EMISSIONS: EU End-Of-Day Carbon Summary: EUAs/UKAs Track Weekly Gains
EUAs/UKAs Dec25 are on track for 4.12% and 5.93% weekly gains, hitting the highest level since mid-Feb 2025 and July 2023 respectively, amid heightened bullish sentiments while outperforming EU gas and equities. Meanwhile, the below estimation US non-farm payroll data weighed on global equities and offset rising bets on Federal Reserve rate cut. EUAs/UKAs Dec25 are rising today amid persistent bullish sentiment reflected in call options activities.
- EUA DEC 25 up 0.74% at 76 EUR/t CO2e
- UKA DEC 25 up 1% at 56.29 GBP/t CO2e
- TTF Gas OCT 25 down 1.1% at 32.07 EUR/MWh
- NBP Gas OCT 25 down 1% at 78.3 GBp/therm
- Estoxx 50 down 0.7% at 5311.91
- The latest Germany ETS CAP3 auction cleared at €75.44/ton CO2e, up 5.81% compared with the previous Germany auction at €71.3/ton CO2e according to EEX.
- Bullish conditions in ICE EUA futures remain intact and this week’s gains reinforce current conditions. The contract has again traded higher, today. The move higher this week signals scope for an extension towards €76.75, the Jun 13 high and a key medium-term resistance. Clearance of this level would strengthen a bull theme. Key support to watch lies at €68.71, the May 30 low. A clear breach of this level would reinstate a bearish theme.
- UK ETS has cut 2025 free UKAs allocation for operators of installations by 2.8% (743k UKAs) compared with the June release amid activity level changes, according to the UK government. The cancellation is equivalent to £41mn based on the current UKAs Dec25 price.
- EU Parliament rapporteur Ondřej Knotek rejected the Commission’s 2040 Climate Target Proposal, confirmed by both the EU Parliament and Knotek after market closed on 4 Sept.
- TTF front month has fallen today but remains within the €31.4/MWh to €32.7/MWh range this week. Total European gas in store is approaching pre-winter target levels with healthy LNG imports helping to cover during the current Norwegian seasonal maintenance.
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FED: US TSY 17W BILL AUCTION: HIGH 4.105%(ALLOT 83.04%)
- US TSY 17W BILL AUCTION: HIGH 4.105%(ALLOT 83.04%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 26.35% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 5.67% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 67.98% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 3.31
US OUTLOOK/OPINION: Still Some Way For Full Tariff Impact To Show On Prices
Looking ahead to next week’s US CPI (Tue) and PPI (Thu) releases, latest monthly tariff revenue for July suggests we’re still some way off seeing the full impact from tariffs on prices.
- The effective tariff rate currently stands at 18.3% according to Yale Budget Lab calculations (pre-substitution, i.e. keeping trade shares constant), up from 15.5-16% through June and 16.6% in July.
- In contrast, the $30bn of Treasury deposits from customs and certain excise duties in July was worth 11.0% of goods imports in 2024 (likely reflecting June average tariff rates suggesting further increases still to come). That’s up from 10.3% in June, 8.7% in May, 6.3% in April and 3.0% in Dec 2024 prior to the second Trump administration to give a sense of baseline.
- (Note that this 11.0% rate would be 10.3% if using a 12mth sum up to latest data for June owing to the sharp rise in imports in 1Q25. This dynamic approach with recent data can be misleading).
- Alternatively, these tariff revenues in July were worth ~1.7% of overall personal consumption expenditure, an increase of 1.3pp under the Trump administration.
- Of course, this doesn’t give insight into burden sharing across importers, businesses and consumers.
- On the former, June US import prices showed a partial correction stronger for those from China after what had looked like some taking of a tariff hit in April and May (implied by lower than usual import prices), but import prices more generally haven’t shown much concession. That’s in contrast to NEC Director Hassett saying on Aug 4 that data shows tariffs are being borne by foreign producers, although admittedly the extent to which they’re being borne is vague in that headline.
EQUITY TECHS: E-MINI S&P: (U5) Corrective Pullback Extends
- RES 4: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6500.00 Round number resistance
- RES 2: 6477.31 1.618 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6468.50 High Jul 31 and the bull trigger
- PRICE: 6358.00 @ 16:20 BST Aug 6
- SUP 1: 6244.36 2.0% 10-dma Envelope
- SUP 2: 6239.50 Low Aug 1
- SUP 3: 6213.75 50% retracement of Jun - Aug Upleg
- SUP 4: 6203.65 50-day EMA
Equities sold off sharply Friday on the back of the soft NFP print - pushing prices through mid-July lows in the process. Since that spell of weakness, price has traded either side of support at the 20-day EMA, at 6325.25, signalling scope for a deeper retracement toward the 50-day EMA at 6203.65. Clearance of this average is required to signal a stronger reversal. The primary trend remains up, leaving key short-term resistance and the bull trigger at 6468.50, the Jul 31 high.
