POWER: Italy’s PUN Index to Fall on Strong Renewables
Oct-01 07:27
Italy PUN index is expected to fall with strong renewable generation, with wind output expected to load factors up to 62% on Thursday. The Italian front-month power base-load contract is expected to edge down, once liquid, with small losses in EU gas prices and a slight upward revision in temperature forecasts.
- Italy Base Power NOV 25 closed down 2.4% at 108.52 EUR/MWh on 30 Sept
- Italy Power Cal 26 closed down 1.7% at 103.84 EUR/MWh on 30 Sept
- TTF Gas NOV 25 down 0.2% at 31.335 EUR/MWh
- EUA DEC 25 down 0.5% at 75.32 EUR/MT
- TTF front month is trading near the previous close after falling to the lowest since Aug. 28 amid healthy LNG imports.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures have been revised up top remain below the seasonal average until end of this week when temperatures will briefly rise to be in line with the average, before easing back again.
- Mean temperatures in Rome are forecast at 16C on Thursday, down from 18.7C on Wednesday and below the seasonal normal of 19.3C.
- The PUN index rose to €117.18/MWh for Wednesday’s delivery, from €112.20/MWh the day before.
- Wind output in Italy is forecast to rise sharply to 5.87GW during base load on Thursday, up from 1.5GW on Wednesday. Solar PV output is forecast at 8.3GW during peak load on Thursday, from 6.04GW on Wednesday according to SpotRenewables.
- Residual load in Italy is forecast at 20.69GWh/h on Thursday, down from 27.3GWh/h on Wednesday, Reuters data showed.
- Power demand in Italy is forecast at 32.01GW/h on Thursday, from 32.73GWh/h on Wednesday, Reuters data showed.
- Italian residential/commercial gas consumption is forecast at 47.7mcm/d on Thursday, from 44.5mcm/d on Wednesday, Bloomberg data showed.
- Italy’s hydro balance forecast has been revised down to end at 1.16TWh on 15 October, from 1.36TWh previously, Bloomberg data showed.
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STIR: EUR Short End Still Leans Towards One Further Cut
Sep-01 07:24
Weakness further out the curve has promoted modest hawkish repricing in the front end of the EUR rates space (early focus this week falls on incoming EUR supply and political risk in France).
- Euribor futures are flat to -3.5, steepening. August lows are untested across the strip
- ECB-dated OIS shows little changed to 1bp less dovish but still leans towards 1 further cut in the cycle, pricing ~17bp of easing through June.
- ECB President Lagarde has reaffirmed the Bank’s ongoing monitoring of EGB spreads, along with the need for fiscal discipline and stressing that the toppling of any Eurozone government presents worry for the Bank. She also stressed that the Bank’s inflation target has been met, while pushing the need for swifter European reforms and highlighting a reduction in economic uncertainty.
- Elsewhere, acting Slovenian central bank Governor Dolenc suggested that the ECB is probably done with rate cuts in the current cycle.
- Meanwhile, Governing Council member Rehn said there is "no room for complacency", while tipping his hat to downside risks to inflation.
- Manufacturing PMI data headlines the Eurozone calendar today. While they are final readings for the larger economies (and Eurozone on the whole), it is worth noting that Spain’s reading was firmer than expected.
- Note that ECB’s Schnabel & Cipollone with chair panels at the ECB legal conference today, with Lagarde set to speak at that event this evening.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Sep-25 | 1.922 | +0.2 |
Oct-25 | 1.900 | -2.0 |
Dec-25 | 1.839 | -8.1 |
Feb-26 | 1.815 | -10.6 |
Mar-26 | 1.770 | -15.0 |
Apr-26 | 1.758 | -16.2 |
Jun-26 | 1.748 | -17.2 |
MNI: SPAIN AUG MANUF PMI 54.3 (52.1 FCAST, 51.9 JUL)
Sep-01 07:15
- MNI: SPAIN AUG MANUF PMI 54.3 (52.1 FCAST, 51.9 JUL)
EURIBOR OPTIONS: Large Call Spread
Sep-01 07:13
ERM6 98.3125/98.4375, bought for 2.5 in 15k.
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