POWER: German Jan Trades in Green on Emissons, TTF and Revised Temps
German front-month power is trading in green today amid gains in European gas and emissions, with temperatures in Dusseldorf revised down over 27 December – 1 January by up to 0.5C from the previous estimate. However, relatively strong wind is expected in Germany next week, which may lower power prices from the week prior.
- Germany Base Power JAN 25 up 3.4% at 118.7 EUR/MWh
- EUA DEC 25 up 1.2% at 70.3 EUR/MT
- TTF Gas JAN 25 up 2.3% at 46.77 EUR/MWh
- European gas remains well supported into the end of the year as Ukraine transit supporters fail to find any last-minute solutions to its closure. Temperatures in NW Europe have also been revised down on the day – likely increasing the need for heating.
- EU ETS December 2025 is trading higher this morning to track increases in EU gas, with a downward revision of temps in NW Europe also adding some support. However, stronger wind next week could reduce the call on thermal power plants – weighing on the contract slightly.
- Wind output in Germany is forecast at just 2.13GW, or a 3% load factor on Saturday from 1.25GW, or a 2% load factor forecasted for Friday, according to SpotRenewables. However, with lower demand on the day prices could still fall from the previous session.
- Wind is expected to pick up from the weekend to be between 36-63% load factors over 30 December-3 January (Mon-Fri) – likely dropping prices on the week.
- The latest 6-10 day ECMWF weather forecast for Dusseldorf suggested temperatures remain below normal until 29 December before flipping above on 30 December and remaining higher until 3 January 2025
- Mean temperatures in Dusseldorf are forecast to drop on Saturday to 1.03C compared with 3.10C on Friday – with temperatures below the seasonal average.
- Power demand in Germany is forecast to decrease to 39.48GW on Saturday from 45.25GW on Friday, according to Bloomberg.
- Germany’s hydro balance has been revised higher on the day to end at 182GWh on 10 January, compared with 123.5GWh previously.
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SILVER TECHS: Bear Cycle Still In Play
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $31.290/537 - 50-day EMA / High Nov 19
- PRICE: 30.677 @ 08:11 GMT Nov 27
- SUP 1: $29.677 - Low Nov 14
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
Medium-term bullish conditions in Silver remain intact and the bear cycle that started on Oct 23 still appears to be a correction. However, the corrective cycle remains in play. Price has recently breached the 20- and 50-day EMAs, and traded through a trendline drawn from the Aug 8 low. This has exposed $28.446, a Fibonacci retracement. Initial firm resistance to watch is $31.290, the 50-day EMA.
EGBS: SPGB/OAT/PGB 10-Year Fly Moves Towards -50bp
We have been monitoring the SPGB/OAT/PGB 10-Year fly for some and the structure sits at the lowest level seen since ’06, nearing -50bp.
- Last -48bp vs. ’06 lows of -66.3bp
- With French fiscal and political risk remaining present, it is hard to envisage a scenario whereby the trend is reversed, at least in the immediate term.
- A brief recovery was seen in late October/early November, as passive index inclusion flows into PGBs faded and the fiscal impact of the Valencia floods was considered.
- That was before the French risks mentioned above re-emerged, which helped relative fiscal trajectories of the 3 countries reassert themselves in the structure.
- Indeed, Commerzbank warn that “OATs remain vulnerable, above all vs. Iberia.”
Fig. 1: SPGB/OAT/PGB 10-Year Butterfly (%)
Source: MNI - Market News/Bloomberg
MNI EXCLUSIVE: MNI SOURCES: ECB Closer To Dropping "Restrictive" Language
MNI speaks to ECB sources about monetary policy --- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
