EMISSIONS: EU End-Of-Day Carbon Summary: EUAs, UKAs Rise to Record High
Jan-15 16:23
EUAs Dec26 are rising to the highest level since June 2023 amid persisted bullish sentiment, gains in TTF and colder temperature. UKAs Dec26 are rising to a fresh high since April 2023 amid EU–UK ETS link update, gains in EUAs and TTF. Intraday correlations between TTF and both carbon contracts near close were above 0.65.
- EUA DEC 26 up 0.22% at 92.02 EUR/t CO2e
- UKA DEC 26 up 0.19% at 72.86 GBP/t CO2e
- TTF Gas FEB 26 up 4% at 33.075 EUR/MWh
- NBP Gas FEB 26 up 4.2% at 86.53 GBp/therm
- Estoxx 50 up 0.7% at 6044.93
- The latest EU ETS CAP3 auction cleared at €91.32/ton CO2e, up 2.94% compared with the previous EU auction at €88.71/ton CO2e according to EEX.
- EUAs Auction Calendar Week Ahead (Calendar Week 4) - A total of 10.8mn EUAs will be auctioned next week across five auction sessions. The latest EU ETS CAP3 auction rose to the highest since June 2023 at €91.32/ton CO2e, up 6.84% w/w.
- BNEF listed four key items to watch for EU ETS in 2026, including updates to the Market Stability Reserve (MSR), the inclusion of permanent carbon removals, changes to free allocations, and the inclusion of international flights.
- EUAs’ 30-day correlation with TTF tightened to the highest level since mid-December amid recent strength in both contracts. EUAs rose on bullish sentiment amid expectations of tightening supply, while TTF gained on colder weather forecasts in Europe and increased geopolitical risks linked to Iran. Meanwhile, correlations with UKA, EU equities and German front-month power remained stable week on week.
- The medium-term trend condition in ICE EUA futures remains bullish and fresh cycle highs this week, confirms once again a resumption of the medium-term uptrend. The move higher also maintains the price sequence of higher highs and higher lows. Sights are on €94.97 next, a Fibonacci projection. Clearance of this hurdle would strengthen the bull theme. Support to watch lies at €85.87, the 50-day EMA.
- TTF front month is resuming the trend higher this week driven by a forecast for cold weather in Europe throughout the second half of January and expectations of a fall in temperatures across Asia next week. The rise is despite steady imports and weak oil prices due to reduced Iran risk sentiment.
- Martin McCluskey, Minister for Energy Consumers, said on 14 Jan that the department is committed to assess the feasibility of including refined products in the UK CBAM in the next Autumn Budget, according to House of Commons.
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SOFR: BLOCK: Red Sep'27 1Y Bundle
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- 3,000 SFRU7 1Y bundle (SFRU7-SFRM8) +0.030 at 1102:43ET, likely swap-tied selling with spds running wider at the moment.
US DATA: NY Fed Services Activity Stays Weak At Year-End, With Prices A Concern
Dec-16 16:08
The New York Fed's monthly regional services firm (aka "Business Leaders") survey showed continued weak activity in December, with a notable pickup in price pressures. As the first of the monthly regional Fed services surveys, as with the prior day's Empire manufacturing report, it suggested little cause for cheer over economic developments at end-year.
- The general activity index ticked up to -20.0 from -21.7, but this is firmly negative and little changed over the last 4 months (the report describes the upshot as "activity continued to decline significantly"). Likewise, the business climate index at -44.2 (-42.2 prior) remained sub -40 for a 4th consecutive month, though the latest reading was narrowly a 6-month worst.
- Among the details: capex spending was steady at weak levels, employment fell for a 4th consecutive month amid weak wage growth, and supply availability continued to worsen. Confidence improved marginally (echoing the Empire Manufacturing survey), with the 6-month general outlook of -1.1 the 2nd best of the year (-4.6 prior).
- The prices paid gauge however was an inflationary warning sign, jumping over 10 points to 72.1 for a post-2022 high. Expected prices paid edged down 1.7 points to 63.2 but remained above 60 for a 10th straight month.
