POWER: End of Day Power Summary: CWE March Power Extends Losses on Gas
Feb-26 16:21
CWE front-month power futures have extended losses today, mirroring movements in EU gas prices. The UKA-EUA spread has narrowed to the lowest so far this year, with UKAs resisting losses in natural gas prices.
- Nordic Base Power MAR 25 down 4.1% at 31.85 EUR/MWh
- France Base Power MAR 25 down 6.6% at 73.1 EUR/MWh
- Germany Base Power MAR 25 down 4.6% at 87.96 EUR/MWh
- EUA DEC 25 down 1.4% at 70.75 EUR/MT
- ICE UKA Dec25 up 2.5% at 41.7 GBP/MT
- TTF Gas MAR 25 down 7.3% at 41.045 EUR/MWh
- TTF has extended losses today with warm weather forecasts in March pointing to easing withdrawal pressure towards the end of the season. Signs of progress in Ukraine peace negotiations have reduced supply risk sentiment, while talks on the potential relaxation of gas storage targets are also weighing.
- EU ETS December 2025 allowances have erased earlier gains to edge lower with downward pressure from sharp losses in EU gas prices.
- UKAs spiked to the highest level since 20 Feb, supported by low wind expectation and strong buying interest mid-day.
- Speculator positioning in EU ETS futures on the ICE exchange turned more bearish for the second consecutive week with net long positionings at the lowest since 17 January.
- The Climate Change Committee (CCC) advises the UK government to reduce emissions by 87% versus 1990 levels by 2040, compared with 81% in the last official target from November.
- The EC confirmed CBAM will exempt small importers with less than 50 ton CO2e per year from surrendering obligations, eliminating around 182,000, or 90%, of importers, while still covering over 99% emissions
- Investment Funds positioning in ICE German power futures increased their net short positioning for the second consecutive week, with short positioning hitting another fresh all-time high.
- German net power imports from France this month are on track to be at the lowest level for any month since November 2023.
- Italian hydropower reserves last week accelerated the decline to 0.12TWh to 2.25TWh, falling below the five-year average for the first time this year.
- Romania is set to auction 3.5GW of renewable capacity in 2025 as part of a €3bn state aid scheme, aiming to accelerate wind and solar development under its recovery and resilience program.
- Finland’s 1.6GW Olkiluoto 3 nuke will now have planned maintenance over 1 March-2 May compared to 1 March-25 April.
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FED: US TSY 26W AUCTION: NON-COMP BIDS $1.904 BLN FROM $72.000 BLN TOTAL
Jan-27 16:15
- US TSY 26W AUCTION: NON-COMP BIDS $1.904 BLN FROM $72.000 BLN TOTAL
FED: US TSY 2Y AUCTION: NON-COMP BIDS $750 MLN FROM $69.000 BLN TOTAL
Jan-27 16:15
- US TSY 2Y AUCTION: NON-COMP BIDS $750 MLN FROM $69.000 BLN TOTAL
ECB: Weekly ECB Speak Wrap (Jan 20 – Jan 27)
Jan-27 16:09
The World Economic Forum in Davos brought plenty of ECB speakers but little in the way of new policy signals. Consensus amongst analysts, markets and policymakers is firmly for a 25bp cut to be delivered on Thursday (MNI’s full preview will be released tomorrow), with a subsequent 25bp cut in March also appearing very likely.
- The January flash PMIs were stronger-than-expected, with OIS now pricing 6bps fewer cuts through 2025 than a week ago (today’s DeepSeek driven dovish repricing has been fully pared at typing). However, we note that some analysts have raised questions around the seasonality of the PMIs post-Covid, which may have biased readings higher in Q1.
- President Lagarde’s interview with CNBC at Davos stuck to familiar themes. She said that future cuts will depend on data and that "gradual" steps remain reasonable, while noting that she did not see the ECB as “behind the curve” on rate cuts. She also signalled that the debate around neutral (which she placed as between 1.75-2.25%) will start to “get a little bit hotter” soon.
- The usually hawkish Kazimir notably endorsed market pricing for “three or four cuts”, while stating that the “deal is done” on a January cut. Meanwhile, the ever-hawkish Holzmann told Kronen Zeitung that he would prefer to “wait a bit more” before cutting rates again. However, even he admitted that he could be persuaded into supporting a cut if there were “good arguments” presented.
- In the tables below, we provide a summary of ECB-speak between January 20 and January 27: 250127 - Weekly ECB Speak Wrap.pdf
