POWER: German-French Day Ahead Premium Climbs to 2025 High
Jan-08 11:57
German and French spot prices diverged on the day, with German prices continuing their rise as wind generation in the country maintained its downward trend, while power consumption is expected to increase. In contrast, French prices fell due to higher wind and stronger nuclear availability. This led to a sharp widening of the DE-FR premium to €35.91/MWh, up from just €0.20/MWh previously.
- The German day-ahead spot settled at €121.53/MWh from €104.53/MWh on the previous day.
- The French day-ahead spot cleared at €85.62/MWh from €104.33/MWh on the previous day.
- Germany was at a €35.91/MWh premium from a €0.20/MWh premium in the previous session.
- Wind output in Germany is forecast to decrease to 18.41GW during base load on Thursday, down from 27.03GW forecasted for Wednesday according to SpotRenewables.
- Wind output is then forecast to rebound to 22.26GW the next day.
- Power demand in Germany is forecast to increase to 59.67GW on Thursday, up from 58.29GW on Wednesday amid mean temperatures in Dusseldorf forecasts to decrease to 2.4C on Thursday from 2.8C on Wednesday and below the seasonal average of 3.4C, according to Bloomberg.
- Demand will remain firm the next day at 59.61GW.
- In contrast, Wind output in France is forecast to rise to 8.89GW during base load on Thursday, up from 7.18GW forecasted for Wednesday according to SpotRenewables.
- Wind will then drop to 3.83GW the next day.
- Power demand in France is forecast to edge higher to 63.79GW on Thursday, up from 63.49GW on Wednesday despite mean temperatures in Paris forecast to rise to 6.9C on Thursday, up from 6C on Wednesday and above the seasonal normal of 4.7C, according to Bloomberg.
- Demand will then be at 65.92GW the next day.
- Nuclear availability in France increased to 88% of capacity as of Wednesday morning, up from 86% on Tuesday, RTE data showed, cited by Bloomberg.
- The 1.62GW Flamanville 3 outage has been extended by three days to end on 12 January 23:00CET.
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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.
