MARKET UPDATE

Dollar, Euro Stabilize Ahead of ECB Meeting

The U.S. dollar and the euro stabilized in early European trade Thursday,  with traders cautious ahead of a widely-anticipated meeting of the European Central Bank which should signal the tightening of its monetary policy.

EUR/USD edged higher to 1.0716, having traded in a range-bound fashion for much of the week, as traders eagerly await news from the ECB policymakers.

 

U.K., European Natural Gas Prices Leap as Texas LNG Terminal Fire Threatens Supply

Natural gas prices in the U.K. and continental Europe rocketed higher in early trading in Europe on Thursday, after a fire at an LNG export terminal in Texas threatened to cut off a vital supply channel for months.

By 2.50 AM ET (0650 GMT), the July U.K. natural gas futures contract on the ICE was at 174.18 pence a therm, up around 34% from Wednesday’s close, while the comparable price for northwest Europe, the Dutch TTF contract, was up by around 12% at 89.12 euros per megawatt-hour.

The fire broke out on Wednesday at Freeport LNG’s facility on Quintana Island near Houston, Tx. It was quickly brought under control and there were no casualties or injuries, but Bloomberg cited a company spokesperson on Wednesday as saying that shipments from the terminal could be disrupted for three months.

 

European shares fall ahead of ECB decision

European shares slipped on Thursday ahead of the European Central Bank’s meeting later in the day, with investors awaiting clues on the central bank’s policy tightening plans.

The pan-European STOXX 600 index fell 0.5% by 0709 GMT. The index is set to mark its third straight session of losses.

Money markets have now priced in 75 basis points of hikes from the ECB by October, from earlier expectations of 25 bps hikes at each meeting, as euro zone inflation hit record highs. Data showing strong first-quarter economic growth in the euro zone lent weight to the hawkish bets.

 

Oil pares gains as new China lockdown measures emerge

Oil prices gave up early gains on Thursday after parts of Shanghai imposed new COVID-19 lockdown measures, outweighing news of China’s stronger-than-expected exports in May.

Brent crude futures for August dipped 15 cents, or 0.1%, to $123.43 a barrel at 0630 GMT, while U.S. West Texas Intermediate crude for July was at $121.91 a barrel, down 20 cents, or 0.2%.

Both benchmarks closed on Wednesday at their highest since March 8, matching levels seen in 2008.

China’s May exports jumped 16.9% from a year earlier as easing COVID curbs allowed some factories to restart, the fastest growth since January this year and more than double analysts’ expectations.

 

 

 

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