POWER: French Hydro Stocks Widen Gap to Five-Year Average
Mar-18 09:10
French hydropower reserves last week – calendar week 11 – accelerated the decline to 3.7 percentage points to fall to 28% of capacity, with the gap to the five-year average at the widest so far this year, RTE data showed.
- Stocks declined by 2.5 percentage points the week before.
- The deficit to the five-year average widened to 11.8 points last week, from 8.9 points the week before – and the largest deficit so far this year.
- The deficit to 2024 levels also widened to 9.8 points, from 9.4 points the week before.
- Power demand in France last week jumped by 3.75GW on the week to 57.63GW.
- French nuclear generation last week increased by 1.05GW on the week to 44.89GW.
- Hydropower output from reservoirs last week increased by 740MW to 2.2GW. Output from pumped storage was broadly stable at 1.1GW, while run-of-river generation increased by 891MW on the week to 4.74GW.
- Wind output in France last week declined by 1.23GW to 4.47GW. Solar PV output also decreased by 1GW to 2.66GW.
- Precipitation in the hydro-intensive region of Grenoble last week rose to 20mm, above the seasonal average of 14mm.
- Looking ahead, the latest weather forecast for Grenoble for this week suggests wetter conditions with precipitation to total 30mm, compared with the seasonal average of 15.8mm.
- France’s EdF warned that hydropower production in the Durance valley, in south east France, may be curtailed due to flooding.
- The latest ECMWF weather forecast for Paris for this week suggests mean temperatures between 6.8-13.9C in Paris this week, with temperatures most days above the seasonal normal.
- French nuclear generation is forecast to average 48.22GW – which would be up on the week – according to Reuters.
- Nuclear availability in France stood at 75% of capacity as of 18 March, RTE data showed, cited by Bloomberg.
- Wind output in France for the remainder of this week (Wed-Sun) is forecast at 6.17GW to 11.76GW during base load according to SpotRenewables.
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US TSYS: Yields Pull Back Again With Consumer Growth Story In Question
Feb-14 21:08
Treasuries outperformed global counterparts Friday, fully completing a reversal from a midweek selloff.
- A large miss in January retail sales (-0.9% M/M vs 0.7% prior, -0.2% consensus) represented the biggest sequential drop in 22 months, with a similarly weak "control group" figure leading to a 0.5pp downgrade to the Atlanta Fed's GDP nowcast (to 2.3% GDP growth in Q1, i.e. no acceleration from Q4).
- That was enough to see the 10Y Treasury yield drop 7bp in the subsequent half hour, continuing the downtrend seen beginning in the immediate aftermath of Wednesday's hot CPI release. 10Y yields dropped over 21bp from the Wednesday high to Thursday's low, ultimately ending a tumultuous week 1.5bp lower.
- Yields ticked a little higher in afternoon trade Friday but the curve leaned bull steeper on the day, with the belly outperforming: 2-Yr yield is down 4.6bps at 4.261%, 5-Yr is down 5.7bps at 4.3328%, 10-Yr is down 5.1bps at 4.4782%, and 30-Yr is down 3.9bps at 4.6982%.
- In futures: Mar 10-Yr futures (TY) up 9/32 at 109-08 (L: 108-26 / H: 109-15.5).
- Other data (industrial production mixed, import prices soft) had little lasting impact.
- The coming week’s data schedule is relatively light, due in part to Monday’s Presidents Day holiday (SIFMA recommends bond cash close, equities closed), with initial jobless claims, February prelim PMIs, and regional Fed manufacturing surveys among the highlights. Supply includes 20Y Bond and 30Y TIPS auctions.
- We also get plenty of Fed communications including the January meeting minutes, and speaking appearances by both doves (Gov Waller) and hawks (St Louis Pres Musalem).
USDCAD TECHS: Bear Cycle Extends
Feb-14 21:00
- RES 4: 1.4948 High Mar 2003
- RES 3: 1.4814 High Apr 2003
- RES 2: 1.4503/1.4793 High Fb 4 / 3 and key resistance
- RES 1: 1.4380 High Feb 10
- PRICE: 1.4175 @ 16:54 GMT Feb 14
- SUP 1: 1.4107 50.0% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
- SUP 2: 1.4011 Low Dec 5 ‘24
- SUP 3: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
- SUP 4: 1.3894 Low Nov 11 ‘24
USDCAD broke lower Thursday, breaking out of a tight trading range this week and remains soft. A key support at 1.4261, the Jan 20 low, has been cleared and this signals scope for an extension of the current bear cycle - a correction. Scope is seen for a move towards 1.4107, a Fibonacci retracement. Initial firm resistance to watch is 1.4380, the Feb 10 high. A break would highlight an early bullish reversal signal.
OPTIONS: Mixed SOFR Rates Trade To Cap Week
Feb-14 20:47
Friday's US rates/bond options flow included:
- SFRH5 95.62p, traded half in 2k.
- SFRH5 96.93c, traded 0.25 in 4k.
- SFRH5 95.75/95.62ps 1x2, Traded 3.75 in 3k.
- SFRK5 97.00c, traded for 0.75 and 1 in 3k.
- SFRU5 95.93/95.81/95.68p fly, traded 1 in 1.5k
- SFRU5 96.50c, traded for 6.5 in 1.5k.
- SFRU5 95.87^, traded for 36 in 5k.
- SFRJ5 95.87/95.75/95.68p fly 1x3x2 with SFRK5 95.81/95.68/95.62p ladder 1x3x2, bought for 10 in 2k.
- SFRM5 95.68p, sold at 2.5 in 10k.
- 0QH5 96.00c, bought for 13 in 3k.
- TYH5 107p, bought for 11 in 15k
- TYJ5 107p, bought for 11 in 17k total.
- TYJ5 107/106ps, bought for 7 in 15k total.
