POWER: Spending Cuts May Halve UK SMR Contracts
Apr-16 11:15
UK government spending cuts could reduce the number of contracts awarded under the government's SMR competition to just one from two, according to industry sources, cited by Utility Week.
- Great British Nuclear (GBN) has shortlisted four developers, but the Treasury will have the final say on the number of contracts, with industry players fearing a monopoly if only one supplier is selected.
- “One supplier would create a monopoly. In a few years, when the construction cost is finalised, with only one SMR, the price will double, guaranteed,” a source close to one of the developers said.
- Additionally, selecting just two vendors is risky—any delays could cost billions and limit exports and jobs, according to sources.
- GE-Hitachi, Holtec, Rolls-Royce, and Westinghouse have submitted their final tenders. But the uncertainty surrounding the number of contracts is affecting their plans.
- Despite the concerns, GBN has stated that it plans to recommend awarding two contracts. However, the final decision rests with the Treasury, which is expected to weigh in on the competition results.
- And if the Treasury reduces the number of contract awards to one, it could open the door for appeals from losing bidders.
- Some industry sources say Rolls-Royce would likely win if only one contract is awarded, given its status and nuclear track record, according to Utility Week.
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EQUITIES: Option Expiries for Friday
Mar-17 11:08
Equity Option Expiries in Notional Terms for Friday's Triple Witching.
US:
- SPX: $2.91T vs $2.85T Friday.
- NDX: $106.21bn vs $104.53bn.
- Amazon: $16.24bn vs $15.33bn.
- Apple: $21.57bn vs $20.86bn.
EU: As of Friday's Data.
- SX5E: €252.84bn.
- SX7E: €19.05bn.
- DAX: €66.52bn.
- CAC: €6.54bn.
- FTSE: £24.27bn.
OUTLOOK: Price Signal Summary - Bear Threat In S&P E-Minis Remains Present
Mar-17 10:59
- In the equity space, the trend condition in S&P E-Minis remains bearish and fresh cycle lows last week reinforced current conditions. Moving average studies are in a bear-mode set-up highlighting a dominant downtrend. Sights are on 5483.50, a 2.00 projection of the Dec 6 ‘24 - Jan 13 - Feb 19 swing. Note that the short-term trend condition is oversold, a corrective bounce would allow this set-up to unwind. Firm resistance to watch is 5976.83, the 50-day EMA. First resistance is at 5726.75, the Mar 12 high.
- The medium-term trend direction in the EUROSTOXX 50 futures contract remains up and the recent pullback is considered corrective - for now. However, note that support at the 50-day EMA, at 5314.94, has been pierced. A clear break of this average would highlight a stronger short-term bear threat and suggest scope for a deeper retracement. This would open 5202.00, the 50.0% retracement of the Dec 20 ‘24 - Mar 3 bull leg. A resumption of gains would open the 5600.00 handle.
GILTS: UBS Continue To Like 2s10s Steepeners
Mar-17 10:52
UBS expect the FY25/26 gilt remit to provide fresh steepening pressure for the 2s10s curve.
- A couple of other factors also play into their view:
- They expect “an uneventful MPC to offer little support to gilts, especially since the data following the last meeting has also been relatively strong”.
- They are also of the view that “the broad-based deterioration in consumer confidence and ongoing drag from higher mortgage payments are posing downside risks to growth forecasts.”
