POWER: EU Mid-Day Power Summary: CWE Power Extends Gains
Jan-30 12:00
CWE front-month power futures are extending yesterday’s gains, after initial trends lower in the morning, with a recovery in the European energy complex. Nordic front-month power is shrugging off gains in neighbouring markets amid an upward revision in the region’s hydro balances and forecasts for temperatures in line with the average.
- Nordic Base Power FEB 25 down 4.9% at 42 EUR/MWh
- France Base Power FEB 25 up 1.7% at 118.66 EUR/MWh
- Germany Base Power FEB 25 up 1.7% at 127.5 EUR/MWh
- EUA DEC 25 up 0.7% at 83.52 EUR/MT
- TTF Gas FEB 25 up 1.8% at 52.07 EUR/MWh
- TTF has reversed the softer tone from that start of the day to reach a fresh high of $52.37/MWh amid tighter market risks from cooler weather and low wind generation this weekend.
- EU ETS December 2025 allowances have erased earlier losses to trade higher on the day with support from a recovery in EU gas markets.
- The latest EU ETS CAP3 auction cleared higher at €81.57/ton CO2e, compared with €77.06/ton CO2e in the previous auction and the highest since 17 October 2023.
- The latest bullish momentum in EU carbon prices could see some downside risks next month, with an expected drop in power sector emissions, while lower gas prices could further limit the upside in EUAs according to BNEF.
- Switzerland is planning to reduce GHG emissions by at least 65% by 2035 vs 1990 levels as part of the country’s new climate plan.
- German power base-load prices are forecast to average €90/MWh this year, a Rabobank analyst said in a note.
- The unplanned curtailment at the 2GW IFA power link between France and the UK has been extended by five days until 4 February.
- The 1.01GW IFA2 power link had an unplanned outage on Thursday morning that has been extended until 2 February due to issues with the converter valves.
- Fingrid will lift restrictions on connecting electricity storage facilities to the grid along the west coast starting 1 February 2025.
- Estonia produced around 3.4TWh of renewable generation in 2024, accounting for 63% of the country’s total power output.
- Poland’s 566MW unit 10 at its 2.2GW Kozienice 2 coal plant has extended its unplanned outage to 1 February from 30 January.
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GILTS: Extending gains ahead of the close
Dec-31 11:50
- Overall it is a fairly decent move in Gilt, the contract continues to gain, the lower volume has been helping, but there's been a pick up in the past few minutes with just under 30 minutes left for the trading session.
- Around 2k cumulative lots have been bought in the past few minutes, multiple clips.
US TSYS: Yields Slip to 10D Lows Into Year End, Early Cash Close
Dec-31 11:39
- Treasuries added to Monday's rally overnight -- back near December 20 levels before drawing some sell interest in early London trade. Average to small year-end duration extensions: US +0.07Y, EU: +0.04Y, UK -.02Y (Bbg).
- The Mar'25 10Y contract trades 109-03 last (+4) vs. -06 high on modest year end volume of just over 135k. Tsy 10Y yield tapped 4.5027% low overnight, curves are looking modestly flatter: 2s10s .966 at 28.317, 5s30s -1.864 at 37.011.
- Projected rate cuts into early 2025 look steady to slightly higher vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -21.3bp (-19.5bp), Jun'25 -30.8bp (-28.8bp).
- Today's economic data (prior, est) limited to FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, followed by Dallas Fed Services Activity (9.8, --) at 1030ET.
- Reminder: early cash Tsy close at 1400ET, futures at normal time of 1600ET.
- For next week: the NYSE Group markets will close on January 9 in observance of the National Day of Mourning for President Carter (New York Stock Exchange, NYSE American Equities, NYSE American Options, NYSE Arca Equities, NYSE Arca Options, NYSE Chicago and NYSE National), while the CME Group has opted for early close, link HERE. FI open outcry will close at 1300ET, GLOBEX shortly after at 1315ET next Thursday.
EUROPEAN INFLATION: Irish HICP Accelerates in December, Core Also Higher
Dec-31 11:38
Irish HICP rose by 0.5pp to 1.0% Y/Y in December, its highest rate since August and the third consecutive acceleration. This comes as energy price deflation tapered off amid base effects, to -4.6% Y/Y vs -7.7% in November.
- The core rate (excl. energy and unprocessed food) meanwhile accelerated slightly this month, to 1.6% Y/Y vs 1.5% November.
- Food inflation stands unchanged at 1.7% Y/Y in December.
Looking more broadly at the December Eurozone inflation round, the prints released so far (Spain, Belgium, Portugal) generally underpin calls for energy-driven headline upticks this month. However, core rates also appear to have accelerated a bit so far - analysts were rather looking for a broadly unchanged print for the overall Eurozone.
- Heavy-weighted Germany, France, Italy and the Netherlands, which are all scheduled to release their national-level prints next week, do not necessarily have to tilt in the same direction, however, and it might be that some acceleration for the countries which released so far was indeed expected - so the signal for the overall core print might not be clear for the time being.
