EMISSIONS: BNEF Revises Down Utilities’ EU ETS Hedging Amid Policy Risk
{EU}{BNEF revised-down EU utilities’ annual EU ETS hedged holdings for 2025-2035 by an average of 106mn tCO2e amid changes in policy outlook and generation mix, it said.
- The reduction is driven by bearish policy risks linked to the EU’s political agenda and upcoming regulatory reviews this year and in 2026.
- Declining coal and lignite generation has increased reliance on gas, which is less carbon-intensive, reducing the need for carbon hedging.
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EURUSD TECHS: Pullback Exposes Key Short-Term Support
- RES 4: 1.1919 High Sep 17 and a bull trigger
- RES 3: 1.1820 High Sep 23
- RES 2: 1.1775 61.8% retracement of the Sep 17 - Oct 9 bear leg
- RES 1: 1.1728 High Oct 17 and key near-term resistance
- PRICE: 1.1598 @ 15:24 BST Oct 22
- SUP 1: 1.1542 Low Oct 9 and the bear trigger
- SUP 2: 1.1516 76.4% retracement of the Aug 1 - Sep 17 bull leg
- SUP 3: 1.1392 Low Aug 1 and bear trigger
- SUP 4: 1.1313 Low May 30
EURUSD trading lower again Wednesday. The move lower exposes key short-term support at 1.1542, the Oct 9 low. Clearance of this level would cancel a recent bullish signal following the recovery from the Oct 9 low. Instead, this would confirm a resumption of the bear cycle that started on Sep 17, and open 1.1516, a Fibonacci retracement. The pair needs to break above 1.1728, the Oct 17 high, to reinstate a bull theme.
US TSYS/SUPPLY: WI 20Y Re-Open
Tsy futures are drifting off lows (TYZ5 currently at 113-23.5, -.5), WI dips to 4.516% from 4.522% earlier ahead of the $13B 20Y bond auction re-open (912810UN6) cutoff at 1300ET.
OPTIONS: No Slowdown In Rate Upside
Wednesday's Europe rates/bond options flow included:
- ERH6 98.12/98.25/98.50/98.62 c condor vs 98.00 puts at 3 in 8k (sold condor/ bought put)
- ERM6 98.50/98.62/98.75/98.87c condor, bought for half in 4k
- ERM6 98.25/98.4375/98.50/98.87c condor vs 97.87p, bought the condor for 1.5 in 10k
- ERZ6 98.875/99.00 call spread, paper pays 0.75 on 17k
- SFIZ5 96.25/96.40/96.50 broken c fly, bought for 4 in 9k
- SFIZ5 96.40/96.50cs, bought for 1 in 3k
- SFIF6 96.40/96.30ps 1x2, bought for 1.5 in 3k
- SFIG6 96.50/96.60/96.65/96.75c condor, bought for 1.75 in 5k
- SFIH6 96.15/96.25/96.40/96.50c condor sold down to 3.25 in 18.5k
- SFIM6 96.75/97.00/97.25c fly, bought for 3 in 4k
