POWER: Italy November Power to Open Higher
Italy November power is expected to open higher with small gains in EU gas prices. Italy’s PUN index is seen to decline for the second consecutive session with forecasts for strong wind output and lower demand.
- Italy Base Power NOV 25 closed down 0.1% at 108.46 EUR/MWh on 1 Oct
- Italy Power Cal 26 closed down 0.1% at 103.74 EUR/MWh on 1 Oct
- TTF Gas NOV 25 up 0.8% at 31.59 EUR/MWh
- EUA DEC 25 up 0.4% at 76.65 EUR/MT
- TTF front month has recovered from a low of €30.735/MWh yesterday amid signs of Indian LNG interest boosted by low prices. The slow return of Norwegian supplies from seasonal maintenance continues but the curtailed supplies are offset by a recent rise in LNG sendout.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures will remain below normal through most of the first half of October, with temperatures broadly in line with the average in mid-October.
- Mean temperatures in Rome are forecast at 14.9C on Friday, down from 16.2C on Thursday and below the seasonal average of 19.2C.
- The PUN index declined to €104.40/MWh for Thursday’s delivery, down from €117.18/MWh the day before.
- Wind output in Italy is forecast to rise to 6.17GW during base load Friday, up from 6GW on Thursday. Solar PV output is forecast at 8.48GW during peak load on Friday, up from 8.22GW on Thursday according to SpotRenewables.
- Residual load in Italy is forecast at 20.51GWh/h on Friday, compared with 20.73GWh/h on Thursday, Reuters data showed.
- Power demand in Italy is forecast at 31.79GWh/h on Friday, down from 32.07GWh/h the day before according to Reuters.
- Italian residential/commercial gas consumption is forecast at 67.4mcm/d on Friday, up from 54.6mcm/d on Thursday according to Bloomberg.
- Italy’s hydro balance forecast has been revised down to end at 885GWh as of 15 October, from 1.16TWh previously, Bloomberg data showed.
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STIR: Just 9bps of BOE Cuts Priced Through Year-end
BOE-dated OIS continue to price just ~4bps of easing through November, with 9bps of cuts priced through year-end. We think the November meeting is much more “live” than current market pricing implies, with focus on next week’s labour market and inflation data double header.
- Today’s domestic calendar is light. However, tomorrow will see Bailey, Lombardelli, Taylor & Greene appear in front of the Treasury Select Committee (alongside separate comments from Deputy Governor Breeden at a money and payments conference).
- SONIA futures are flat to -2.5 ticks through the blues, with the strip bear steepening alongside the Gilt curve (more on Gilts to follow shortly).
| Meeting Date | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Sep-25 | 3.974 | 0.7 |
| Nov-25 | 3.928 | -3.9 |
| Dec-25 | 3.879 | -8.7 |
| Feb-26 | 3.785 | -18.1 |
| Apr-26 | 3.751 | -21.6 |
| Jun-26 | 3.686 | -28.1 |
| Jul-26 | 3.664 | -30.2 |
| Sep-26 | 3.629 | -33.7 |
| Source: MNI/Bloomberg Finance L.P |
SILVER TECHS: Northbound
- RES 4: $40.323 - 2.000 proj of the Apr 7 - 25 - May 15 swing
- RES 3: $42.000 - Round number resistance
- RES 2: $41.064 - 1.764 proj of the Apr 7 - 25 - May 15 swing
- RES 1: $40.850 - Intraday high
- PRICE: $40.688 @ 07:58 BST Sep 2
- SUP 1: $38.585 - 20-day EMA
- SUP 2: $37.661 - 50-day EMA
- SUP 3: $36.216 - Low Jul 31 and a key support
- SUP 4: $35.285 - Low Jun 24
Trend signals in Silver remain bullish and the metal traded sharply higher Monday. Resistance at $35.930, the Jul 23 high, has been cleared. This confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position, reinforcing current trend conditions. Sights are on $41.064 next, a Fibonacci projection. Initial support to watch is $38.585, the 20-day EMA.
GILTS: Opening calls
Gilt calls, 90.03/90.19 range.
