Get started

Europe

European Gas March 2023: Bullish and Bearish FactorsThe idea has two parts: fundamental and technical analysis . The latter is based on the weekly chart. On the fundamental side , several essential and minor factors affect and could affect March 2023 price change. Let's divide them into three groups. Bullish : Russian shutdown of gas supply to Europe Russia has cut its European flows for the last months so that a total shutdown would be possible. Russian gas remains crucial for the European economy despite the American armada of LNG ships. Freeport LNG plant Restart Shift The company plans to restore the plant in January 2023. A possible postponement would support TTF prices in the winter season. Limitations of US Gas Exports Last winter, some US Senate members suggested limiting or prohibiting US LNG export. They estimated that the change would increase US gas supply for the internal US market, especially for New England, which is dependent on the import of gas from the gas-production states getting gas via pipelines and LNG. They said the prohibition would reduce high gas prices for customers and industry. In July, LNG winter 2023 prices for New England touched a record high of $40/MMBtu, while Henry Hub traded at about $8.6/MMBtu. I suppose that senators would return to the idea, especially since the US elections are in November. Although the risk is low, its realization could dramatically affect the TTF price assessment. Analysts and think tanks have considered possible Russian gas cuts but haven't accessed a potential US gas supply reduction. French Nuclear Plants Outages Since the end of 2021, the French nuclear industry has been weak with planned and unplanned maintenance. As a result, nuclear output has lost more than 40% YoY of its output. While serious issues are unlikely to arise, new minor obstacles could buoy TTF prices. Dry Summer The continuation of the European 2022 dry summer led to abbreviated hydropower production. On the back of hydropower reduction, natural gas-power generation increases its output and gas consumption, driving subdued gas injection into storage facilities. Subdued gas injection in summer means less gas for winter, creating a possible gas deficit. Bearish: Slowing European Economy and Demand Destruction High inflation induced by the monetary policy of 2020-2021 provokes a decline in real incomes and makes some industrial production unprofitable or near break-even. These debilitate aggregate demand, particularly industrial output of fertilizers, ceramics, and other chemicals. Industries that are heavily reliant on gas are cutting their gas consumption today. Lasting historically high gas prices would promote a decrease in gas utilization. The demand destruction could happen among all consumers: power, industrial and individual. A new recession is near. ECB monetary policy with a growing rate also adds problems to the economy. The rate is still tiny, but debt bubbles are sensitive to interest rate change. The bust of bubbles would drop economic growth and curtail gas demand pushing TTF prices down. Slowing world economy The world economy suffers from high prices losing economic growth momentum. A move into a recession would trigger a decline in gas consumption lowering LNG gas prices and letting LNG producers increase LNG sendout to Europe. Voluntary Demand Reductions of 15% and Gas Rationing Energy ministers of Europe adopted plans to voluntarily cut gas demand by 15% from August until March 31, 2022. In case of emergency, like near zero Russian flows, the voluntary reduction changes to mandatory. i.e., gas rationing. The actions could divert rising prices. Covid Lockdowns in Europe Europe has prepared different measures to withstand possible gas issues in winter. Besides voluntary reduction or rationing Europe could return to the lockdowns of 2020, when gas consumption dramatically went down because industrial production of goods collapsed. Since June 2022, the media has published news about a new variant of Covid. Countries could impose Covid-related limitations this fall. Unstable gas consumption and gas shortage would drive for a Covid or climate lockdown. A good measure to cut gas demand and destroy the economy. Covid Lockdowns in China Despite possible lockdowns of 2022-2023 in Europe, lockdowns in China happened in the last months and could be imposed again. An effect of prohibitions has hit the Chinese economy and cut gas consumption resulting in freeing up the supply for other consumers, i.e., Europe. New Chinese lockdowns would mean more gas for Europe. Joker : The joker that could be a bullish or bearish driver is the weather. They can't predict winter weather today. Lasting temperatures above season norms in winter could be a lifesaver for Europe, dropping gas consumption and its prices. Cold spells and lingering temperatures under the winter season average would lift prices significantly. Near-average temperatures would put the significance of the factor on hold. While in summer, it is vice versa. Temperatures above the norms slow gas storage injection and slightly increase a lack of gas risk in the winter season. On the technical side , there are no resistance levels cause the contract is traded near its record high. Only psychological levels like €200/MWh , €300/MWh , and higher. On the bulls' side, there are many support levels. For those practicing buy a bounce trading , essential levels are €125/MWh , €100/MWh , and €86/MWh . The last one developed in the December 2021-April 2022 period. I estimate that Gazprom made a significant contribution to its existence. Gazprom's export price to Europe, which was pegged to a fusion of lagged prices of fossil fuels, including TTF, was near to €86/MWh . So when the market price rose significantly above the level, market participants cut their demand because Gazprom sold cheaper. When the price tried to break through €86/MWh and went down, Gazprom trimmed its flows to Europe. All in all, this helped the company to control its revenues on the same level. Since then, it has not been the case because Gazprom has changed its approach. Finally, I am afraid to forecast the price on the expiration date. I suppose the price would remain volatile, and we could see spikes above €200/MWh in the winter season. Thank you for your reading, and have profitable trading! Comment your thoughts!
