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Putin Firm On Ruble As Energy Hike Hits UK

Putin Firm On Ruble As Energy Hike Hits UK

The deadline for European buyers of Russian gas to start paying in roubles and the release of the Non-Farm Payrolls report from the US means it won’t be a quiet end to the week.

It is not clear which side has the most to lose if existing gas contracts are halted but Germany, which is heavily reliant on Russian gas, has already activated an emergency plan that could lead to rationing in Europe’s biggest economy.

On a separate note, millions of UK households will now feel the impact of an unprecedented £700 a year rise in energy costs. The 54% rise in the energy price cap means a household using a typical amount of gas and electricity will now pay £1,971 per year with a further rise expected, pushing the annual bill up to £2,600 in October.

As trading gets underway this morning, the softer tone to the euro sees EUR/USD open just above the midpoint of 1.10-1.11 with GBP/EUR trading higher around the 1.1855 mark. Cable (GBP/USD) on the other hand continues to operate quite flat circa 1.3125

Datawise, the main highlight today will be the US labour market report for March. Payrolls are forecast to rise by 490k. The jobless rate is expected to edge lower to 3.7% from 3.8%. Investors will assess the data to see if the very tight conditions in the labour market are improving. In the Eurozone, flash HICP inflation is projected to rise to 6.6% in March from 5.9%. In the meantime, sentiment will remain sensitive to developments in relation to Ukraine.

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