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On September 17th, Robert Sorkin, chief U.S. economist at PGIM, stated that the latest Federal Reserve meeting signaled that the Fed could implement three rate hikes, or even more if necessary, with just a slight push. This rate hike was hawkish, signaling another rate hike this year. Of the 18 Fed officials who submitted forecasts, eight expect three rate hikes in this cycle by the end of 2027. In a report, Sorkin noted that Fed Chairman Warshs mention of the Fed "withdrawing some easing measures" suggested that he and other participants viewed Wednesdays action as merely a small step towards tightening financial conditions, implying further action is possible. Sorkin added that the risk of further Fed rate hikes remains high if inflation continues to be high.On September 17th, Futures News reported that Zhang Guoqing, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, stated in his concluding remarks that it is essential to thoroughly study and implement the spirit of General Secretary Xi Jinpings important instructions and the requirements of Premier Li Qiangs speech, and to earnestly enhance the sense of urgency, responsibility, and mission in developing advanced manufacturing. He emphasized the need to focus on key areas and crucial aspects, deeply implement the high-quality development action plan for key industrial chains, vigorously develop next-generation intelligent manufacturing, accelerate the upgrading and integrated development of the industrial system, and solidly promote the implementation of various tasks. He also stressed the importance of better leveraging the role of market mechanisms, accelerating the construction of a high-quality standard system, continuously rectifying disorderly and irrational competition, actively helping enterprises solve practical difficulties, and striving to create a favorable ecosystem for the development of advanced manufacturing.On September 17, the Pakistani Foreign Ministry issued a statement on the evening of the 16th, saying that Pakistan summoned the Chargé dAffaires ad interim of the Indian High Commission in Pakistan that day to lodge a strong protest against the "highly provocative and unacceptable behavior" taken by an Indian Navy vessel in Pakistans Exclusive Economic Zone on the 15th. The statement said that during the Pakistani Navys biennial routine exercises, the Indian warship took provocative actions at extremely close range towards a Pakistani warship, resulting in a contact between the two vessels. This action seriously violated the relevant agreements signed by both sides and could escalate regional tensions. The statement urged India to strictly abide by international law and bilateral agreements, especially those aimed at preventing maritime conflicts. The Chargé dAffaires ad interim of the Pakistani High Commission in India will lodge the same protest with the Indian Ministry of External Affairs.Japanese Finance Minister Satsuki Katayama: No comment on the Bank of Japans policy.Japanese Finance Minister Satsuki Katayama: The Bank of Japan is expected to work closely with the government to implement appropriate monetary policy in order to achieve the 2% price target.

Flattening gas futures in Europe During Nord Stream Pipeline Upkeep

Haiden Holmes

Jul 12, 2022 11:18

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On Monday, European natural gas prices remained relatively stable as market participants braced for a complete cessation of Russian gas exports to Germany, the largest gas market in Europe.


Monday marked the start of a maintenance period for the Nord Stream 1 pipeline, essentially halting the flow of Russian gas to the largest market in Europe. The move was nominally routine, but it followed what the German government described as a politicized Russian decision to cut supplies by 60 percent last month. This has stoked fears that Gazprom (MCX:GAZP) will refuse to bring the pipeline back online at the end of the period, thereby aggravating Europe's energy crisis.


Dutch TTF Natural Gas Futures for August, the benchmark for north-west Europe, were trading at 174.40 euros per megawatt-hour at 5:40 a.m. ET (9:40 a.m. GMT), down 0.5% on the day but up more than sixfold from their average level in the first half of 2014, before Russia began serious preparations for the invasion of Ukraine.


In the past two weeks, prices have increased to near all-time highs as the reduction of Russian gas supply has made it difficult for European buyers to continue stocking winter storage facilities. Gas Infrastructure Europe said on Saturday that EU storage was just 61,6 percent filled, the lowest level for early July in the past three years. To avert winter shortages, the EU has stipulated that it must be at least 90 percent full by the beginning of October.


The European energy infrastructure gained some relief over the weekend when the Canadian government permitted the return of compression equipment used on the Nord Stream pipeline to Russia after maintenance at a Canadian repair facility. However, the German government rejected this argument.


Siemens Energy noted in a press release, "The political export permission is a crucial and necessary first step for the delivery of the turbine." "Our professionals are presently intensively working on all further official approvals and logistics" so that it may be brought back up as soon as possible.


Regardless of the technical details, many European legislators are concerned that Russia would not reopen the Nord Stream 1 pipeline, which delivers gas from the far north of Russia to Germany beneath the Baltic Sea, once maintenance is complete. Bruno Le Maire, the French Minister of Finance, warned over the weekend that a total supply cutoff is "the most likely scenario."


Le Maire has warned that France, similar to Germany, must prepare for industrial gas limits.


Le Maire addressed Rencontres Économiques, on the periphery of a business conference, "It takes a very specific study of each company and each industry." Which enterprises should reduce their energy use, and which cannot?


He singled out Saint Gobain SA (EPA:SGOB) as a company that would require privileged supplier access. Monday saw a 1.7% decline in Saint Gobain shares, which have already lost a third of their value this year owing to similar fears.


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