EMISSIONS: Preview EU Environment Council Meeting 18 Sept.

Sep-17 13:18

The EU Environment Council meeting is scheduled to take place on Thursday, 18 September at 10:00 CET. The agenda will focus on the proposed amendments by the European Commission to the EU Climate Law for the 2040 Climate Target, and a statement of intent for the EU’s 2035 NDC ahead of COP30.

EU 2040 Climate Target:

  • On 2 July, the Commission proposed to set a legally binding 2040 climate target, which includes a 90% net GHG reduction target versus 1990 levels.
  • On 4 September, the EU Parliament rapporteur Ondřej Knotek rejected the Commission’s 2040 Climate Target Proposal, citing risks of higher energy prices and industrial relocation.
  • On 12 September, a total of 11 member states requested a postponement of the vote on the target, including Italy, France, Germany, Poland, Czech Republic, Malta, Austria, Slovakia, Romania, Hungary, and Latvia.
  • On 12 September, the rotating Danish presidency cancelled the vote on the target that was scheduled to take place at the EU Environment Council meeting on 18 September, with Germany and France pushing for a ministerial discussion to take place at the 23–24 October summit before any vote.
  • The main sticking point remains the 90% reduction target by 2040, with several member states hoping for lower reduction levels. Poland, the Czech Republic and Italy expressed strong opposition. However, so far only Italy has proposed an alternative target of 80-85%.
  • After the Environment Council meeting on 18 September, Denmark is reportedly expected to draft a proposal outlining a formal pledge to cut emissions by 66.3%–72.5% by 2035 to present at the UN General Assembly on 23–27 September, according to Bloomberg reports.

EU's Nationally Determined Contribution (NDC) for 2035:

  • The EU's NDC for 2035 has not been formally submitted yet.
  • Member states remain divided on whether the bloc should base the NDC on the legally binding 2050 climate target or the 2040 target, which the bloc has not yet agreed on.
  • Most the EU member states missed the deadline on 10 February to submit the post-2030 NDCs.
  • At the EU Environment Council meeting on 18 September, ministers are seeking to approve a statement of intent on the EU’s post-2030 NDC. This will serve as a formal declaration of intent rather than a commitment to actual targets.
  • This would mean the bloc will miss the extended NDC submission deadline of 25 September, set by the UNFCCC.
  • The EU still aims to submit its 2035 NDC before the UN’s COP30 conference that is scheduled to take place on 10–21 November 2025 in in Belém, Brazil.
     

Historical bullets

US TSY FUTURES: BLOCK: Sep'25 10Y Buy

Aug-18 13:08
  • +9,000 TYU5 111-24.5, buy through 111-24 post-time offer at 0859:52ET, DV01 $796,000.
  • The 10Y contract trades 111-23 last (+4).

MIDEAST: Trump Stresses Need To Destroy Hamas

Aug-18 13:07

U.S. President Trump posts the following to Truth Social: "We will only see the return of the remaining hostages when Hamas is confronted and destroyed!!! The sooner this takes place, the better the chances of success will be. Remember, I was the one who negotiated and got hundreds of hostages freed and released into Israel (and America!). I was the one who ended 6 wars, in just 6 months. I was the one who OBLITERATED Iran’s Nuclear facilities. Play to WIN, or don’t play at all! Thank you for your attention to this matter! President DJT"

FOREX: Fresh Session Highs for USDJPY, Re-Approaching 148.00

Aug-18 13:06
  • The uptick for US yields from session lows has provided a supportive backdrop for USDJPY, which has risen through the overnight highs to extend session gains to 0.4% in recent trade. As mentioned, the less constructive tone for major equity indices has been boosting the greenback to start the week.
  • For USDJPY, spot remains shy of last Thursday’s post PPI highs, which come in at 147.96 and provide initial resistance. Above here, firm resistance to watch is at 148.52, the Aug 12 high, of which a breach would be viewed as a S/T bull signal.
  • Overall, a bearish threat in USDJPY remains present, although support remains much further out at 145.86, the Jul 24 low. Clearance of this level would highlight a stronger reversal and strengthen the bearish engulfing signal from Aug 1.
  • In Japan, national CPI data is scheduled this Friday, ahead of Chair Powell’s speech at Jackson Hole.