The exit from the “reflation trade” continued yesterday with a strong decline in equities and new lows for bond yields (1.25% for the US 10y). China fueled growth fears by signaling it could ease its policy very soon again. But the trend seems to be reversing (1.33% now): the sharp fall in bond yields has likely been amplified…
The European power spot prices were mixed yesterday, up in Germany on forecasts of dropping wind output, slightly down in France and Belgium likely due to the weaker clean fuels costs and steady in the Netherlands, torn between both. The day-ahead prices hence reached 98.28€/MWh on average, +0.49€/MWh day-on-day due to Germany observing a 9.60€/MWh…
ICE Brent prompt contract collapsed further yesterday, at 73.2 $/b for the September contract. The move was likely caused by two drivers: A broad selloff in commodity futures, as inflation hedges were less demanded by financial players, given how global bond markets are rallying, with the 10Y T-bond at 1.3% and inflation expectations consistently declining…
European gas prices continued to correct downward yesterday, further reducing their premium over parity prices with coal for power generation. They ignored the additional drop in Russian supply (248 mm cm/day on average yesterday, compared to 266 mm cm/day on Tuesday) due to the complete halt of flows to Mallnow (landing point of the Yamal…
Much ado about nothing: the Fed minutes showed many Fed members getting more nervous about inflation and eager to discuss tapering bond purchases in order to react quickly if necessary. The most noticeable information that was not obvious after the Fed meeting was growing concern about the impact of monetary policy on the overheating housing market. Some…
