EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Track Weekly Losses
Jul-11 11:23
EUAs Dec25 are on track for a weekly loss of 2%, diverging from both TTF and equities movements, amid subdued trading interest in the first four sessions of the week and a potential rise in short positioning due to a 0.31% rise in open interest as of 9 July. EUAs are edging lower on the day, despite a brief recovery amid a morning spike in trading volume, likely driven by a small number of participants as the surge in activity failed to sustain, with prices retreating shortly after reaching the intraday high. UKAs Dec25 are set for a weekly loss of 0.73%, tracking the decline in EUAs. UKAs are edging higher on the day, loosely following EUA movements while holding firmer in positive territory.
- EUA DEC 25 down 0.34% at 70.5 EUR/t CO2e
- UKA DEC 25 up 0.28% at 47.36 GBP/t CO2e
- TTF Gas AUG 25 down 0.1% at 35.12 EUR/MWh
- NBP Gas AUG 25 down 0.4% at 83.89 GBp/therm
- Estoxx 50 down 1.1% at 5377.05
- FTSE 100 SEP 25 down 0.6% at 8930
- The latest Germany EU ETS CAP3 auction cleared at €69.3/ton CO2e, down 2.19% compared with the previous Germany auction at €70.85/ton CO2e according to EEX.
- EUAs Dec25 recovered following a spike in trading volume at 10:30 BST, with 1,428 traded contracts within a 10min timeframe that pushed the price up by 1%. The trading volume during the price upticks was well above the average 10min trading volume at 377 contracts.
- The UK Climate Change Committee (CCC) has advised the UK Government to strengthen its UK ETS mechanisms to align more closely with the EU ETS, according to its letter to Department for Energy Security & Net Zero.
- The German Federal Council has passed a resolution urging the Federal Government to implement the EU Action Plan for Steel and Metals adopted in March 2025, aiming to strengthen competitiveness and climate alignment amid rising decarbonisation and trade pressures, according to Bundesrat.
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OUTLOOK: Price Signal Summary - Oil Futures Hold On To Their Gains
Jun-11 11:08
- On the commodity front, a bullish theme in Gold remains intact and the latest pullback appears corrective. Medium-term trend signals remain bullish - moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would refocus attention on $3435.6 next, the May 7 high. A break of this hurdle would strengthen bullish conditions. On the downside, the next support to monitor is $3245.6, the 50-day EMA.
- In the oil space, WTI futures have traded higher this week, extending the current bull cycle. The contract has cleared the 50-day EMA, signalling scope for an extension towards $67.14 next, the 76.4% retracement of the Apr 2 - 9 bear leg. It is still possible that the recovery since early May is a correction. MA studies are in a bear-mode position, highlighting a dominant M/T downtrend. Support to watch lies at $59.74, the May 30 low. A break would highlight a potential bearish reversal.
UK FISCAL: Spending Review Due to Begin Just After 12:30BST
Jun-11 11:07
- Just a reminder that Chancellor Reeves will begin delivering the Spending Review shortly after 12:30BST.
- There shouldn't be new money allocated to spending in this - it will be an allocation of the "envelope" of previously announced departmental spending which was last updated in the March Spring Statement.
- Capital spending for 5 years will be detailed (going into the next parliament) with current spending for 3 years (taking us to the end of this parliament).
- From the markets side, we think that the biggest concern is that the costings aren't credible - which might take some time to have a big market impact, but if markets view the figures presented as unreasonable gilts and the pound could be vulnerable here. We discuss this a little more in the Gilt Week Ahead here.
- From the political side, this is a hugely important event that will set the economic tone for the rest of the parliament and for Chancellor Reeves' remaining term. We look more at the political implications in our preview here.
OUTLOOK: Price Signal Summary - USDJPY Corrective Cycle Still In Play
Jun-11 11:00
- In FX, EURUSD is unchanged and continues to hold on to the bulk of its recent gains. The breach of 1.1419, May 26 high, confirmed an extension of the current bull cycle and sights are on 1.1573, the Apr 21 high and bull trigger. MA studies are in a bull-mode position, highlighting a dominant uptrend. Support to watch is 1.1232, the 50-day EMA. A clear break of this average would undermine the bull theme. Initial support is 1.1356, the 20-day EMA.
- Trend signals in GBPUSD remain bullish and the latest pullback appears to be corrective. A fresh cycle high last week, confirmed a resumption of the uptrend and an extension of the price sequence of higher highs and higher lows. This opens 1.3681 next,the 1.500 projection of the Feb 28 - Apr 3 - 7 price swing. Support at 1.3466, the 20-day EMA, has been pierced. A clear break of it would suggest potential for a deeper correction and expose the 50-day EMA, at 1.3306.
- A short-term bull cycle in USDJPY remains in play - for now. The latest recovery is considered corrective and the trend condition is bearish. A resumption of weakness would open 142.12, the May 27 low. A clear break of this level would confirm a continuation of the bear leg and open 139.89, the Apr 22 low. MA studies remain in a clear bear-mode position too, highlighting a dominant downtrend. Key short-term resistance is 146.28, the May 29 high.
