EMISSIONS: EC Publishes CBAM Update, Keeping Registry Confidential
The EC has published a technical update to the Carbon Border Adjustment Mechanism (CBAM), maintaining the confidentiality of the registry used by companies for declarations, it said, cited by Bloomberg.
- The update, released on 30 Dec, outlines how the registry will manage certificates, declarations, and company registrations, amid ongoing discussions on transparency and trade secrecy.
- European industries had requested more transparency for the register during public consultations in November.
- Non-EU industry representatives supported maintaining confidentiality, emphasising the need to protect trade secrets.
- The CBAM imposes a carbon price on imported industrial goods with high greenhouse gas emissions.
- The EU aims to implement the final version of the tax by 2026, designed to prevent industries from relocating abroad to avoid tightening climate regulations.
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OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Remains In Play
- In the FI space, Bund futures traded higher Monday and the contract maintains a firmer tone as it once again extends the current bull cycle. Further gains are likely. Price has traded through 134.87, the 76.4% retracement of the Oct 1 - Nov 6 bear leg. A clear break of this level strengthens a bullish theme and signals scope for a climb towards 136.20, the Oct 1 high. Initial firm support lies at 133.08, the 20-day EMA. First support lies at 134.34, the Nov 29 low.
- A bullish corrective cycle in Gilt futures remains in play and recent gains reinforces current conditions. Sights are on 96.33 and 96.52 next, the 2.236 and 2.382 projection points of the Nov 18 - 19 - 20 price swing. On the downside, a reversal lower would refocus attention on the initial key support at 93.40, the Nov 18 low. A breach of this support would be a bearish development. First support lies at 95.78, the Nov 29 low.
CROSS ASSET: European Equities are paring gains
- initial support in Bund seen at 134.94 (in Dec) has so far held, there's also been some demand in the front Euribor (ERZ4), saw an earlier block trade of 7.6k at 97.18.
- Eurex roll still dominates in Bonds, but desks swill also start to look at rolling their positions in ERZ4 into the end of the week and into next Week ahead of expiry on the 16th December.
- European equities are also giving back their earlier gains, with Estoxx futures (VGZ4) close to fully reversing its rally seen on the European cash open, the index was trading around 4865.00, now at 4878.00.
STIR: OI Points To Net Short Setting In SFRH5-H6 Dominating On Monday
OI data suggests that net short setting in SFRH5 through SFRH6 provided the most notable positioning swing on the SOFR futures strip on Monday.
- There was a modest bias towards net long cover further out the strip.
| 02-Dec-24 | 29-Nov-24 | Daily OI Change |
| Daily OI Change In Packs |
SFRU4 | 1,264,034 | 1,264,240 | -206 | Whites | +21,919 |
SFRZ4 | 1,321,139 | 1,327,797 | -6,658 | Reds | +50,083 |
SFRH5 | 1,064,478 | 1,038,166 | +26,312 | Greens | -5,674 |
SFRM5 | 982,939 | 980,468 | +2,471 | Blues | -4,484 |
SFRU5 | 801,344 | 791,033 | +10,311 |
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SFRZ5 | 950,076 | 914,074 | +36,002 |
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SFRH6 | 577,859 | 571,072 | +6,787 |
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SFRM6 | 584,340 | 587,357 | -3,017 |
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SFRU6 | 631,241 | 643,677 | -12,436 |
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SFRZ6 | 678,424 | 675,860 | +2,564 |
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SFRH7 | 410,594 | 409,422 | +1,172 |
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SFRM7 | 348,533 | 345,507 | +3,026 |
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SFRU7 | 272,577 | 274,592 | -2,015 |
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SFRZ7 | 288,950 | 288,273 | +677 |
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SFRH8 | 205,334 | 206,116 | -782 |
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SFRM8 | 153,141 | 155,505 | -2,364 |
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