EMISSIONS: EU End-Of-Day Carbon Summary: EUAs/UKAs Rangebound On EU Gas Move
May-21 15:17
EUAs/UKAs Dec25 are rangebound on the day, with losses in EU gas suppressing carbon. Meanwhile, the EUA-UKA spread continued to narrow and hit the lowest level since April 2023.
- EUA DEC 25 down 0.66% at 72.7 EUR/t CO2e
- UKA DEC 25 down 0.64% at 54.73 GBP/t CO2e
- TTF Gas JUN 25 down 1.4% at 36.455 EUR/MWh
- NBP Gas JUN 25 down 1.9% at 87.43 GBp/therm
- Estoxx 50 up 0% at 5462
- Correlation between EUA/TTF for 30-day period tightened up to 0.58.
- Correlation between EUA/STOXX for 30-day period loosened to the lowest level since early April.
- Correlation between EUA/UKA for 30-day period remained high at 0.58.
- Correlation between UKA/FTSE100 for 30-day period loosened to the lowest level since early April.
- The EUA Dec25 premium to the UK equivalent remained at a similar level at €7.87/t CO2e.
- EUA POSITIONING – Funds positioning in EU ETS futures on the ICE exchange was bullish for the third consecutive week according to the latest COT data as of 16 May.
- UKA POSITIONING – Speculator positioning in UK ETS futures on the ICE exchange raised bullish bets for the ninth consecutive week amid rising bullish sentiments on EU-UK ETS linkage deal, according to the latest COT data as of 16 May.
- EU carbon prices could crash by over 75% in 2025 due to declining industrial activity triggered by Trump trade tariffs, according to BNEF model.
- EU Steelmakers could see EUAs exposure up to 7% of their 2025 EBITDA, according to Bloomberg.
- Poland is working on modification to the upcoming EU ETS2 scheme, aiming to address transition period concerns and price hedging mechanism, Deputy Climate and Environment Minister, Urszula Zielinska, told the Polish Lower House of Parliament Sejm, according to Bloomberg.
- Ireland’s energy-related emissions fell 1.3% to its lowest level in over 30 years in 2024, despite an 2.3% increase in overall energy use, marking an 11% drop since 2021, according to Sustainable Energy Authority of Ireland (SEAI).
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US DATA: Weak LEI Reflects Of Weaker Manufacturing, Tighter Financial Conditions
Apr-21 14:28
March's Conference Board leading economic index (LEI) was softer than expected at -0.7% M/M (-0.5% survey, -0.2% prior which is an upward revision from -0.3%). The coincident index rose 0.1% (0.3% prior), with the lagging index -0.1% (+0.3% prior).
- This was the weakest monthly change in the LEI since October 2023, in keeping with other indicators that appear to have been negatively impact by tariff uncertainty.
- The Conference Board release notes "the data does not suggest that a recession has begun or is about to start", though the LEI hasn't been a particularly reliable indicator of recession in this cycle, having printed in negative territory for a few years now. On a 6-month basis, the index is actually trending up from the early 2023 lows, but this doesn't offer much confidence in the outlook in and of itself.
- MNI interprets the LEI more as a manufacturing cycle indicator: it is very heavily weighted toward cyclicality in manufacturing: avg weekly manufacturing hours (25%) and ISM New Orders (17%) are combined over 40% of the index, when added to core capital goods orders (5%) and manufacturers' new orders (consumer goods and materials, 8%).
- That being said, the biggest contributor to March's LEI drop was financial conditions (equity prices, leading credit index, spreads) for the weakest such conditions since October 2023. The accompanying chart shows MNI's grouping of contributing sectors to the LEI.
