EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Rise On Resting Selling Pressure
Oct-15 11:27
EUAs/UKAs Dec25 are rising as selling pressure rests after declines in the prior sessions driven by heightened trade tensions between the US and China. EUAs and UKAs are also supported by gains in EU equities amid optimism over political stability in France and better-than-expected earnings from heavyweight stocks.
- EUA DEC 25 up 0.91% at 77.62 EUR/t CO2e
- UKA DEC 25 up 1.5% at 54.8 GBP/t CO2e
- TTF Gas NOV 25 down 0.3% at 31.7 EUR/MWh
- NBP Gas NOV 25 down 0.7% at 80.76 GBp/therm
- Estoxx 50 up 1.4% at 5630.08
- FTSE 100 DEC 25 down 0.4% at 9443.5
- The latest bi-weekly Poland ETS CAP3 auction cleared at €76.58/ton CO2e, up 3.07% compared with the previous bi-weekly Poland auction at €74.3/ton CO2e according to EEX.
- UA POSITIONING – Investment funds increased their net long positions in EU ETS futures on the ICE exchange for the second consecutive week to the highest since early May 2021 according to the latest CoT data as of 10 October.
- UKA POSITIONING – Investment funds reduced their net long positions in UK ETS futures on the ICE exchange to a four-week low as of 10 October, amid potential profit-taking activity, while fundamentals remained stable, according to the latest COT data.
- EU leaders are set to refrain from explicitly voicing support for the 2040 climate target and have called for enabling conditions for industrial decarbonisation to be established, according to a draft statement seen by Bloomberg.
- The UK ETS Authority reinstated that the EU-UK ETS linkage could provide a cheaper path to net zero, according to its annual UK ETS report released yesterday after market close. The benefits mentioned include increased carbon market liquidity, greater investment certainty and EU CBAM exemption.
- UK Climate Change Committee (CCC) urged the UK to prepare for the global warming to reach 1.5°C above preindustrial levels by 2030s and 2°C by 2050s, according to its letter to Emma Hardy MP, the Parliamentary Under-Secretary of State at the Department for Environment, Food and Rural Affairs.
- Oil and Gas Climate Initiative (OGCI) member companies have reduced aggregate upstream carbon intensity in 2024 to 17.2 kg CO2e/boe, nearing their 2025 target of 17 kg CO2e/boe.
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EURIBOR OPTIONS: 97.5625 Calendar Spread Still Trading
Sep-15 11:18
ERH6/ERM6 97.5625 put calendar spread, paper pays 0.75 for 3k all day
US TSYS: Back Little Changed, Politics Including Fed Positions In Focus Today
Sep-15 11:04
- Treasuries are on balance little changed from Friday’s close, with cash having firmed through European trading are opening a little lower following a Japan holiday.
- Cash yields are 0.5bp lower (3s) to 0.7bp higher (7s).
- Curves for now holds last week’s flattening, including 5s30s at 105.7bps vs fresh multi-year highs of ~127bps after the August payrolls report two weeks ago.
- TYZ5 trades at 113-07+ (-01+) on thin volumes only just approaching 200k, having eased back from a session high of 113-10.
- Some might look to initial resistance at 113-15+ but a firmer level is seen at 113-29 (Sep 5 high), with a bullish trend sequence in play. Support meanwhile is seen at 112-23+ (20-day EMA).
- Data: Empire Mfg Sep (0830ET)
- Fed positions: Miran confirmation votes (~1730/2000ET) and Cook case – see STIR bullet
- Bill issuance: US Tsy $82B 13W & $73B 26W bill auctions (1130ET)
- Politics: Trump meets Ecumenical Patriarch Bartholomew (1400ET), Trump signs Presidential Memorandum (1600ET). Today also sees a second day of Bessent-He talks in Madrid, with a press conference potentially in the European afternoon
OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Still In Play
Sep-15 10:57
- In the FI space, recent gains in Bund futures resulted in a break of resistance at 128.87, the Aug 28 high and short-term bull trigger. The climb undermines a recent bearish theme and highlights a stronger reversal. Price has moved through the 129.00 handle, signalling scope for an extension towards 129.50, the Aug 5 high. Key support and the bear trigger has been defined at 127.61, the Sep 3 low. The latest pullback is - for now - considered corrective.
- A bull cycle in Gilt futures remains in play - a recent rally highlights a stronger corrective cycle and the contract is holding on to its gains. The move higher is allowing an oversold trend condition to unwind. Price has breached initial firm resistance at 90.84, the Aug 28 and 29 high. A continuation higher would open 92.06, the Aug 14 high. Initial support lies at 90.65, the Sep 5 low.
