POWER: Italy August Power to Open Higher
The Italian August power contract is extended to open slightly higher with some gains in EU gas markets, while forecasts suggest temperatures to remain above normal
- Italy Base Power AUG 25 closed up 0.2% at 114.7 EUR/MWh on 8 July
- TTF Gas AUG 25 up 0.4% at 34.37 EUR/MWh
- EUA DEC 25 down 0.2% at 70.28 EUR/MT
- TTF front month prices are edging higher with support from a warm weather forecast expected to support cooling demand.
- The latest two-week ECMWF weather forecast for Rome suggested mean temperatures will remain above the seasonal average throughout the forecast period.
- Mean temperatures in Rome are forecast at 24.9C on Thursday, from 24.4C on Wednesday and broadly in line with the average.
- The PUN index fell to €100.83/MWh for Wednesday’s delivery, from €109.39/MWh the day before.
- Wind output in Italy is forecast to decline to 3.06GW during base load on Thursday, from 4.69GW on Wednesday according to SpotRenewables.
- Power demand in Italy is forecast at 35.91GWh/h on Thursday, from 36.96GWh/h on Wednesday, Reuters data showed.
- Residual load in Italy is forecast at 25.2GWh/h on Thursday, from 23.74Gwh/h on Wednesday, Reuters data showed.
- Italy’s hydro balance forecast has been revised up to end at -458GWh as of 23 July, from -584GWh a day earlier, Bloomberg data showed.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BTP: Citi Flag Risk Of BTP/Bund Move To 75bp
Citi note that “EGB spreads shrugged off the hawkish ECB cut and neutral risk-asset behaviour last week to extend their tightening”.
- They suggest that “while BTPs look rich vs other risk assets (and our fair value model), we suspect they are going through a regime change in shedding some of the legacy risk premium. This might have more to go, and any near-term consolidation and the impact of elevated NCR in coming months might give way to 10-Year BTP/Bund spread reaching 75bp over the course of ‘25”.
SILVER TECHS: Impulsive Bull Wave Extends
- RES 4: $38.000 - Round number resistance
- RES 3: $37.195 - 2.236 proj of the May 15 - 22 high / low price swing
- RES 2: $36.987 - 1.000 proj of the Apr 7 - 25 - May 15 price swing
- RES 1: $36.712 - 2.000 proj of the May 15 - 22 high / low price swing
- PRICE: $36.283 @ 08:06 BST Jun 9
- SUP 1: $33.967 - Low Jun 3
- SUP 2: $33.147/31.651 - 50-day EMA / Low May 15
- SUP 3: $30.915/28.351 - Low Apr 11 / 7 and the bear trigger
- SUP 4: $27.686 - Low Sep 6 ‘24
An impulsive bull wave in Silver remains in play and last week’s strong gains reinforce this condition. The metal has recently cleared a number of important resistance points. Thursday’s rally resulted in a move above $34.903, the Oct 23 ‘24 high and a key bull trigger. The clear break of it marks an important medium-term bullish development. Sights are on $36.712 next, a Fibonacci projection. Initial support to watch lies at $33.967, the Jun 3 low.
BONDS: BTP/Bund spread tightens towards 91.00bps
- The Italian BTP futures is leading the gains in EGBs here, but the contract is still short of Friday's high, although the small resistance is seen at 121.04.
- Regardless, the price action has put the BTP/Bund another 1bp tighter, and could be set to test the big Psychological 90.00bps level, printed a 90.4bps low in 2021, its lowest since Mid March 2015.
