In the currency market, the prospect of a slower pace of interest rate hikes by the US Federal Reserve weighed on the dollar Wednesday night. In return, the euro rose by almost one US cent to 1.0212 dollars. The US monetary authorities raised the key interest rate by 0.75 percentage points to 2.25 to 2.5 percent. Fed President Jerome Powell said during the press conference following the rate meeting, among other things, that a slower pace of rate hikes may be appropriate. This put the greenback under additional pressure, especially as some investors had expected interest rates to be raised by a full percentage point in the run-up to the Fed’s decision.
The renewed reduction in gas deliveries by the Russian state-owned company Gazprom fueled the gas price rally. As previously announced, Russia has further restricted gas supplies via the Nord Stream 1 pipeline. As long as the future energy supply for Germany is not regulated, the market will depend on the political drip in the Kremlin, said Jochen Stanzl from the broker CMC Markets. Against this background, the European natural gas future continued its rally and at times rose by 14 percent to 228 euros per megawatt hour. “It looks like the shortage will hit everyone,” said a gas trader.
The lowering of the rating outlook for Italy to stable from Italian government bonds that had previously been positively impacted by the agency S&P. In return, the yield on ten-year Italian bonds rose from 3.34 to 3.46 percent. The much-noticed gap between the yields of ten-year Italian and German bonds is thus widening further. The ten-year federal bond yielded at 0.939 percent. With the lowered rating outlook, Italy is threatened with a downgrade in the near future and higher borrowing costs as a result.