POWER: French Spot Power to Fall
Mar-17 08:17
The French spot power index is seen to fall for Tuesday’s delivery with forecasts for higher renewables output and lower demand.
- France Base Power APR 25 closed up 0.4% at 55.97 EUR/MWh on 14 March.
- EUA DEC 25 down 1% at 70.3 EUR/MT
- TTF Gas APR 25 down 1.3% at 41.725 EUR/MWh
- Nuclear availability in France declined to 75% of capacity as of Monday morning, down from 77% on Friday, RTE data showed, cited by Bloomberg.
- French nuclear generation is forecast at 47.48GWh on Tuesday, up from 47.45GWh on Monday, Reuters data showed.
- EdF’s 910MW Gravelines 4 nuclear reactor had an unplanned outage on Sunday morning that is scheduled until 23:00CET 18 March.
- The latest two-week ECMWF weather forecast for Paris suggests mean temperatures will remain below normal until 18 March, after which temperatures are seen above normal until 23 March, before falling back down before the average until 27 March.
- Mean temperatures in Paris are forecast to rise to 6.6C on Tuesday, from 6.2C on Monday and below the seasonal average of 8.1C.
- Power demand in France is forecast to fall to 60.39GW on Tuesday, down from 61.03GW on Monday according to Bloomberg.
- Wind output in France is forecast to rise to 8.66GW during base load on Tuesday, up from 6.6GW on Monday. Solar PV output is forecast to edge up to 10GW during peak load on Tuesday, up from 9.18GW on Wednesday according to SpotRenewables.
- Residual load in France is forecast to fall to 47.21GWh/h on Tuesday, down from 49.46GWh/h on Monday according to Reuters.
- France’s hydro balance has been revised lower from Friday’s forecast to end at -2.92TWh on 31 March, Bloomberg data showed.
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US TSYS: Yields Pull Back Again With Consumer Growth Story In Question
Feb-14 21:08
Treasuries outperformed global counterparts Friday, fully completing a reversal from a midweek selloff.
- A large miss in January retail sales (-0.9% M/M vs 0.7% prior, -0.2% consensus) represented the biggest sequential drop in 22 months, with a similarly weak "control group" figure leading to a 0.5pp downgrade to the Atlanta Fed's GDP nowcast (to 2.3% GDP growth in Q1, i.e. no acceleration from Q4).
- That was enough to see the 10Y Treasury yield drop 7bp in the subsequent half hour, continuing the downtrend seen beginning in the immediate aftermath of Wednesday's hot CPI release. 10Y yields dropped over 21bp from the Wednesday high to Thursday's low, ultimately ending a tumultuous week 1.5bp lower.
- Yields ticked a little higher in afternoon trade Friday but the curve leaned bull steeper on the day, with the belly outperforming: 2-Yr yield is down 4.6bps at 4.261%, 5-Yr is down 5.7bps at 4.3328%, 10-Yr is down 5.1bps at 4.4782%, and 30-Yr is down 3.9bps at 4.6982%.
- In futures: Mar 10-Yr futures (TY) up 9/32 at 109-08 (L: 108-26 / H: 109-15.5).
- Other data (industrial production mixed, import prices soft) had little lasting impact.
- The coming week’s data schedule is relatively light, due in part to Monday’s Presidents Day holiday (SIFMA recommends bond cash close, equities closed), with initial jobless claims, February prelim PMIs, and regional Fed manufacturing surveys among the highlights. Supply includes 20Y Bond and 30Y TIPS auctions.
- We also get plenty of Fed communications including the January meeting minutes, and speaking appearances by both doves (Gov Waller) and hawks (St Louis Pres Musalem).
USDCAD TECHS: Bear Cycle Extends
Feb-14 21:00
- RES 4: 1.4948 High Mar 2003
- RES 3: 1.4814 High Apr 2003
- RES 2: 1.4503/1.4793 High Fb 4 / 3 and key resistance
- RES 1: 1.4380 High Feb 10
- PRICE: 1.4175 @ 16:54 GMT Feb 14
- SUP 1: 1.4107 50.0% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
- SUP 2: 1.4011 Low Dec 5 ‘24
- SUP 3: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
- SUP 4: 1.3894 Low Nov 11 ‘24
USDCAD broke lower Thursday, breaking out of a tight trading range this week and remains soft. A key support at 1.4261, the Jan 20 low, has been cleared and this signals scope for an extension of the current bear cycle - a correction. Scope is seen for a move towards 1.4107, a Fibonacci retracement. Initial firm resistance to watch is 1.4380, the Feb 10 high. A break would highlight an early bullish reversal signal.
OPTIONS: Mixed SOFR Rates Trade To Cap Week
Feb-14 20:47
Friday's US rates/bond options flow included:
- SFRH5 95.62p, traded half in 2k.
- SFRH5 96.93c, traded 0.25 in 4k.
- SFRH5 95.75/95.62ps 1x2, Traded 3.75 in 3k.
- SFRK5 97.00c, traded for 0.75 and 1 in 3k.
- SFRU5 95.93/95.81/95.68p fly, traded 1 in 1.5k
- SFRU5 96.50c, traded for 6.5 in 1.5k.
- SFRU5 95.87^, traded for 36 in 5k.
- SFRJ5 95.87/95.75/95.68p fly 1x3x2 with SFRK5 95.81/95.68/95.62p ladder 1x3x2, bought for 10 in 2k.
- SFRM5 95.68p, sold at 2.5 in 10k.
- 0QH5 96.00c, bought for 13 in 3k.
- TYH5 107p, bought for 11 in 15k
- TYJ5 107p, bought for 11 in 17k total.
- TYJ5 107/106ps, bought for 7 in 15k total.
