NATGAS: German to Lower legally-Binding Gas Storage Targets
Germany will lower the legally-binding gas storage targets with cavern storage facilities down from 90% to 80% and porous reservoirs to 45%, according to an economy ministry press release cited by Bloomberg. The change is to ease speculation and pressure on stockpiling ahead of the next heating season.
- The ministerial ordinance does not require parliamentary approval.
- Four porous reservoirs sites near the Swiss and Austrian borders have targets of 80% due to the importance of supply in those countries.
- Germany’s overall storage capacity target would be around 70% full by Nov. 1.
- Europe remains vulnerable to tight supplies, despite recent easing of prices partly driven by the potential impact of US tariffs on global demand.
- European lawmakers will vote on their common position on the gas storage regulation on May 8, opening the way for negotiations with member states. It follows the EU Parliament industry committee’s vote in favour of reducing the EU’s gas storage target to 83%.
- State-sponsored storage filling via Germany’s Trading Hub Europe GmbH “is not appropriate” and “would unnecessarily increase costs for gas consumers,” the economy ministry added.
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EUROPEAN INFLATION: Services Deceleration Continues in March EZ HICP
Eurozone March flash HICP Y/Y inflation came in at 2.18%, 0.02 hundredths below the rounded consensus of 2.2% (vs 2.32% February). On a monthly basis, Eurozone inflation came in at 0.61% (0.6% cons, 0.43% prior). The data on services in the release should be seen as a good sign regarding tapering stickiness in the category.
- Core HICP printed below consensus, at 2.41% Y/Y and 0.95% M/M (2.5% cons; Feb 2.57% Y/Y, 0.55% M/M).
- Looking at the individual categories:
- Services inflation notably decelerated to 3.42% Y/Y; rounded to 1dp, there has not been a print lower than 3.4% since April 2022. The median sellside analyst estimate ahead of the national data stood at 3.5% - so that looks like a bit of a downside surprise.
- Energy came in at -0.74% Y/Y, with the deceleration vs February's 0.19% underpinned by a sequential fall (M/M at -1.17%) - this looks broadly in line with expectations.
- Non-energy industrial goods printed 0.63% Y/Y, the category has remained between 0.44% and 0.70% since last May and this broadly in line with analyst consensus.
- Food, alcohol and tobacco inflation, as expected, accelerated in March, at 2.90% Y/Y, above February's 2.66% but also broadly line w/ expectations.
- Looking at the national-level prints, headline HICP inflation accelerated in 7 countries in March vs Feb (Netherlands, Austria, Estonia, Latvia, Malta) despite the overall decrease in headline.
EQUITIES: EU Bank put spread
SX7E (17th Apr) 180/165ps 1x1.5, bought for 0.90 in 7.2k.
EURIBOR: EURIBOR FIX - 01/04/25
EURIBOR FIX - EMMI/Bloomberg
- EUR001W 2.3900 0.0020
- EUR001M 2.3490 -0.0090
- EUR003M 2.3240 -0.0120
- EUR006M 2.3090 -0.0270
- EUR012M 2.2770 -0.0290
