EMISSIONS: EU Leaders Advance 2040 Climate Target While Seek Revision Clause
Oct-24 08:17
EU leaders agreed on Thursday for the bloc to move ahead with setting a 2040 climate target of cutting net emissions by 90% versus 1990 level, while requesting to add revision clause, according to the European Council.
- Ministers are set to vote for approval at a 4 November meeting.
- Some EU diplomats said they felt the discussion had sufficiently reassured key countries, including France and Germany, to enable them to support the target in the upcoming vote.
- Meanwhile, some EU diplomats said they did not see how the result is any different from September, when ministers first attempted to vote on the target, adding that leaders may have simply delayed the crisis until 4 Nov voting, according to Politico.
- Discussions remain open on how much of the 90% cut may rely on foreign carbon credits.
- The Council also invited the Commission to present a revision of the EU ETS 2 implementation framework to smoothen the entry.
- Commission President Ursula von der Leyen previously said the target would strengthen Europe’s green competitiveness and industrial base.
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CROSS ASSET: USD extends small gains
Sep-24 08:09
- No real reaction in Bund, althought it has pushed higher after the German IFO missed expectatio, came below consensus, the EURUSD dipped to session low on tyhe back of it.
- The liquidity has been quite poor acroos assets in early and most of the moves in G10 FX have been a function of the Dollar bid, as Cable also push through a new intraday low.
- Closest Technical in G10 FX is in Cable, with the next support eyed at 1.3458, the Trendline support drawn from the Aug 1 low.
SWEDEN: Sep ETI: Sentiment Picking Up, Inflation Pressures Easing
Sep-24 08:07
The Swedish Economic Tendency indicator rose to a year-to-date high of 97.2 in September (vs 96.3 prior). Increases were seen in consumer confidence, alongside the retail, construction and manufacturing sectors. Services sector confidence declined a little.
- Sentiment remains below the neutral 100 level, but the combination of another Riksbank rate cut and increased Government fiscal spending (with particular emphasis on households) should support further improvements ahead. Key for both institutions is whether this translates to better real consumer spending/economic activity outcomes.
- Barring an unexpected shock. the Riksbank’s easing cycle is likely over after yesterday’s 25bp cut to 1.75%.
- Consumer confidence rose for a fifth consecutive month to 93.2, up from a year-to-date low of 82.2 in April. Relative to August, the “Macro” index (consumer’s perceptions of general economic activity) rose to 97.6 (vs 94.8 prior) while the “Micro” index (consumer’s perceptions of their personal economic situations) rose to 90.5 (vs 89.0 prior).
- Business sentiment is strongest in the retail sector (106.5 vs 105.8 prior), after a brief dip below 100 in June. Other sectors remain below neutral.
- Expected prices continued to decline (diffusion index of 12 vs 13 prior and a YTD high of 22 in March), supporting the Riksbank’s assessment that the summer inflation rise was likely to be temporary.
- The expected employment diffusion index was steady at 1, while the labour hoarding index eased to 3 (vs 5 prior).
SOFR OPTIONS: 0QX5 96.875/97.125 Strangle Trades
Sep-24 08:05
0QX5 96.875/97.125 strangle desks initially suggest that paper paid 15 on 6K, while others point to a vol seller. -4% delta.
