EMISSIONS: EUAs Could Find Support On Tighter Gas Supply, Lower Wind Output
Aug-22 11:21
–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.
- EUA DEC 25 up 2.72% w/w at 72.61 EUR/t CO2e
- TTF Gas SEP 25 up 7.68% w/w at 33.495 EUR/MWh
- TTF front month is on track for an 8% weekly gain, the highest since 6 August, amid supply concerns with seasonal maintenance in Norway set to ramp up next week. EUA prices could be lifted if TTF rises further, given the tight correlation.
- Correlation between EUA/TTF for 30-day period at 0.38.
- CWE wind output has been revised lower for 23–29 August, with only 28 August revised up by about 7.6GW, according to SpotRenewables. The downward revisions point to higher reliance on thermal generation, raising expectations of additional EUA demand.
- German power demand is forecast to rise from 50.85GW on 25 August to 52.98GW on 28 August, with no significant revisions, indicating limited impact on EUA prices.
- The latest week-ahead ECMWF weather forecast for NWE has remained at a similar level, with the temperature rising above average between 26-30 Aug. Without significant revisions, it could have limited impact on EUA prices.
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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).
EU: EU Plans 30% Tariffs On E100bn Of Goods To US If No US Deal - Bloomberg
Jul-23 11:02
- Bloomberg reports that "The European Union plans to quickly hit the US with 30% tariffs on some €100 billion ($117 billion) worth of goods in the event of no deal and if US President Donald Trump carries through with his threat to impose that rate on most of the bloc’s exports after Aug. 1.
- As a part of a first wave of countermeasures, the EU would combine an already approved list of tariffs on €21 billion of US goods and a previously proposed list on an additional €72 billion of American products into one package, an European Commission spokesman said on Wednesday."
- The broad piece chimes with our policy team exclusive from last week (see "MNI: Support Grows For Retaliation Against US - EU Officials" - Jul 17).
- However, the following would be a notable firming in Germany stance. "Berlin would be willing to even support the activation of the EU’s anti-coercion instrument, or ACI, in a no-deal scenario, a government official said on condition of anonymity. This tool would come into play only if a deal fails to materialize."
- From our policy piece last week: "There is also the prospect of enacting the EU’s Anti-Coercion Instrument, which would apply charges to a wide range of U.S. services, though concerns over whether this would do excessive harm to Europe’s economy mean there is widespread reluctance to see it deployed."
MNI: US MBA: MARKET COMPOSITE +0.8% SA THRU JUL 18 WK
Jul-23 11:00
- MNI: US MBA: MARKET COMPOSITE +0.8% SA THRU JUL 18 WK
