POWER: Italy’s Pun to Drop on Lower Demand Amid Holiday
Italy’s Pun is expected to fall for Friday’s delivery amid a sharp decline in power demand due to a public holiday. Italian front-month power is seen to edge down, once liquid, closely tracking EU gas prices.
- Italy Base Power MAY 25 closed up 0.7% at 98.04 EUR/MWh on 23 Apr.
- TTF Gas MAY 25 down 0.2% at 34.09 EUR/MWh
- EUA DEC 25 down 0.8% at 66.39 EUR/MT
- EU gas prices decline on Thursday amid above normal injections and healthy LNG supplies to Europe as Asia demand is muted by cheaper alternative fuels and despite recent LNG supply disruptions.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures have revised up to remain above normal during the forecast period.
- Mean temperatures in Rome are forecast to be broadly stable on the day at 15.2C on Friday, broadly in line with the seasonal average.
- The PUN index decreased to €99.96/MWh for Thursday’s delivery, from €109.90/MWh in the previous session.
- Wind output in Italy is forecast to decline to 1.6GW during base load on Friday, from 3.05GW on Thursday according to SpotRenewables.
- Power demand in Italy is forecast to fall sharply to 20.4GWh on Friday, down from 25.99GWh on Thursday, Reuters data showed. Italy has a public holiday for Liberation Day on Friday.
- Residual load in Italy is forecast at 12.40GWh/h on Friday, from 16.83GWh/h on Thursday, Reuters data showed.
- Italy’s hydro balance forecast has been revised down to 651GWh as of 8 May, from 774GWh a day earlier, Bloomberg data showed.
- Italian hydropower reserves last week rose for the third consecutive week to 2.25TWh, with stocks rising above 2024 levels and above the five-year average.
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GOLD TECHS: Bulls Remain In The Driver’s Seat
- RES 4: $3106.8 - 2.764 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 3: $3100.0 - Round number resistance
- RES 2: $3079.2 - 2.618 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $3057.5 - High Mar 20
- PRICE: $3013.8 @ 07:25 GMT Mar 24
- SUP 1: $2999.5 - Low Mar 18
- SUP 2: $2964.9/2884.4 - 20-day EMA / 50-day EMA
- SUP 3: $2832.7 - Low Feb 28 and key support
- SUP 4: $2758.3 - Low Jan 30
A clear uptrend in Gold remains intact and last week’s resumption of the bull cycle reinforces current conditions. The yellow metal is holding on to the bulk of its recent gains. Last Thursday’s fresh trend high reinforces the bull theme and sights are on $3079.2 next, a Fibonacci projection. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Support is at $2964.9, the 20-day EMA.
BRENT TECHS: (K5) Trades Through The 50-Day EMA
- RES 4: $79.98 - High Jan 15 and a reversal trigger
- RES 3: $76.78 - High Feb 11 and a bull trigger
- RES 2: $74.76 - High Feb 25
- RES 1: $73.17 - High Mar 24
- PRICE: $73.12 @ 07:09 GMT Mar 25
- SUP 1: $68.33 - Low Mar 5 and the bear trigger
- SUP 2: $67.87 - Low Sep 10 ‘24 and a key medium-term support
- SUP 3: $66.36 1.618 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $63.90 2.000 proj of the Jan 15 - Feb 4 - 11 price swing
Brent futures traded higher Monday and the contract is holding on to its recent highs. For now, gains are considered corrective. However, price has breached the 50-day EMA, at $72.83. A clear break of this average would signal scope for a stronger recovery and open $74.76 next, the Feb 25 high. Moving average studies remain in a bear-mode position highlighting a dominant downtrend. The bear trigger lies at $68.33, the Mar 5 low.
SWEDEN: Domestic Supply Inflation Momentum Remains Solid
The Swedish price index for domestic supply pulled back to 2.8% Y/Y in February (vs 3.6% prior). However, this masked diverging trends between domestic producer prices and import prices. Domestic producer price inflation accelerated for the third consecutive month to 4.8% Y/Y (vs 2.5% prior), while import price inflation eased to 1.2% Y/Y (vs 4.8% prior). The latter’s development is likely a function of the stronger krona in February. Producer price inflation (which takes into account domestic producer prices and export prices) eased a tenth to 3.4% Y/Y.
- The Riksbank will need to see further easing in “core” domestic supply pressures in the coming months to feel confident that the recent uptick in CPI inflation is temporary. Rate cuts appear off the table until this view is confirmed.
- Energy inflation (in the price index for domestic supply) ticked up to 4.0% Y/Y (vs -1.0% prior), the highest rate since January 2023. This came as an acceleration in domestic electricity prices (to 23.5% Y/Y) was offset somewhat by lower imported crude oil prices.
- Excluding energy, domestic supply inflation was 2.7% Y/Y (vs 4.7% prior), with pullbacks noted in capital goods, consumer goods and food.
- Food inflation has been a key driver of higher CPI outturns in 2025, so further deceleration in producer prices (and survey expected price data) will be required to ease Riksbank concerns for this category.
- On a 3m/3m (NSA) basis, inflation momentum remained strong across components.
