EMISSIONS: Industry Urges EU-UK ETS Link Talk Ahead Of EU-UK Summit
May-01 08:51
A coalition of more than 50 signatories has called on the EU and UK to initiate talks on linking their ETS ahead of EU-UK Summit on 19 May, according to the joint letter.
- Signatories include Equinor, Orsted, RWE and other major trade associations.
- Linkage would enable carbon price convergence, improve investment confidence, and mitigate unintended CBAM effects on electricity trade.
- The EU and UK both have legally binding net-zero targets by 2050, and closer coordination would reduce decarbonisation costs and carbon leakage risks.
- A 2024 Baringa study shows coordinated North Sea energy efforts and ETS linkage could save consumers up to €44bn annually by 2040 and cut emissions by 24%.
- EUA DEC 25 up 0.32% at 66.76 EUR/t CO2e
- UKA DEC 25 up 0.08% at 47.25 GBP/t CO2e
- The EUA Dec25 premium to the UK equivalent at at €11.17/t CO2e.
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OAT: Rabobank Play Down Le Pen Impact, Look To Financial Conditions
Apr-01 08:43
Rabobank suggest that “with Le Pen having done little to move the needle in terms of the perceived cohesiveness of the Eurozone, her current political problems seem unlikely to have much if any impact on a systemic level”.
- They go on to note that “French 2014 5-Year CDS now matches levels reached in the immediate wake of last year’s shock election announcement. Much of this widening move, however, took place in prior weeks. The reason for the subsequent ascent, in our view, is that the German-led sell-off in rates has prompted a tightening of financial conditions”.
- The conclude by noting that “Le Pen’s travails look currently to be something of a sideshow. The disconnect between French financial conditions and the country’s fundamental outlook is the more important theme for investors to focus on and one which raises the odds of OAT/Bund spread widening. Resonating with this view is a notable nugget of feedback we received during a client visit last week which was from an investor who noted that the back up in German yields would now see them operating with a clear home bias as there is no longer a need to hunt for returns elsewhere. They believe many of their peers would be of a similar view”.
UK: Trade Min-UK 'In Best Possible Position' To Reverse US Tariffs
Apr-01 08:41
Secretary of State for Business and Trade Jonathan Reynolds has acknowledged that despite the gov'ts efforts to avoid the imposition of US 'reciprocal' tariffs on British goods, the levies are set to impact UK goods from 2 April. However, the minister added the claim that the UK is in the "best possible position of any country" to see the tariffs reversed. Speaking to the BBC, Reynolds was circumspect on the prospect of retaliatory tariffs, saying "The longer we don't have a potential resolution to [the US tariffs], the more we will have to consider our own position."
- Earlier, PM Sir Keir Starmer claimed "Our talks on an economic deal with the US are well advanced."
- Steven Swinford at The Times outlined on X some of the latest details:
- "Donald Trump's administration decided against signing economic deal with UK because president wants a 'big bang' on tariffs with no exceptions.[...]. Ministers are drawing up plans to protect key industries amid concerns UK will be flooded with cheap goods [...]."
- "[UK/US deal is] on the table and ready to sign. The focus is on AI and technology. The Digital Services Tax, which hits silicon valley giants, will be dropped and ultimately replaced with a tax with a broader base."
- "There are concessions on agriculture. Sounds like tariffs on imports of US beef, chicken and other meat will be lowered, but SPS checks - animal welfare and hygiene standards - will not change."
RIKSBANK: Maintains FX Hedging Approach, Boosts USD Exposure
Apr-01 08:37
Riksbank's new FX strategic allocation importantly sees an unchanged approach to FX hedging - meaning the Riksbank remain in a "good balance" between contingency planning as well as risk and return.
- Their new FX allocation boosts USD exposure, drops EUR and NOK, maintains GBP and AUD: 70% USD (from 62%) EUR at 17.5% (from 22%), GBP unchanged at 5%, AUD unchanged at 5%, NOK at 2.5% (from 3%)
