POWER: EU Mid-Day Power Summary: DE-FR February Power Spread Narrows
Jan-08 11:58
German February power is pulling back, further narrowing the premium to the French equivalent to the lowest since 5 December, weighed on by lower EU gas prices. Nordic February power is nearing Tuesday’s contract low amid an upward revision in Norway’s hydro balance and weakness from German power and EU gas prices.
- Nordic Base Power FEB 25 down 4.2% at 36.4 EUR/MWh
- France Base Power FEB 25 down 3.6% at 98 EUR/MWh
- Germany Base Power FEB 25 down 3.9% at 102.24 EUR/MWh
- EUA DEC 25 down 2.2% at 72.44 EUR/MT
- TTF Gas FEB 25 down 2.7% at 46.2 EUR/MWh
- Front-month TTF extended gains throughout the European morning trading session with forecasts suggesting slightly milder weather, while steady LNG imports help to maintain storage withdrawals near normal levels.
- EU ETS December 2025 is pulling back today with weakness from EU gas prices despite bullish COT data. Speculator positioning in EU ETS futures on the ICE exchange turned significantly more bullish on the week with net long positionings at the highest since 10 March 2023.
- The latest bi-weekly Polish Primary Market Auction (Phase 4 - CAP3) cleared at €71.50/ton CO2e according to EEX.
- The monthly traded volume of global power market derivatives on the EEX exchange in December rose by 28% on the year to 994.9TWh, supported by a large increase in European power derivates volumes.
- Investment Funds positioning in ICE German power futures increase their net short position sharply from the previous week to a fresh high since flipping from a net long position in the week of 29 Nov.
- France’s Neoen has started construction in December at the 45MW Arneburg battery project in Saxony-Anhalt, Germany, with commercial operations to start in 2026.
- The UK grid operator issued a power-market warning for tight electricity margins on Wednesday 4PM GMT until 7PM GMT with to a 1.7GW shortfall in power supplies.
- The planned maintenance at the 1.4GW Viking Link interconnector between the UK and Denmark has been shortened by one day to end on 8 January 15:30 GMT.
- Eni Plentitude has completed the installation of several solar PV parks in Spain with a combined capacity of 400MW.
- Finland added 1.414GW of wind power capacity in 2024 – a 10.5% increase compared to volumes added in 2023.
- Lithuania met 62% of its energy needs from domestic power plants in 2024, up from 48% in 2023.
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US TSYS: PBOC Stimulus Sees Bear Steepening But On Low Volumes
Dec-09 11:53
- Treasuries are mostly lower on the day after selling impetus following a dovish monetary policy tweak from the PBOC, although volumes have been light as US CPI on Wednesday and approaching year-end seems to weigh on activity.
- Cash yields are unchanged (2s) to 2bp higher (30s).
- 2s10s has steepened to 6.3bps (+1.2bp) but remains within last week’s range.
- TYH5 trades at 111-13 (- 01+) off session highs of 111-18+ but has remained within Friday’s range throughout the overnight session, all on very low cumulative volumes of 235k.
- Friday’s post-payrolls high of 111-20+ cleared the 50-day EMA and strengthens a bull cycle. It’s now an initial resistance level after which lies 111-23 (38.2% retrace of Sep 11 – Nov 15 bear leg). To the downside, support at 110-18 (Dec 4 low).
- Data: Wholesale inventories, trade sales Oct F/Oct (1000ET), NY Fed 1-Yr Inflation Nov (1100ET)
- Fedspeak: FOMC media blackout
- Bill issuance: US Tsy $81B 13W & $72B 26W bill auctions (1130ET)
OUTLOOK: Price Signal Summary - Bear Threat In Oil Futures Remains Present
Dec-09 11:50
- On the commodity front, Gold is unchanged and continues to trade inside a tight range, for now. The long-term trend condition remains bullish and the Oct 31 - Nov 14 bear leg appears to have been a correction. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Resistance to watch is $2721.4, the Nov 25 high. Clearance of this level would highlight a bullish short-term development. Key support to monitor is $2536.9, the Nov 14 low.
- In the oil space, a bearish threat in WTI futures remains present and recent weakness reinforces this theme. A continuation down would open $65.74, the Oct 1 low, and $63.90, the Sep 10 low and key support. For bulls, a stronger reversal to the upside would instead refocus attention on the key short-term resistance at $77.04, the Oct 8 high. Initial firm resistance to watch is unchanged at $72.41, the Nov 7 high.
EQUITIES: S&P 500 & NASDAQ 100 E-minis Tick Lower As China Probes Nvidia
Dec-09 11:47
Fresh session lows for S&P 500 & NASDAQ 100 e-minis following news that Nvidia is being probed by the Chinese authorities on anti-monopoly grounds.
- The tech giant is now indicated 2.1% lower pre-market.
- E-mini moves are relatively limited at this stage.
- Contracts had already traded away from session highs as optimism surrounding the dovish tweak in the Chinese monetary policy stance proved short-lived.
- Marginal outperformance in the DJIA e-mini since the headlines, given relative sensitivity to tech.
