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Why did Russia interrupt the gas supply via the main European gas pipeline?

Russian energy giant Gazprom has suspended gas flows to Europe indefinitely via a major pipeline, fueling fears that parts of the continent will need to ration energy over winter.

However, while Gazprom cited an oil leak for the shutdown of the Nord Stream 1 pipeline, the Kremlin has since said that resuming gas supplies to Europe depends on Europe lifting its measures. punitive economics.

“Pumping problems have arisen because of the sanctions imposed on our country and on a number of companies by Western states, including Germany and the United Kingdom,” the spokesman for the Ministry told reporters on Monday. Kremlin, Dmitry Peskov. according to the Russian Interfax news agency.

When asked if the pumping of gas via Nord Stream 1 was entirely dependent on the sanctions and if the supply would resume if these were lifted, Peskov replied: “Of course… It is precisely these sanctions that the States western introduced that brought the situation to what we see now.”

European lawmakers accuse Russia of militarizing energy supplies in a bid to sow uncertainty in the 27-nation bloc and drive up energy prices.

—Sam Meredith

Consumer stocks will suffer more as margins tighten, Saxo Bank analyst says

According to Peter Garnry, head of equity strategy at Saxo Bank, consumer discretionary stocks will weaken further as tighter financial conditions meet a global energy crisis.

Consumer-facing companies are at the limit of input costs they can pass on, because if they raise prices by 6%, volumes will fall by more than 6%, he told ‘Squawk Box Europe’ .

“You’re hearing more and more from consumer companies that they’re going to be chipping away at their margins over the next year,” Garnry said.

—Jenni Reid

Uniper CEO says the worst is yet to come after Russia cuts off gas flows to Europe

Uniper has requested billions in financial aid from the German government due to soaring gas and electricity prices.

Bloomberg | Bloomberg | Getty Images

The chief executive of German gas giant Uniper delivered a grim assessment of Europe’s worsening energy crisis, warning that the worst is yet to come.

“I’ve said it many times over this year and I’m also educating policy makers. Look, the worst is yet to come,” Uniper CEO Klaus-Dieter Maubach told Hadley Gamble of CNBC at Gastech 2022 in Milan, Italy.

“What we see in the wholesale market is 20 times the price we saw two years ago – 20 times. That’s why I think we need to have a really open discussion with everyone who takes responsibility on how to solve this problem,” he added. .

Read the full story here.

—Sam Meredith

Brent and gas prices in Europe fall

International benchmark Brent prices fell 2.7% late in the morning in Europe after OPEC+ agreed to a modest supply cut.

Gas prices in Europe also fell by around 10%, according to the latest Dutch readings from TTF Gas Futures, retreating from Monday’s 30% rise following Russia’s halt to gas flows to the UK. Europe via the Nord Stream 1 gas pipeline.

-Elliot Smith

Britain’s Prime Minister could be about to shake up the City of London

As Liz Truss officially becomes Prime Minister, questions are being asked about her plans to change the way the UK’s main financial district – the City of London – is regulated.

Truss’ campaign team originally suggested a merger between the big three regulators – Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and Payment Services Regulator (PSR) – in the Financial Times last month.

In an email to CNBC, former FCA insider Matthew Nunan asked what this move would accomplish.

“If the answer is reform of the old Financial Services Authority, what was the question? Or is it just change for change’s sake? »

You can read the full story here.

—Hannah Ward-Glenton

US Treasury yields rise as investors watch economic data

US Treasury yields were higher as market participants awaited a fresh batch of economic data and Treasury auctions after Monday’s Labor Day break.

The yield on the benchmark 10-year Treasury rose more than 7 basis points to 3.265% around 3:40 a.m. ET, while the yield on the 30-year Treasury rose 6 basis points to 3.408 %.

The yield on the 2-year Treasury note jumped almost 7 basis points to trade at 3.466%.

—Sam Meredith

German industrial orders fell by 1.1% over the month

German industrial orders fell 1.1% in July, data from the Federal Statistics Office showed on Tuesday, falling short of expectations of a 0.5% contraction from a Reuters analyst poll.

The decline marks a sixth straight month of contraction as the war in Ukraine continues to weigh on activity in Europe’s biggest economy, with rising costs and material shortages hampering industry.

