“Agreement Reached on Gas Price Cap…”

EU countries agree gas price cap to contain energy crisis

The cap is the 27-country EU’s latest attempt to lower gas prices that have pushed energy bills higher and driven record-high inflation this year after Russia cut off most of its gas deliveries to Europe.

Ministers agreed to trigger a cap if prices exceed 180 euros ($191.11) per megawatt hour for three days on the Dutch Title Transfer Facility (TTF) gas hub’s front-month contract, which serves as the European benchmark.

The TTF price must also be 35 eur/MWh higher than a reference price based on existing liquefied natural gas (LNG) price assessments for three days.

“We have succeeded in finding an important agreement that will shield citizens from skyrocketing energy prices,” said Jozef Sikela, industry minister for the Czech Republic, which holds the rotating EU presidency.

The cap can be triggered starting from Feb. 15, 2023. The deal will be formally approved by countries in writing, after which it can enter into force.

Once triggered, trades would not be permitted on the front-month, three-month and front-year TTF contracts at a price more than 35 euros/MWh above the reference LNG price.

This effectively caps the price at which gas can be traded, while allowing the capped level to fluctuate alongside global LNG prices – a system designed to ensure EU countries can still bid at competitive prices for gas in from global markets.

Those safeguards include that the cap will be suspended if the EU faces a gas supply shortage, or if the cap causes a drop in TTF trading, a jump in gas use or a significant increase in gas market participants’ margin calls.

Soaring power and gas prices have rocked energy companies across Europe, forcing utilities and traders to secure extra funds from governments and banks to cover margin call requirements.

Central bankers will shift inflation goalposts

Central bankers spent the decade after 2008 worrying about deflation. Now they are once again trying to stop prices from rising too quickly. The Federal Reserve, European Central Bank and others are determined to limit annual price increases to around 2%, in line with their targets. Stubborn inflation may force them to shift the goalposts.

Most developed-world central banks define price stability as a 2% annual increase: low enough for most people not to notice while leaving wiggle room before damaging deflation sets in. After the 2008 financial crisis, economists worried the targets were discouraging authorities from launching aggressive economic stimulus.

Today, monetary authorities are facing price increases they have not experienced since the early 1980s.

Central bankers say switching targets would damage the credibility of their commitment to get prices under control, while any new goal would be suspect.

Ukraine’s Zelensky tells U.S. Congress aid is ‘not charity’, urges more support

President Volodymyr Zelensky told the U.S. Congress that aid to Ukraine was an investment in democracy and “not charity” as he invoked American battles against the Nazis in World War Two to press for more assistance for his country’s war effort.

Zelensky’s comments on Wednesday come as Republicans – some of whom have voiced increasing scepticism about sending so much aid to Ukraine – are set to take control of the U.S. House of Representatives from Democrats on Jan. 3.

Some hardline Republicans have even urged an end to aid and an audit to trace how allocated money has been spent.

“Your money is not charity. It is an investment in the global security and democracy that we handle in the most responsible way,” Zelensky told a joint session of the U.S. Senate and House of Representatives, speaking in English.

Earlier, Zelensky, wearing his trademark olive green trousers and sweater on his first foreign wartime visit, met President Joe Biden, who called for support to keep flowing in 2023.

The United States also announced another $1.85 billion in military aid for Ukraine, including a Patriot air defence system to help it ward off barrages of Russian missiles.

Zelensky said the Patriot system was an important step in creating an air shield.

“This is the only way that we can deprive the terrorist state of its main instrument of terror – the possibility to hit our cities, our energy,” Zelensky told a White House news conference, standing next to Biden.

“We would like to get more Patriots … we are in war,” Zelensky told reporters at the White House.

Elon Musk poll shows 57.5% want him to step down as Twitter chief

Twitter users voted decisively in a poll for Elon Musk to step down as chief executive of the social media platform, a backlash against the billionaire less than two months after he took over in what has been a chaotic and controversial reign.

Musk said on Sunday he would abide by the results of the poll, but did not give details on when he would step down if results said he should. He had said that there is no successor yet.

About 57.5% votes were for “Yes”, while 42.5% were against the idea of Musk stepping down as the head of Twitter, according to the poll the billionaire launched on Sunday evening. Over 17.5 million people voted.

Netflix will be next on Microsoft’s shopping list

Satya Nadella keeps thinking bigger. Microsoft’s MSFT.O chief executive has been buying new businesses at an impressive clip. Look for him to add Netflix NFLX.O to the list in 2023.

Since his 2014 promotion into the technology titan’s corner office, Nadella has embarked on a pricey shopping spree. It started with the $2.5 billion acquisition of the company behind the hit game Minecraft. Later, Microsoft bought LinkedIn for $26 billion and the speech recognition and artificial intelligence software developer Nuance for $20 billion. Activision Blizzard ATVI.O was by far the largest disclosed target, at $69 billion.

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