POWER: Nordic 2Q25 Falls 9% On Week Amid Declines in TTF, Stronger Hydro Balance
The Nordic front quarter is trading around 9% lower on the week to be at parity with its settlement on 4 March amid price falls in TTF and German power. Upward revisions of the hydro balance in Norway and Sweden also weigh. However, downward revision of temperatures in the region could limit losses.
- Nordic Base Power 2Q25 down 0.7% at 19.25 EUR/MWh
- Germany Base Power APR 25 down 2.9% at 70.77 EUR/MWh
- EUA DEC 25 down 0.4% at 67.07 EUR/MT
- TTF Gas APR 25 down 4.1% at 36.69 EUR/MWh
- Norway’s hydrological balance was revised higher 7-21 March by as much as around 350GWh and is expected to end at +9.58TWh on 21 March from +9.23TWh in the previous forecast for the same period.
- Sweden’s balance is also expected higher on the day and is now anticipated at +7.31TWh on 21 March from +7.21TWh previously estimated for the same day.
- However, average temperatures in the Nordics have been revised lower over 10-12 March by as much as 0.4C on the day. Temperatures are expected to be on a general downward trend until 12 March – when it will flip below the seasonal average.
- Temperatures will remain below until 18 March before flipping back above over 19-21 March.
- Rainfall in the region is expected to remain below the seasonal average until 21 March – which could limit flows into reservoirs.
- Closer in, Nordic nuclear reactors were operating at 82% capacity on Friday morning, up from 78% on Thursday. 10 of 11 units are still online, according to Bloomberg.
- Norwegian wind is anticipated at 2.05GW, or 39% load factor on 8 March, up from 2.20GW anticipated on 7 March – however, prices could still fall from the previous session due to lower demand.
- Wind will then drop to 1.06GW on 10 March – likely having a limited impact on gains from higher demand from the weekend.
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STIR: Over 80bp Of BoE Cuts Priced Through Year-End, Cycle Extreme Holds
Modest dovish moves in GBP STIRs as core global FI firms alongside a downtick in U.S. equity futures.
- Tech earnings and trade war worries weigh on e-minis.
- BoE-dated OIS showing ~83bp of cuts through ’25 vs. ~81.5bp late yesterday.
- Dovish cycle extremes of ~84bp held at the open.
- 24bp of cuts priced for this week’s meeting, with ~48bp priced through May.
- SONIA futures last little changed to +2.0.
- It would be a huge surprise if tomorrow's MPC decision delivered anything other than a 25bp rate cut.
- The bar is also high for forward guidance to be meaningfully tweaked.
- We would be surprised if the vote split wasn’t 8-1, although there are risks here.
- Our full preview of the decision can be found here.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Feb-25 | 4.466 | -23.8 |
Mar-25 | 4.406 | -29.8 |
May-25 | 4.223 | -48.1 |
Jun-25 | 4.139 | -56.6 |
Aug-25 | 4.014 | -69.0 |
Sep-25 | 3.975 | -72.9 |
Nov-25 | 3.899 | -80.5 |
Dec-25 | 3.873 | -83.1 |
SWEDEN: Jan Services PMI Details Not Overly Strong
The January services PMI just about remained in expansionary territory at 50.1 (vs 51.2 prior). The series is reasonably volatile month-to-month, but has generally trended higher alongside the Economic Tendency Indicator’s services sentiment series since the start of 2024.
- This contrasts with the manufacturing PMI, which has diverged from the Economic Tendency Indicator’s manufacturing sentiment series in recent months.
- The composite PMI was 50.9 (vs 51.5 prior), the third consecutive month in expansionary territory.
- The details of the services release were not overly strong. Production was 50.1 (vs 50.0 prior), while new orders dipped to 49.5 (vs 50.1 prior). The employment index softened to 45.6 (vs 47.7 prior).
- Meanwhile, supplier input prices rose notably to 65.5 (vs 61.9 prior), the highest since August 2023.
MNI: FRANCE DEC INDUSTRIAL PRODUCTION -0.4% M/M, -1.7% Y/Y
- MNI: FRANCE DEC INDUSTRIAL PRODUCTION -0.4% M/M, -1.7% Y/Y
- FRANCE DEC MANUFACTURING OUTPUT -0.7% M/M, -2.6% Y/Y
