POWER: Nordic Hydro Stocks Fall at Quickest Pace This Year
Nordic hydropower reserves fell at their fastest pace this year to reach just above 60% of capacity to be at 60.6%, or 76.98TWh at the end of week 7. Stocks were pressured amid stronger demand and lower precipitation in the region. Reserves could slow their pace of decline this week amid warming temperatures and higher hydro balances.
- Stocks dropped by 3.8 percentage points on the week in week 7 compared to a 2.9-point fall at the end of week 6.
- Stocks narrowed their surplus on the year to 19.1 points compared to 19.7 points the week prior.
- And hydro levels narrowed to a 9.4-point surplus to the 19-year average from a 9.8-point surplus in week 6.
- Precipitation in the Nordic region continued to descend on the week to a total of 3.8mm compared to 5.31mm in week 6 and 12.9mn in week 5. This is also lower than the 30-year average of about 20mm.
- Stronger demand on the week continued to place sustained downward pressure on stocks, with Norwegian demand averaging about 20.15GW from 19.26GW in week 6 and 19.37GW in week 5.
- Swedish demand averaged around 19.75GW from 19.02GW the week prior and 18.72GW in week 5.
- However, nuclear generation in the region was stronger on the week, with Swedish output at around 7.01GW from 6.34GW the week prior and Finnish generation at 4.2GW from 4.17GW.
- This is due to the full return of the 1.17GW Forsmark 3 on 11 February.
- But Finland’s 890MW Olkiluoto 2 nuclear reactor will curtail capacity by 415MW on 21 February for around 2hrs, with the capacity then curtailed by 155MW over 21 February- 25 May. This could dent nuclear generation.
- Swedish reserves moved downward to be at 64.2% capacity from 67.8% capacity in week 6, while Norwegian reserves dropped to 60.2% capacity from 64% in week 6.
- And Finnish hydro stocks followed the same trend, falling to 45.7% of capacity from 48.4% in week 6.
- Looking ahead, the latest ECMWF suggests Norway’s and Sweden’s hydrological balance to end at +8.27TWh and +4.49TWh, respectively, on 5 March compared to +7.35TWh and +4.16TWh in the previous forecasts for the same day.
- precipitation in the region will be on a general upward trend throughout the 6–10-day ECMWF forecasts – which could ease downward pressure on hydro stocks.
And average temperatures in the Nordics are expected to flip above the seasonal average on 21 February. They are seen remaining above until 5 March when temps will reach as high as 4C on that day.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CANADA: BoC Business and Consumer Surveys Ahead - 1030ET
- GoC yields are 0.7-1.5bp lower on the day, with declines led by the front end in the broader FI response to WSJ sources suggesting President-elect Trump won’t immediately unveil tariffs.
- USDCAD meanwhile has seen heavy declines, including a low of 1.4262 (latest 1.4293) that has now pierced multiple support levels. The latest was 1.4280 (Jan 6 low), opening 1.4226 (50-day EMA).
- Up next, the BoC publishes its influential business and consumer surveys for Q4 (BOS/CSCE) at 1030ET.
- The Q3 releases saw a notable moderation in inflation expectations, including BOS 2Y inflation falling 50bps to 2.5% after two quarters at 3% for what had been the very top of the 1-3% target range.
- We’ll also watch latest developments for firms hiring expectations and excess capacity.
- Note that the Q3 surveys were collected 8-30th and 6th-23rd of the mid-month and so a similar convention should at least capture initial reactions to the US presidential election result.
- BoC-dated OIS prices 19-20bp of cuts for next week’s BoC decision.
EURUSD TECHS: Pierces Trendline Resistance
- RES 4: 1.0630 High Dec 06
- RES 3: 1.0568 High Dec 10
- RES 2: 1.0463 50-day EMA
- RES 1: 1.0437 High Jan 6
- PRICE: 1.0417 @ 15:09 GMT Jan 20
- SUP 1: 1.0260/0178 Low Jan 15 / 13 and the bear trigger
- SUP 2: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 3: 1.0095 2.0% 10-dma envelope
- SUP 4: 1.0031 2.000 proj of the Sep 25 - Oct 23 - Nov 5 price swing
The trend condition in EURUSD is unchanged, it remains bearish. For now, the latest recovery appears corrective, however, the pair has breached the 20-day EMA, at 1.0338, and pierced trendline resistance at 1.0403, drawn from the Sep 30 ‘24 high. A clear breach of the line would expose the 50-day EMA at 1.0463. Clearance of this average would strengthen a bullish condition. Key support and the bear trigger is at 1.0178, the Jan 13 low.
EQUITY TECHS: E-MINI S&P: (H5) Bull Cycle Extension
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6163.75 High Dec 16
- RES 2: 6107.50 High Dec 26
- RES 1: 6078.25 Intraday high
- PRICE: 6071.00 @ 16:06 GMT Jan 20
- SUP 1: 5961.75 Low Jan 16
- SUP 2: 5879.50/5809.00 Low Jan 15 / 13 and key S/T support
- SUP 3: 5784.00 Low Nov 4
- SUP 4: 5698.25 50.0% retracement of the Aug 5 - Dec 6 bull leg
S&P E-Minis are trading higher, marking an extension of last week’s bull phase. The move higher undermines the recent bearish theme. The contract has traded through the 50-day EMA and attention is on resistance at 6107.50, the Dec 26 high. Clearance of 6107.50 would strengthen a bullish theme. Key support has been defined at 5809.00, the Jan 13 low. A reversal lower and a breach of this level would reinstate a bear theme.
