POWER: Italy December Power Stable W/W
The Italian December power base-load contract is broadly stable on the week as of Thursday’s close. The contract is expected to edge up on Friday, once liquid, with gains in EU gas prices.
- Italy Base Power DEC 25 closed down 0.9% at 111.85 EUR/MWh on 13 Nov
- Italy Power Cal 26 closed down 0.7% at 103.53 EUR/MWh on 13 Nov
- TTF Gas DEC 25 up 0.9% at 30.72 EUR/MWh
- EUA DEC 25 down 0.3% at 81.09 EUR/MT
- TTF front month has regained some ground but still on track for a net weekly decline as the market weighs healthy supplies against higher demand risk from colder weather next week.
- Italy front-month power/TTF 30-day correlation stood at 0.85 as of Thursday’s close.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures have been revised down for next week drop below normal from early next week for the remainder of the forecast period.
- Mean temperatures in Rome are forecast at 15.4C on Saturday and at 15.9C on Sunday, from 14.5C on Friday and above the seasonal average.
- The PUN index settled at €115.36/MWh for Friday’s delivery, from €124.41/MWh for Thursday’s delivery.
- Wind output in Italy is forecast at 1.03GW on Saturday during base load and at 1.6GW on Sunday, from 842MW on Friday, according to SpotRenewables.
- Italian wind output is forecast at 729MW to 5.05GW during base load on 15-23 November.
- Residual load in Italy is forecast at 23.95GWh/h on Saturday and at 19.31GWh/h on Sunday, from 29.08GWh/h on Friday, Reuters data showed.
- Power demand in Italy is forecast at 28.4GWh/h on Saturday and at 24.64GWh/h on Sunday, from 33.54GWh/h on Friday, Reuters data showed.
- Italian residential/commercial gas demand is forecast at 70.1mcm/d on Saturday and at 66.5mcm/d on Sunday, from 91.1mcm/d on Friday, Bloomberg data showed.
- Italy’s hydro balance forecast has been revised down to end at -1.27TWh on 28 November, from -1.06TWh previously, Bloomberg data showed.
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NATO: Def Mins Meet For Ukraine Talks w/Focus On Tomahawks & Air Defences
NATO defence ministers are meeting at the alliance's HQ in Brussels. Speaking on 14 Oct, US President Donald Trump raised again the potential sale of Tomahawk missiles, which could strike deep into Russia, to Kyiv. Trump hosts President Volodymyr Zelenskyy at the White House on 17 Oct, claiming “He would like to have Tomahawks...We have a lot of Tomahawks.” Russian President Vladimir Putin said the sale of Tomahawks, capable of carrying a nuclear warhead and capable of reaching Moscow, would mark a “qualitatively new stage of escalation.” In order to fire the Tomahawks, the US would need to provide Ukraine with Typhon launchers.
- Regarding Russian aerial incursions, an aim of today's meeting is to get clarity on ‘national caveats’, which dictate how the Supreme Allied Commander Europe can respond to immediate threats using NATO troops from various countries.
- Secretary General Mark Rutte will hold a post meeting presser at 14:15CET (08:15ET, 13:15BST), livestream here.
- After a meeting of the ~50-nation Ukraine Defence Contact Group at 15:00CET, Ukrainian Minister of Defence Denys Shmyhal will hold a presser with Rutte at 17:00CET (11:00ET, 16:00BST) and then with the hosts of the UDCG, the British and German defence ministers, at 17:40CET.
- Finally, EU defence ministers will have an informal meeting at 19:00CET (13:00ET, 18:00BST), with the main topic of discussion being the EU's 'Readiness 2030' plans, which include the EUR150bln SAFE loans scheme to boost defence spending by member states.
SWAPS: Spill Over From Fed Chair Powell's QT Comments Widens UK Swap Spreads
Long end swap spreads lead the widening on the UK curve this morning, seemingly driven by spill over from Fed Chair Powell signalling the potential end to QT in the “coming months”.
- 30-Year swap spreads ~1.5bp wider vs. closing levels, while 2- & 5-Year spreads are closer to 0.5bp wider on the day.
GERMAN AUCTION PREVIEW: On offer next week
Germany has announced it will be looking to sell the following at its auction next Tuesday, October 21:
- E750mln of the 1.30% Oct-27 Green Bobl (ISIN: DE0001030740)
- E750mln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047)