-Elliot Smith

Stocks in motion: D’Ieteren up 9%, Marks & Spencer up 7%

Shares of Belgian car retailer D’Ieteren Group soared more than 9% in early trading to top the Stoxx 600 after posting strong first-half results, while British retailer Marks & Spencer added 7.5% to lead a broad advance in retail stocks.

-Elliot Smith

Sterling jumps on reports of new UK Prime Minister’s energy billing plans

The pound climbed 0.6% against the dollar in early trading on Tuesday after Bloomberg reported that new British Prime Minister Liz Truss had drawn up plans to freeze British household energy bills, in a bid to mitigate the spiraling cost of living crisis in the country.

The pound was changing hands for around $1.158 shortly after 8 a.m. in London, after slipping below $1.15 on Monday.

The overnight report suggested that Truss planned to set typical gas and electricity prices for households at their current level of £1,971 ($2,300) a year. UK energy regulator Ofgem recently announced an 80% increase in the country’s energy price cap from October 1, which would raise the cap to £3,548 a year.

—Elliot Smith

The Reserve Bank of Australia is expected to raise rates again for the fifth consecutive time

The Reserve Bank of Australia is expected to raise interest rates on Tuesday by an additional 0.5 percentage point on the back of a “fully employed labor market, a massive overshoot in inflation and tight financial conditions.” always very accommodating,” said Goldman Sachs chief economist for Australia. and New Zealand Andrew Boak said.

Boak told CNBC that “Squawk Box Asia” markets do not expect the central bank to soften its stance on controlling inflation when it announces its rate decision at 2:30 p.m. ‘East Australian.

“I think the markets will be particularly sensitive to any kind of signal that the RBA is considering reducing the pace of tightening to, say, increase by 25 basis points,” Boak said.

“I think the key language will be kept around the expectation of further tightening over the next few months. But also the caveat that policy is not on a predefined path.”

There are risks with continued interest rate hikes, such as the “messy unraveling of the housing market,” but Boak says “that’s not our central scenario.”

— Su-Lin Tan

CNBC Pro: Forget volatility. Buy this ETF for a long-term growth story, analyst says

Buy this tech ETF to play a long-term growth story, says portfolio manager

Investors should navigate the current market volatility by choosing ETFs with a long-term growth history, according to one portfolio manager.

“The idea of ​​owning an ETF instead of a specific player – you have the whole basket and are riding the wave of more capital investment in cyberspace,” John Petrides, portfolio manager at Tocqueville, told CNBC. Asset Management.

He names his favorite cybersecurity ETF, along with two others.

CNBC Pro subscribers can learn more here.

—Weizhen Tan

Russia’s energy minister says price cap will lead to more Russian oil being shipped to Asia

A worker walks from the Sans Vitesse housing towards the gas receiving compressor station of the Nord Stream 1 gas pipeline in Lubmin, Germany, Tuesday, August 30, 2022.

Krisztian Bocsi | Bloomberg | Getty Images

Russian Energy Minister Nikolai Shulginov said the country would ship more oil to Asia in response to price caps on its oil exports, Reuters reported.

“Any action to impose a price cap will lead to a deficit in the own markets (of the initiating countries) and will increase price volatility,” he told reporters at the Eastern Economic Forum in Vladivostok, according to Reuters.

Last week, the G-7 economic powers agreed to cap the price of Russian crude to punish Moscow for its unprovoked invasion of Ukraine. Prior to the invasion, Russia exported about half of its crude and oil product exports to Europe, according to the International Energy Agency.

— Natalie Tam

CNBC Pro: Hold on to money because it beats the market, pros say

Strategists are urging investors to allocate more of their portfolios to cash in these volatile times as interest rate hikes mean it now offers higher yields.

“Cash was king” last month, Bank of America said in a Sept. 1 note, as most asset classes — such as stocks, bonds and even commodities — posted losses.

Here’s how to add it to your portfolios, according to the pros.

CNBC Pro subscribers can learn more here.

—Weizhen Tan

European markets: here are the opening calls

According to IG data.

The data releases include preliminary eurozone unemployment data for the second quarter as well as gross domestic product for the second quarter. The latest UK inflation figures for July will be released along with the preliminary Dutch Q2 GDP.

Revenue comes from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.