T
by Nikita_Kalinin
**Long Nikkei Short DAXPost BOJ decision which is USDJPY supportive, we could expect the Nikkei to recover from recent weakness. Since it remains a choppy Equity Environment, selling DAX against it (delta hedge) makes sense from a relative price perspective and looking at technical levels, along with oscilators. Another way would be to buy Upside calls on Nikkei (cheap in Impiled volatilities) and selling upside on DAX (call vs. Calls strategy) I will keep it plain vanilla though
OSE:NK2251!
by ArisopeCapital
1
EUR/JPY - SHORT; Geopolitics matters - Center stage.Given the inevitability of; 1) An abject Chinese population collapse - already under way -, necessitating the consequent *** massive DEurbanization, DEindustrialization *** (leaving in its wake ~800 million subsistence "gardeners" - No, not even farms, in the traditional sense of scale!); 2) Japan having *** the only other (beside the US) long range Navy *** capable to protect shipping/supply lines, anywhere on the globe; (While China couldn't defend it's own coast line, if push came to shove. All that The "Chinese Menace" propaganda is laughable, at best. China is already dead, it just hasn't rolled over, yet, fully.) 3) The EU's obvious, ongoing Hara Kiri (the kind that would fill every samurai with envy), the demise of the Euro is a foregone conclusion. (How long for total EU disintegration?? ... A) Most likely measured in a couple years; B) It is well under way!. 4) Germany's full and unmitigated retreat from a collapsed Chinese market - the US filling the vacuum in every imaginable corner on the globe; 5) Japan being *** the only other (alongside Taiwan, S. Korea and the US) precision manufacturer of high-technology, of any scale ***; 6) ... ... 12) ... There are at least a dozen existential reasons - already well within grasp! - all of which will leave Japan likely the only industrial power standing in Asia, while Germany (as is the whole of Europe) will be forced to backtrack to the '60s. - Not to the 1960s, no ... to the 1860s! The technicals are also favorable to start shorting this pair from here, ... on and on ... onto forever. p.s. The rise of France in Europe and Japan's in Asia - relative to their current industrial and geopolitical pull- is all but a foregone conclusion. France being the "youngest" industrial and agricultural power in the EU while Japan, having survived - so far - their own demographic apocalypse, will have ring side seats to revel in the total and abject Chinese collapse. Germany also "only" lacks any and all domestic energy or food resources (except Sauerkraut), while also beset with a demographic apocalypse that is about to hit its full stride.
Short
by Nemo_Confidat
THE EASIEST ARBITRAGE EVER IS RIGHT IN FRONT OF OUR EYES? LONG US, SHORT EU Hello, these two charts seem to show an identical background situation for the two economies (US and German), however, the economy in US and EU is very different (among other explanations, TFP - total factor productivity is, and always has been positive in the US, while it is negative and, most importantly, decreasing since many years in Europe; US has never lowered rates below 0, while Europe did, breaking the Marxist M-G-M model, which means Money-Goods-Money1 cycle, and transforming it into a mere M to M1 model, money to money1, where M1 >M, skipping the "Goods" part of the cycle, basically creating a system where Money that creates other money out of thin air). The markets (especially the European ones) are discounting the fact that there will be no recession based on last data, and that we will have a soft landing after all in US. I believe this will not be the case but it is not important now. The important thing is that, European investors are believing that the same will happen in EU, where, however, the increase of interest rates is far from being done, and inflation has not peaked yet! Surprisingly, European investors are continuing to consider the two economies as identical, simply because in the last 40 years they moved together. However, they forget the 10-15 years of QE and the fact that the world after it will not simply continue to be the same as before, as we simply can erase these 15 years of history and put in conjunction the two extremities. They are pricing the two markets as it they were at the beginning of capitalism, while we are probably at the end of it, or better at a new phase of it. A phase in which US adapted to the MDM model by increasing the productive cycle (they have companies like Tesla, Amazon, Google) while in Europe we persevered in the aberration of the M-> M1. LONG US (Dow jones), SHORT EU (Dax) IThis is why, n my opinion, what we have in front of us is a win-win situation. If the markets will continue, in my opinion wrongly, to consider these two markets almost perfectly correlated, while they are going up even if at least one of the two will have a recession ahead, we will be covered in any case. case 1 - recession in USA, recession in EU the recession will hit stronger in Europe-> The position will lose on long US less than what it would gain from the short on EU (DAX) case 2 - no recession in USA, recession in EU double gain (from the on long US and from the short on EU) case 3 - no recession in USA, no recession in EU US economy will perform better then EU : the long position on US will gain more than what it would LOSE from the short on EU It is worth noting that both indices are surprisingly at 8% from their respective peaks of 2021 but the strength of the trend (red line on the second indicator - DMI) is very low. Of course, the strategy will need to be adjusted with the sizes so that every side has the same notional value in USD - What do you think?
