POWER: End of Day Power Summary: FR-DE Front-Year Discount at Highest On Record
Jan-31 16:52
The French-German front-year power contract discount has widened by around 9% on the week to be at around €28.81/MWh at the time of writing to reach the highest since France flipped to a discount in March 2024. The discount widened as the French front year moved up by only 2.9% compared to a 4.6% rise in the German equivalent owing to gains in the energy complex, while EdF raised its French nuclear output target for 2026.
- French Power Cal 2026 up 2.8% at 69.99 EUR/MWh
- Germany Power Cal 2026 up 3.4% at 98.8 EUR/MWh
- EUA DEC 25 up 1.5% at 83.93 EUR/MT
- TTF Gas MAR 25 up 4.2% at 53.595 EUR/MWh
- Rotterdam Coal FEB 25 up 1.7% at 111 USD/MT
- TTF Front Month has extended midday gains as concerns over low storage levels and upcoming summer refill needs boost the contract, with the ongoing outage at Norway’s Asgard field and cooler temperatures heading into next week providing further support. The contract is up by around 7% on the week.
- EU ETS December 2025 allowances have remained in green towards the end of the session amid price increases in TTF and European coal, with cooler temperatures in NW Europe and lower wind – potentially increasing demand and raising the call for fossil-fuel-fired generation. The contract is up by around 3% on the week.
- UKAs Dec 25 allowances have further extended this week's gains on Friday to reach the highest since 8 July, with the initial rally this week due to talks on relinking the UK and EU ETS schemes.
- The German Parliament on Friday passed a legislative proposal – THEG – and thereby adopted the reform of the European emissions trading system that came into force in 2023.
- Germany’s parliament has extended a support scheme for gas-fired combined heat and power plants by four years to 2030.
- Finland is advancing policies to support nuclear energy expansion, addressing regulatory hurdles and investment challenges, with Fortum set to unveil its nuclear strategy in the coming months.
- Westinghouse has signed a contract with Slovenia’s GEN energija conduct a technical feasibility study for the deployment of an AP1000 reactor for the planned expansion at the Krsko nuclear power plant.
- Poland’s 566MW unit 10 at its 2.2GW Kozienice 2 coal plant has extended its unplanned outage to 4 February from 1 February.
- The EU is investing over €1.2bn in key cross-border energy infrastructure projects, with €645mn earmarked for the Bornholm Energy Island project linking Denmark and Germany and €33mn for the Danube InGrid electricity grid project between Hungary and Slovakia.
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US TSYS: Tsy Curves Look To Finish 2024 at June'22 Highs
Dec-31 19:18
- Treasuries look to finish the last trading session of 2024 lower after reversing Tuesday morning support. Markets closed Wednesday for New Years day, resume full trade Thursday.
- The Mar'25 10Y contract trades 108-25.5 (-5.5) late in the day, 10Y yield near session high of 4.5871%. Curves bounced off flatter levels, 2s10s climbing to 34.344 -- the highest level since June 2022.
- Short end support, in turn, helped projected rate cuts into early 2025 gain momentum vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -20.6bp (-19.5bp), Jun'25 -29.8bp (-28.8bp).
- No substantive reaction to this morning's housing and regional Dallas Fed services activity data. Looking ahead to Thursday data (prior, est): Initial Jobless (219k, 221k) and Continuing Claims (1.910M, 1.890M) at 0830ET; S&P Global US Manufacturing PMI (48.3, 48.3) at 0945ET; Construction Spending MoM (0.4%, 0.3%) at 1000ET.
- Treasury supply: $85B 4- & $80B 8W bill auctions at 1130ET, $64B 17W bill auction at 1300ET.
COMMODITIES: WTI Futures, Gold Holding Higher
Dec-31 18:47
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.9 or +1.27% at $71.88
- Natural Gas down $0.32 or -8.13% at $3.618
- Gold spot up $19.24 or +0.74% at $2625.86
- Copper down $6.95 or -1.7% at $402.3
- Silver down $0.1 or -0.34% at $28.8383
- Platinum up $3.96 or +0.44% at $908.02
US STOCKS: Late Equity Roundup: Tech & Interactive Media Sectors Underperforming
Dec-31 18:36
- Stocks are trading near session lows after reversing early session gains. Though off this year's record highs (SPX Eminis 6178.75, DJIA 45,073.63, Nasdaq 20,204.58) major averages will finish the year with double digit gains: SPX Eminis +19.5%, DJIA +13.1%, while the Nasdaq gained 29.9%!
- Currently, the DJIA trades down 92.19 points (-0.22%) at 42474.46, S&P E-Minis down 28 points (-0.47%) at 5929.75, Nasdaq down 147 points (-0.8%) at 19337.13.
- Information Technology and Communication Services shares underperformed continued to underperform late Tuesday, shares of software and semiconductor makers weighing on the tech sector: Nvidia -1.61%, Advanced Micro Devices -1.36%, Crowdstrike Holdings -1.28%.
- Interactive media and entertainment shares weighed on the Communication Services sector: Alphabet -0.9%, Live Nation -0.76%, Netflix -0.60%, Meta -0.41%.
- On the positive side, Energy and Materials sectors outperformed in the second half, oil & gas stocks buoyed the Energy sector as crude prices continued to rise (WTI +1.0 at 71.99): APA Corp +3.59%, Marathon Petroleum +2.46%, Occidental Petroleum +2.15%.
- Meanwhile, shares of chemical & fertilizer makers supported the Materials sector: Mosaic +2.44%, Celanese +1.42%, Dow +1.37%.
- Looking ahead, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.
