EMISSIONS: EU End-Of-Day Carbon Summary: EUAs Track Weekly Losses, UKAs Rise
EUAs Dec25 are on track for a weekly loss of 1.6%, diverging from both TTF and equities movements, amid low trading interest through the week and a potential rise in short positioning due to a 0.77% rise in open interest as of 10 July. EUAs are edging lower on the day amid a possible ninth consecutive session of below-average daily trading volume and potential rising short positioning, despite a brief recovery following a morning spike in trades that were likely driven by a small number of participants as the surge in activity failed to sustain. UKAs Dec25 are set for a weekly loss of 0.54%, tracking the decline in EUAs. UKAs are edging higher on the day, loosely following EUA movements while holding firmer in positive territory.
- UK Baseload Month 1 Aug 25 up 1.67% at 75.61 EUR/t CO2e
- UK Spk Base Month 1 Aug 25 down 1.58% at -9.65 EUR/t CO2e
- UKA DEC 25 up 0.47% at 47.45 EUR/t CO2e
- NBP Gas AUG 25 up 1.39% at 85.37 EUR/t CO2e
- The latest Germany EU ETS CAP3 auction cleared at €69.3/ton CO2e, down 2.19% compared with the previous Germany auction at €70.85/ton CO2e according to EEX.
- ICE EUA futures remain above last week’s lows. A short-term bearish threat is in place - for now - and gains appear corrective. Recent weakness has resulted in a breach of a number of support points. This undermines a bull theme and note too that support at €69.60, the May 19 low, has also been pierced. A clear break of this level would highlight a stronger reversal. First resistance to watch is €74.57, the Jun 24 high.
- EUAs Dec25 recovered following a spike in trading volume at 10:30 BST, with 1,428 traded contracts within a 10min timeframe that pushed the price up by 1%. The trading volume during the price upticks was well above the average 10min trading volume at 377 contracts.
- The UK Climate Change Committee (CCC) has advised the UK Government to strengthen its UK ETS mechanisms to align more closely with the EU ETS, according to its letter to Department for Energy Security & Net Zero.
- The EU’s informal meeting of environment ministers, hosted by the Danish Council Presidency, concluded today, setting a schedule to present environmental policy plans toward 2030 in Aug and to reach an agreement on the 2040 climate target by Sept, according to the official press release.
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OPTIONS: Larger FX Option Pipeline
- EUR/USD: Jun13 $1.1400-05(E1.7bln), $1.1485-00(E2.0bln); Jun16 $1.1400(E1.3bln), $1.1450-65(E1.5bln), $1.1500(E1.5bln)
- USD/JPY: Jun13 Y144.00($1.2bln); Jun16 Y145.00($4.4bln)
FED: US TSY 17W BILL AUCTION: HIGH 4.220%(ALLOT 22.92%)
- US TSY 17W BILL AUCTION: HIGH 4.220%(ALLOT 22.92%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 32.60% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 5.12% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 62.28% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 2.96
TARIFFS: Lutnick Says China Won't Get "Our Best Chips"
Reuters carrying comments from US Commerce Secretary Howard Lutnick, speaking to CNBC on the US-China trade framework struck after two days of talks in London.
- Lutnick notes that US President Donald Trump and Chinese President Xi Jinping have to “approve final wording” of the deal. The tone of Trump’s Truth Social post earlier today suggests he is likely to endorse the agreement.
- Lutnick said: “China is going to approve all applications for magnets for US companies,” referring to rare earth components that are critical for a range of high-tech products.
- Lutnick appeared to suggest that the tariff rate agreed in London will be final: “You can say China tariff levels won't change from here.”
- On export controls, which come under the purview of his Commerce Department, Lutnick said the Chinese side “always wants to remove export controls,” but added "We are not going to give China our best chips.”
- Lutnick continued, “They've agreed we are going to examine how China can do more business with us.”
- In his ongoing testimony to the House Ways and Means Committee, Treasury Secretary Scott Bessent noted a short time ago that the Trump administration will continue to take a firm line on China’s industrial overcapacity.
- Speaking more broadly on trade, Lutnick said, “deal after deal” will start coming next week. Bloomberg reports that EU negotiators see trade talks stretching beyond the July 9 deadline, despite an uptick in talks.
