POWER: Italy April Power Falls Below €100/MWh
Italy April power base load is tracking a weekly net decline of above 13% with a sharp selloff in EU gas prices. Front-month power is extending losses today with lower EU gas prices and forecasts for milder weather.
- Italy Base Power APR 25 down 2.1% at 99.5 EUR/MWh
- TTF Gas APR 25 down 0.9% at 37.9 EUR/MWh
- EUA DEC 25 down 0.1% at 67.22 EUR/MT
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures have been revised higher with temperatures above normal through most of the forecast period.
- Mean temperatures in Rome are forecast to rise to 11.9C on Saturday, from 11.6C on Friday and above the seasonal average of 10.9C.
- The PUN index cleared at €124.33/MWh for Friday’s delivery, from €124.27/MWh a day earlier.
- Wind output in Italy is forecast to decline to 1.09GW on Saturday and to 1.51GW on Sunday during base load, down from 1.95GW on Friday according to SpotRenewables.
- Residual load in Italy is forecast to decline to 22.77GWh/h on Saturday and to 17.59GWh/h on Sunday, from 25.13GWh/h on Friday according to Reuters.
- Power demand in Italy is forecast to fall to 32.82GWh on Friday, down from 33.4GWh on Thursday, Reuters data showed.
- Italy’s hydro balance has been broadly stable on the day to end at -3.44TWh on 21 March.
- Planned maintenance at the 3.2GW VILLARODIN-VENAUS power link between France and Italy is scheduled to end today at 16:00CET, RTE data showed.
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MNI: ITALY JAN SRVCS PMI 50.4 (FCAST 50.4); DEC 50.7
- MNI: ITALY JAN SRVCS PMI 50.4 (FCAST 50.4); DEC 50.7
GILTS: Citi Dig Into '24 Gilt Demand, Offshore Took Greatest Share Again
Citi note that “data out at the end of last week completes the picture of who bought all the gilts in ‘24. 45% of ’24 net gilt supply was absorbed overseas, 34% was taken by private domestic investors and 22% was taken by domestic banks.”
- They note that “this was the fifth time in the last six years that overseas investors have taken the greatest share (‘23 the exception), largely thanks to a strong pick-up in demand in the last quarter, a period in which cable depreciated by over 6% and gilts underperformed sharply vs. Bunds.”
- Elsewhere, Citi observe that “net buying by UK banks also had a late surge to the fastest 3-month pace on record, perhaps responding to cheaper ASW levels. In contrast, non-bank domestic demand fell away in late ‘24 to the slowest 3-month pace since early ‘22, despite higher outright yields, perhaps put off by the domestic uncertainty created by the Budget.”
- They conclude with “this highlights the efficiency of the gilt market in offering RV to entice one investor group whenever another one may be stepping back.”
SPAIN DATA: Composite PMI Still Comfortably Expansionary Despite Services Miss
The Spanish services PMI was a little weaker-than-expected at 54.9 (vs 56.8 cons, 57.3 prior). Taken alongside a lower-than-expected manufacturing PMI on Monday, the composite index ticked down to 54.0 (vs 55.9 cons, 56.8 prior). The composite index has nonetheless been in expansionary territory since November 2023, notably outperforming other major Eurozone economies.
We highlight that input price increases were passed through to output charges in January. A similar dynamic was also seen in the manufacturing PMI.
Key notes from the release:
- “The rate of growth in new business in January was rapid, rising to its highest level since April 2023. Panellists noted that demand for their services was strong, and that commercial activities had helped to support new business gains”…. “Latest data did however suggest that growth was centred on domestic markets”
- “In response to higher overall workloads, service providers chose to take on additional staff at a rapid and accelerated pace”.
- “Panellists also noted an upturn in typical labour expenses during January”… “Suppliers were also reported to have increased their prices”… “firms increased their output charges in response to higher operating expenses”.
