EMISSIONS: EU End of Day Carbon Summary: Carbon Fall on Clean Deal Support
EUAs Dec25 fell to their lowest level since March 6, as EU member states expressed support for the Clean Industrial Deal during the Environment Council today, while France’s call for a reconsideration of the free allowances phaseout ahead of CBAM’s full implementation also suppressing prices. UKAs Dec25 also declined to their lowest level since March 17, tracking EUAs losses before rebounding in the remaining trading hours.
- EUA DEC 25 down 3.19% at 68.57 EUR/t CO2e
- UKA DEC 25 down 2.68% at 45.1 GBP/t CO2e
- TTF Gas APR 25 up 0.6% at 41.125 EUR/MWh
- NBP Gas APR 25 down 0.1% at 98.9 GBp/therm
- Estoxx 50 down 0.4% at 5427.19
- Correlation between EUA/TTF for 30-day period weakened to 0.59 from the 0.62 on the previous day, amid stronger EUAs decline.
- Correlation between EUA/UKA for 30-day period remained stable at 0.69.
- The EUA Dec25 premium to the UK equivalent remained narrow at €14.44/t CO2e.
- The latest EU ETS CAP3 auction cleared at €68.41/ton CO2e, down 1.72% compared with the previous EU auction at €69.61/ton CO2e according to EEX.
- TTF front month saw a steady move upward after headlines suggested a continued firm stance from Europe towards Russia, suggesting harsher sanctions.
- The trend outlook in ICE EUA futures remains bearish and today’s strong sell-off reinforces this theme. The break lower exposes key support and the bear trigger at €66.78, the Mar 7 low. Clearance of this level would confirm a resumption of the downtrend that started Jan 30. Moving average studies are in a bear-mode position and this continues to highlight a downtrend. Key short-term resistance has been defined at €74.23, the Mar 19 high.
- Italy, backed by France and Slovakia, is calling for changes to the EU's Carbon Border Adjustment Mechanism (CBAM) to ease administrative burdens and ensure industrial competitiveness, according to a signed document seen by Bloomberg.
- France has proposed strengthening price stabilisation mechanisms in the upcoming EU ETS2, set to launch in 2027, to prevent excessive volatility and enhance market predictability, according to Bloomberg.
- Europe's major airlines are increasingly expressing concern over their ability to meet environmental targets under EU ETS, as they struggle with the cost and availability of Sustainable Aviation Fuel (SAF), Bloomberg reported.
- UK greenhouse gas emissions fell to 371mn tonnes CO2e in 2024, a 54.2% decline from 1990 levels, according to the Department for Energy Security and Net Zero.
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SCANDIS: NOKSEK Narrows Gap To Multi-year Support At 0.9500
This afternoon’s pullback in crude oil and natural gas futures (the former in response to the weaker-than-expected US consumer confidence reading) has weighed on the Norwegian krone. NOKSEK is down 0.5% today (now at its lowest since August 5th), narrowing the gap to key multi-year support at 0.9500.
- This level has contained downside in tthe cross on three occasions since March 2023, and also provided strong support back in 2016.
- A clear breach of 0.9500 would signal scope for a deeper retracement towards 0.9274, the June 2020 low.
- Meanwhile, SEK continues to outperform the G10 basket, trading resiliently despite today’s European equity volatility.
- Tomorrow’s Scandinavian calendar includes tier 2 data (Swedish PPI and Norwegian credit growth).
Figure 1: NOKSEK Weekly Chart
STIR: May/June SOFR Put Condor Strip
- +5,000 SFRK5/SFRM5 95.68/95.75/95.81/95.87 put condor strip, 2.5 ref 95.915
US: Navarro Proposes Expelling Canada From Five Eyes, Deepens Rift With Allies
Peter Navarro, the White House senior counselor for trade and manufacturing; one of US President Donald Trump's most important advisors, has proposed expelling Canada from the Five Eyes intelligence sharing alliance, according to FT. The group, which includes the UK, Australia, and New Zealand, is considered a foundational security alliance of the member nations, with nearly all intelligence shared mutually within the group.
- FT suggests that the comment could be designed to pile more pressure on Ottawa to extract concession as the March 4 deadline for a 25% tariff on Canadian imports approaches.
- Trump said yesterday: “We're on time with the tariffs and it seems like that's moving along very rapidly... So, the tariffs will go forward, yes, and we're going to make up a lot of territory…”
- Bloomberg reported: “…following [Trump's] remarks, a US official... said the fate of the special 25% levy on Canada and Mexico — tied to border security demands — was still to be determined."
- The threat comes amid a major shake-up of the postwar Western alliances, with the presumptive next Chancellor of Germany, Friedrich Merz, suggesting that the US could be cut out of NATO: "I never thought I would have to say something like this on a television program. But after Donald Trump’s statements last week at the latest, it is clear ....this administration, [is] largely indifferent to the fate of Europe.”
- ABC reports that Trump's approach to foreign policy has prompted concerns in Australia that both FVEY and AUKUS could collapse amid an isolationist pivot from Washington.