DJ:DJI
by edutradinguru
Short STOXX EUROPE 600 OIL & Gas sectorWe are having here a very well structured trade idea, exploiting the confluence of high important technical factors, mean reverting stance, and extreme positioning in the Oil and Gas space thanks for a Long Inflation lean by most investors this year. Into year end and preparing for 2023, Fact is that after such a good performance some will be tempted to take profit especially with a potential FED pivot in [/b preparation based on Inflation peaking. Saying it simply and pragmatically : if you made money being long the sectors or High dividend stocks in that space, that's a great achievement, but the forward looking factors are clearly pointing lower. the USD price action is clearly indicating of Inflation peaking and is highly supportive of this trading idea. Bottom line: Sell / Short SXEP Sector using this Multi Month horizontal trendline and overbought technical indicators
EUREX:FSTE1!Short
by ArisopeCapital
1
Euro up or down?EURUSD closed the year well and above many key support levels, and it even closed above several diagonals, as did several other currencies vs. the USD. On the one hand, the USD may have peaked, especially as the DXY swept a critical low and retested its 2015-2020 highs. The year has started with a EURUSD dump, and the pair has closed below its Monthly and Yearly P. This isn't great, but given the low liquidity, it could simply be a trap. In some of my past analyses, I had thought it was possible that it would go down to 1.055 to test an untested zone and then go higher, but it went higher first. Recovery may be coming as it has come down and tested the VP PoC in this area. There are many reasons why I think the USD could go down and EUR could strengthen, but I won't go into them here. I only want to focus on the current TA, as a close above the key pivots could indicate that the market is going much higher. It could go up to 1.08 before going lower, or it might not even go lower for a long time. Until I see it close below 1.035, I have to be neutral/bullish, and if it does close below 1.035, then I think 1.01 is the next target. My point is that although this doesn't look like the cleanest long, I do see the potential in this trade, and I think that going long here with a stop below 1.047 or 1.035 makes sense.
by BitcoinMacro
Short position for EURGBP + daily resistanceThe orange line is a daily resistance that I use a long time ago. As we can see RSI already crossed the 50, after a overbought zone, together with MACD we can see after the RSI change the direction MACD had crossed the signal line and also changed it. And joining these indicators we've the BB where the candles had already crossed the MA, and the BB lower line is moving away from upper line, showing us a great continuation of the downtrend Analysis of the 4H time-frame is the same, all the indicators are moving in the same direction as 1H tf
Short
by AFCapital21
Germany30 Technical AnalysisHello traders! Europe and most dominant economies of it such as England, Germany and France are under fire but regardless good news from USA have eased the situation and some pressure. It reasonable to buy some of the positions on retest of recent support levels such as a historic 1W timeframe- 13602 / 13011. Bearish trend has been stopped and looking for more upside in the upcoming weeks. Like and subscribe if you agree and you want to discuss the ideas all together.
