The 27 member states of the European Union have agreed on a plan to block over 75% of their Russian oil imports, and oil prices jumped following the move from the EU members. China is set to face a shortfall of cash of almost $1 trillion and the cryptocurrency Luna is trying a comeback after $40 billion crash earlier this month.
On Monday, European Council chief Charles Michel and European Commission President Ursula von der Leyen announced that an agreement was found between the 27 members of the European Union on a ban of Russian oil imports. Hungary’s Prime Minister Viktor Orban was initially hostile to a ban as it is a large importer and dependent on Russian oil but accepted the ban after a temporary exception was agreed for Hungary, Czech Republic and Slovakia. Currently, roughly 36% of the EU’s oil imports are from Russia, and the ban is set to impact already about 75% of the current Russian oil imports, with a target of 90% by the end of the year.
Russia is currently the third largest producer of oil in the world and the move has already set oil prices to jump by 2.81% on the U.S. Crude Futures for July to $118.29 and by 2.84% for August to $115.42. Brent Crude Futures saw an increase of 0.93% to $122.80 for July and 1.17% for August to $118.98.
China is currently facing a shortfall of cash as covid restrictions have caused decrease in tax revenue, weaker economic production, and general loss of sales revenue. Tax refunds and measures to help inhabitants have also contributed as analysts estimate that about $895.52 billion is currently needed to fund these shortfalls on cash. Shenzhen is one of the most affected cities with a drop in tax revenue of 44% year-on-year in April. PMI figures show that Chinese factory activity fell again in May despite falling at slower pace, but they remain under the 50 mark. This shows that although some lifting of the restrictions were announced this weekend, the Chinese economy has yet to recover from the lockdown and restrictions of its financial and industrial hubs. However, the fall in activity is much slower than expected and announce the imminent recovery of the Chinese economy, which translates into a bullish attitude of the markets towards the CNY after a steep rise in April as the sanctions were applied.
Terra has relaunched a new version of its Luna cryptocurrency, called Terra 2.0. The failed token crashed by 97% of its 2022 high on the 11th of May along with its sister token UST Stablecoin which feel to $0, and was supposed to act a safe guard tool to prevent such crashes. The new iteration, Terra 2.0, is already trading on several platforms and is set to launch on Binance - the largest cryptocurrency exchange platform in the world - this Tuesday, despite already showing signs of weakness as the token traded at a peak of $19.53 on Saturday but crashed a few hours only to a low of $4.39 before finding stability at the $5.90 mark.
Cable remained stable yesterday as American markets were closed for a bank holiday. GBPUSD opened at 1.2641 and close slightly over 1.2649.
GBPEUR followed a similar trend with as the pair opened at 1.1744 and closed at 1.1733.
EURUSD also saw some stability but the ban led USD to make small gains after market closure. The pair opened at 1.0770 and closed at 1.0775 before falling down to a low of 1.0745 last night.