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The European Central Bank will announce its interest rate decision in ten minutes.June 11th - Forex strategist Karamanis stated that euro options indicate traders expect another calm day for the ECB decision, as the rate hike has already been fully priced in by the market, and this meeting is largely seen as procedural. The euro could see volatility if officials hint at a possible consecutive rate hike in July, rather than a pause until September (a probability currently priced in by the swap market at less than 50%). However, for the forex market to experience significant volatility, the markets pricing in three rate hikes before the end of the year would need to be substantially challenged. Lagarde is unlikely to do much in this regard – she is expected to offer little beyond reiterating that future decisions will rely on data.On June 11th, Nanjing held a football work conference. The conference heard reports on the construction of a key national football development city, the development of school football in the city, and preparations for the Jiangsu Super League. Representatives from relevant municipal departments also shared their experiences. The conference emphasized the need to fully implement key tasks for football reform and development. Focusing on "nurturing talent," the conference stressed strengthening the youth training system, consolidating the foundation of school football, ensuring smooth career advancement channels for players, and promoting the large-scale growth of young football talent. Focusing on "strengthening teams," the conference called for promoting the healthy development of professional football teams, cultivating a fertile ground for social football, and solidifying support for professional teams. Focusing on "building a brand," the conference emphasized actively introducing high-level competitions, organizing local competitions effectively, and continuously amplifying the spillover effects of competitions to enhance Nanjings football reputation through high-quality events. Focusing on "optimizing the ecosystem," the conference stressed the importance of strengthening football culture and industry management, creating a clean and healthy football environment, and continuously injecting vitality into football development.June 11 – According to The Washington Post, oil and gas industry executives have warned the White House that gasoline prices could surge in the coming months as fuel inventories fall to extremely low levels. This would make it more difficult for the Trump administration to curb inflation, which has already impacted American consumers. According to multiple sources familiar with the conversations, industry officials said they are doing everything they can to warn that inventories that previously mitigated price increases are rapidly dwindling as commercial and government stocks are quickly depleted, and prices are poised to soar. These executives warned that some inventories could be completely depleted within weeks, coinciding with the peak summer travel season. Bob McNally, founder of Rapidan Energy Group, said, “I’m absolutely certain that the White House—from the president to officials at all levels—is fully aware that oil companies and analysts are almost universally concerned about oil price movements this summer.”June 11th - Analyst Weber stated that the market widely expects the European Central Bank (ECB) to raise interest rates for the first time since 2023 later this month. Due to the unique nature of the impact of the Iran war, the ECB faces a dilemma. On the one hand, inflation is above 3%, and even after excluding food and energy costs, it has accelerated to 2.5%—far above the central banks 2% target. On the other hand, economic growth has been impacted, with business surveys showing a sharp decline in economic activity in May. Any rate hike would exacerbate these headwinds. However, the current consensus is that inflationary pressures are too great to ignore. This could mean further action after tonight. Given the high degree of uncertainty and the ongoing efforts by the US and Iran to end the war, ECB President Lagardes statements are likely to be more ambiguous. At the same time, she doesnt want to appear complacent, so she may emphasize the ECBs vigilance and close monitoring of the latest data.

A consensus on a petrol price cap eludes EU states for the time being

Skylar Williams

Oct 13, 2022 12:00

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The European Union will disclose measures next week to launch collective gas purchasing within months and establish an alternative gas price benchmark, but a summit of EU members on Wednesday left it unclear whether the package will include a gas price cap.


As Europe prepares for a winter of scarce Russian gas, a crisis in the cost of living, and the looming risk of a recession, the 27-nation EU is pondering its next move to contain rising energy prices and protect citizens from soaring bills.


EU energy commissioner Kadri Simson indicated, following a meeting of EU energy ministers in Prague, that the European Commission would propose measures to build an alternative EU gas pricing baseline and promptly commence joint gas purchasing among EU nations.


Simson indicated, however, that it remained unclear whether there was sufficient support among countries for a price restriction on gas used for power generation to be added to the Oct. 18 package - a policy desired by various nations.


She added that the package will detail how a "temporary mechanism" to regulate gas prices may function, as well as the risks it would entail.


The Czech Minister of Industry, Jozef Sikela, stated that ministers agreed that cooperative gas purchasing should commence by next summer and that the Czech Republic, which currently holds the rotating EU presidency, will convene an extraordinary meeting of ministers in November to ratify the next measures.


Sikela added, "I am certain that today's summit has helped to reconcile conflicting perspectives among member nations."

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With gas prices around 90% higher than a year earlier, the majority of EU countries have voiced a desire for a gas price cap, but have had trouble agreeing on its design - whether it be a price restriction on all gas, pipeline gas, or only power-generating gas.


In June, Spain and Portugal put a limit on the price of gas used in power generation, which contributed to the reduction of local electricity costs. As a result of the increase in Spain's gas consumption, support has emerged among other EU members to implement the measure on a larger scale, despite worries that it may increase gas demand across the bloc.


The outcome of the meeting was consistent with many of the measures recommended in a proposal by Germany and the Netherlands - who are concerned that high gas price ceilings will make it difficult for Europe to attract supply - while avoiding the cap that 15 other EU nations have urged Brussels to adopt.


The German and Dutch plan, acquired by Reuters, backed an alternative benchmark gas price, pooled gas purchase, and negotiated lower rates with non-Russian suppliers, in addition to stronger gas conservation targets for this winter.


Energy Minister Terje Aasland of Norway, who attended Wednesday's meeting along with other European non-EU members, indicated that his country "does not advocate" a gasoline price cap.


Following its invasion of Ukraine, Russia curtailed its gas exports to Europe, which it attributed on Western sanctions imposed in response to the conflict.


EU states have already adopted emergency energy windfall profit levies, gas storage filling penalties, and power consumption limitations to offset the surge in energy prices.


The statement by Germany that it would spend up to 200 billion euros to shield its homes and businesses from high energy costs has increased the pressure to agree to additional EU-wide measures, with other countries objecting to the unequal distribution of national support.

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