EMISSIONS: EU End-Of-Day Carbon Summary: EUAs, UKAs Rise on US-Iran Ceasefire
Apr-08 15:29
EUAs and UKAs are rising alongside EU and UK equities following a two-week ceasefire agreement between the US and Iran. STOXX posted its biggest rally since March 2022 at around 5.4%.
- EUA DEC 26 up 0.48% at 71.85 EUR/t CO2e
- UKA DEC 26 up 2.41% at 42.13 GBP/t CO2e
- TTF Gas MAY 26 down 14.5% at 45.535 EUR/MWh
- NBP Gas MAY 26 down 15.1% at 114.66 GBp/therm
- Estoxx 50 up 4.5% at 5885.72
- FTSE 100 JUN 26 up 2.4% at 10607.5
- EUA POSITIONING – Investment funds very marginally increased net long positions in EU ETS futures on the ICE exchange, after cutting positions for the ten consecutive weeks, the latest CoT data as of 2 April showed.
- UKA POSITIONING – Investment funds decrease their net long positions marginally in UK ETS futures on the ICE exchange as of 2 April, according to the latest COT data.
- UKA ICE auction cleared at £40.49/ton CO2e, compared with £36.38/ton CO2e in the previous auction on 25 March when the price hit the lowest level since January 2025, according to ICE.
- EUAs have decoupled from EU gas, power and equities as attention turns to EU ETS reform developments, while Middle East headlines add volatility. All eyes are now on the 2026–2030 emissions benchmark announcement that are used for the calculation of free allocations, expected “after Easter.”
- The trend condition in ICE EUA futures remains bearish - MA studies are in a bear-mode position, highlighting a dominant downtrend. This suggests the latest recovery is likely a correction. Note that key resistance at €73.76, 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.
- EEX reported that EUAs secondary market traded volume in March 2026 rise 520% y/y to 119mn tonnes CO2e, compared with the 19mn tonnes CO2e in March 2025, according to its latest note.
- The UK ETS has raised the Auction Reserve Price (ARP) in 2026 from £22 to £28 to reflect inflation. The adjustment was set out in the December 2025 Authority Response and the legislation for this amendment came into effect today.
- UK Climate Change Committee recommends emissions for CO2 transport by road, rail, and ships below 5000GT to be included in the UK ETS, while refraining from issuing additional allowances for this inclusion, according to its latest letter to Department for Energy Security and Net Zero.
- Total UK net territorial greenhouse gas emissions are provisionally estimated to be 367mn tCO2e, down by 7mn tCO2e or 2% from 2024 and 54% from 1990 level, according to Department for Energy Security & Net Zero.
- France cut GHG emissions in 2025 by 5.5mn tonnes CO2e or 1.5% year-on-year, below what is needed to meet its 2030 climate target, according to Citepa data.
- Veyt said potential amendments to the EU ETS 2 MSR are unlikely to materially affect allowance prices, it said in a latest note.
- TTF front month has dropped to the lowest since early March after a two-week ceasefire was announced in Iran, though the ceasefire is on shaky ground amid Israeli attacks in Lebanon, and various Iranian attacks on regional infrastructure, including the East-West pipeline and Kuwaiti desalination plants.
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UK: Gilt consultation agenda and Chancellor Reeves both due shortly
Mar-09 15:27
- The DMO is expected to publish the consultation agenda for next week's GEMM and investor meetings regarding FQ1 (April to June) gilt operations. Within this, the number of auctions in each maturity bucket will be outlined as well as any new gilts expected. Finally, the number of syndications (and maturity buckets) will be outlined. We'd expect one medium gilt syndication in FQ1 and pencil in April (with a new 10-year gilt likely to be launched). There may also be a long/link syndication suggested.
- Chancellor Reeves is due to give an update also shortly after 15:30. She isn't expected to announce any specific policy and we think the most likely policy response to the Middle East conflict (if there is one) would be a delay to the September fuel duty increase. However, it is too early to expect that.
FOREX: USD Remains Under Modest Pressure, Cable Back to 1.34
Mar-09 15:26
- Renewed downside for crude over the past hour continues to weigh modestly on the greenback, with the likes of MXN in the EM space now tilting into positive territory on the session. As noted, the firmer/more stable sentiment overall is providing support to the higher beta currencies, and helps GBPUSD extend its recovery in recent trade to the 1.34 handle, closing the gap to last Friday’s close at 1.3415.
- For cable, that represents a near 120 pip reversal from the intra-day lows which feel just shy of the 1.3253 low from last week. Recent cable weakness resulted in the breach of a number of important short-term support levels, which will make developments in energy prices this week very important to monitor in assessing whether downside momentum may stall for the pair.
- Bank of America has noted GBP showing impressive resilience against the backdrop of elevated geopolitical uncertainty. They think the nature of the initial shock has defined broader G10 FX price action: a combination of relative terms of trade shifts and FX positioning. BofA believe GBP resilience should continue, but their concerns are two-fold: cross-asset measures of volatility remain muted; whilst macro data is yet to capture in the impact on inflation and sentiment.
- Rising volatility presents the greatest risk to GBP whilst the vol curve is underpricing risks around the UK local elections. BofA think the case for hedging GBP risk is well advised.
SECURITY: NYP: Trump-'We're Nowhere Near' Ordering Ground Troops In Iran
Mar-09 15:24
The New York Post reports that US President Donald Trump told the outlet that he is "nowhere near" the point of deploying US ground troops to Iran. Regarding speculation that US special forces could be deployed to safeguard fissile material at the Isfahan nuclear enrichment facility, Trump said, “We haven’t made any decision on that. We’re nowhere near it.”
- Needless to say, the deployment of any US ground troops would mark a major escalation in the conflict and carry risks of the war turning into a much more protracted affair, and of significantly damaging the president's standing domestically should US military casualties increase. The counter to this being, the prospect of US and Israeli troops on the ground could steer Iran towards major concessions to avoid ground operations that could presage full regime change.
- Regarding the appointment of Mojtaba Khamenei as Iran's next supreme leader, Trump said to the Post, “Not going to tell you. I’m not happy with him.” He did not repeat earlier threats to eliminate any successor to the late Ayatollah Ali Khamenei, who was chosen without Trump's personal input.
- MNI's latest US Daily Brief carries further analysis of the reports surrounding the prospect of US and/or Israeli troops being deployed on the ground (see MNI POLITICAL RISK - Iran War Weighs On Global Economy)
