EMISSIONS: EU Mid-Day Carbon Summary: EUAs, UKAS Recover
EU carbon allowances have rebounded to trade higher on the day with a small recovery in EU gas prices from earlier lows and a downward revision in wind output forecasts for CWE. UKAs Dec25 have also rebounded, tracking movements in EUAs while the cash FTSE-100 is also trading higher on the day.
- EUA DEC 25 down 0.2% at 65.16 EUR/MT
- ICE UKA Dec25 up 0.3% at 47.65 GBP/MT
- TTF Gas MAY 25 down 2% at 31.765 EUR/MWh
- NBP Gas MAY 25 down 2.5% at 76.3 GBp/therm
- Correlation between EUA/UKA for 30-day period remained high at 0.76.
- Correlation between EUA/TTF for 30-day period remained high at 0.6, compared with 0.59 the previous day.
- TTF is trending lower on Tuesday amidst steady LNG imports to Europe and muted demand in Asia. Uncertainty still surrounds global demand given ongoing US trade negotiations, while Norwegian outages are set to rise.
- The latest EU ETS CAP3 auction cleared at €63.55/ton CO2e, compared with €64.2/ton CO2e in the previous round, while clearing at parity with the futures market.
- CWE wind output has been revised lower and is forecast at load factors between 5-20% between 30 April and 6 May according to SpotRenewables.
- CWE solar output is forecast at load factors of 23-28% during peak-load hours between 30 April and 6 May according to SpotRenewables.
- Finland is supporting the EU’s ambition to cut GHG emissions by 90% by 2040, the country’s state secretary for climate, Mika Nykänen said.
- Ineos has cautioned that Britain’s carbon tax is severely damaging the country’s manufacturing sector, arguing it could push production abroad and backfire on the UK’s climate goals.
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Historical bullets
USDCAD TECHS: Bullish Outlook
- RES 4: 1.4700 Round number resistance
- RES 3: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 2: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 1: 1.4402 High Mar 20
- PRICE: 1.4292 @ 16:50 GMT Mar 28
- SUP 1: 1.4235 Low Mar 26 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD traded through support at 1.4242 on Wednesday but has recovered. A return lower and clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. Moving average studies continue to highlight a dominant uptrend. A reversal higher would refocus attention on the bull trigger at 1.4543, the Mar 4 high. First resistance is 1.4402, the Mar 20 high.
US FISCAL: Debt Limit "Extraordinary Measures" Pick Up, But Cash Dipping Pre-Tax
Treasury data shows that there were $207B of "extraordinary measures" available to circumvent hitting the debt limit as of Wednesday Mar 26.
- That's the most since Jan 27th and up from $163B a week earlier, from a total $376B available.
- However, Treasury cash in the TGA fell to $316B as of the 26th (and was down to $280B on Thursday), meaning there were a combined $523B of resources available to avert the debt limit, the lowest since the impasse began in January (and half of the starting amount of just over $1T).
- The next couple of weeks will be very important for Treasury, as they represent the biggest tax take of the year. The Congressional Budget Office reported this week that per its estimates "if the debt limit [$36.1T] remains unchanged, the government's ability to borrow using extraordinary measures will probably be exhausted in August or September 2025." Treasury wrote to Congress this month that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
AUDUSD TECHS: Remains Above Support
- RES 4: 0.6429 High Dec 12 ‘24
- RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg
- RES 2: 0.6409 High Feb 21 and a bull trigger
- RES 1: 0.6391 High Mar 17 / 18
- PRICE: 0.6291 @ 16:46 GMT Mar 28
- SUP 1: 0.6258 Low Mar 21
- SUP 2: 0.6187 Low Feb 4
- SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
AUDUSD is unchanged. A short-term bull theme is intact and the latest move down appears corrective. Key short-term support to watch is 0.6187, the Mar 4 low. Clearance of this level would reinstate a bear threat. First support is at 0.6258, the Mar 21 low. A stronger recovery would refocus attention on 0.6409, the Feb 21 high. Clearance of this hurdle would strengthen the bull cycle and resume the uptrend that started Feb 3.
