POWER: Poland's January Climbs to Another Fresh High on EU ETS, Temps
Poland’s January continue to climb to be supported by cooler average temperatures in Warsaw and gains in EU ETS. The contract reached another fresh all-time high.
- Poland’s January baseload power settled at PLN521.00/MWh compared to its settled price of PLN516.94/MWh on 22 December, according to data on Polish power exchange TGE.
- EUA DEC 26 up 1.3% at 88.62 EUR/MT
- Rotterdam Coal JAN 26 down 0.8% at 93.9 USD/MT
- EUAs Edge Higher EUAs Dec26 are edging higher, extending Monday’s gains with expected thinner trading volumes ahead of the Christmas holidays. While, UKAs Dec26 are continuing to rise, narrowing the spread to EUAs, with optimism towards linking the EU-UK ETS systems.
- The 630MW Plock power plant will still be disconnected over 9-24 January, while the 670MW Gryfino unit 9 at the 1.34GW Gryfino power plant will be still be offline over 1-5 January.
- The 1.34GW Jaworzno 3 power plant will be curtailed by up to 775MW over 6-17 January.
- However, works at other key power plants will be limited over the month.
- Average temperatures in Warsaw were mostly lower over 1-22 January and revised higher over the remainder of the month. Despite this, temperatures are still expected to be below the seasonal throughout the entirety of January.
- Closer in, average temperatures in Warsaw are expected to be below the seasonal norm until 26 December before flipping and remaining most above over 27 December – 6 January.
The day-ahead dropped to PLN360.03/MWh for Wednesday delivery from PLN475.61/MWh for Tuesday amid wind expected at 22% load factor tomorrow unchanged from today, coupled with the start of Christmas holidays.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
RATINGS: Moody's Upgrades Italy To Baa2 From Baa3, Still A Notch Below Others
The Moody's upgrade to Italy's credit rating announced late Friday was the first from the agency since 2002 but shouldn't be considered a major surprise. Among the 3 major ratings agencies, Moody's had the lowest rating on Italy - by two notches (Fitch and S&P both BBB+).
- So this upgrade to Baa2 from Baa3 represents something of a closing of that gap rather than a major breakthrough for Italy.
- From the release:
- "The rating upgrade reflects a consistent track-record of political and policy stability which enhances the effectiveness of economic and fiscal reforms and investment implemented under the National Recovery and Resilience Plan (NRRP). It also points to prospects of further policy actions supporting growth and fiscal consolidation beyond the plan's deadline in August 2026. As a result, we expect that Italy's high government debt burden will gradually decline from 2027 onwards."
FED: Heading Into Its Final Weeks, QT Pace Remains At $20B/Month (2/2)
On the asset side of the Fed balance sheet, we saw a $25B drop in assets, of which just $2B could be attributed to QT in one of its final weeks (ends Dec 1).
- Instead it was a $6B drop in dealer repo operations vs a week earlier, and $17B in "other" areas that aren't related directly to monetary policy and typically don't have any significant impact on the size of the balance sheet (such changes are largely due to items such as bank premises, accrued interest, and other accounts receivable.)
- Discount window takeup edged up $0.3B to $6.1B but remains relatively low.
- QT has totaled just under $21B over the last month, around the expected pace, though as noted this will flatline in December with a pickup in net bills as MBS proceeds are rolled over into T-bills.
LOOK AHEAD: US Week Ahead: Retail Sales, PPI & Claims Headline Thanksgiving Week
A Thanksgiving-condensed week sees data highlights from delayed retail sales and PPI reports for September on Tuesday (Nov 25) before a Wednesday release for weekly jobless claims (Nov 26). Aside, the Fed’s Beige Book should also offer another important update on Wednesday for latest liaison reporting, with no Fedspeak currently scheduled around the holiday and the FOMC media blackout due to start on Saturday, Nov 29.
- As we regularly comment in this weekly publication, Redbook and Chicago Fed CARTS indicators point to solid nominal growth in retail sales, something broadly reflected in analyst consensus for the release.
- PPI inflation will offer a useful albeit not overly timely update on input cost pressures.
- Jobless claims will be watched particularly closely, both for latest initial claims for signs of layoffs and a notable update for continuing claims. The latter covers the payrolls reference period for November and will be an important reference point for FOMC members trying to get a sense of latest unemployment rate clues with the next payrolls reports coming after the Dec 9-10 FOMC decision (going into it with this week’s 0.12bp rise to 4.44% back in September).
