POWER: German Day-Ahead Narrows Premium to France to Lowest This Week
Jan-30 11:55
Both the German and French day-ahead markets saw an increase, driven by a continued decline in wind power generation in both countries, which raised their respective residual loads. The gains were more pronounced in France, where lower wind output and an anticipated rise in demand contrasted with the downward trend in consumption in Germany.
- The German day-ahead spot settled at €141.02/MWh from €131.53/MWh on the previous day.
- The French day-ahead spot cleared at €131.46/MWh from €107.86/MWh on the previous day.
- Germany was at a €9.56/MWh premium from a €23.67/MWh premium in the previous session.
- Wind output in Germany is forecast to decline to 12.60GW on Friday, down from 13.16GW on Thursday according to SpotRenewables.
- Wind will then be at just 3.65GW, or a 6% load factor the next day, however, with typically lower demand on the weekend spot prices could still drop.
- Power demand in Germany is forecast to edge down to 60.25GW, down from 60.51GW on Thursday as mean temperatures in Dusseldorf are forecast to decline to 2.7C on Friday from 5.9C on Thursday and below the seasonal average of 3.1C, according to Bloomberg.
- Demand will then drop to 51.67GW on Saturday (1 February)
- Residual load in Germany is forecast to edge higher to 43.69GWh/h on Friday. Up from 43.6GWh/h on Thursday according to Reuters.
- In contrast, wind output in France is forecast to decrease to 3.50GW during base load on Friday, down from 5.41GW on Thursday according to SpotRenewables.
- Wind will then be at 2.70GW, or a 12% load factor on 1 February.
- Power demand in France is forecast to increase to 65.96GW on Friday, up from 63.94GW on Thursday as mean temperatures in Paris are forecast to decline to 1.6C on Friday, down from 6.3C on Thursday and below the seasonal average of 4.3C, according to Bloomberg.
- French power demand will then be at 63.17GW the next day.
- Residual load in France is forecast to increase to 60.3GWh/h on Friday. Up from 55.94GWh/h on Thursday according to Reuters.
- Nuclear availability in France was stable at 86% of capacity as of Thursday morning, RTE data showed, cited by Bloomberg.
- The 1.33GW Flamanville 2 is scheduled to restart on Thursday 12:00CET after planned works.
- Planned maintenance at 1.33GW Paluel 3 has been brought forward by six days to end on 13 February.
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GILTS: Extending gains ahead of the close
Dec-31 11:50
- Overall it is a fairly decent move in Gilt, the contract continues to gain, the lower volume has been helping, but there's been a pick up in the past few minutes with just under 30 minutes left for the trading session.
- Around 2k cumulative lots have been bought in the past few minutes, multiple clips.
US TSYS: Yields Slip to 10D Lows Into Year End, Early Cash Close
Dec-31 11:39
- Treasuries added to Monday's rally overnight -- back near December 20 levels before drawing some sell interest in early London trade. Average to small year-end duration extensions: US +0.07Y, EU: +0.04Y, UK -.02Y (Bbg).
- The Mar'25 10Y contract trades 109-03 last (+4) vs. -06 high on modest year end volume of just over 135k. Tsy 10Y yield tapped 4.5027% low overnight, curves are looking modestly flatter: 2s10s .966 at 28.317, 5s30s -1.864 at 37.011.
- Projected rate cuts into early 2025 look steady to slightly higher vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -21.3bp (-19.5bp), Jun'25 -30.8bp (-28.8bp).
- Today's economic data (prior, est) limited to FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, followed by Dallas Fed Services Activity (9.8, --) at 1030ET.
- Reminder: early cash Tsy close at 1400ET, futures at normal time of 1600ET.
- For next week: the NYSE Group markets will close on January 9 in observance of the National Day of Mourning for President Carter (New York Stock Exchange, NYSE American Equities, NYSE American Options, NYSE Arca Equities, NYSE Arca Options, NYSE Chicago and NYSE National), while the CME Group has opted for early close, link HERE. FI open outcry will close at 1300ET, GLOBEX shortly after at 1315ET next Thursday.
EUROPEAN INFLATION: Irish HICP Accelerates in December, Core Also Higher
Dec-31 11:38
Irish HICP rose by 0.5pp to 1.0% Y/Y in December, its highest rate since August and the third consecutive acceleration. This comes as energy price deflation tapered off amid base effects, to -4.6% Y/Y vs -7.7% in November.
- The core rate (excl. energy and unprocessed food) meanwhile accelerated slightly this month, to 1.6% Y/Y vs 1.5% November.
- Food inflation stands unchanged at 1.7% Y/Y in December.
Looking more broadly at the December Eurozone inflation round, the prints released so far (Spain, Belgium, Portugal) generally underpin calls for energy-driven headline upticks this month. However, core rates also appear to have accelerated a bit so far - analysts were rather looking for a broadly unchanged print for the overall Eurozone.
- Heavy-weighted Germany, France, Italy and the Netherlands, which are all scheduled to release their national-level prints next week, do not necessarily have to tilt in the same direction, however, and it might be that some acceleration for the countries which released so far was indeed expected - so the signal for the overall core print might not be clear for the time being.
