BoE has launched a temporary bond-buying programme to prevent "material risk" to UK financial stability, which could have resulted in the collapse of a swathe of pension funds. BoE will buy as many long-dated government bonds as needed to stabilise financial markets. This news had an immediate impact on the interest rates of UK government debt.

UK day-ahead power prices tripled to record levels as tight generation margins combined with soaring power import, natural gas and carbon prices. The UK's coal phase-out and low wind generation have exposed the market to rising gas prices. Adding to the strain of coal closures has been the UK's ageing and inefficient nuclear power plants.

Total outflows from European stock funds in the past six months have reached $83 bln. Investors have been steadily accumulating short positions on German bunds as yields hover near the highest level in a decade. The outflows from European-focused ETFs are the biggest in at least 15 years, while global stock funds have added $166 billion this year.

Dutch pension funds sold €88 billion worth of assets in the first half of 2022. They used part of the proceeds to meet the margin requirements under derivatives contracts, which had risen due to increased interest rates. Dutch pension funds sold a large proportion of their equities and money market fund stakes, while increasing the share of bonds.

Former Naftogaz chair Andriy Kobolev says that if Russia cuts off gas supply to Europe this winter, it will be the end of Gazprom’s presence in European markets. Russia wants to remain Europe’s primary gas supplier. It is now burning gas, because it cannot reduce output. Shutting down a shaft means a 50% lower output when extraction resumes.

Rapid interest-rate hikes deployed by policy makers have brought to an end a four-decade bull market in bonds. That’s creating a difficult environment for investors, with bonds and stocks sinking in tandem. MSCI's Index of global stocks has slumped 19% this year. Fixed-income investors are showing plenty of demand for government bonds as yields rise.

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.

Uranium reserves of 7.6 million tons are on a course to reach exhaustion within a century. The Indian institute IISER was successful in extracting uranium from seawater, which contains 1,000-times more uranium than conventional sources. The challenge was to capture it cost-effectively. They managed to capture 95% of uranium within two hours.

Company says it is reducing production for few hours where possible as ability to cool plants with river water is restricted. However, half of EDF’s 56 nuclear reactors are offline due to planned maintenance and work to repair corrosion which was delayed by the pandemic. France is relying on expensive imports from the neighbouring countries.

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.

Greening of “grey” industries offers interesting investment opportunities to withstand a high-inflation regime. EU’s green taxonomy sees investments as either green or not. But only 2% of the revenues of Europe’s top 50 companies would be judged to have come from green operations under the EU taxonomy, according to a study by ISS ESG.