POWER: German Feb Power Tracks 16% Weekly Increase
Jan-31 08:12
German February power is tracking a weekly net increase of almost 16%, exceeding gains in the wider European energy complex, with forecasts for colder, less windy weather adding support.
- Germany Base Power Feb 25 up 4.65% at 132.65 EUR/MWh
- EUA DEC 25 up 1.1% at 83.6 EUR/MT
- TTF Gas MAR 25 up 1.8% at 52.37 EUR/MWh
- German Spark Spreads M1 (March) down 263.5% at -13.8192 EUR/MWh
- TTF front month is gaining towards the high of €52.65/MWh seen yesterday with pressure to gas demand expected from cooler weather and low wind this weekend. Concerns for low storage and summer refill requirements continues to drive prices higher.
- EU ETS December 2025 allowances are tracking a weekly net increase of around 2.5%. EUAs are trading higher today with gains in EU gas prices, while forecasts suggested a slight downward revision in temperature forecasts. The next German ETS CAP3 auction will clear today 11:00CET.
- Wind output in Germany is forecast to decline to 3.68GW on Saturday and to 2.06GW on Sunday during base load, down from 14.52GW on Friday according to SpotRenewables.
- The latest 6-10 day ECMWF weather forecast for Dusseldorf suggests mean temperatures have been slightly revised down on the day with mean temperatures below the seasonal normal until 11 February, before rising broadly in line with the average.
- Mean temperatures in Dusseldorf are forecast to decline to 1C on Saturday and to 0.5C on Sunday, down from 2.9C on Friday.
- Power demand in Germany is forecast to decline to 51.3GW on Saturday and to 48.33GW on Sunday, down from 60.35GW on Friday according to Bloomberg.
- Residual load in Germany is forecast to rise to 43.8GWh/h on Saturday, before falling to 40.91GWh/h on Sunday, compared with 42.49GWh/h on Friday according to Reuters.
- Germany’s hydro balance has been revised lower on the day to end at -215GWh on 14 February, compared with -131GWh a day earlier.
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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.
