OIL: 8 Iranian STS Oil Transfers Bound for China Spotted: TankerTrackers
Apr-26 10:56
TankerTrackers has flagged a record level of 8 pairs of ships performing ship-to-ship transfers totalling 16mn bbls of Iranian oil today in the Riau archipelago in the South China Sea – all bound for China.
- “This is happening on the back of a recent record month in oil exports.” TankerTrackers said.
- China will be the main beneficiary of recent US sanctions on Iran and Venezuela, which are expected to deepen the discounts on crude oil, according to Kpler earlier this week.
- The impact is expected to be more pronounced on Iranian grades, which have seen sustained price increases in recent months which had been putting off China buyers at the start of the year along with upfront payment requirements.
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US TSYS: Midrange at Midweek
Mar-27 10:53
- Cash Treasuries running lower, yields near steady after a quiet overnight session, curves are steeper (2s10s +0.192 at -36.156). Quiet overnight session, month end extension trade absent as yet ahead of the early week close for the Easter holiday.
- Treasury futures trade mildly weaker, off recent lows as rates hold to a narrow overnight range: light volumes, the Jun'24 10Y (TYM4) contract is just over 200k, trades 110-19 last (-1.5) with initial technical support at 110-08+/109-24+ (Low Mar 21 / 18 and the bear trigger); resistance at 110-30.5 (Mar 21/22 high).
- Economic data limited to MBA Mortgage Applications at 0700ET, capped by revised Wholesale sales, inventories at 1000ET.
- Scheduled Fed-speak: Fed Governor Christopher Waller will discuss his economic outlook at an event hosted by the Economic Club NY this evening at 1800ET, text and Q&A is expected.
- US Treasury auctions continue with $28B 2Y FRN and $60B 17W Bills at 1130ET, $43B 7Y Notes (91282CJU6) at 1300ET.
- Short end SOFR futures mildly weaker while projected rate cut pricing continues to ebb: May 2024 at -13.9% w/ cumulative -3.5bp at 5.291%; June 2024 -63.1% w/ cumulative rate cut -19.3bp at 5.134%. July'24 cumulative at -29.6bp, Sep'24 cumulative -48.6bp at 4.841%.
RIKSBANK: Thedeen: 50% Chance Of May Rate Cut
Mar-27 10:53
The Riksbank’s press conference has concluded. EURSEK was generally little moved through the press conference, with Governor Thedeen’s comments generally in line with the policy statement/MPR communication. A few highlights:
- The new policy path indicates about a 50% chance of a rate cut in May.
- The Riksbank is happy to move before the Fed/ECB if its latest forecasts are met. However, he noted that this includes “all” forecasts, not just those for inflation.
- Favourable wage developments in Sweden (vs in Europe) may also allow for a move before the ECB.
- The long-term policy rate path (i.e. past the next three quarters) is more reflective of a general macroeconomic forecast, rather than an explicit rate forecast.
- While the recent rise in services inflation momentum has been concerning, the Riksbank still views the overall trend as declining.
OUTLOOK: Price Signal Summary - EUROSTOXX 50 Futures Head North
Mar-27 10:51
- In the equity space, the trend condition in S&P E-Minis is unchanged and remains bullish. Last week’s extension reinforces this theme and the break of 5257.25, Mar 8 high, confirmed a resumption of the uptrend. Note that moving average studies remain in a bull-mode position reflecting positive market sentiment. Sights are on 5407.23, the top of a bull channel drawn from the Jan 17 low. Initial firm support is 5218.00, the 20-day EMA. A move lower is considered corrective.
- A bullish trend condition in EUROSTOXX 50 futures remains intact and the contract has traded to fresh cycle highs this week. The climb once again confirms a resumption of the uptrend as the contract pulls away from the 5000.00 handle. Moving average studies remain in a bull-mode position, highlighting positive market sentiment. Sights are on 5074.7, the 1.236 projection of the Jan 17 - Feb 12 - 13 price swing. Initial firm support is at 4926.10, the 20-day EMA.
