Overview

EUA prices dropped heavily at the start of last week, before rebuilding to end the week 3% up. The week started with the benchmark December 26 futures contract slumping to reach the lowest levels since August 19. By midweek, however, EUAs clawed back all of Monday's loss and more, helped by firmer equities and a positive move in natural gas markets, then added a further 0.6% Wednesday on reports that the UK and EU have reached an agreement in principle to link their emissions trading systems (deal targeted for a bilateral summit next month

Furthermore, news emerged that Germany and France had softened their stance on 2035 car-emission rules — seen as clearing a path to a broader ETS compromise, allowing EUAs to close the week at €86.94 (Oct 9), up ~9% year-on-year. The market remains skittish but well supported by bullish fundamentals outside of ongoing geopolitical concerns.