EMISSIONS: August EUAs Outlook Bearish Amid Lower Power Demand
Aug-01 10:57
{EUBNEF held a bearish view over EU ETS in August amid the expectation of falling allowances demand due to lower power demand across the bloc as temperatures cool slightly and improvement in renewables generation, it said.
- EU power emissions are projected to decline in August as power demand is set to drop by 4% m/m, while renewables output is expected to rise, with wind up 4% and solar up 13%.
- Supply will fall 9% m/m in August due to fewer auctions, but 2025 remains oversupplied as maritime allowance cancellations are deferred to 2026.
- Volatility risks remain on the US global tariff, and Russian LNG and pipeline gas flows developments.
- EUA DEC 25 up 1.30% m/m at 71.49 EUR/t CO2e
- TTF Gas SEP 25 up 2.99% m/m at 34.735 EUR/MWh
- Estoxx 50 down 1.56% m/mat 5223.46
- FTSE 100 SEP 25 up 2.93% m/m at 9065.5
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PIPELINE: Corporate Bond Roundup: SoftBank Grp, Korea Gas, Bank of Kuwait on Tap
Jul-02 10:54
- Date $MM Issuer (Priced *, Launch #)
- 07/02 $Benchmark Korea Gas 3Y SOFR+100a, 5Y +85a
- 07/02 $Benchmark National Bank of Kuwait PerpNC6 6.875%a
- 07/02 $Benchmark SoftBank Group 3.75Y 6.75%a, 5.5Y 7.125%a, 7 Y 7.500%a, 10Y 7.875%a (in addition to 3 Eur tranches) Note, SoftBank Corp issued $1B over 2 tranches on Monday.
- $1.75M Priced Tuesday, $13.5B/wk
US TSYS: Lower Ahead Of More Labor Data In Payrolls Build-Up
Jul-02 10:48
- Treasuries are lower across the curve, bear steepening as curves partly reverse yesterday’s bear flattening that was extended by a strong JOLTS report.
- Treasuries outperform EGBs but modestly underperform Gilts amidst fiscal concerns.
- Today sees labor market data in early focus with Challenger job cuts and ADP employment, the latter on a clear moderating trend in recent months, as a warm-up for tomorrow’s payrolls report (MNI Preview here).
- Cash yields are 1.2-4.7bp higher across the curve, with increases led by 30s.
- 5s30s has lifted to 95.5bps off a low of 93bps having pulled off last week's fresh ytd high of 103.3bps.
- TYU5 trades at 111-22 (-05+) on moderate cumulative volumes of 345k, having lifted a touch off session lows of 111-20+.
- A bull cycle remains in play although there was a sizeable reversal off yesterday’s high of 112-12+, which now forms initial resistance before 112-15+ (61.8% of Apr 7-11 sell-off). To the downside, firmer support is seen at 111-07+ (20-day EMA).
- Data: MBA mortgage applications (0700ET), Challenger job cuts Jun (0730ET), ADP employment Jun (0815ET)
- Fedspeak: Nothing scheduled
- Bill issuance: US Tsy $65B 17W bill auctions (1130ET)
ECB: Rehn Sees Real Chance for EUR to Become More Important
Jul-02 10:47
ECB'S REHN: RISKS TO INFLATION ARE TWO-SIDED" -bbg
REHN: CAN'T ALLOW INFLATION UNDERSHOOT TO SHIFT EXPECTATIONS
- Speaking on BBG TV - and mentions the EUR currency: "Exchange rate is not a policy target, and EUR appreciation has helped the ECB reach 2% inflation target. EUR has a real chance to become more important"
- Follows increased focus on the EUR rally this year - particularly after de Guindos said this week that EUR/USD at $1.20 is "acceptable", but a rally beyond that point would "complicate" things.
