POWER: Nordic Forward Curve Up on Drier Outlook, Cooler Temps
Jan-31 08:33
The Nordic forward curve is being lifted by a much drier outlook in Norway and Sweden – potentially limiting inflows to reservoirs. At the same time, gains in German power and TTF are also lending support. Temperatures are expected to be on a general downward trend over 7-14 February and are seen heading into negative territory.
- Nordic Base Power FEB 25 up 8.1% at 46.25 EUR/MWh
- France Base Power MAR 25 up 3.5% at 86 EUR/MWh
- Germany Base Power MAR 25 up 3% at 104.6 EUR/MWh
- EUA DEC 25 up 0.5% at 83.09 EUR/MT
- TTF Gas MAR 25 up 1.7% at 52.315 EUR/MWh
- Works on the 350MW Estlink 1 between Finland-Estonia are expected to last until 3 February, with no capacity available between the two countries due to the 650MW Estlink 2 still being down.
- The Norwegian hydro balance is expected lower over 6-14 February, with downward revisions seen as high as around 1.6TWh from previous forecasts. The balance anticipated at +6.22TWh on 14 February compared to +7.74TWh previously estimated.
- Sweden’s hydro balance is expected at +5.90TWh on 14 February compared to +6.41TWh in the previous estimate.
- And rainfall in the Nordics over 1-14 February will see below-normal precipitation, with most days over the period seeing just slightly above 0mm.
- Average temperatures in the region will be on a steady decline from 7 February and are seen flipping below the norm over 10-14 February, reaching as low as -4.9C in the middle of the month.
- Closer in, Norwegian wind is forecasted at 0.441GW on 1 February, or a 6% load factor down from today's forecasts of around 0.709GW, however, with typically lower demand on the weekend spot prices could still be impacted.
- Nordic nuclear capacity was at 89% capacity on Friday morning, unchanged from Thursday, according to Bloomberg. 10 of the 11 units are still online.
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US TSYS: Tsy Curves Look To Finish 2024 at June'22 Highs
Dec-31 19:18
- Treasuries look to finish the last trading session of 2024 lower after reversing Tuesday morning support. Markets closed Wednesday for New Years day, resume full trade Thursday.
- The Mar'25 10Y contract trades 108-25.5 (-5.5) late in the day, 10Y yield near session high of 4.5871%. Curves bounced off flatter levels, 2s10s climbing to 34.344 -- the highest level since June 2022.
- Short end support, in turn, helped projected rate cuts into early 2025 gain momentum vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -20.6bp (-19.5bp), Jun'25 -29.8bp (-28.8bp).
- No substantive reaction to this morning's housing and regional Dallas Fed services activity data. Looking ahead to Thursday data (prior, est): Initial Jobless (219k, 221k) and Continuing Claims (1.910M, 1.890M) at 0830ET; S&P Global US Manufacturing PMI (48.3, 48.3) at 0945ET; Construction Spending MoM (0.4%, 0.3%) at 1000ET.
- Treasury supply: $85B 4- & $80B 8W bill auctions at 1130ET, $64B 17W bill auction at 1300ET.
COMMODITIES: WTI Futures, Gold Holding Higher
Dec-31 18:47
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.9 or +1.27% at $71.88
- Natural Gas down $0.32 or -8.13% at $3.618
- Gold spot up $19.24 or +0.74% at $2625.86
- Copper down $6.95 or -1.7% at $402.3
- Silver down $0.1 or -0.34% at $28.8383
- Platinum up $3.96 or +0.44% at $908.02
US STOCKS: Late Equity Roundup: Tech & Interactive Media Sectors Underperforming
Dec-31 18:36
- Stocks are trading near session lows after reversing early session gains. Though off this year's record highs (SPX Eminis 6178.75, DJIA 45,073.63, Nasdaq 20,204.58) major averages will finish the year with double digit gains: SPX Eminis +19.5%, DJIA +13.1%, while the Nasdaq gained 29.9%!
- Currently, the DJIA trades down 92.19 points (-0.22%) at 42474.46, S&P E-Minis down 28 points (-0.47%) at 5929.75, Nasdaq down 147 points (-0.8%) at 19337.13.
- Information Technology and Communication Services shares underperformed continued to underperform late Tuesday, shares of software and semiconductor makers weighing on the tech sector: Nvidia -1.61%, Advanced Micro Devices -1.36%, Crowdstrike Holdings -1.28%.
- Interactive media and entertainment shares weighed on the Communication Services sector: Alphabet -0.9%, Live Nation -0.76%, Netflix -0.60%, Meta -0.41%.
- On the positive side, Energy and Materials sectors outperformed in the second half, oil & gas stocks buoyed the Energy sector as crude prices continued to rise (WTI +1.0 at 71.99): APA Corp +3.59%, Marathon Petroleum +2.46%, Occidental Petroleum +2.15%.
- Meanwhile, shares of chemical & fertilizer makers supported the Materials sector: Mosaic +2.44%, Celanese +1.42%, Dow +1.37%.
- Looking ahead, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.
