EMISSIONS: UKAs Rise On UK Equities Gains
Aug-27 07:46
UKAs Dec25 are rising, supported by gains in EUAs and equities, with FTSE100 trending higher as utilities and energy sectors leading the gains.
- UKA DEC 25 up 0.42% at 52.4 GBP/t CO2e
- NBP Gas SEP 25 down 1.7% at 81.7 GBp/therm
- FTSE 100 SEP 25 up 0.2% at 9297
- ICE UKA futures daily aggregate traded volume stood at 1,492 contracts in the previous session, down 23.75% compared with the 30-day average.
- The EUA Dec25 premium to the UK equivalent remained at a similar level at €12.39/t CO2e.
- Correlation between EUA/UKA for 30-day period at 0.53.
- Correlation between UKA/TTF for 30-day period at 0.54.
- UK gas demand, including power generation and exports, is forecast at 102 mcm/d, below the five-year average of 157 mcm/d, according to National Grid.
- The latest month-ahead ECMWF weather forecast has been remained at a similar level.
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US TSY OPTIONS: Weekly TY Option
Jul-28 07:45
TY Weekly Option, Friday NFP Expiry:
- TY 111p, bought for '22 in ~5.11k.
GILTS: Firmer & Flatter
Jul-28 07:42
Gilts follow Bunds higher, with a lack of meaningful domestic news flow leaving macro and cross-market cues at the fore.
- Futures trade as high as 91.85, last +27 at 91.74.
- Initial resistance at the 20-day EMA (91.92) goes untested.
- Initial support comes in at the July 24 low (91.18).
- The recent recovery from lows has stalled a bearish move.
- Yields 0.5-3.5bp lower, curve bull flattens.
- 2s10s and 5s30s still don’t move too far from 75bp & 140bp, respectively.
- GBP STIRs see a modest dovish shift given the bid in the long end.
- SONIA futures flat to +2.0, BoE-dated OIS pricing ~46bp of cuts through year-end.
- GBP750mln medium bucket sales from the BoE’s APF are due today.
- Elsewhere, focus will fall on macro matters (any ongoing adjustment to the U.S.-EU trade deal and Sino-U.S. discussions in Stockholm).
- Slightly further out, final UK manufacturing PMI data is due Friday, with nothing in the way of BoEspeak scheduled until next week’s monetary policy decision. The overwhelming consensus looks for a cut at that meeting.
- On the supply front, the DMO will sell GBP5bln of 4.375% Mar-28 paper tomorrow and GBP300mln of the 3.75% Jul-52 gilt on Wednesday.
MONTH-END EXTENSIONS: Bond Extensions
Jul-28 07:38
Bloomberg Bonds:
- US Tsys: +0.06yr (Small).
- EU Govies: +0.09yr (Decent).
- UK Govies: +0.22yr (HUGE).
