EMISSIONS: Czech Calls For Complete Abolition Of EU ETS 2
Jun-25 12:02
The Czech Republic Prime Minister, Petr Fiala, called for the complete abolition of EU ETS 2 today during a press conference, according to Ceske Noviny.
- The Czech Republic has yet to receive support of complete abolition from other Member States.
- It is one of the 12 signatories that called for EU ETS 2 adjustments, including capping allowances prices, early auctions and stronger price control, according to a draft document seen by Bloomberg.
- There’s no cap on prices currently. However, during the first three years of the EU ETS 2, if the allowances price exceeds €45, additional allowances may be released from the MSR to weigh down the prices.
- ICE EU ETS 2 DEC28 Futures was priced at 82.07 EUR/t CO2e on 24 June, with demand remained muted as the open interest currently stood at 4 contracts.
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EUROPEAN INFLATION: EUR 5y5y Inflation Swap Still Close To 2%
May-26 11:54
EUR traded inflation swaps are little changed relative to a month ago. The 5y5y HICP ex-tobacco inflation swap remains close to 2% at 2.09%, while 1-, 2- and 5-year swaps are comfortably below the 2% handle.
- The trade agreement between the US and China in early May saw market-implied EUR inflation expectations rise, as it implied a reduced risk of disinflationary trade diversion from China into the Euro-area compared to when tariffs were at triple-digit levels.
- However, the combination of soft Eurozone data (May flash PMIs and Q1 negotiated wages) and US President Trump’s latest threats of tariffs as high as 50% on the EU has prompted a renewed softening of traded inflation metrics.
- The May 2025 HICP ex-tobacco inflation swap fixing is currently 189bps.
US: Memorial Day Trading Hours
May-26 11:18
US TSY FUTURES: CFTC Shows Asset Managers Covering Some Of Long Position
May-26 11:14
The latest CFTC CoT report points to asset managers reducing their curve-wide net long by ~$12mln DV01, with the cohort only extending net longs in WN futures.
- Meanwhile, leveraged funds added to net shorts in TY & WN futures, while they trimmed net shorts across the rest of the curve. They still extended their curve-wide net short position by ~$1.5mln, with the size of the net short build in WN futures (~$4.7mn) dominating.
- Broader non-commercial net positioning saw a mix of net short setting and cover (detailed in the table below). The cohort remain net short across the curve.
Source: MNI - Market News/CFTC/Bloomberg
