Finimize - 🇷🇺 Russia's giving Europe... nothing

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Hi Reader, here's what you need to know for September 6th in 3:08 minutes.

☕️ Finimized with a Kaffee Creme at Pinch in Berlin, Germany (☀️ 25°C / 77°F)

Today's big stories

The euro fell to a new 20-year low against the dollar after Russia pulled the gas plug
Forget stocks, here are three reasons why you might want to add commodities to your portfolio right now – Read Now
Volkswagen’s planned listing of Porsche is getting investors all worked up

When Russia Acts, The Euro Falls

What’s Going On Here?

The euro dropped to its lowest in 20 years against the US dollar on Monday, after Russia shut off the gas.

What Does This Mean?

Russia’s been slimming the Nord Stream’s capacity in recent months, and it went a step further on Friday: the country announced that a “technical fault” will keep the key gas pipeline between Russia and Europe shut indefinitely. Suspect timing, cynics say, as the shut-off came only hours after the G7 confirmed price caps on exported Russian oil.

Those extremely well-founded conspiracy theories aside, the shutdown sent European gas prices up over 30% on Monday, worsening an energy crisis that’s already hampering the region’s economy. Some economists even think the European Central Bank (ECB) might opt for lower-than-expected rate hikes in a desperate bid to limit the damage. Layer on the ever-mounting risk of a recession, and that might be why the euro dropped to below $0.99 for the first time since 2002.

Why Should I Care?

The bigger picture: The Fed has it easy.
The ECB, in fairness, probably has a tougher job than the Federal Reserve (the Fed): inflation’s sitting at a similar rate in the US, sure, but Europe’s is more driven by a short supply of things like energy while high demand plays a relatively bigger part in America's. That means the Fed can count on interest rate rises – which typically dent demand – more than the ECB can. Not to mention the Fed doesn’t have the impossible task of setting one interest rate across different economies with very different needs.

Zooming out: Lightning fast.
Europe was quick to roll out support after the shutdown: Germany unveiled a consumer relief plan worth $65 billion, while Finland and Sweden introduced new funding to bolster struggling utility companies. That won’t be the end of it either, since the European Commission’s set to meet at the end of this week to discuss more special energy cost-cutting measures.

You might also like: The euro could fall even further.

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Analyst Take

Why It’s (Still) A Good Time To Add Commodities To Your Portfolio

Stéphane Renevier, Analyst

Commodity prices aren’t what they were in their Covid-era heydey.

In fact, they recently slipped 20% from their highs as investors started to really worry that a global recession might cut demand for raw materials.

You know, like everything from oil and gas to metals and agricultural products.

And that makes this an ideal time, then, to bulk up on commodity investments.

So that’s today’s Insight: three big reasons why you might want more commodities in your portfolio.

Read or listen to the Insight here

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