EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Rangebound This Week
Sep-12 11:27
EUAs/UKAs Dec25 are on track for a 0.29% weekly loss and 0.23% weekly gains, remaining rangebound as most gains were erased by Thursday’s sharp decline. EUAs/UKAs Dec25 are edging higher today, supported by gains in EU gas, with TTF rising amid ongoing supply disruption risks.
- EUA DEC 25 up 0.21% at 75.7 EUR/t CO2e
- UKA DEC 25 up 0.38% at 56.2 GBP/t CO2e
- TTF Gas OCT 25 up 0.1% at 32.34 EUR/MWh
- NBP Gas OCT 25 up 0.2% at 79.39 GBp/therm
- Estoxx 50 down 0.3% at 5372.26
- FTSE 100 SEP 25 up 0.4% at 9343.5
- The latest Germany ETS CAP3 auction cleared at €75.02/ton CO2e, down 0.56% compared with the previous Germany auction at €75.44/ton CO2e according to EEX.
- EUA Auction Calendar Week Ahead (Calendar Week 38) - A total of 20.2mn EUAs will be auctioned next week, with 5 auction sessions will be held. The latest EU ETS auction cleared at €75.02/ton CO2e, down -0.56% w/w, above the 10, 50 and 100-day averages.
- EUA Sep25 is seeing balanced positioning as traders weigh modest downside risk amid rising implied volatility and widened volatility skew. The put/call ratio is marginally above parity at 1.01, while the delta call-put volatility skew widened to -1.26, suggesting downside protection has become relatively more expensive.
- TTF front month is steady today but near its low for the week after falling back from a high of €33.44/MWh on Sep.10. Seasonal maintenance in Norway is set against strong wind forecasts next week amid ongoing Russia sanctions uncertainty.
- Lead MEPs from the European People’s Party (EPP) proposed allowing EU member states to use limited international carbon offsets in EU ETS from 2031, according to the leak amendments proposals.
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US DATA: Refis Lead An Uptick In Mortgage Applications
Aug-13 11:14
MBA mortgage applications increased to recent highs last week on the back of a rise in volatile refinance applications. Overall levels remains subdued however and new purchase applications continue to point an anemic trend for housing activity.
- MBA composite mortgage applications increased 10.9% sa last week after trending sideways in recent weeks, for their highest since single weeks in July and April and before that Sep 2024.
- It was however driven by a 23% increase in refis after 5.2% as new purchase applications once again saw relative underperformance with just a 1.4% increase after 1.5%.
- Comparison with 2019 averages: composite applications at 59.5%, new purchases at 62% and refis at 55%.
- These refis are reacting to a recent decline in mortgage rates, with the 30Y conforming rate falling 10bps to 6.67% after a 6bp decline the week prior. It leaves the conforming rate at its lowest since early April.
- 30Y mortgage rate to 10Y swap rate spreads remain at the low end of the 300 +/- 5bp range mostly seen since reciprocal tariffs were first detailed in early April, still wider than the 285bp averaged in Q1.
- Within the mortgage rate details, 30Y jumbo mortgage rates saw a relative correction as they increased 5bps to 6.70%. It saw the regular-jumbo spread slide from +12bp (highest since Oct 2023) to -3bp (lowest since mid-April), tentatively ending what had been a sign of some relative loosening in conditions or perhaps borrowers with higher FICO scores.
MNI: US MBA: MARKET COMPOSITE +10.9% SA THRU AUG 08 WK
Aug-13 11:00
- MNI: US MBA: MARKET COMPOSITE +10.9% SA THRU AUG 08 WK
US TSYS: Back Close To Post-CPI Highs, Fedspeak and Trump Watched
Aug-13 10:54
- Treasuries have steadily firmed throughout London hours as they push back towards post-CPI highs, reversing the EGB-led post-data retracement that was hard to square away at the time.
- Treasuries underperform EGBs but outperform Gilts.
- Today sees focus on further FOMC reaction to yesterday’s CPI release whilst Trump headlines can as always have an impact, especially with such a light data calendar today.
- Trump makes an announcement at The Kennedy Center at 1115ET, which we believe should be focused on announcing Honors recipients but we’ll monitor for any surprises.
- Cash yields are 2.5-4bp lower, with the front end lagging declines.
- The modest flattening sees curves ease away from post-CPI steeps. That includes 5s30s at 105.4bps (-0.4bp) after yesterday’s 107.6bps came close to ytd highs of 108.5bps.
- TYU5 has lifted to 112-02 (+ 08) at typing but remains within yesterday’s CPI-induced range of 111-19+ to 112-06. Cumulative volumes are higher than recent overnight sessions but still limited at 250k.
- The contracts hold its ground from a technical perspective, with resistance at 112-15+ (Aug 4/5 high depending on timezone) and support at 110-10+ (Jul 24 low).
- Data: MBA mortgage applications (0700ET).
- Fedspeak: Barkin (0800ET), Goolsbee (1300ET) and Bostic (1330ET) – see STIR bullet
- Bill issuance: US Tsy to sell $65B 17-W bills (1130ET)
- Politics: Trump visits The Kennedy Center and makes announcement (1115ET), Trump signs executive orders (1600ET)
