The euro is re-approaching Friday's post-payrolls lows against the dollar with a break through parity seemingly just a question of days or even hours away. The European natural gas story is now on everybody's mind but that doesn't necessarily mean its fully priced.
It might make sense for Russia to re-start some flow on July 22 if only to further delay (and hence make potentially sharper still) the inevitable government-imposed savings measures in Germany. See the UBS Research note estimating a GDP hit of around 5%.
EURUSD below par might force the ECB to hike 50bp next week (29bp priced) but any currency rebound on the back of that might be seen by traders as a selling opportunity. - UBS Strategy
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