The CO2 Market 09.03.2020

News Update

Lombardy in quarantine  because of Corona virus and the state of New York asked for emergency. All commodities markets collapsed this morning at opening.

The carbon market collapsed to 22,37 Euro/EUA early in Monday morning, but went a little bit upper to 22,65 at mid-day. Last week prices also had a volatility between 23.24 – 24.04 Euro/EUA.

Markets Comment

All major markets in Asia moved higher on Thursday. In another milestone for China’s recovery, the yuan on Wednesday rose to 6.91 against the US dollar. While the spread of the virus continues to accelerate outside China, domestic outbreaks appear to have slowed significantly since mid-February. The resumption of work has returned as well as the movement of workers to some major cities and carbon consumption now returning to more than 70% of last year’s levels. The main assumption is that the virus in China will stop at the end of the first half. The huge volatility of markets and commodities has even led the Carlyle Group to delay Atotech’s IPO.

This is not the first time, however, that we have observed disruptions and events that are hindering global growth, but this is not necessarily bad, as there are arising significant opportunities.

Technical Analysis

We see the reaction after the announcement of interest rate cut in the US by 0,50% that showed how much it is affected by the liquidity flowing into the system and in conjunction with the compliance period. Area 23-23.3 is particularly important and only a significant deterioration in global growth  could possibly lead to break it. Technically most formations pointing lower, but that still has to be proven. Until then it remains trapped between 23-25.89 range and the 23-23.3 area looks attractive for buying.

Source: AitherCO2, London