POWER: Italy Front-Month Power to Trade Sideways
Italy front-month power is expected to trade sideways, once liquid, with EU gas prices struggling to find a clear direction on Wednesday morning. Front-month futures settled at the highest since late February in Tuesday’s session, supported by expectations for increased cooling demand with forecasts suggesting well above-normal temperatures.
- Italy Base Power JUL 25 closed up 2.4% at 118.31 EUR/MWh on 3 June.
- TTF Gas JUL 25 down 0.2% at 35.76 EUR/MWh
- EUA DEC 25 down 0.3% at 72.39 EUR/MT
- EU gas prices are holding onto gains seen yesterday amid supply concerns due to seasonal maintenance in Norway and the US.
- EU gas prices are trading rangebound today after yesterday’s gains with support from ongoing Norwegian maintenance, while Russia-Ukraine talks yielded no major breakthroughs.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures have been revised up to remain above normal through the forecast period with max temperatures reaching 30.4C in mid-June.
- Mean temperatures in Rome are forecast at 22.4C on Thursday, from 22.1C on Wednesday and above the seasonal average of 21.1C.
- The PUN index settled at €116.82/MWh for Wednesday’s delivery, up from €107.89/MWh for Tuesday.
- Wind output in Italy is forecast at 1.15GW during base load on Thursday, from 1.14GW on Wednesday according to SpotRenewables.
- Power demand in Italy is forecast at 31.94GWh/h on Thursday, down from 32.31GWh/h on Wednesday, Reuters data showed.
- Residual load in Italy is forecast at 24.32GWh/h on Thursday, from 23.83GWh/h on Wednesday according to Reuters.
- Italy’s hydro balance forecast has been slightly revised up to end at 573GWh on 18 June, from 476GWh previously forecasted, Bloomberg data showed.
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AUD: Best performer within G10s
- While just off its best level, the AUD is still the best performer against the Dollar within G10 Currencies, the Aussie has extended through the 2025 high on Friday and has found a boost following Albanese's win over the Weekend.
- Tariffs risks are still the major concern, but some of the continuity in Policy could be seen as supportive at least short Term.
- Next resistance in AUDUSD comes at 0.6528 High Nov 29 ‘24, and upside traction could be on the card, although Trade risks are at the forefront.
SILVER TECHS: Trend Structure Remains Bullish
- RES 4: $36.000 - Round number resistance
- RES 3: $34.903 - High Oct 23 ‘24 and the bull trigger
- RES 2: $34.590 - High Mar 28
- RES 1: $33.686 - High Apr 25
- PRICE: $32.385 @ 08:07 BST May 5
- SUP 1: $31.668 - Low May 2
- SUP 2: $30.915/28.351 - Low Apr 11 / 7 and the bear trigger
- SUP 3: $27.686 - Low Sep 6 ‘24
- SUP 4: $27.180 - Low Aug 14 ‘24
A strong rally in Silver on Apr 23 reinforced the current bullish theme. This suggests the latest pullback that started Apr 25, is a correction. Price has traded below support at $322.443, the 50-day EMA. A continuation lower would highlight scope for a deeper retracement and open $30.915, the Apr 11 low. For bulls, resistance to watch is $33.686, the Apr 24 high. Clearance of this level would confirm a resumption of the latest uptrend.
EURIBOR OPTIONS: Put Condor
ERU5 98.50/98.37/98.25/98.00p condor, bought for flat in 6.2k.
