POWER: France March Power Tracks Weekly Increase
The French March power base-load contract is tracking a weekly net increase of almost 3% supported by forecasts for colder weather and lower nuclear availability. French spot power is expected to fall on the day with lower demand offsetting a decline in wind output.
- France Base Power MAR 25 down 2.3% at 91 EUR/MWh
- EUA DEC 25 up 0.1% at 82.05 EUR/MT
- TTF Gas MAR 25 down 0.2% at 54.42 EUR/MWh
- Nuclear availability in France fell to 79% of capacity as of Friday morning, down from 81% on Thursday, RTE data showed, cited by Bloomberg.
- EdF’s 1.62GW Flamanville 3 reactor is scheduled to increase test run capacity to 200MW, from 100MW currently, from 8 February 00:00CET.
- The latest 14-day day ECMWF weather forecast for Paris suggested mean temperatures have been revised lower on the day, with temperatures falling below normal from the end of this week.
- Mean temperatures in Paris are forecast at 5.6C and 4.2C on Saturday and Sunday respectively, compared with 4.4C on Friday.
- Power demand in France is forecast to fall to 63.78GW on Saturday and to 62.32GW on Sunday, compared with 68GW on Friday according to Bloomberg.
- Wind output in France is forecast to fall to 6.26GW on Saturday and to 2.19GW on Sunday during base load, down from 9.05GW on Friday according to SpotRenewables.
- Residual load in France is forecast to decline to 56.08GWh/h on Saturday before rising to 57.85GWh/h on Sunday, compared with 57.29GWh/h on Friday according to Reuters.
- France’s hydro balance has been revised up to end at -2.18TWh on 21 February, compared with -2.36TWh a day earlier.
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GILTS: Light Bull Steepening, Supply & Global FI Cues Eyed
Gilt futures off opening highs, with core global FI markets seeing some light selling pressure in recent trade.
- Contract last +10 at 91.50.
- Bearish technicals intact, initial support at yesterday’s low (91.31), while initial resistance comes in at yesterday’s high (92.13)
- Yields 1-2bp lower across the curve, light bull steepening.
- 10s last 4.67%, focus on 4.70% next, yesterday’s high was 4.687%.
- 30s topped out at 5.25% yesterday, which represents the highest level seen since ’98.
- 10-Year gilt/Bunds ~2bp tighter on the day, last ~216bp.
- There isn’t anything of note on the UK data calendar today, which will leave focus on swelling global supply and U.S. data.
- On the supply front, the DMO will return to market today, looking to sell GBP4.25bln of the 4.375% Mar-30 gilt.
- This morning has already seen the DMO confirm a syndicated re-opening of the 4.375% 2040 gilt, planned for w/c January 20 "subject to demand and market conditions".
USDCAD TECHS: MA Studies Remain In A Bear-Mode Set-Up
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.125 - High Nov 1
- RES 2: $32.338 - High Dec 12 and a key resistance
- RES 1: $30.489 - 50-day EMA
- PRICE: $30.054 @ 08:08 GMT Jan 8
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play - for now - and recent gains appear corrective. The metal has recently breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
USDCAD TECHS: Bull Flag
- RES 4: 1.4676 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4360 @ 08:04 GMT Jan 8
- SUP 1: 1.4326/4280 20-day EMA / Low Jan 6
- SUP 2: 1.4232 Low Dec 17
- SUP 3: 1.4163 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD traded lower Monday. The trend set-up remains bullish and the move down is considered corrective. The latest pause in the uptrend appears to be a flag formation - a bullish continuation signal. Note too that MA studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. 1.4326, the 20-day EMA, has been pierced. A clear break of the EMA would open 1.4163, the 50-day EMA.
