Market Information 4 June 2024

After most Russian gas supplies were halted after the invasion of Ukraine, Norway has got a pivotal role in European fuel security. Gas traders are closely monitoring updates on the planned seasonal maintenance of Gassco AS, as any unplanned extensions to works have an out-sized impact on the gas market. The Norwegian state owned gas company was supposed to ease maintenance in June, however, Gassco now says that the duration of these outages are uncertain.
Benchmark futures advanced as much as 6% on Monday. Uk prices rose 5.67%. Dutch front-month futures, the European gas benchmark, rose 5.05% to €35.95 a megawatt-hour.

Sanctions against Russia have weakened the value of the ruble, currently trading at 89.61 per dollar, and pushed up the cost of goods, especially imports. Russia’s central bank has tried to offset inflation by raising interest rates, with short-term rates currently set at 16%. However, Russia’s official inflation rate is still at an uncomfortable 7.8%, and the Russian research firm Romir reports that overall price levels for common consumer goods have nearly doubled since the 2022 invasion.

Turkey’s inflation accelerated more than forecast last month. Data published on Monday showed inflation accelerated to 75.5% in May, compared to just under 70% a month earlier. Monthly price growth, the central bank’s preferred gauge, was 3.4%. Both readings exceeded predictions. This trajectory of prices follows the path mapped out by the central bank as it embraced more conventional economics since President Recep Tayyip Erdogan’s re-election a year ago. The question now is whether inflation will also follow the forecasts on the way down and subsequently allow interest rates to fall after an aggressive cycle of monetary tightening. Policymakers anticipate Turkey’s inflation will end the year at 38%. The central bank performed a cumulative tightening of over 40 percentage points in less than a year, which brought its interest rate to 50% since March.

The 6M Euribor decreased with 1 basis point to 3.75% compared to previous business day. The 10Y Swap decreased with 7 basis points to 2.82% 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.