POWER: EU Mid-Day Power/Emissions Summary: FR-DE July Discount at June Low
Jun-09 11:07
German front-month power futures are trading lower with a pullback in TTF, with gains in EU ETS limiting losses. French July power is trading higher amid increased cooling demand owing to an upward revision of average temperatures. The French-German July discount has narrowed to its lowest this month.
- France Base Power JUL 25 up 1.8% at 43.63 EUR/MWh
- Germany Base Power JUL 25 down 0.1% at 80.53 EUR/MWh
- EUA DEC 25 up 1.5% at 74.59 EUR/MT
- TTF Gas JUL 25 down 1.5% at 35.715 EUR/MWh
- TTF front month is softer today as LNG supplies remain steady to help maintain gas storage injection rates despite seasonal outages in Norway and a US LNG export terminals.
- EUAS/UKAs are trending higher on Monday, diverging from EU gas, amid easing tariff fears ahead of the US-China trade talks, while hot weather across the continent is expected to boost cooling demand and fossil-fired power generation.
- Correlation between EUA/TTF for 30-day period weakened to 0.64 from the 0.66 on the previous session.
- The EUA Dec25 premium to the UK equivalent was slightly elevated from the previous session at €14.12/t CO2e.
- The French month-ahead power contract has entered overbought territory, with the 14-day RSI at 71.2 at the time of writing, which could indicate a trend reversal in the next trading sessions.
- Entso-E has launched a dedicated webpage for the investigation of the Iberian power outage on 28 April.
- The unplanned outage at Endesa’s 1.03GW Asco 1 nuclear plant has been extended by one day until 11 June 00:00 UTC.
- The Baltic Institute for Energy Transformation (BETI) has urged Poland’s PM Donald Tusk in a letter to immediately implement the provision of the EU’s Red III Directive in order to reduce bureaucratic hurdles for the offshore wind sector.
- The 1GW Temelin 1 nuclear power plant in the Czech Republic started planned maintenance on Friday evening that is scheduled to last around two months.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MACRO OUTLOOK: US PPI/Retail Sales And Powell Follow On Thursday [2/2]
May-09 20:17
- Core PCE implications will then be watched closely in Thursday’s PPI report, and we expect with additional focus on portfolio management after last month’s huge upward revision to February.
- Retail sales, whilst only reported in nominal terms, will offer a keenly awaited look at consumer behavior.
- Real spending moderated to 1.8% annualized in Q1 after 4.0% in Q4 despite likely tariff front-running, with April a good test of how much discretionary spending was pulled forward.
- Finally, Powell provides “Opening Remarks” at the Second Thomas Laubach Research Conference, although he’s allotted twenty minutes so there is scope for more substantive remarks than you’d usually expect. His message at Wednesday’s FOMC press conference was one firmly of being in no hurry to cut rates amidst huge uncertainty. He also appeared to put more weight on hard data over soft indicators that appear more stagflationary in nature.
MACRO OUTLOOK: US CPI Offers Look At April Tariff Distortions on Tuesday [1/2]
May-09 20:15
- The week’s US data calendar is highlighted by CPI inflation on Tuesday although PPI inflation and retail sales reports on Thursday are in close second. All three releases are going to be important, offering further hard data for April in the first month under reciprocal tariffs. What’s more, PPI and retail sales are followed by Fed Chair Powell just ten minutes after their release (more on that below).
- Core CPI inflation is seen accelerating to 0.3% M/M in April, with six unrounded estimates we’ve seen to date averaging 0.27% M/M.
- A potential for a ‘low’ 0.3% aside, it’s still likely a swift acceleration from a particularly soft 0.06% M/M in March which was in large part down to surprisingly abrupt declines in lodging away from home (-3.5%) and airfare (-5.3%) prices.
- This lodging weakness carried over to core PCE inflation back in March, at just 0.03% M/M after a particularly strong 0.50% M/M in February in a large wedge with core CPI at 0.23% M/M.
- Markets currently price a next Fed cut with the September FOMC meeting.
USDCAD TECHS: Pressuring Resistance
May-09 20:00
- RES 4: 1.4296 High Apr 7
- RES 3: 1.4111 High Apr 4
- RES 2: 1.4041 50-day EMA
- RES 1: 1.3943 High May 9
- PRICE: 1.3930 @ 16:06 BST May 9
- SUP 1: 1.3751 Low May 6
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
USDCAD has recovered from its recent lows. Despite the recovery, the trend condition remains bearish and short-term gains are considered corrective. A fresh cycle low on Tuesday reinforces the bearish theme. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Note that moving average studies are in a bear mode position, highlighting a dominant downtrend. Key resistance is seen at 1.4041, the 50-day EMA.
