EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Fall On EU Gas Losses
Nov-19 12:17
EUAs/UKAs Dec25 are trending lower, pressured by losses in EU gas, with TTF falling amid milder weather forecasts next week. The intraday correlations hit the heights of around 0.67 for EUA-TTF and 0.74 for EUA-UKA near midday.
- EUA DEC 25 down 0.57% at 80.76 EUR/t CO2e
- UKA DEC 25 down 0.88% at 56.49 GBP/t CO2e
- TTF Gas DEC 25 down 2.6% at 30.885 EUR/MWh
- NBP Gas DEC 25 down 2.6% at 81.37 GBp/therm
- Estoxx 50 up 0.1% at 5540.59
- FTSE 100 DEC 25 up 0.1% at 9580
- Intraday correlation between EUA/TTF at 0.51
- Intraday correlation between EUA/UKA at 0.69
- EUA POSITIONING – Investment funds increased net long positions in EU ETS futures on the ICE exchange for the third consecutive week, hitting the highest since late April 2021, according to the latest CoT data as of 14 November.
- UKA POSITIONING – Investment funds increase their net long positions in UK ETS futures on the ICE exchange as of 14 November, according to the latest COT data.
- TTF front month has pulled back to reverse gains from earlier this week with milder weather expected next week while the market also digests renewed US efforts to strike a Ukraine peace deal.
- EU Parliament delegation chair Lídia Pereira and Climate Action Commissioner Wopke Hoekstra are scheduled to host a press conference today at 14:30 CET.
- OCBC expects the planned delay of EU ETS 2 to ease inflation by 0.3 percentage-point in 2027, in line with market forecasts.
- Germany’s transport and buildings emissions in 2024 were around 295mn tCO2e, up 4% year-on-year and exceeding the Effort Sharing Scheme (ESR) target by 6%, according to DEHSt data.
- Tripling renewables, doubling energy efficiency and cutting methane by 2030 can cut global emissions by 18bn tons in 2035, compared to the current emission projections, according to Climate Action Tracker.
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EURIBOR OPTIONS: Large Call Spread buyer
Oct-20 12:11
ERH6 98.25/98.37cs, bought for 1.5 in 30k (ref 98.075, 10del).
CHF: EURCHF Nearing Key Support Ahead Of Inaugural SNB Meeting Notes
Oct-20 12:09
- Price action last week saw EURCHF break notably below 0.9300, a support level that has broadly been respected over the last six months. Spot has subsequently narrowed the gap to a crucial cluster of support between 0.9206-22, with Friday's 0.9219 print further strengthening the significance of this area from a technical viewpoint. Clearance of the lows would place EURCHF at its lowest since the peg removal in 2015.
- Domestically in Switzerland, last week's SECO forecasts would be consistent with an SNB policy rate of 0% for the foreseeable future. In real, trade weighted terms, the Franc stands only around 0.7% below the April highs. Clearance of these highs could prompt the SNB to harden their language on the Franc once again, having maintained their usual currency rhetoric in recent months that they remain “willing to be active in the foreign exchange market as necessary".
- This brings particular focus on the inaugural edition of the SNB meeting minutes, which will be published this Thursday. In the minutes, alongside any view on FX valuations, we will look for more insight on whether Chairman Schlegel's non-mention of side effects of potential negative rates in his September opening remarks was a dovish or hawkish policy signal.
- Société Générale write today they "remain in wait-and-see mode" but that "there is merit in […] the safe -haven qualities of the CHF, relative to the EUR and GBP".
- Given the illiquidity back in 2015, support levels below 0.9200 are hard to pin-point. Fibonacci projection levels would place immediate attention on 0.9099 and 0.9032. USDCHF cycle lows at 0.7829 remain the key medium-term support level for the pair.
STIR: Repo Reference Rates: Retreat
Oct-20 12:02
- Secured Overnight Financing Rate (SOFR): 4.18% (-0.12), volume: $3.022T
- Broad General Collateral Rate (BGCR): 4.16% (-0.09), volume: $1.180T
- Tri-Party General Collateral Rate (TCR): 4.16% (-0.09), volume: $1.145T
- (rate, volume levels reflect prior session)
