EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Track Weekly Gains On TTF Rally
Aug-22 11:36
EUAs/UKAs Dec25 are on track for a 2.57% and 3.11% and weekly gain, supported by over 8% gains in TTF amid supply concern with seasonal maintenance in Norway to ramp up next week. Meanwhile, Federal Reserve Chair Jerome Powell is set to speak at 3pm BST, with investors warning that the bullish run could stall if an interest rate cut is delayed or abandoned, according to Bloomberg. With the EUA-STOXX correlation at 0.30, close to the EUA-TTF correlation, broader equity market reactions could potentially impact both EUAs and UKAs.
- EUA DEC 25 down 0.28% at 72.42 EUR/t CO2e
- UKA DEC 25 up 0.75% at 52.44 GBP/t CO2e
- TTF Gas SEP 25 up 0.1% at 33.2 EUR/MWh
- NBP Gas SEP 25 up 0.1% at 82.58 GBp/therm
- Estoxx 50 up 0.3% at 5478.51
- FTSE 100 SEP 25 up 0.1% at 9339
- The latest Germany ETS CAP3 auction cleared at €72.05/ton CO2e, up 2.74% compared with the previous Germany auction at €70.13/ton CO2e according to EEX.
- TTF front month is set for a net gain on the week, reaching the highest since Aug. 6 at €33.5/MWh amid supply concern. Seasonal maintenance in Norway is to ramp up next week while hope of a Ukraine ceasefire reduced through the week.
- EUAs Dec25 has strengthened over the week, up nearly 3% w/w, rising above its 10, 50, and 100-day moving averages for the first time in two weeks. Momentum indicators point to potential bullish signals.
- Prices moving above all key short and medium-term moving averages reinforce bullish momentum, with traders now eyeing on short-term catalysts, such as Federal Reserve interest rate decision.
- EUA Dec25 could find support next week from tighter gas supply and lower wind output, while stable power demand and weather forecasts may limit gains.
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TARIFFS: Highlights Of Bessent's Bloomberg TV Interview
Jul-23 11:25
Tariff-related excerpts from Bessent's Bloomberg interview.
On Japan
- Bessent: Japan got the 15% [tariff] rate because they were willing to provide this innovative financing mechanism.
- This is all new capital. It's going to be targeted at strategic industries.
On EU
- Bloomberg TV: Can anyone get below 15%? Is this the new floor? Is the EU still trying for a 10% baseline?
- Bessent: Repeats result of innovative package. Brussel’s hasn’t come up with anything innovate yet. Talks are going better than they had been. I think we are making good progress. Repeats previous line about collective action problem in EU.
On China
- Bessent: We are in a good place with China now. There is the potential for a big beautiful rebalancing between the US and China. […] We believe they should become more of a consumption economy. If they are willing to do down that route we could do it together.
- Bloomberg TV: You told me last week the market does not need to worry about Aug 12. That’s the deadline for this current detente between Washington and Beijing. What’s the new deal?
- Bessent: Again, I think we could roll it forward, maybe on a 90 day increment. The goods news here is that we are back on track with negotiations. I think we can get into a very good cadence of regular meetings.
- A Trump-Xi meeting wouldn't be before Labor Day.
TARIFFS: US' Bessent: EU Threats On Retaliatory Tariffs A Negotiating Tactic
Jul-23 11:23
Speaking to Bloomberg TV, US Treasury Secretary Scott Bessent dismisses EU threats on retaliatory tariffs against the US as a "negotiating tactic". Also claims that talks with the EU "are going better than they had been." Comes a short time after Bloomberg News reported that the EU is preparing 30% tariffs on EUR100bln of US goods if the US imposes its retaliatory tariffs on 1 Aug (see "EU: EU Plans 30% Tariffs On E100bln of Goods To US If No Deal - Bloomberg", 12:02BST).
- On talks with China, Bessent repeats comments from yesterday saying talks are on a good place, and that they can move on to bigger talks. Mentions Chinese purchase of Iranian and Russian oil again. Says that there is no specific date set for President Donald Trump's visit to China.
- Regarding the deal announced with Japan, and whether the EU could get a similar deal, Bessent says Japan "got 15% due to an innovative financing mechanism."
European Trade Commissioner Maros Sefcovic will hold talks with Commerce Secretary Howard Lutnick later today (23 July). Commission spox Olof Gill said earlier that "The EU's primary focus is on achieving a negotiated outcome with the US. Intensive technical and political level contact is ongoing,"
SOFR OPTIONS: BLOCK: Aug'25 SOFR Puts
Jul-23 11:06
- 50,000 SFRQ5 95.62 puts, cab (0.25) at 0652-0656ET (open interest at 39,810 coming into the session).
