The European carbon market saw heightened volatility yesterday, influenced by both bullish and bearish factors. EUAs declined early in the session but recovered alongside gains in the gas market in the afternoon. However, further growth was limited by turbulence in the U.S. financial markets. The EUA Dec ’25 contract closed at €69.01, over €1 below the daily high, however, recording its highest settlement in a week.

TTF front month rose on Monday, closing the session with a 3,15% daily gain amid a colder weather forecast and lower wind generation. “The latest temperature forecasts show lower temperatures for the period between March 12-18”, said LSEG analyst Saku Jussila quoted by Reuters. However, for the end of the month, extended-range forecasts indicate a likelihood of warmer-than-average temperatures across much of Europe.

The gas market also reacted to news that Russia continues to launch massive strikes against Ukrainian energy and gas infrastructure. While its own production capacity is being hit by Russian missiles,  Ukraine is  forced to increase gas imports from Europe, a bullish signal for gas prices. 

The main focus in yesterday’s trading was the US stock market. “Monday was a fiercely bearish day on the US stock markets, which reacted negatively to the indications from Donald Trump that he is willing to accept a recession to force through his tariff policy against other countries”, writes Energi Danmark this morning. 

After two weeks of steep decline, the S&P 500 closed on Monday with a daily loss of 2,7% dropping to its lowest level since September. The index is down 8,6% from its February 19 record high, erasing  more than $4 trillion in market value since then. 

According to analysts, the likelihood of an economic downturn has risen significantly. Economists at JPMorgan see the chances of a recession at 40%, up from 30% at the beginning of this year, “owing to extreme US policies.” Goldman Sachs also increased its odds of a recession to 20% from 15%.