EMISSIONS: EU End-Of-Day Carbon Summary: EUAs/UKAs Fall On EU Gas Losses
Apr-24 15:21
{EU}{2EUAs/UKAs Dec25 are trending downward alongside EU gas losses amid signs of progress towards reducing gas storage targets in Europe. Meanwhile, the correlation between EUA-UKA tightened to the highest level since April 2024.
- EUA DEC 25 down 0.79% at 66.37 EUR/t CO2e
- UKA DEC 25 down 1.51% at 47.49 GBP/t CO2e
- TTF Gas MAY 25 down 1.5% at 33.655 EUR/MWh
- NBP Gas MAY 25 down 2.5% at 81.48 GBp/therm
- Estoxx 50 up 0.5% at 5064
- Correlation between EUA/TTF for 30-day period remained high at 0.62.
- Correlation between EUA/UKA for 30-day period hit the highest level since April 2024 at 0.77.
- The EUA Dec25 premium to the UK equivalent remained at a similar level at €10.74/t CO2e.
- The trend in ICE EUA futures is unchanged, it remains bearish and the latest recovery is considered corrective. Recent fresh cycle lows reinforce a bearish theme. The sell-off earlier this month resulted in a breach of €61.98, the Oct 9 ‘24 low. Clearance of this level confirmed a resumption of the downtrend and opens €56.76, a Fibonacci projection. The 20-day EMA has been pierced. Resistance at the 50-day EMA is at €69.07.
- The latest EU ETS CAP3 auction cleared at €63.93/ton CO2e, up 1.00% compared with the previous EU auction at €63.3/ton CO2e according to EEX.
- TTF front month has fallen today after signs of progress towards reducing gas storage targets in Europe. Meanwhile, Europe continues to secure healthy LNG supplies as Asia demand is muted by cheaper alternative fuels, despite recent LNG supply disruptions.
- The latest EU ETS CAP3 auction cleared at €63.93/ton CO2e, up 1.00% compared with the previous EU auction at €63.3/ton CO2e according to EEX.
- EUA POSITIONING – Speculator positioning in EU ETS futures on the ICE exchange turned more bullish in the week to 17 April, after speculators cut bullish bets for three consecutive weeks prior.
- UKA POSITIONING – Speculator positioning in UK ETS futures on the ICE exchange remained bullish since mid-March with net long positionings at an all-time high, the latest COT data as of 17 April showed.
- The updated 2025 UK ETS free allocation for operators of installations showed a 14.5% reduction year on year, the largest reduction factor since UK ETS establishment, according to Department for Energy Security and Net Zero data.
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GBP: Retracement Mode in EURGBP Remains in Play
Mar-25 15:20
- A retracement mode in EURGBP remains in play as attention for the cross remains on the 50-day EMA, at 0.8351. The average marks a key short-term pivot level and has been pierced. A clear break of it would undermine the recent bull theme and signal scope for a deeper pullback, towards 0.8321, a Fibonacci retracement.
- Overall, levels between 0.8300-0.8200 continue to represent the base of a longer-term range, as indicated below. Key resistance and the bull trigger are located at 0.8450, the Mar 11 high.
STIR: April ECB Pricing Unfazed By Cautious Speakers
Mar-25 15:16
April ECB implied rates have been unfazed by today’s cautious/hawkish leaning Governing Council speakers, with ESTR OIS continuing to price just over a ~65% implied probability of a 25bp cut.
- Both Kazimir and Muller suggested the ECB’s deposit rate was no longer in restrictive territory, evidently not subscribing to ECB staff’s (heavily caveated) 1.75-2.25% nominal neutral range.
- Both speakers (alongside GC colleague Vujcic) noted that the April decision remains an open question.
- February lending data is due on Thursday, before the March flash inflation round kicks off with Spain and France on Friday. Expect the majority of speakers to display a non-committal tone until next Tuesday at the earliest, following the Eurozone-wide inflation print and US President Trump’s next wave of tariff announcements.
- With the exception of the April meeting, OIS-implied rates are higher on the day, tracking similar movements in Euribor implied yields and core EGBs.
OPTIONS: Expiries for Mar26 NY cut 1000ET (Source DTCC)
Mar-25 15:16
- EUR/USD: $1.0690(E912mln), $1.0775-90(E766mln), $1.0900-25(E2.3bln)
- USD/JPY: Y148.00-10($932mln), Y151.74($519mln), Y152.00($955mln)
- AUD/USD: $0.6370-80(A$699mln)
- USD/CAD: C$1.4200($556mln), C$1.4240($634mln), C$1.4500($781mln)
- USD/CNY: Cny7.2430($600mln), Cny7.3000($500mln)
