EMISSIONS: EU End-Of-Day Carbon Summary: EUAs/UKAs Fall On EU Gas Losses
EUAs Dec25 are both trending lower, pressured by losses in EU gas, while the latest EUAs auction cleared at its highest level since mid-October 2023. Meanwhile, UKAs Dec25 fell to their lowest level since early November amid strong selling pressure and above-average trading volumes. UKAs Dec25 Open interest remained on a downward trend, with the latest data from last Friday falling to the lowest since late April.
- EUA DEC 25 down 0.78% at 82.61 EUR/t CO2e
- UKA DEC 25 down 2.45% at 56.85 GBP/t CO2e
- TTF Gas JAN 26 down 1.7% at 28.32 EUR/MWh
- NBP Gas JAN 26 down 1.5% at 74.14 GBp/therm
- Estoxx 50 down 0.1% at 5662.04
- The latest EU ETS CAP3 auction cleared at €83.01/ton CO2e, up 2.39% compared with the previous EU auction at €81.07/ton CO2e according to EEX.
- The UK ETS Authority has set the 2026 civil-penalty carbon price at £49.41/tCO2e, a 18% discount to current UKAs Dec26 prices.
- TTF extends the decline from last month, falling to as low as €27.75/MWh earlier in the session amid mild weather forecasts through the first half of December, though recovering some of the losses later in the day.
- Centre for Climate and Energy Analyses projected that EU CBAM revenue in 2030 at €5–9bn and €16–31bn under the extended scope, it said.
- Germany’s chambers of industry and commerce (DIHK) stressed that emissions trading should remain the core climate-policy instrument and said free allocation should continue if CBAM proves effective, according to Clean Energy Wire.
- The EU Commission adopted rules to implement the certification framework for carbon removals and carbon farming, it said. Certification schemes can apply for recognition in early 2026, with approvals valid for five years.
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AUSSIE 10-YEAR TECHS: (Z5) Returns Lower
- RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
- RES 2: 95.960 - High Apr 7 (cont.)
- RES 1: 95.900 - High Oct 17
- PRICE: 95.670 @ 16:16 GMT Oct 31
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures slipped lower Wednesday on the back of hotter-than-expected Australian inflation. This returned prices lower despite nascent signs of a technical recovery as recently as last week. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg.
AUSSIE 3-YEAR TECHS: (Z5) Struck by Strong CPI
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.375 @ 16:13 GMT Oct 31
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Having bounced well on the back of the mild US CPI print, Aussie 3-yr futures reversed course Wednesday on strong domestic inflation data containing RBA cut pricing through 2026. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 96.280 as the next major support.
FED: Gov Waller: Still Advocating For A December Rate Cut
Gov Waller, one of the FOMC's more prominent doves, makes clear in an appearance on Fox Business that he supports a follow-up rate cut in December. He makes reference to Chair Powell's press conference comment that the Fed could skip a cut at the December meeting due in part to a lack of official government data during the federal shutdown (Powell: “what do you do if you are driving in the fog? You slow down").
- Waller says today: "Right now, we know that the labor market has been weak... We know inflation is going to come back down. Inflation expectations are anchored, and in that world, the standard of central bank wisdom is to look through it and proceed with worrying about the labor market. So in my view, we should just look at what the data is telling us and proceed on policy that way.... So this is why I'm still advocating that we cut policy rates in December, because that's what all the data is telling me to do. The fog might tell you to slow down. It doesn't tell you to pull over to the side of the road. You still have to go. You may want to be careful, but it doesn't mean to stop, and ... the right thing to do with policy is to continue cutting."
- This is of particular interest since he appeared to suggest he would have a more cautious outlook on further easing after cutting in October.
