.75 percentage points. On the other hand, according to statements made by some Council members, the European Central Bank (ECB) may be faced with further sharp interest rate hikes in view of escalating inflation.
The currency investors were unimpressed by the renewed decline in the Ifo index, which reflects the mood in the German executive floors. “The significant decline does not come as a complete surprise,” says Thomas Gitzel from VP Bank. “It shouldn’t come as a surprise that companies are much more skeptical about their further business development than in the previous month.”