US government sources announced on Monday that leaders at the G7 summit are close to setting a price cap on Russian oil imports in an effort to decrease the Kremlin’s energy revenue. The move comes as gas prices in Europe increased by more than 50% in the past two weeks, and have been multiplied by 6 since March 2020.
The European Central Bank has been forced to set up a new bond-buying scheme to curb yields as countries with large debts like Italy have seen theirs surge. It recently unveiled plans to stop buying debt and raise its interest rates for the first time in over a decade, which has led to the surge in bond yields. Furthermore, the ECB is considering pairing new-bond purchase schemes with auctions at which banks can bid to hold cash at the ECB with better interest rates than ordinary deposits. The European institution aims to fight against raising borrowing cost for the eurozone with the goal of capping these costs for some of its weaker members like Greece or Italy.
The GfK German consumer climate sentiment for July is expected to reach an all-time low for July as food and energy prices are skyrocketing and the war in Ukraine draws fear of a spread of the conflict. The index declined from its June figure of -26.2 to -27.4 with income expectations falling to a 20 year low of -33.5.
Cable saw US stayed saw some volatility yesterday. GBPUSD opened at 1.2264 and close slightly under 1.2264 with a high of 1.23334 and a low of 1.2237.