• Gas supply concerns haven't triggered a big FX reaction yet – Societe Generale

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26 julio 2022

Gas supply concerns haven't triggered a big FX reaction yet – Societe Generale

The shared currency, so far, hasn't reacted to growing market concerns about gas supply and rising gas prices, explains Kit Juckes, Macro Strategist at Societe Generale.

Key Quotes:

“Gazprom announced yesterday the flow through Nord Stream 1 will be cut to 20% of capacity in the next day or two, for an indeterminate time. Prices at the Netherland virtual trading point have risen to EUR 182/MWh, close to post-March highs. The euro hasn't over-reacted to this news, however. Maybe that reflects a willingness to wait and see how temporary the supply reduction will be, though the uncertainty about supplies in the months ahead will hurt growth because Europe's leaders will need to curb demand regardless of what transpires. Maybe also, euro shorts are finally big enough, after another increase last week, to cushion the currency.”

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