Market Information Monday 17 October 2022

The executive branch of the European Union (EU) plans to propose a mechanism to reduce price volatility in the gas market and to avoid extreme price spikes in derivatives trading. The aim is to tackle the energy crisis in the EU. The temporary mechanism would impose a dynamic price cap on transactions on the Dutch Title Transfer Facility, whose main index is the benchmark for all gas trades in the continent.

Gazprom threatens to turn off the gas tap to Europe if a price cap is imposed on Russian gas exports, according to statements by Gazprom CEO Alexei Miller on Russian state television. The Group of Seven and the European Union (EU) are working on a price cap on Russian oil and gas and an import ban as part of Western sanctions imposed on Russia for invading Ukraine.

The European Central Bank (ECB) must reduce its sizeable balance sheet of around 5.1 trillion euros from 2023, according to Bundesbank president Joachim Nagel said in an interview with Bloomberg TV on Friday evening. “The size of the balance sheet is too big and shrinking the balance sheet is more or less complementary to what we need to do on the interest rate side,” said Nagel. At the end of this month, the ECB will make a new interest rate decision, with key interest rates expected to be raised again by 75 basis points.

The 6M Euribor increased with 1 basis point to 2.01% compared to previous business day. The 10Y Swap increased with 6 basis points to 3.32% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.