Energy Crisis

The European Commission aims to introduce a raft of regulatory changes to alleviate the liquidity squeeze in the energy sector as the bloc ramps up support to industries and consumers affected by Russia’s throttling of gas supplies. The proposed measures include raising the clearing threshold for commodities and other derivatives to 4 billion euros ($4 billion) and allowing bank guarantees to be accepted as collateral against margin calls. The European Securities and Markets Authority has until Sept. 22 to respond to the proposals. In France, the government will budget 16 billion euros to limit power and gas price increases to 15% for households and small companies next year.

The Merge

Cryptocurrencies traded in tight ranges Thursday as the clock ticked down to a major software upgrade of Ethereum, the most commercially important blockchain in the digital-asset sector. Bitcoin edged up to about $20,000 while Ether, the native token of Ethereum, also made modest gains to hover around $1,605 as of 11:21 a.m. in Tokyo. The revamp, known as the Merge, will make Ethereum vastly more energy efficient and over time pave the way for it to scale up and become quicker, according to the network’s developers. They say an update years in the making will go smoothly, though some investors are wary of possible hiccups.

Waving White Flag

Swedish Prime Minister Magdalena Andersson will resign as a surge in support for a nationalist party helped the right-wing opposition win one of the closest elections ever in the largest Nordic country. Andersson, who became the nation’s first female prime minister last year, said she will submit her resignation early Thursday. The announcement came as the country’s election authority was about to release the full vote count. Gains by anti-immigrant Sweden Democrats played the key role in the narrow victory of the opposition bloc led by Moderate Party leader Ulf Kristersson.

Putin’s Narrowing Options

Humiliated by lightning Ukrainian gains on the battlefield, Russian President Vladimir Putin faces narrowing options as he seeks to turn the tide in his struggling invasion. Criticism of Russia’s sudden retreat in the northeast Kharkiv region has spread. There are signs the Kremlin may also be redeploying forces to protect Crimea, which Russia annexed as the main prize of its 2014 campaign, in the event Ukraine is able to break through its lines. Meanwhile, Chinese President Xi Jinping is set to meet Putin on Thursday, but is unlikely to throw the Russian leader a lifeline despite their declaration of a “no limits” friendship before the invasion.

Coming Up…

European equity futures edged higher and Asian shares advanced as investors assessed the Fed’s outlook. US retail sales figures will provide more clarity on the state of the economy as consumers grapple with inflation. Other expected data include Dutch unemployment, Finnish retail sales and Norwegian foreign trade. ECB’s Luis de Guindos gives the keynote speech at a conference in Lisbon. H&M and Ryanair deliver sales results, while Adobe reports earnings.

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(Source: Bloomberg, Sept. 15-2022)