EMISSIONS: EU End-Of-Day Carbon Summary: EUAs Fall on US-Iran Conflict
EUAs Dec26 are edging down alongside EU equities on heighted tension around US-Iran Conflict after President Donald Trump ordered a blockade of the Strait of Hormuz. However, US equities appeared to influence EU carbon intraday, with EUAs rising by around 1% within 30 minutes of the US market opening, while the S&P 500 gained 0.5% over the same period. UKAs Dec26 are edging up amid mix influence from EU equities, EUAs and US equities.
- EUA DEC 26 down 0.48% at 72.49 EUR/t CO2e
- UKA DEC 26 up 0.3% at 43.52 GBP/t CO2e
- TTF Gas MAY 26 up 6.6% at 46.51 EUR/MWh
- NBP Gas MAY 26 up 6.6% at 116.98 GBp/therm
- Estoxx 50 down 0.3% at 5907.49
- The latest EU ETS CAP3 auction cleared at €70.62/ton CO2e, down 0.07% compared with the previous EU auction at €70.67/ton CO2e according to EEX.
- The trend condition in ICE EUA futures is bearish - MA studies are in a bear-mode position, highlighting a downtrend. This suggests that recovery from the Mar 19 low is likely a correction. Note that key resistance at €73.65, the 50-day EMA, has been pierced. A clear break of it would undermine the bearish theme and instead expose €78.43, a Fibonacci retracement point. A resumption of the bear trend would open €61.69, the Apr 9 low ‘25 low.
- EU ETS verified emissions in 2025 fell 1.3% year on year in 2025, extending the downward trend in emissions, according to the EU Commission publication on 10 April after market closed. The reduction rate was below market expectation of around 2%.
- European Commission President Ursula von der Leyen said the Commission will consult member states on updated free allocation benchmarks, while a full EU ETS review is scheduled for July, according to the press release.
- Czech Prime Minister Andrej Babiš called on the EU in a letter to European leaders to grant additional free EU ETS allowances to industries, reported by Radio Prague International.
- Italy’s greenhouse gas emissions in 2024 fell 30% compared with 1990 levels, down 3.6% year on year to just over 360mn tCO2e, according to ISPRA.
- The UK government is preparing a legislation, UK–EU reset bill, that could allow it to adopt certain EU rules through secondary legislation without requiring a full parliamentary vote on each measure, reported by Bloomberg.
- TTF front month jumped to a high of €51.3/MWh before pulling back slightly after talks between the US and Iran failed to result in a deal resulting in US threats to blockade Iran-linked flows through the Strait of Hormuz.
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FED: MNI Fed Preview - March 2026: Navigating A Narrow Strait
We've just published our preview of the March FOMC meeting - Download Full Report Here
- The FOMC will hold the Federal Funds rate at 3.50-3.75% for a second consecutive meeting in March, in what increasingly looks like a prolonged pause before the next move.
- The outlook for policy changes has been complicated by events in the Middle East. With energy prices soaring, markets have swung from anticipating two 25bp rate cuts this year to now not even pricing one fully.
- The updated Dot Plot is likely to show the same median expectation for the rate path as December’s, including one 25bp cut by end-2026, which combined with a largely unchanged statement will effectively maintain the easing bias.
- Incoming data for the year so far won't allay hawks’ skepticism that inflation is headed sustainably to 2%, and while job gains remain soft at best, the labor market hasn't deteriorated to the point once feared.
- The threat posed to both dual mandate variables from the conflict in the Middle East gives policymakers even more reason to wait and see how things develop.
- We suspect that most on the FOMC, including the core leadership, will be more concerned with the potential demand destruction from the ongoing energy supply-side shock, than with the inflationary implications.
- But this is no time for pre-emptive action given inflation remaining above-target and expectations beginning to pick up, and it will take some months before a case can be made to resume easing.
- (MNI’s separate preview of sell-side analyst summaries to follow on Monday March 16)
USDCAD TECHS: Clean Break of 50-Day EMA
- RES 4: 1.3845 High Jan 22
- RES 3: 1.3800 High Jan 23
- RES 2: 1.3753 High Mar 03 and key resistance
- RES 1: 1.3691 / 3742 50-day EMA / High Mar 13
- PRICE: 1.3737 @ 16:40 GMT Mar 13
- SUP 1: 1.3526 Low Mar 09
- SUP 2: 1.3482 Low Jan 30 and the bear trigger
- SUP 3: 1.3420 Low Sep 25 ‘24
- SUP 4: 1.3400 50.0% retracement of the 2021 - 2025 uptrend
USDCAD is firmer, however remains inside the recent range. The pair looks to have made a clean break of resistance at the 50-day EMA. The break highlights a breach of both the 20- and 50-day EMAs and signals a stronger bull cycle. This opens the 1.3800 level initially, the Jan 23 high. For bears, a reversal would refocus attention on 1.3482, the Jan 30 low and bear trigger.
AUDUSD TECHS: Monitoring Support
- RES 4: 0.7284 High Jun’22
- RES 3: 0.7256 2.500 proj of the Nov 21 - Dec 10 - 18 price swing
- RES 2: 0.7208 61.8% of the Feb 25 ‘21 - Apr 9 ‘25 bear leg
- RES 1: 0.7187 High Mar 11 and the bull trigger
- PRICE: 0.7003 @ 16:31 GMT Mar 13
- SUP 1: 0.7000 Low Mar 13
- SUP 2: 0.6963 50-day EMA and key support
- SUP 3: 0.6897 Low Feb 6
- SUP 4: 0.6834 Low Jan 23
AUDUSD has pulled back further from Wednesday’s high. For now, the move down is considered corrective and attention turns to key support at 0.6963, the 50-day EMA. A clear break of this average would undermine the current bullish theme. Note that the moving average set-up is in a bull mode position signalling a dominant uptrend. A resumption of gains would open 0.7208 next, a Fibonacci retracement point.
