POWER: Rapid Res Buildout, Sluggish Demand Growth Weigh on Nordic Prices
Renewable capacity in the Nordics increased by around 22TWh in the past two years, while demand only rose by 7TWh over the same period, causing an increased number of negative priced hours according to Aurora Energy Research.
- Nordic power demand edged up by 7TWh in the past two years to 395TWh in 2024.
- Power consumption from household and services has increased in recent years amid electrification, while demand from industry has decreased due to sluggish economic activity.
- Solar and wind capacity increased by 22TWh in the last two years to 105TWh of capacity as of 2024, with the largest absolute increase in onshore wind, followed by solar PV.
- Finland and Sweden experienced the highest number of negative priced hours last year, driven by a rapid buildout of onshore wind capacities, with most negative prices occurring during hours of high wind and hydro generation.
- However, rising system flexibility in the coming years is expected to limit negative priced hours in the region from 2028 onwards.
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US TSYS: Early SOFR/Treasury Option Roundup: Focus on Midweek FOMC
Option desks report mixed SOFR & Treasury options overnight, lighter volumes with multiple spring holiday closures in Asia and UK. Focus on Wednesday's FOMC policy annc, no rate change expected. Underlying futures mixed, curves twist steeper with the short end outperforming weaker Bonds (2s10s +2.465 at 50.697, 5s30s +3.158 at 90.038). Projected rate cut pricing largely steady to late Friday levels (*) as follows: May'25 at -0.5bp (-0.8bp), Jun'25 at -8.4bp (-8.4bp), Jul'25 at -25.5bp (-25.7bp), Sep'25 -46.9bp (-45.6bp).
- SOFR Options:
- +4,000 SFRZ5 95.93 puts, 9.5 ref 96.475
- 2,000 SFRK5 95.93/96.00 call spds ref 95.80
- over 3,500 SFRK5 96.06 calls, 0.5 ref 95.81
- Treasury Options:
- over 7,500 TYM5 112 calls, 25 last
- 1,600 FVM5 107/107.5 put spds ref 108-14.25
- 2,000 TYM5 110.5/111.25 put spds, 22 ref 111-06.5
- over 3,200 TYM5 111.25 calls, 46 ref 111-08
- 1,000 TYM5 111/112/113/114 call condors
- 1,600 FVM5 107.25 puts ref 108-15.25
USD: The Dollar is still pushing lower
- Further intraday lows for the Dollar, nothing fast, 1 pip at a time, but it has been a one way move so far during the early European session and into the US one.
- EUR, GBP, NOK, AUD, JPY, PLN, ZAR, and CAD are all at session high, and this is more of a pure FX move, given the lack of moves in Equities or eve Bonds (Yield).
- AUD is still the best performer and is still eyeing a test to the 0.6500 handle.
EQUITIES: EU Bank put fly
SX7E (19th Sep) 160/155/150p fly, bought for 0.20 in 6k.
