Countries in eastern Europe plan to build a dozen new nuclear reactors, with a value of €130 bln, but the question is, who will pay for them. Governments need to step in. EU will likely approve state aid for the next budget cycle 2028-34 by June 2025. But inadequate supply chain, and a shortage of experts and contractors will also slow down the projects.

Compared to the US, European banks face less competition for the €9 trillion of consumer deposits. They offer 2% on 1-year deposits. Money-market funds invest in short-term debt instruments, offer liquidity and an average 3.4% yield, but manage only €1.5 trillion, almost all of it institutional money. In the US, a third of the $5.5 trillion comes from retail customers.

Money in all money-market funds climbed by $304 bln last month because of banking concerns and the higher yields of money funds. The amount might increase by another $1.5 tln over the next year, according to Barclays Plc. Whether fresh cash mostly finds its way into government instruments, will depend on the supply of attractive alternatives.

The European Investment Bank launched Project Venus and issued a €100 million digital bond. Central banks of France and Luxembourg provided a digital representation of the euro in a form of tokens. Société Générale and Goldman Sachs acted as on-chain custodians. The bond will be listed on the Luxembourg Stock Exchange.

UK’s 5,200 defined benefit schemes use derivatives to hedge against moves in interest rates and inflation, which require cash collateral to be added depending on market moves. The sharp fall in the price of 30-year government bonds led to unprecedented demands for more cash. To raise the funds, pension funds sold assets, causing prices to fall further.

In the wholesale power market, the price paid to the costliest generator needed to meet demand is paid to all. That is usually a gas-fired power station, even though renewables and nuclear plants supply around 60%. Eventually, “someone has to pull the plug and make price equal cost”, says Sir Dieter Helm, an economist at Oxford University.

The share of green and sustainable bonds rose from 2% of all bonds globally in 2018 to 12% at the end of 2021, but investors have become less willing to pay the premium. They have wised up to bogus environmental claims, or so-called greenwashing. But the outflows from ESG bond funds in 2022 have been much lower than outflows from other bond funds.

It has become more difficult for European companies to raise money in the bond market. Bond transactions are being withdrawn. Fund managers are demanding much higher returns, but companies are balking at this higher price tag. The Bank of England wants to sell down its corporate bond portfolio and the ECB asset purchase programme is finishing.

France has raised 4 billion euros. The bond has a 15-year maturity and a yield of -0.415%, harmonised with the European consumer price index. The order book was nearly 7-times oversubscribed at over €27 billion. More than 220 investors participated. Lead managers included Barclays, BNP Paribas, Crédit Agricole CIB, Natixis and Société Générale.

Ecu has been accepted into the Venture Development programme of R3, which started as an IT development consortium of banks and other companies in the finance sector. R3 has developed the Corda distributed ledger technology, now used by the major European securities exchanges in Zürich, Frankfurt and London for trading digital securities.

The Luxembourg Stock Exchange marked the admission of the first financial instruments registered on a public distributed ledger technology (DLT). The three series of security tokens admitted on LuxSE SOL are digital covered bonds (housing finance bonds) and structured products. They are financial instruments and debt securities under French law.

Prices of copper, platinum and lithium are rising. Copper is needed for wind farms, platinum for hydrogen production, and lithium for battery production. New environmental guidelines are making future production of copper and aluminium more difficult. This could make carbon dioxide-free electricity significantly more expensive than previously thought.