OANDA:DE30EURLong
by federalAntelop4954
European Central Bank Preview – Time to PivotDespite facing the unknown external shock of a war, the Eurozone economy’s growth has been resilient in the first three quarters of the year. Eurozone Gross Domestic Product (GDP) rose by 0.3% quarter-on-quarter (QoQ) in Q3, easing from a 0.8% increase in Q2 2022 aided by the rise in government spending alongside an improvement in inflation adjusted trade surplus . However, this is likely to change in Q4 2022 and Q1 2023 as COVID reopening demand fades. Eurozone recession remains a key risk until Q1 2023 Europe is set to embark on a harsh winter, and with savings rates extending the decline from a 1.7% drop in Q2, consumer spending is likely to come under pressure. The 1.8% month on month falls in euro area retail sales in October is consistent with the notion that real income squeeze is now catching up the with consumers. Services spending rose only 1.5% in Q3 compared to the 3.1% jump in Q2 2022 . The labour market has remained fairly resilient as Eurozone unemployment hit a new low of 6.5% in October, pushed down by falling unemployment in Southern Europe, the Netherlands, Finland and Austria. However, unemployment is likely to rise as the economic slowdown and tightening financial conditions impact hiring. That being said, fiscal policy could come to the rescue as major Eurozone governments have earmarked €573Bn into the economy to shield the private sector from the upcoming fallout in economic activity. Inflation in the Eurozone declined more than expected from 10.6% in October to 10% in November. Yet it’s hard to say for certain that the inflation rate has passed its peak as it is largely dependent on the fluctuations in energy prices. Core inflation remained at 5% in November and is likely to remain close to 5% through Q1 2023 . Companies continue to transfer higher input costs to consumers and in spite of an approaching recession, we expect this process of cost-push inflation to extend into 2023, keeping price pressures higher for longer. European Central Bank (ECB) split between the doves and hawks Ms Isabel Schnabel (a member of the executive board of the ECB) warned in November that loose fiscal policy risks adding to underlying inflation pressures by boosting consumption and reducing the incentive for consumers and businesses to save energy. We would argue that while the volume of relief packages is large, they are insufficient to provide complete relief for all consumers and companies. Ms Schnabel also noted that, “that the room for slowing down the pace of interest rate adjustments remains limited, even as we are approaching estimates of the ‘neutral rate’”. This hawkish sentiment was echoed by Dutch central bank head Klaas Knot in his statement that risks are tilted towards the ECB doing too little to combat rising inflation, noting that an economic slowdown, or perhaps even a recession, is needed to bring inflation under control. President Lagarde stressed that she would be surprised if inflation has already peaked, as there is too much uncertainty regarding the pass-through of high energy costs at the wholesale level into the retail level. She added that the ECB may have to go into restrictive territory with key rates. On the other hand, the head of the French central bank, Villeroy, who has often anticipated the actual ECB decisions in his statements, spoke out in favour of 50 basis points. Even hawks such as Bundesbank President Nagel and Estonian Mueller seem to be able to come to terms with a hike of just 50 basis points. Further clarity on Quantitative Tightening (QT) The ECB is likely to meet consensus expectations this week of narrowing the pace of rate hikes to 50Bps on 15 December, following two 75Bps rate hikes in September and October. This decision will lift its deposit and refinancing rates to 2% and 2.5% respectively. Neither peaking inflation nor a recession will give the ECB a reason to hold back from raising rates in Q1 2023, but both suggest that risks are tilted towards a slower pace of tightening. The outlook for the balance sheet, and more specifically QT, will be another key theme at this week’s meeting. It will be interesting to see whether the ECB will be pressed to sell bonds outright or stick with roll-off. We would expect the central bank to begin with an Asset Purchase Program (APP) roll-off equivalent to a monthly reduction of €25Bn in the balance sheet on average. Currently the ECB is still using Pandemic Emergency Purchase Programme (PEPP) reinvestments to compress spreads and the Transmission Protection Instrument (TPI) remains at its disposal if conditions deteriorate further. Both these tools limit how far the ECB can go with QT. Sources: 1Eurostat as of 30 November 2022 2National Accounts as of 30 November 2022 3Bruegel as of 31 October 2022 4Bloomberg as of 30 November 2022
FRED:ECBASSETSW
by aneekaguptaWTE
Engie's stalling momentum signifies turnaround.Engie - 30d expiry - We look to Sell a break of 14.09 (stop at 14.61) We are trading at overbought extremes. Although the bulls are in control, the stalling positive momentum indicates a turnaround is possible. Short term RSI is moving lower. Momentum is stalling with the posting of new highs and indicates bearish divergence. A higher correction is expected. A break of the recent low at 14.12 should result in a further move lower. Our profit targets will be 12.82 and 12.52 Resistance: 14.70 / 15.00 / 15.50 Support: 14.10 / 13.55 / 13.00 Disclaimer – Saxo Bank Group. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like any and all indicators, strategies, columns, articles and other features accessible on/though this site (including those from Signal Centre) are for informational purposes only and should not be construed as investment advice by you. Such technical analysis are believed to be obtained from sources believed to be reliable, but not warrant their respective completeness or accuracy, or warrant any results from the use of the information. Your use of the technical analysis , as would also your use of any and all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features. Please also be reminded that if despite the above, any of the said technical analysis (or any of the said indicators, strategies, columns, articles and other features accessible on/through this site) is found to be advisory or a recommendation; and not merely informational in nature, the same is in any event provided with the intention of being for general circulation and availability only. As such it is not intended to and does not form part of any offer or recommendation directed at you specifically, or have any regard to the investment objectives, financial situation or needs of yourself or any other specific person. Before committing to a trade or investment therefore, please seek advice from a financial or other professional adviser regarding the suitability of the product for you and (where available) read the relevant product offer/description documents, including the risk disclosures. If you do not wish to seek such financial advice, please still exercise your mind and consider carefully whether the product is suitable for you because you alone remain responsible for your trading – both gains and losses.
EURONEXT:ENGIShort
by Saxo