POWER: Italian Hydro Stocks Fall Below Five-Year Average
Italian hydropower reserves last week – calendar week 6 – declined by 0.15TWh to 2.48TWh to fall below the five-year average for the first time this year.
- Stocks declined by 0.12TWh the week before.
- Reserves switched to a deficit to the five-year average last week of 0.05TWh, compared with a slight 0.02TWh surplus in the week prior.
- The deficit to 2024 levels, however, narrowed on the week slightly to 0.14TWh, compared with 0.15TWh the week before.
- Power demand in Italy last week edged higher to 33.69GW, up from 33.53GW the week prior.
- There was no precipitation in Torino near Italy’s hydro-intensive region last week, for the second consecutive week.
- Looking ahead, the latest Bloomberg ECMWF weather forecast for Torino suggests precipitation to total 4.1mm, compared with the seasonal average of 5mm.
- Italy’s hydro balance is forecast to end this week at -3.83TWh. The balance is expected to narrow further to end at -4.27TWh on 27 February.
- Wind generation in Italy for the remainder of this week is seen at load factors between 21% and 30% according to SpotRenewables.
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FRANCE: Socialist Party Ldr-Agreement w/Gov't Possible In The Coming Hours
Speaking to BFM TV leader of the centre-left Socialist Party (PS) Olivier Faure says that after conversations with PM Francois Bayrou overnight they could see a non-censorship agreement in exchange for a suspension/freeze/pause of the controversial 2023 pension reforms, among other policies. Faure says that any such agreement not to vote for the gov'ts censure in confidence motions would apply to today's general policy speech from Bayrou (taking place in the National Assembly at 1500CET (0900ET, 1400GMT) as well as the social security budget (PLFSS) and state budget (PLF). However, it would not apply to general gov't policy beyond that.
- Faure says that he has made a proposal to Bayrou that would win the PS' support but will not reveal it. Instead, he says "if the Prime Minister definitively accepts it, it is up to him to announce it."
- A move to suspend the increase in the pension age could bring the PS on board, but would risk alienating the conservative Republican Right. President of the Senate Gerard Larcher: "I have no problem with [Bayrou] being open and having dialogue with the left. It's just that, on matters of state and budget, there are things that the right will not give up," It would also risk alienating President Emmanuel Macron, for whom the pension reforms stand as an issue of legacy.
- Support from the PS would likely prove sufficient for the Bayrou gov't to avoid censure in a 16 Jan censure vote. no matter whether the Republican Right votes for or abstains.
EGBS: Citi Wary Of OAT Risks
Ahead of this morning’s OAT-positive headlines Citi wrote “we turn neutral on BTPs, while risk of further widening is perhaps elevated for OATs around today’s inaugural policy speech by PM Bayrou.”
- “The speech is likely to be followed by a confidence vote.”
- “Dilution of the reform or government collapse is likely to weigh on OAT spreads.”
- They conclude with “regardless of the immediate outcome, OATs might begin to price in an eventual change in the pension reform anyway - if not under the current parliament, then after a potential legislative election later this year where the likelihood of a far-right/left majority has perhaps increased vs. the 2024 election.”
EQUITIES: BNP put buyer
Single stock Bank Option, BNP:
- BNP (19/12/25) 56p, bought for 4.79 in 4.2k.
