EMISSIONS: EU End Of Day Carbon Summary: EUAs/UKAs Fall On EU Gas Losses
{EUAs Dec25 are trending downward to the lowest level since 10 April alongside EU gas losses, with carbon tightening correlation with gas. Meanwhile, UKAs Dec25 hit a one-week high amid EUAs influence, while the spread between EU-UK ETS hit the lowest level since June 2024 amid greater EUAs losses.
- EUA DEC 25 down 2.56% at 64.2 EUR/t CO2e
- UKA DEC 25 down 0.78% at 46.79 GBP/t CO2e
- TTF Gas MAY 25 down 4.5% at 34.065 EUR/MWh
- NBP Gas MAY 25 down 4.4% at 83.4 GBp/therm
- Estoxx 50 up 0.6% at 4902
- Correlation between EUA/TTF for 30-day period tightened to 0.63 from the 0.56 on the previous day.
- Correlation between EUA/UKA for 30-day period remained high at 0.74.
- The EUA Dec25 premium to the UK equivalent narrowed to €9.66/t CO2e from the €10.94/t CO2e in the previous day, amid greater EUAs loses.
- The latest EU ETS CAP3 auction cleared at €63.3/ton CO2e, up 4.89% compared with the previous EU auction at €60.35/ton CO2e according to EEX.
- The trend in ICE EUA futures remains bearish and recent fresh cycle lows reinforce this theme. The sell-off earlier this month resulted in a breach of key support at €61.98, the Oct 9 ‘24 low. Clearance of this level confirms a resumption of the downtrend and paves the way for an extension towards €56.76, a Fibonacci projection. Recent gains are considered corrective. The 20-day EMA has been pierced. Resistance at the 50-day EMA is at €69.49.
- EUA Dec25 implied volatility hit a two-week low as of April 17 as market tension from the US tariff in the prior week eased off. EUAs Dec25 gained 6% in the week, while the TTF front-month contract and EU equity market were up 7% and 2%, respectively.
- UKA Dec25 call-put volatility skew hit a two-week high as of April 17 as bullish sentiments building up ahead of EU-UK ETS relink chat in May. UKAs Dec25 gained 9% in the week, while EUAs were up 6%.
- EC is exploring options to align its methane emissions regulations with US practices to avoid a trade tension with the President Donald Trump’s administration and ensure continued LNG supply from the US, according to Offshore Technology.
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CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CARNEY EXPECTED TO SEEK ELECTION
US TSYS: Available "Extraordinary Measures" Pick Up Slightly From Lows
Treasury has $163B of "extraordinary measures" remaining for authorities to use to fend off hitting the debt limit as of March 19, per the latest release of Treasury data. That's up from $86B on Mar 17 and a low of $34B on Feb 24.
- That's a little under half of the $377B in measures available to Treasury, with most of the amount remaining ($143B) coming from the so-called "G Fund".
- This headroom is in addition to $416B in cash left in the TGA, at last count.
- We haven't seen any changes recently to "x-dates" by when Treasury will run out of cash until the debt limit is lifted.
- Consensus still centers around late July/early August, but much will depend on April's major mid-month tax take. Treasury wrote to Congress last week that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
USDCAD TECHS: Short-Term Outlook Remains Bullish
- RES 4: 1.4793 High Feb 3 and key resistance
- RES 3: 1.4700 Round number resistance
- RES 2: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 1: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- PRICE: 1.4345 @ 16:27 GMT Mar 21
- SUP 1: 1.4242 Low Mar 6 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD is trading closer to its recent lows. The bull cycle that started Feb 14 remains intact and moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Note that the latest pullback has exposed a near-term key support at 1.4242, the Mar 6 low. Clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. The bull trigger is 1.4543, the Mar 4 high.
