Posted BY: Zerohedge

Two weeks ago, when previewing the scheduled 10-day shutdown of the Nord Stream 1 pipeline – which supplies the bulk of European nat gas usage courtesy of Russia – for maintenance, we quoted from DB FX strategist George Saravelos that if the gas shutoff is not resolved in coming weeks this would lead to a broadening out of energy disruption with material upfront effects on economic growth, and of course much higher inflation, or as he puts it, “beyond the market’s worries about slower global growth in recent months, what is unfolding in Europe in recent days is a fresh big negative supply shock.”

Trending: Over 1.6 Million Vaccinated New Yorkers Have Caught COVID-19

As such, DB’s Jim Reid said that July 22, the day gas is supposed to come back online, could be the most important day of the year: “while we all spend most of our market time thinking about the Fed and a recession, I suspect what happens to Russian gas in H2 is potentially an even bigger story. Of course by July 22nd parts may have be found and the supply might start to normalize. Anyone who tells you they know what is going to happen here is guessing but as minimum it should be a huge focal point for everyone in markets.”

Fast forward to today when, one day after the start of the scheduled 10-day shutdown period which has already sent flows through to NS 1 pipeline to basically zero…

Read more