POWER: End of Day Power Summary: FR-DE Feb Discount More Than Doubles On Week
Jan-17 16:46
The French-German February power contract discount has more than doubled on the week to be at around €9.95/MWh at the time of writing amid around an 8% on week gain in the German front-month amid similar on week price moves in the energy complex. In contrast, French gains have been more subdued – up by around 2.6% on week – due to high nuclear availability in the country and limited sensitivity to price increases in TTF.
- Nordic Base Power FEB 25 down 1.6% at 38 EUR/MWh
- France Base Power FEB 25 up 0.6% at 93.85 EUR/MWh
- Germany Base Power FEB 25 up 1.5% at 103.8 EUR/MWh
- EUA DEC 25 up 1.5% at 79.48 EUR/MT
- TTF Gas FEB 25 up 2.2% at 47.275 EUR/MWh
- Rotterdam Coal FEB 25 up 1.4% at 107.65 USD/MT
- TTF front month is holding onto gains from the midday session amid supply concerns surrounding Russian LNG sanctions and continued strong storage withdrawals, offsetting downward pressure from warmer weather in NW Europe and firm LNG imports. The contract is up by around 5% on the week.
- EU ETS December 2025 allowances have dropped slightly from their intra-day high of €80.50/t CO2e, however, are still supported by movements in TTF and European coal, with a sharp rise in the clearing price of German EUA auctions lending some support.
- The EU ETS December 2025 contract hit an intra-day high of €80.50/t CO2e at 13:18 GMT – the highest since 29 December 2023 settlement – as low wind and cooler temperatures have boosted power demand in the EU region and supported fossil-fired power generation, specifically in Germany.
- The South West Link 1 between Sweden’s SE3 and SE4 unplanned curtailment has been extended to 23 January from 19 January.
- The Finnish Energy Authority has criticised Norway’s Statnett for making unjustified and uncoordinated changes to the Nordic flow-based capacity calculation method, warning that such actions undermine market transparency and disrupt electricity price stability.
- Poland’s February has rebounded from the previous session to settle up by around 4.6% on the week on the back of price increases in EU ETS and European coal. Temperatures in Warsaw are still expected to remain above the 30-year norm until 26 January before flipping below over 27-29 January at between -2.9C and -4.3C – likely lifting heating demand over the period.
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SEP: Growth, Inflation Forecasts Due To Rise (Along With Uncertainties)
Dec-18 16:42
The MNI Markets Team’s expectations for the updated Economic Projections are below.
- This will largely mark-to-market the stronger growth, lower unemployment and higher inflation in 2024 than foreseen in the September projections, rather than a wholesale change in the outlook.
- The main risks to our expectations are to the upside for 2024 real GDP (could be as high as 2.7-2.8%) and core PCE inflation (could be 2.9% depending on participants' assumptions).
- We will also be watching the longer-run variables, particularly longer-run GDP growth which could be nudged higher from 1.8% at a meeting in the not-too-distant future.
- We don’t expect the forecasts to incorporate anticipated policy changes under the incoming Trump administration - instead, as we explain in our full Fed preview, we expect it to be reflected in the forecast uncertainty diffusion indices provided with the SEP materials.
- By the same token, if uncertainties are extreme with risks pointing in the same direction (eg higher growth and inflation), it could just mean that the December economic projections are obsolete upon publication as they don't reflect participants' "true" view of the impact of tariff and trade policy shifts.
December Dot Plot: Longer-Run Likely To Continue Heading Higher (2/2)
Dec-18 16:34
- 2026-27: While the 2025 median will show a rise vs September, we would expect the number of cuts in 2026 to remain roughly the same: 50bp (to 3.1%, up from 2.9% prior). However there may be no further cutting in 2027 (to steady at 3.1%, vs 2.9% in the September projections). That’s largely contingent on an increase in the longer-run dot, however, and we think the 2027 split will be very close between 2.9 and 3.1%.
- Longer-Run: The longer-run dot has shifted up in each quarterly projection so far in 2024, from 2.50% last December, to 2.625% in March, to 2.75% in June, and finally to 2.875% in September.
- There were 9 participants at 3.00% or above (including 7 at 3.25% or above), with 2 on 2.875% and 8 below that (2.375% the lowest dot). This means it would take only one of 10 dots dot to shift above 2.875% to move the median higher to 3.00%, and we would not be surprised to see such a move.
- That would bring it back to a level last seen in September 2018, and up from the trough of 2.40% in 2022.
FED: US TSY 17W BILL AUCTION: HIGH 4.220%(ALLOT 75.52%)
Dec-18 16:32
- US TSY 17W BILL AUCTION: HIGH 4.220%(ALLOT 75.52%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 31.85% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 4.73% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 63.41% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 2.97
