Euro Markets: Midday Update
European carbon prices bounced back at the start of the new quarter as speculative traders that had been stopped out of long positions during the price decline of the previous four days began to amass new length, with prices getting an additional lift from a rally in energy markets.
Read MoreEuro Markets: EUAs tumble to post 2.1% monthly drop amid aggressive long-squeeze as energy weakens
European carbon prices ended the month of June with a drop of 2% but rounded off the second quarter with a 1.5% gain, even after prices tumbled 2.8% on Monday amid aggressive selling that took many sources by surprise, driving prices below several technical support levels as long positions were stopped out, while UKAs recorded their biggest monthly drop since September.
Read MoreDifficult to quantify UK ETS role in verified emissions decline, says govt accounting office report
The UK has seen emissions from sectors covered by its ETS decline over the four years since the market was established, but “it is difficult to isolate the [market’s] contribution to this performance”, and efforts should be made to better understand the role of allowance prices in driving investment in low-carbon alternatives, according to a report by the British government’s auditor.
Read MoreEuro Markets: EUAs bounce back on steady buying amid macro optimism as gas extends losses
EU carbon allowance prices rebounded modestly on Friday after falling to their lowest in nearly four weeks, trimming the weekly loss to 2.8% as the market found support from bullish-positioned traders and enjoying a tailwind from record equity index levels in the US, even as European gas continued to retreat amid easing supply constraints.
Read MoreEuro Markets: EUAs slide as gas market drops sharply amid options expiry and lack of storage demand
EU carbon prices came under pressure on Thursday amid volatility in gas as the front-month TTF options contract neared expiry, with EUAs falling to their lowest level for over three weeks, as the correlation with gas seemed to re-establish itself, while UK Allowances fell to their lowest in nearly two months.
Read MoreEuro Markets: EUAs drop back to low end of recent range as selling increases around options expiry
European carbon prices slumped on Wednesday as renewed selling both before and after the expiry of June options dominated the session, with selling interest picking up as prices weakened after the daily auction, while gas and power prices weakened slightly as several days of volatility appeared to be nearing an end.
Read MoreEuro Markets: EUAs post third modest gain in a row as energy prices plunge on ceasefire news
European carbon allowances rallied on Tuesday along with equities, posting a third modest daily gain while gas and crude oil markets plunged after a ceasefire between Iran and Israel reduced risks to energy supply and shipping, as EUAs rose within reach of a key upside price target and options traders eyed Wednesday’s expiry of the June contract.
Read MoreEuro Markets: EUAs advance modestly even as gas gives up early jump on geopolitical turmoil
European carbon prices unexpectedly ended the day slightly firmer on Monday as commodity markets reacted calmly to the US airstrikes in Iran over the weekend, with expectations of steep falls in equities and EUAs – and sharp jumps in energy – confounded by a growing sense that Iran was unlikely to retaliate in a way to trigger significant volatility in global markets.
Read MoreEuro Markets: EUAs stabilise in familiar price range as energy markets trim big weekly gains
European carbon prices bounced off their two-week lows of Thursday to post their first rise of the week, settling back into the middle of their recent trading range on Friday, with options hedging appearing to be the main driver, while energy markets gave up some of their recent gains after President Trump indicated he would delay any strike on Iran to give more time for diplomacy.
Read MoreEuro Markets: EUAs drop most in a month as correlation to gas breaks down amid heavy selling
European carbon prices fell 2.5% on Thursday, completely reversing the recent positive correlation with natural gas, as aggressive selling dominated a lacklustre market, even as energy prices continued to climb amid signs that the US was considering joining the conflict between Israel and Iran.
Read More