POWER: EU End of Day Power Summary: France Holds Onto Gains
May-26 15:21
France June power base load hold onto sharp gains in the European afternoon with lower nuclear availability and forecasts for warmer weather, while high wind output and an acceleration in weekly hydro stock increases are weighing. Nordic June power settled lower with an upward revision in the region’s hydro balances and wet weather in early June.
- France Base Power JUN 25 up 10.7% at 27.68 EUR/MWh
- Germany Base Power JUN 25 up 0.4% at 75.45 EUR/MWh
- Italy Base Power JUN 25 up 1.7% at 107.5 EUR/MWh
- EUA DEC 25 up 2.2% at 73.1 EUR/MT
- TTF Gas JUN 25 up 2.1% at 37.23 EUR/MWh
- EUAs are holding onto gains at a two-session high, amid higher EU gas prices, while a delay to potential US tariffs on the EU is also being supportive.
- TTF is on track for gains today, supported by a spike in Norwegian pipeline outages, an extension of maintenance at the Troll field.
- France’s EdF adjusted its 2025 corrosion plan, removing the Dampierre 3 and Gravelines 2 nuclear reactors from the list.
- French hydropower reserves last week accelerated the increase to 4.7 percentage points to rise to 52.2% of capacity, and narrowed the deficit to the five-year average.
- EdF has extended works at its 915MW Tricastin 1 nuclear reactor to 2 June from 28 May.
- EdF has extended the planned maintenance due to modulation at the 915MW Cruas 3 nuclear reactor by five days until 2 June.
- Solaria has signed a financing agreement with Banco Sabadell for the construction of 175MW solar PV capacity Spain.
- Portugal will continue to ease restrictions on power imports from Spain after the power outage on 28 April.
- Greece’s IPTO has launched the 1GW Attica-Crete power interconnector on 24 May with trial operations expected to last through summer.
- Latvia has freed up nearly 2GW of grid capacity as stalled renewable projects were dropped.
- Svenska kraftnat has issued mFRR price corrections for several intervals between 17-18 May, revising previously published figures that showed extreme negative prices, as low as €-10,000/MWh.
- Polish grid operator PSE has secured PLN1.3bn (€310mn) in EU funding to support a decade-long upgrade of the country’s power network.
- Romania has launched €310mn of funding to support investment in solar, wind, and hydro for self-consumption, with project submissions open until 22 August.
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US TSYS: Extraordinary Measures And Cash Look Sufficient To Head Off X-Date
Apr-25 20:32
Treasury has about $164B in "extraordinary measures" available as of April 23 to avoid hitting the debt limit, per its regular report out Friday. That's out of a maximum total of $375B (they have used $211B).
- With Treasury cash looking healthy (around $600B), that's a fair amount of dry powder to get through the summer months to wait out the debt limit impasse. Tax receipts have looked strong with tariff revenues also starting to boost cash flows, further reducing the near-term urgency to adjust bond issuance.
- This has also helped push back analyst “x-date” expectations to later in the summer/September. We expect to hear from Treasury about its own x-date assumptions next week.
US TSYS: Treasury Market Trading Stayed Orderly In April: Fed Report
Apr-25 20:25
Liquidity across financial markets including the Treasury market deteriorated after President Trump's April 2 reciprocal tariffs announcement but market functioning was generally orderly, according to the Federal Reserve's semiannual report on financial stability, released Friday. (PDF link is here)
- Treasury market liquidity has been poor for years and yields were particularly volatile in early April, contributing to a deterioration in market liquidity, the Fed said.
- Nevertheless "trading remained orderly, and markets continued to function without serious disruption," according to the report, which looked at information available as of April 11.
FED: Ex-Gov Warsh: Fed Has Failed To Satisfy Price Stability Remit
Apr-25 20:22
From our Washington Policy Team - Some fairly sharp words today from ex-Fed Governor Warsh on the central bank (who for what it's worth is seen by betting markets as by far the frontrunner for the next Fed Chair):
- The best way for the Federal Reserve to safeguard its independence is for policymakers to avoid expanding the institution's role over time, including wading into policy areas that are outside its core mission, former Fed Governor Kevin Warsh, a leading contender to replace Jerome Powell as chair next year, said Friday.
- "I strongly believe in the operational independence of monetary policy as a wise political economy decision. And I believe that Fed independence is chiefly up to the Fed," Warsh said in a speech at a Group of Thirty event on the sidelines of the IMF meetings. "Institutional drift has coincided with the Fed’s failure to satisfy an essential part of its statutory remit, price stability. It has also contributed to an explosion of federal spending." His speech made no mention of Trump's tariffs or the appropriate monetary policy to deal with them.
- He said the ideas of data dependence and forward guidance widely adopted by Fed officials are not especially useful and might even be counterproductive.
"We should care little about two numbers to the right of the decimal point in the latest government release. Breathlessly awaiting trailing data from stale national accounts -- subject to significant, subsequent revision -- is evidence of false precision and analytic complacency," he said.
"Near-term forecasting is another distracting Fed preoccupation. Economists are not immune to the frailties of human nature. Once policymakers reveal their economic forecast, they can become prisoners of their own words. Fed leaders would be well-served to skip opportunities to share their latest musings."
