POWER: French Hydro Stocks Continue Descend
French hydropower reserves last week – calendar week 30 – declined for the fourth consecutive week by 0.5 percentage points to 71.5% of capacity, RTE data showed.
- This compares to 0.8 point fall in the previous week, with declines slowing down amid lower hydropower generation and lower demand.
- The deficit to the five-year average widened to 6.7 points, from 6.2 points the week before.
- The deficit to 2024 levels also widened to 15.5 points, from 14.3 points the week prior.
- Power demand in France last week edged down by 444MW to 42.66GW.
- Hydropower generation from reservoirs last week was broadly stable at 1.05GW. Output from pumped storage declined by 411MW to 544MW. Run-of-river generation edged up by 262MW to 3.2GW.
- Nuclear generation in France last week declined by 517MW to 39.29GW.
- Wind output in France last week was broadly stable at 4.32GW, while solar PV output fell by 450MW to 4.79GW.
- Precipitation in Grenoble, near France’s hydro-intensive region, totalled 11.5mm last week, compared with the seasonal average of 13.6mm.
- Looking ahead, the latest weather forecast for Grenoble for this week suggests broadly no precipitation – hindering inflows into reserves.
- France’s hydropower balance is forecast to end this week at 583GWh. The balance is forecast to edge down to 534GWh as of 12 August, Bloomberg data showed.
- Wind output in France for the remainder of this week (Tues-Sun) is forecast at 2.56-4.31GW during base load. Solar PV output is forecast at 9.24-11.4GW during peak load for the same period according to SpotRenewables.
- Available nuclear capacity in France is forecast at 47.94GWh/h this week, Reuters data showed.
- French available nuclear capacity stood at 74% of capacity as of 28 July.
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US FISCAL: Available "Extraordinary" Measures To Ward Off X-Date Pick Up
Treasury reported Friday that as of Jun 25 it had $130B in remaining "extraordinary" measures (of a total $378B available) to ward off an "x-date" of running out of resources before defaulting. That's the highest in 2 weeks.
- Combined with $334B cash as of Jun 25 (after a bit of a buildup after the mid-June tax deadline), that's a total of roughly $465B in total resources available.
- We noted earlier this week that Treasury told Congress that it was required to extend its debt issuance suspension period from Jun 27 to Jul 24, in effect prolonging the use of extraordinary measures while we await a resolution to the debt limit impasse, probably through the fiscal legislation currently going through Congress.
- Realistically, fiscal dynamics so far this year point to potential for Treasury to get into September without running out of cash + extraordinary measures. That seems to be the broad market expectation.
US DATA: Cleveland, Dallas Fed PCE Medians Show Progress But Still Above-Target
The Cleveland and Dallas Fed's median PCE metrics showed a notable drop in May. All indices suggest PCE inflation running above 2%, and higher than the actual core and headline PCE measures, but pressures appear to have cooled from a pickup in the early months of the year.
- The Cleveland Fed's median PCE measure came in at 0.22% M/M, a 10-month low after April's 15-month high 0.31%. This left median PCE at 3.01% on a Y/Y basis, down from 3.06% prior for a the joint-lowest (with Feb) since September 2021.
- The Dallas Fed's annualized median rate fell to 2.01%, from 2.65% prior for a 10-month low. The 6-month annualized rate edged lower to 2.74% (2.76% prior), a 4-month low, with the Y/Y rate ticking down to 2.55% from 2.56%, echoing the Cleveland Fed for the lowest reading since September 2021.
USDCAD TECHS: Pivot Resistance Remains Intact
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.2710/3803 20- and 50-day EMA values
- PRICE: 1.3658 @ 16:23 BST Jun 27
- SUP 1: 1.3618 Low Jun 26
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
USDCAD has pulled back from its recent highs. The primary downtrend remains intact and short-term gains appear to have been corrective. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend. Any reversal higher would instead signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3803.
