EMISSIONS: EU Risks Missing Net Zero In 2050
The EU risks missing its 2050 net zero goal without stronger 2035 and 2040 climate targets, according to the latest Climate Action Tracker analysis.
- The EU’s 2040 target of 90% emissions cut below 1990 levels remains uncertain, with no official submission of a 2035 target and Member States include Italy, Poland, and Hungary pushing for weaker ambition.
- The EU’s current 2030 NDC target of a 55% reduction below 1990 levels is not aligned with a 1.5°C pathway, as emissions need to fall at least 62% by 2030 and 74% by 2035 to remain on track.
- Current projections suggested the EU will only achieve a 49–59% reduction in emissions by 2035, far short of the required 74%, indicating the bloc is set to miss the 1.5°C target.
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US TSY OPTIONS: BLOCK: Aug'23 10Y Strangle
- 17,000 TYQ5 113 calls, 21 w/ 17,500 TYQ5 107.5 puts, 26 vs. 600 TYM5 110-05
EQUITY TECHS: E-MINI S&P: (M5) Bulls Remain In The Driver’s Seat
- RES 4: 6080.75 High Feb 26
- RES 3: 6057.00 High Mar 3
- RES 2: 6000.00 Round number resistance
- RES 1: 5993.50 Intraday high
- PRICE: 5964.00 @ 14:32 BST May 20
- SUP 1: 5837.25/5693.1 High Mar 25 / 50-day EMA
- SUP 2: 5455.50 Low Apr 30
- SUP 3: 5355.25 Low Apr 24
- SUP 4: 5127.25 Low Apr 21 and a key support
A bullish trend condition in S&P E-Minis remains intact and the contract is holding on to its latest gains. An important resistance at 5837.25, the Mar 25 high and a bull trigger, has been cleared. This strengthens the current bullish theme, and paves the way for a continuation near-term. Sights are on the 6000.00 handle next. Initial firm support to watch lies at 5693.1, the 50-day EMA.
BTP: 10-year BTP/Bund Spread Hovers Around 100bps Once Again
The 10-year BTP/Bund spread is once again hovering around the key psychological 100bp handle (-1bp today), having briefly printed a 99bp low earlier this afternoon. European equity futures are up 0.8% on the session, which is applying some weight to core EGBs and helping spreads tighten.
- After piercing 100bps for the first time since 2021 last Wednesday, the BTP/Bund spread has struggled to sustain moves below this level. We think more tangible progress on EU-US trade talks may be needed to drive meaningful narrowing towards the 2021 lows of ~90bps.
- Eurozone flash May consumer confidence is due at 1500BST, but more focus remains on Thursday’s flash May PMIs and Friday’s Q1 negotiated wages print.
