EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Fall On EU Equities Losses
Aug-20 11:15
{EUAs/UKAs Dec25 are trending lower, weighed by losses in EU equities, with STOXX edging down as global bullish sentiment stalls following tech stock selloffs, while investors awaiting Federal Reserve Chair Jerome Powell’s speech on Friday. Meanwhile, EU gas gains are limiting carbon downsides, with TTF rising on steady fundamentals ahead of seasonal maintenance in Norway. Additionally, UK headline CPI came in a tenth above consensus expectations on higher services, while remaining in line with the BOE’s MPR forecast.
- EUA DEC 25 down 0.45% at 70.84 EUR/t CO2e
- UKA DEC 25 down 0.26% at 50.45 GBP/t CO2e
- TTF Gas SEP 25 up 0.3% at 31.31 EUR/MWh
- NBP Gas SEP 25 up 0.3% at 77.05 GBp/therm
- Estoxx 50 down 0% at 5482.5
- FTSE 100 SEP 25 up 0.2% at 9237.5
- The latest bi-weekly Poland ETS CAP3 auction cleared at €70.47/ton CO2e, down 0.38% compared with the previous bi-weekly Poland auction at €70.74/ton CO2e according to EEX.
- EUA POSITIONING – Investment funds cut net long positions in EU ETS futures on the ICE exchange as of 15 August, ending a three-week streak of rising positions, according to the latest COT data.
- UKA POSITIONING – Investment funds cut net long positions in UK ETS futures on the ICE exchange as of 15 August, ending a three-week streak of rising positions, according to the latest COT data.
- TTF front month is relatively unchanged today amid steady fundamentals ahead of seasonal maintenance in Norway as the market watches for any progress toward a ceasefire in Ukraine.
- Climate Action Network (CAN) Europe has called for the EU ETS 2 to be implemented without delay and urged against adding extra allowances to the system, it said.
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EQUITIES: Earnings & Trade Tension Weigh On Stoxx
Jul-21 11:01
Euro Stoxx 50 futures trade lower, with the hawkish reports surrounding U.S.-EU trade relations and Stellantis earnings providing a couple of sources of pressure.
- The contract trades at the lowest levels seen in 3 sessions, initial support at Wednesday’s low (5,303.00).
OUTLOOK: Price Signal Summary - Bear Cycle In GBPUSD Still In Play
Jul-21 10:55
- In FX, EURUSD is in consolidation mode just ahead of its recent lows. The move down since Jul 1 appears corrective. The 20-day EMA has recently been cleared and scope is seen for a test of the 50-day EMA, at 1.1518. A clear break of the average is required to signal a stronger reversal. For now, trend indicators continue to highlight a dominant uptrend. A resumption of gains would open 1.1829, the Jul 1 high and bull trigger.
- A short-term bear cycle in GBPUSD remains in place and the pair continues to trade closer to its recent lows. Last week’s extension lower resulted in a breach of trendline support currently at 1.3470 - drawn from the Jan 13 low. The breach strengthens a bearish threat, exposing 1.3335 next, the May 20 low. On the upside, initial firm resistance to watch is 1.3519, the 20-day EMA. A clear break of this average is required to highlight a potential base.
- A short-term bull cycle in USDJPY remains in place and last week’s gains mark an extension of the current uptrend. The latest rally has resulted in a breach of resistance at 148.03, the Jun 23 high, and a move through key resistance at 148.65, the May 12 high. The break strengthens the bullish theme and sights are on 149.38, 50.0% of the Jan 10 - Apr 22 bear leg. On the downside, key short-term support is seen at 145.78, the 50-day EMA.
SWAPS: German Spreads Wider, Goldman See EUR 10s30s As Roughly Fair
Jul-21 10:47
German swap spreads have widened today, generally extending the recovery from July lows that also coincides with yields moving away from their July highs.
- Desks also stress that prevailing repo levels helped put a base into Schatz spreads earlier this month.
- Long end leads today’s spread widening as the outright yield curve bull flattens.
- Still, spreads remain rangebound multi-week.
- On the broader EUR curve, Goldman Sachs noted the following late on Friday: “although a shortening in the maturity of hedging needs resulting from the Dutch pension reform is likely to contribute to this move over time, we see little evidence that the steepening in the EUR long end reflects this in the near-term. All major 10s30s global swap curves have steepened, which points to a broader realignment of duration demand following the general rise in the distribution of inflationary pressure and ongoing large fiscal deficits. At current levels, our curve model suggests 10s30s trade broadly fair against macro fundamentals”.
