EMISSIONS: Climate Research Says 2035 NDCs Will Not Deliver Material Change
Nov-14 15:30
{2Q}NewClimate Institute stated that the updated 2035 NDCs make no meaningful difference to projected global warming outcomes, citing weak targets, continued fossil fuel expansion, and insufficient renewable energy deployment.
- Current NDCs imply emissions of 53–57 GtCO2e in 2030 and 48–52 GtCO2e in 2035, far above the 1.5°C pathway requirements of 27 Gt and 21 Gt respectively.
- Even full implementation of existing NDCs and long-term targets would leave 2035 emissions more than double the level consistent with 1.5°C.
- Almost none of the 40 governments assessed have strengthened 2030 targets or set credible 2035 action plans.
- Major emitters’ commitments show limited ambition. The EU’s new use of international carbon credits weakens its 2040 climate target.
- It warns that continued fossil fuel expansion remains the central barrier to progress.
- Renewables growth is not yet aligned with the global goal to triple capacity by 2030.
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FOREX: Late Rally in GBP Sees GBPUSD Hit New Daily Highs Through London Close
Oct-15 15:26
- Monitoring some late strength go through in GBP in recent trade - GBPUSD rallies to touch a new daily high, and on decent volumes. Over 2,000 GBP Z5 futures have crossed over the past few minutes for some of the best activity of the day so far (cash equivalent approx. $175mln).
- No specific UK newsflow or headlines to drive the move here, but it is helping EURGBP drift into the London close. The cross is now close to closing the gap with yesterday's French pension reform-tied rally.
FED: US TSY 17W AUCTION: NON-COMP BIDS $397 MLN FROM $69.000 BLN TOTAL
Oct-15 15:15
- US TSY 17W AUCTION: NON-COMP BIDS $397 MLN FROM $69.000 BLN TOTAL
UK DATA: August Monthly Activity Data: Modest Gain Expected, Led By Services
Oct-15 15:14
All sell-side previews we've read look for a 0.1% M/M rise in GDP in the August print (in line with Bloomberg consensus), following July's flat reading. The growth is expected to be services-led, with the monthly index of services (a subcomponent of GDP) also expected to rise 0.1% M/M (vs 0.1% July), with two-sided risks. Note that the monthly GDP series will be revised to take into account the revisions seen alongside the publication of the final Q2 data on 30 September that incorporated the Blue Book as well as extra data incorporated for the July print.
- August's PMIs mostly surprised to the upside, with Services PMI jumping to a 16-month high at 54.2. Retail sales also grew by 0.5% M/M during August, partly attributed to good weather - Goldman Sachs estimate that this would contribute 2-3bps to headline GDP growth. However, NatWest Markets note that Barclaycard data suggest a slight cooling in demand in August. Elsewhere, July's NHS strikes did not continue into August and will therefore providing a boost to M/M services in August.
- The main downward driver is expected to be construction output. Sell-side forecasts converge around -0.2% M/M (though the Bloomberg surveys sees a wide range of estimates from -0.6% to +0.5%).
- There is little of note for industrial production (Bloomberg consensus 0.2% M/M), where an adjustment is seen after July's surprisingly weak M/M print at -0.9%. Stronger oil output is flagged, but much of the growth in industrial production is expected to be due to base effects. August's Manufacturing PMI fell 0.3 points short of consensus, at 47.0.
- Looking ahead to the quarterly print for Q3 (releasing 13 November), the sell-side previews we've read point to 0.2% Q/Q growth, slightly undershooting the BOE's forecast of 0.3% from the August MPR (unchanged from May).
- Factors noted include September's data fully incorporating the impact of the Jaguar Land Rover shutdown, as well as much of 2025H1 strength being driven by transitory factors (frontloaded spending, government consumption, inventory accumulation), both suggesting a weaker reading.
- An interesting point here is that the Bank's own survey indicator model also forecasts an undershoot for Q3 GDP, aligning with the sell-side on 0.2% Q/Q growth.
- Thursday's release also comes alongside trade data for August (also 07:00 BST).
- The trade balance is seen at GBP-4.81bln (Bloomberg consensus), versus GBP-5.26bln in July.
- Note that this will be the last monthly GDP release used by the OBR in its Budget forecasts.
