During the previous week, the European carbon emission allowance market experienced a decline in tandem with the financial markets. The December 2023 benchmark futures contract for EUAs last week dropped from €96,29 to €86,63, reflecting a 10.0% weekly closing loss, but has slightly recovered to €86.63 by yesterday. The EURO STOXX Banks Index also experienced an 11.4% loss during the same period, as concerns about a potential financial crisis increased after several US banks required support and Swiss Credit Suisse was rescued from bankruptcy with €50 billion. Additionally, the major Swiss bank UBS has expressed interest in acquiring the struggling Credit Suisse. Institutional investors, particularly banks and financial institutions, divested from emission rights last week, leading to an exceptionally high spread of minus 2.4% between the auction results on Friday and the current stock exchange trading. Given the current market environment, it is uncertain whether this is simply a mild financial crisis or if it will lead to a financial crisis. If the situation stabilizes, the EUA may swiftly return to above the €90 mark. However, if the financial markets remain apprehensive, the next technical support could be around the €83 area.
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