EU carbon market rocked by politics; volatile “safe havens”

EU carbon prices fell sharply this week on the back of calls by political and industry leaders to water down the EU Emissions Trading System. As we’ve highlighted before, this is a risk that could feasibly materialise and depress prices given that it remains politically challenging to implement climate policies. Elsewhere, precious metals were caught up in the equity market sell-off. Our view is that prices will remain volatile and end this year well below current levels.