POWER: Iberian Markets Attract Investments For Data Centres
Spain’s and Portugal’s abundance of renewable energy is fuelling investments in AI infrastructure that is expected to increase power demand from data centres significantly in the next years according to Aurora Energy Research, cited by Bloomberg.
- Annual power demand from Iberian data centres is forecast to increase by 21TWh until 2035, from 2.8TWh currently.
- The increase in power demand from data centres will absorb the oversupply from the region’s renewable generation.
- The market is attractive to investors due to an abdundance of renewable energy, reliable grids, extensive fiver connectivity and a liquid PPA market, Aurora analyst Javier Pamos said.
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US TSYS: Heavy Issuance In An Otherwise Light Docket
- Treasuries hold a little cheaper on the day, with the main driver being some risk-on after the relatively limited nature of Israel’s strikes on Iranian military targets at the weekend.
- They are however off lows having been aided by spillover from a second step lower in oil futures which has spurred EGB outperformance.
- Cash yields are 0.5-2bp higher, steepening with 2s10s at 15bps (+1.1bp).
- TYZ4 is at 110-27+ (- 06+) but off 110-18+ seen with the Asia open, on strong cumulative volumes approaching 440k. The bear trend has extended with second support at 110-13 (61.8% retrace of Apr-Sep bull cycle, cont.).
- Today’s docket is heavily centered around 2Y and 5Y supply, tests of demand for the front end to belly. Both came in on the screws last month but with less favorable details, although WI yields are currently tracking 58bp and 56bp higher than last month’s high yield.
- Data: Dallas Fed manufacturing Oct (1030ET)
- Note/bond issuance: US Tsy $69B 2Y Note (1130ET), $70B 5Y Note (1300ET)
- Bill issuance: US Tsy $72B 26W Bills (1130ET), $81B 13W Bills (1300ET)
- Fedspeak: FOMC blackout
US 10YR FUTURE TECHS: (Z4) Bear Trend Extends
- RES 4: 113-12 Low Sep 3 and a recent breakout point
- RES 3: 112-31 50-day EMA
- RES 2: 112-22 High Oct 16 and a key short-term resistance
- RES 1: 111-14/112-10+ High Oct 25 / 20-day EMA
- PRICE: 110-27 @ 10:28 GMT Oct 28
- SUP 1: 110-18+ Intraday low
- SUP 2: 110-13 61.8% retracement of the Apr - Sep bull cycle (cont)
- SUP 3: 110-00 Round number support
- SUP 4: 109-16 2.0% 10-dma envelope
The trend condition in Treasuries is unchanged and remains bearish. Today’s move lower reinforces this theme. The move down maintains a bearish price sequence of higher highs and higher lows and note that moving average studies are in a bear-mode position. Sights are on 110-13, a Fibonacci retracement, ahead of the 110-00 handle. Initial key resistance has been defined at 112-22, the Oct 16 high.
EQUITIES: Estoxx Call spread
SX5E (19/12/25) 5400c vs (18/12/26) 5800c, bought the 2025 for 2 in 15k.
