POWER: Mid-Day Power Summary: CWE, Nordics March Decline
Feb-19 12:04
CWE front-month power futures are pulling back, while EU gas prices are struggling to find a clear direction on Tuesday. Nordic March power is also trading lower with weakness from neighbouring markets, milder weather and improved hydro balances.
- TTF has rebounded from a low of €46.82/MWh yesterday on reports that the EU will not seek to relax gas storage targets until after 2025 in its upcoming Clean Industrial Deal to offset bearish pressure from US-Russia talks on peace in Ukraine.
- Front-month TTF is struggling to find a clear direction today with uncertainty over gas storage targets and peace talks in Ukraine.
- EUAs Dec25 are holding onto losses, despite upside pressure from EU gas prices. Speculator positioning in EU ETS futures on the ICE exchange turned more bearish for the first time after more bullish positioning for seven consecutive weeks.
- The latest bi-weekly Polish Primary Market Auction (Phase 4 - CAP3) cleared at lower at €72.90/ton CO2e, compared with €77.87/ton CO2e in the previous auction on 5 February.
- UKAs Dec25 are trading lower, diverging from EUAs, with a small upward revision in temperature forecasts and a higher-than-expected January CPI print at 3% higher y/y, the highest since March 2024. However, latest data is unlikely to change views for the next BOE meeting in March.
- Less than half of the EU member states have translated the EU ETS 2 scheme into national laws over economic and social concerns.
- Investment Funds positioning in ICE German power futures increased their net short positioning, with short positioning hitting a fresh all-time high.
- France’s government and EdF are set to finalise talks on the construction of six new nuclear power plants within weeks, Industry and Energy Minister Marc Ferracci said.
- Lightsource BP eyes to sign PPAs for its 500MW solar PV and storage portfolio in Iberia in 2025.
- Industry leaders are urging the Swedish government to accelerate energy production, streamline permitting, and ensure a level playing field for all fossil-free technologies.
- Finland’s 890MW Olkiluoto 2 nuclear reactor will curtail capacity by 415MW on 21 February for around 2hrs, with the capacity then curtailed by 155MW over 21 February - 25 May.
- Poland’s Energa Operator has secured PLN 7.5bn (€1.8bn) from the National Recovery Plan to fund a power grid modernisation in northern and central Poland.
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US TSYS: Modestly Cheaper To Start Inauguration Day
Jan-20 11:45
- Cash Treasuries are closed today for Martin Luther King Day whilst futures markets are set for an early close at 1300ET.
- Focus is firmly on Trump’s inauguration, due to be sworn in at 1200ET and with eyes on executive orders that may follow. See our political risk team’s schedule for the day: https://media.marketnews.com/MNIPOLRISK_Inauguration_Day_Schedule_07a11994f9.pdf
- TYH5 pushed through Friday’s low overnight with 108-10 (currently 108-12+, -05) but still carries some of the impact from a dovish Waller on Thu and all of Wednesday’s CPI impact. Cumulative volumes are unsurprisingly extremely thin, at 165k.
- Gains are considered corrective against a medium-term bearish trend condition. Resistance is seen at 108-27+ (Jan 17 high) whilst support is seen at 108-00 (Jan 13 low).
- Fed Funds futures meanwhile price a cumulative 7.5bp of cuts for Mar, 13bp for May, 23bp for Jun, 26bp for Jul and 38bp for 2025 (the latter vs 32bp pre-CPI).
EURIBOR OPTIONS: Large Call Condor is bought for more
Jan-20 11:45
Large Condor in Euribor is still trading, multiple clips:
- ERM5 98.125/98.25/98.375/98.50c condor, bought for half in ~40k.
OUTLOOK: Price Signal Summary - Resistance In Gold Remains Exposed
Jan-20 11:42
- On the commodity front, the recent climb in Gold appears corrective - for now. However, the yellow metal continues to hold on to its latest gains and scope is seen for a continuation higher near-term. The stronger recovery exposes $2726.2, the Dec 12 high and an important resistance. Clearance of this level would be a bullish development. On the downside, a reversal lower would expose $2583.6, the Dec 19 low. Initial support is at $2649.0, the 50-day EMA.
- In the oil space, the trend structure in WTI futures remains bullish and the Jan 15 rally reinforces current conditions. The recent strong impulsive climb has resulted in a breach of $75.91, the Oct 8 high. Attention is on $79.48, the Apr 12 ‘24 high. A clear break of this hurdle would strengthen the bullish theme and open 80.63, a Fibonacci projection. On the downside, a reversal lower would expose the 20-day EMA, at $73.89, a key short-term support.
