EMISSIONS: EU End-Of-Day Carbon Summary: EUAs/UKAs Rise On Mix Influences
Nov-25 16:22
EUAs and UKAs Dec25 are rising, driven by late-session buying interest surge. Both contracts initially fell by around 0.5% on news of a Ukraine peace deal but quickly rebounded from intraday lows, tracking recoveries in equities and TTF prices.
- EUA DEC 25 up 1.59% at 81.89 EUR/t CO2e
- UKA DEC 25 up 0.83% at 58.33 GBP/t CO2e
- TTF Gas DEC 25 down 1.1% at 29.43 EUR/MWh
- NBP Gas DEC 25 down 0.9% at 76.8 GBp/therm
- Estoxx 50 up 0.7% at 5569.09
- The latest EU ETS CAP3 auction cleared at €81.19/ton CO2e, up 1.49% compared with the previous EU auction at €80/ton CO2e according to EEX.
- The medium-term trend condition in ICE EUA futures is unchanged, it remains bullish and the latest pullback appears to have been a correction. Recent gains delivered a print above the short-term bull trigger at €82.41, the Nov 4 high. A clear breach of this hurdle would confirm a resumption of the uptrend and open €84.50, the Jan 30 high and a key resistance. On the downside, support to watch lies at €78.76, the 50-day EMA.
- S&P Global expects EUAs to average €85/tCO2e in 2026, implying a 4.7% upside from current levels, driven by tightening supply and declining free allocation.
- ICIS expects EUAs to reach €100/tCO2e in Q1 2026, implying a 23% upside from current levels, driven by forecasted deficits, tightening supply and exhausted fuel-switching options.
- BNEF expects the total EU ETS supply to be reduced by 26% between 2025-2030 amid tightening free allocation and auction volume.
- TTF front month is holding below €30/MWh as the market weighs mild weather in Europe heading into December alongside some signs of progress towards a Russia-Ukraine peace agreement.
- Shell confirmed that the Jackdaw gas field in the UK North Sea is set to emit over 23mn tCO2e over its 11-year lifetime, according to The Chemical Engineer.
- Confindustria, the leading Italian manufacturing association, has called for stronger compensation in indirect EU ETS costs, citing high energy bills and lower compensation compared with Germany.
- BNEF said that European chemicals sector, who accounted for roughly 8% of EU ETS emissions, will likely face challenge in 2026 amid rising global competitions, including imports from China.
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FED: MNI Fed Preview - October 2025: QT, Or Not QT
Oct-24 21:06
MNI's preview of the October FOMC has been published - Download Full Report Here
- The Federal Reserve is overwhelmingly expected to cut the funds rate by 25bp for a 2nd consecutive meeting on October 29, bringing the target range to 3.75-4.00%.
- This will again be framed as a risk management cut, with the limited data available since the September meeting not disconfirming that the shift in the balance of risks had tilted toward labor market downside.
- Dissent to this decision should once again be limited to Gov Miran in favor of a 50bp cut.
- With limited new developments and official data to opine on, Chair Powell’s press conference will be eyed for affirmation that a December cut remains on track, as signalled by the most recent Dot Plot.
- He’s unlikely to give much away, but it would be surprise given the lack of data and relevant developments if he suggested that a further 2025 cut was in any greater doubt than it was 6 weeks earlier.
- Instead, we think focus in terms of action at this meeting will be on the balance sheet, with the Fed likely to announce an end to quantitative tightening amid diminishing reserve levels and nascent evidence of funding market pressures.
- We will also be watching for any news on the Fed’s communications framework, with an updated “Dot Plot” potentially unveiled at some point by year-end.
MNI’s separate preview of sell-side analyst summaries to follow on Monday Oct 27
RATINGS: Moody's Lowers France's Outlook To Negative, Maintains Aa3 Rating
Oct-24 20:55
Moody's has lowered its outlook on France to negative from stable.
- Moody's was expected to at least lower the outlook, so this is not a surprise - there had been some risks perceived of a downgrade to A1 (from Aa3) in the domestic and foreign currency long-term issuer and domestic-currency senior unsecured ratings.
- Per the Moody's release: "The decision to change the outlook to negative reflects the increased risk that the fragmentation of the country's political landscape will continue to impair the functioning of France's legislative institutions. This political instability risks hampering the government's ability to address key policy challenges such as an elevated fiscal deficit, rising debt burden, and durable increase in borrowing costs, thus leading to a more rapid weakening in France's key fiscal metrics than we currently expect."
- Both S&P and Fitch have already downgraded France’s sovereign rating to the single-A bucket this year.
USDCAD TECHS: Corrective Pullback
Oct-24 20:00
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.4111 High Apr 10
- RES 1: 1.4080 High Oct 16 and the bull trigger
- PRICE: 1.4016 @ 16:33 BST Oct 24
- SUP 1: 1.3979/3907 20- and 50-day EMA values
- SUP 2: 1.3829 Bull channel base drawn from the Jul 23 low
- SUP 3: 1.3769 Low Sep 19
- SUP 4: 1.3727 Low Aug 29 and a bear trigger
USDCAD has pulled back from its recent highs. The trend condition is bullish and a move lower is considered corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4111, the Apr 10 high, and further out, scope is seen for an extension towards 1.4167, a Fibonacci retracement. First key support lies at 1.3907, the 50-day EMA. Support at the 20-day EMA lies at 1.3979.
