POWER: Italy Q3 Power Trends Lower on Gas
The Italian front-quarter power contract is edging lower with losses in EU gas prices, while the remainder of the curve has not traded yet amid expected lower liquidity due to public holiday on Thursday.
- Italy Base Power 3Q25 down 0.7% at 104.01 EUR/MWh
- TTF Gas JUN 25 down 1.4% at 31.515 EUR/MWh
- EUA DEC 25 up 0.3% at 65.05 EUR/MT
- EU gas prices are pulling back on Wednesday with Norwegian supply outages set against steady LNG imports to Europe and building storage while energy market focus remains on US trade negotiations and progress towards Ukraine peace.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures will remain above normal until 6 May, before dipping below normal until 10 May, when temperatures will rise back up.
- Mean temperatures in Rome are forecast to rise to 18.2C on Thursday, from 17.8C on Wednesday and above the seasonal average of 16C.
- The PUN index rose to €87.45/MWh for Wednesday’s delivery, from €81.87/MWh a day earlier.
- Wind output in Italy is forecast to rise to 1.68GW during base load on Thursday, from 1.42GW on Wednesday according to SpotRenewables.
- Residual load in Italy is forecast to drop to 12.4GWh/h on Thursday, from 19.34GWh/h on Wednesday according to Reuters.
- Power demand in Italy is forecast to plunge to 21.38GWh on Thursday, amid public holiday, from 27.4GWh/h on Wednesday according to Reuters.
- Italy’s hydro balance has been slightly revised higher to end at -1.31TWh on 14 May, from -1.54TWh a day earlier, Bloomberg data showed.
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GILTS: Rallying On Wider Risk-Off Flow, Bullish Technical Threat Increases
Gilts through last week’s highs on the wider risk-off price action stemming from U.S. tariff worry ahead of “Liberation Day”.
- Futures peak at 92.10 before fading back below 92.00, still up the best part of 50 ticks on the day.
- Note that the short-term technical trend in the contract remains bearish, but the bullish threat has increased.
- Initial Fibonacci resistance (92.17) protects trendline resistance drawn off the March 4 high (91.55).
- Yields 2.5-4.0bp lower, 10s outperform on the curve.
- GBP STIRs still around levels we flagged ahead of the gilt open, as most of the early dovish adjustment holds.
- The DMO will hold its consultations regarding FQ1 (April to June) issuance at 15:30BST (investors) and 17:00BST (GEMMs) today.
- We set out our expectations for gilt issuance across FY25/26 in our UK Issuance Deep Dive publication.
- Elsewhere, only lower tier UK economic data is due on Monday, which will leave macro cues at the fore for much of the session.
EFSF ISSUANCE: New 5-year: Guidance
- EUR Benchmark of the new 5y May-30 MS+32 Area
- Coupon: Annual, act/act, long first
- ISIN: EU000A2SCAT6
- Maturity: May 7, 2030
- Format: Reg S, bearer, 0% rw
- Issuer: European Financial Stability Facility (EFSF)
- Bookrunners: Citi, CA-CIB (B&D), SocGen
- Settlement: April 7, 2025
- Timing: May price today.
Details via Bloomberg
SILVER TECHS: Bullish Trend Sequence
- RES 4: $35.736 - 1.236 proj of the Feb 14 - Apr 12 - May 2 ‘24 swing
- RES 3: $34.903 - High Oct 23 ‘24 and the bull trigger
- RES 2: $34.548 - High Oct 29 ‘24
- RES 1: $34.501 - Intraday high
- PRICE: $34.355 @ 08:23 BST Mar 31
- SUP 1: $33.304 - 20-day EMA
- SUP 2: $32.665 - Low Mar 21
- SUP 3: $32.483/31.814 - 50-day EMA / Low Mar 11
- SUP 4: $30.815 - Low Feb 28 and key support
Bullish conditions in Silver remain intact and last week’s gains reinforce this condition. The rally resulted in a breach of $34.233, the Mar 18 high and a bull trigger. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on $34.903, the Oct 23 ‘24 high and a medium-term bull trigger. Initial firm support to watch is $33.3004, the 20-day EMA.
