POWER: Mid-Day Power Summary: France July Rallies
France July power base load is rallying to the highest since 24 May today, supported by some expectations for cooling demand, a downward revision in renewables forecasts and small gains in the wider European energy complex. German front-month power is also rising today but at a slower pace.
- Nordic Base Power JUL 24 down 2% at 25.35 EUR/MWh
- France Base Power JUL 24 up 9.2% at 57.01 EUR/MWh
- Germany Base Power JUL 24 up 3.4% at 73.72 EUR/MWh
- EUA DEC 24 up 0.2% at 67.07 EUR/MT
- TTF Gas JUL 24 up 1.6% at 34.375 EUR/MWh
- Rotterdam Coal JUL 24 down 0.8% at 106 USD/MT
- TTF has extended earlier gains but remains well within this week’s range. Healthy storage levels and a cooling weather forecast are set against supply risks amid LNG competition from Asia and Russia supply concern.
- The EU ETS Dec 24 is trading higher today, supported by gains in European natural gas prices. The latest EU ETS CAP3 EU auction cleared at €66.17/ton CO2e, up from €65.94/ton CO2e in the previous auction according to EEX.
- French-German net exports have reached a yearly high so far in June, as day-ahead prices in France have been at a discount to Germany for most of the month.
- Iberdrola has finalised the FID for the planned 315MW Windanker offshore wind project in the German Baltic Sea, near the island of Ruegen, the firm said.
- Italian hydropower reserves continued to move upward in week 25 (17-23 June), albeit slightly slower than last week, to reach a yearly high of 3.37TWh, data from Entso-E show. Italian thermal output climbed sharply during the week as wind and PV edged down.
- Nordic front-month power is edging lower today, weighed on by an upward revision in precipitation forecasts and higher nuclear availability, while gains in the German market, driven by higher gas prices, is keeping a lid on losses.
- Norwegian company Statkraft has lowered its annual solar, onshore wind and battery storage development to 2-2.5GW from 2026 compared to 2.5-3GW from 2025, with its offshore wind goals in northern Europe being 6-8GW by 2040 down from the previous 10GW, the firm said.
- EU leaders meet in Brussels from 1230CET (0630ET, 1130BST) today for a Council meeting in which the sign-off on nominating individuals for key EU portfolios is set to be provided. The nomination of Ursula von der Leyen for a second term as EC president is a given, but focus will be on the level of opposition.
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FOREX: Pick-Up in Volumes Puts USD Index Under Pressure
- NY crossover coincides with fresh bout of USD sales (FX futures markets see comfortably the best activity of the session so far) putting EUR/USD at a new daily high. The USD Index now slipped to new daily lows as a result and edged through the 200-dma support of 104.413.
- Firmer support seen into 104.080, with consumer confidence data the next highlight ahead of appearances from Fed's Kashkari, Cook & Daly - although few fresh signals on Fed policy are expected today.
EGB SYNDICATION: Spain New 10-year Obli: Mandate
The new 10-year Obli mandate is line with MNI's expectations. We look for a E10-15bln transaction size.
"The KINGDOM OF SPAIN, rated A/A-/Baa1/A/A- (stab/stab/pos/stab/stab) (S&P/Fitch/Moody's/DBRS/Scope), has mandated BBVA, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley, and Santander for a new Obligacion del Estado syndicated 10-year Euro benchmark maturing on 31st October 2034. The transaction will be launched in the near future subject to market conditions. All remaining primary dealers in the Kingdom of Spain government bond market will be invited into the syndicate".
Details as per Bloomberg.
OUTLOOK: Price Signal Summary - Bear Cycle In Bund Futures Remains In Play
- In the FI space, a bear cycle in {GE} Bund futures, that started off the May 16 high of 132.11, remains in play. The recent extension lower has exposed the key support and bear trigger at 129.53, the Apr 25 low. Clearance of this level would confirm a resumption of the downtrend that started late December last year. This would open 129.26, the 1.618 projection of the Mar 8 - 18 - 27 price swing. Initial resistance is at 130.77, the 20-day EMA.
- Gilt futures remain soft following the recent strong sell-off, and despite the latest bounce. The contract has traded through the 97.00 handle and a continuation lower would suggest scope for an extension towards 96.00, and a support around 95.87, the May 1 low. Initial resistance to watch is 97.44, the May 23 high. A break of this level would allow for a stronger near-term recovery, potentially towards resistance at 98.12, the May 21 high.
