POWER: German Spot Power Index Widens Premium to France
Jun-09 10:53
The German and French spot power indices increased for Tuesday’s delivery, with Germany widening the premium to the French market amid a sharp recovery in demand and lower solar PV output. Both markets are seeing negative priced hours on Tuesday amid relatively high renewables output.
- The German spot power premium over the French market widened to €27.87/MWh, compared with €17.01/MWh in the previous session.
- The German spot power index settled at €54.12/MWh, compared with €33.31/MWh in the previous session.
- The peak-load index rose to €31.03/MWh, up from €11.16/MWh a day earlier.
- Hourly prices in Germany moved into negative territory from hour 12 to 16 with prices as low as -4.26€/MWh.
- Wind output in Germany is forecast at 20.58GW during base load on Tuesday, compared with 15.42GW on Monday. Solar PV output is forecast to decline to 22.81GW during peak load on Tuesday, from 27.39GW on Monday.
- Power demand in Germany is forecast to recover to 49.43GW on Tuesday, from 43.09GW on Monday.
- Residual load in Germany is forecast to at 15.64GWh/h on Tuesday, from 8.04GWh/h on Monday and revised down from the previous forecast of 18.24GWh/h.
- The French spot power index settled at €26.25/MWh, compared with €16.30/MWh a day earlier.
- The French peak-load spot index stood at €16.37/MWh, compared with €2.40/MWh in the previous session.
- Hourly prices in France moved into negative territory from hour 13 to 17 with prices as low as -0.01€/MWh.
- French nuclear availability was at 66% of capacity as of Monday morning down from 69% on Friday.
- French nuclear reactor availability is forecast at 44.5GWh/h on Tuesday, versus 40.84GWh/h on Monday.
- Wind output in France is expected at 2.83GW, or a 12% load factor on 10 June, up slightly from 1.76GW, or a 7% load factor on 9 June.
- Power demand in France is forecast to increase to 40.49GW on 10 June compared to 37.49GW on 9 June.
- Residual load in France is forecast at 33.35GWh/h on Tuesday, up from 29.57GWh/h on Monday.
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MACRO OUTLOOK: US PPI/Retail Sales And Powell Follow On Thursday [2/2]
May-09 20:17
- Core PCE implications will then be watched closely in Thursday’s PPI report, and we expect with additional focus on portfolio management after last month’s huge upward revision to February.
- Retail sales, whilst only reported in nominal terms, will offer a keenly awaited look at consumer behavior.
- Real spending moderated to 1.8% annualized in Q1 after 4.0% in Q4 despite likely tariff front-running, with April a good test of how much discretionary spending was pulled forward.
- Finally, Powell provides “Opening Remarks” at the Second Thomas Laubach Research Conference, although he’s allotted twenty minutes so there is scope for more substantive remarks than you’d usually expect. His message at Wednesday’s FOMC press conference was one firmly of being in no hurry to cut rates amidst huge uncertainty. He also appeared to put more weight on hard data over soft indicators that appear more stagflationary in nature.
MACRO OUTLOOK: US CPI Offers Look At April Tariff Distortions on Tuesday [1/2]
May-09 20:15
- The week’s US data calendar is highlighted by CPI inflation on Tuesday although PPI inflation and retail sales reports on Thursday are in close second. All three releases are going to be important, offering further hard data for April in the first month under reciprocal tariffs. What’s more, PPI and retail sales are followed by Fed Chair Powell just ten minutes after their release (more on that below).
- Core CPI inflation is seen accelerating to 0.3% M/M in April, with six unrounded estimates we’ve seen to date averaging 0.27% M/M.
- A potential for a ‘low’ 0.3% aside, it’s still likely a swift acceleration from a particularly soft 0.06% M/M in March which was in large part down to surprisingly abrupt declines in lodging away from home (-3.5%) and airfare (-5.3%) prices.
- This lodging weakness carried over to core PCE inflation back in March, at just 0.03% M/M after a particularly strong 0.50% M/M in February in a large wedge with core CPI at 0.23% M/M.
- Markets currently price a next Fed cut with the September FOMC meeting.
USDCAD TECHS: Pressuring Resistance
May-09 20:00
- RES 4: 1.4296 High Apr 7
- RES 3: 1.4111 High Apr 4
- RES 2: 1.4041 50-day EMA
- RES 1: 1.3943 High May 9
- PRICE: 1.3930 @ 16:06 BST May 9
- SUP 1: 1.3751 Low May 6
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
USDCAD has recovered from its recent lows. Despite the recovery, the trend condition remains bearish and short-term gains are considered corrective. A fresh cycle low on Tuesday reinforces the bearish theme. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Note that moving average studies are in a bear mode position, highlighting a dominant downtrend. Key resistance is seen at 1.4041, the 50-day EMA.
