EU carbon extended last week’s three-year high early on Wednesday, stretching the mark by 3 cents to reach €8.54 on one of the few days on the 2015 calendar not to have any fresh supply from government auctions.
The price held only briefly, with the benchmark ICE Dec-15 EUA contract slipping back to end 3 cents down on Tuesday’s settlement at a session-low €8.44 on moderate turnover of 8.6 million.
Speculators have grown more confident this week about placing bullish bets as carbon has consolidated near current levels in recent days and remain close to analyst expectations for year-end (see the latest Carbon Pulse poll here)
The energy complex gave a slightly bearish signal for carbon. Calendar 2017 and 2018 German clean dark spreads ticked lower on falling power prices, with the impact of a drop in dollar-denominated coal prices limited by a weaker euro.
Traders will be closely watching for currency swings on Thursday as ECB chiefs meet to set interest rates, with investors expecting them to maintain current rock-bottom levels and hold off on any further quantitative easing.
Auction supply resumes as normal tomorrow with the EU due to sell 2.9 million spot EUAs, followed by Germany’s Friday sale of 3.2 million units.
The addition of the UK’s fortnightly auction next week will boost auction supply to 15.1 million, up from 11.9 million this week.
Meanwhile, no CERs were traded on ICE on Wednesday.
By Ben Garside – firstname.lastname@example.org