REFINING: Al Zour Ramp-Up Reshaping Global Crude and Products Markets
Dec-18 18:13
Kuwait’s 615kbd Al Zour refinery ramped up in 2024, reshaping crude and oil product markets. The facility is fed solely by the nation’s crude.
- The facility ramp up has seen middle distillate flows towards Europe rise according to Vortexa tracking – creating a key market for its diesel and jet barrels. 40% of Al Zour clean product volumes headed for Europe this year.
- A significant portion of Al Zour’s naphtha and VLSFO headed for Asian markets. Japan’s imports of Kuwaiti naphtha rose 50% y/y at the expense of Saudi and Qatari supplies.
- Looking ahead to 2025, under a backdrop of weaker product demand in Europe and Asia, Kuwait may seek to diversify away from its core markets and potentially look increasingly to East & South Africa Vortexa said, mirroring an approach taken by Oman's new Duqm refinery.
Source: Vortexa
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US DATA: Dallas Fed Survey Sees Strong Future Loan Demand
Nov-18 18:11
- The Dallas Fed banking conditions survey, released 'from' 1030ET today and by being collected through Nov 5-13 offers a first look at post-election potential lending behavior, shows broadly similar findings to the prior survey six weeks ago.
- Current loan demand continued to decline modestly whilst future loan demand maintained the particularly strong increase seen in the early October survey.
- The latter is still impressive though considering 10Y Treasury yields increased circa 60bps between the two survey periods.
- The continued tightening in credit standards tallies with the recent Oct 2024 survey from the NY Fed which showed rejection rates for autos and mortgage refinancing hit series highs.
- NPLs offered a mixed picture, with current NPLs reversing the relative improvement seen in October but with expectations of future NPLs showing a notable improvement as the net share expecting increases fell to just 4.5% from 20.5% in October and 35.6% in mid-August.
FOREX: Softer Greenback Sees EURUSD Edge Back Towards 1.06
Nov-18 18:03
- Following the greenback rally pausing for breath on Friday, the USD index also trades softer to start the week, currently down around 0.35% as we approach the APAC crossover. The price action has been assisted by a more stable backdrop for global equity indices, as well as the US 10-year yield once again firmly rejecting the 4.50 level and now residing lower on the day.
- The EUR trades more optimistically, rising to levels around 1.0600 against the dollar, the notable breakdown point during last week’s trade. The 0.5% move higher for EURUSD does little to alter the overall bearish backdrop, and might be allowing an oversold condition to unwind. On the downside, focus remains on a move to 1.0448, the Sep 3 2023 low and a key support, whereas initial firm resistance to watch is 1.0742, the 20-day EMA.
- The JPY is among the weakest in G10, briefly helping USDJPY gravitate back above the 155.00 handle, with the currency receiving little support from an appearance from BoJ's Ueda, who declined to provide a clear indication or time-linked path for the next BoJ rate hike.
- USDCAD has continued its pullback today with a now sizeable drop settling around the 1.4030 level (-0.43%). CAD gains closely follow other growth sensitive peers in the AUD and NOK, along with EUR, potentially offering a slightly less stretched level heading into tomorrow’s Canada inflation report. Support isn’t seen until 1.3959 (Nov 1 and 6 highs)
- Market focus remains on Trump's cabinet picks, with the Treasury Secretary position still up for grabs. Latest reports suggest that Trump's shortlist is growing, and he is to hold interviews this week with the leading candidates, including (but not limited to) Scott Bessent, Howard Lutnick, Kevin Warsh and Marc Rowan. Their perceived support for Trump's tariff regime will prove key to any market reaction on the formal appointment.
- RBA minutes headline the docket overnight before the final readings of Eurozone CPI on Tuesday. Attention will then turn to Canada CPI and US building permits data.
EURUSD TECHS: Bears Remain In The Driver’s Seat
Nov-18 18:00
- RES 4: 1.0997 High Oct 8
- RES 3: 1.0937 High Nov 5 and key short-term resistance
- RES 2: 1.0742 20-day EMA
- RES 1: 1.0601/0683 Low Apr 16 / Low Nov 6
- PRICE: 1.0570 @ 16:37 GMT Nov 18
- SUP 1: 1.0484 1.00 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 2: 1.0448 Low Sep 3 2023 and a key support
- SUP 3: 1.0377 1.236 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 4: 1.0311 1.382 proj of the Sep 25 - Oct 23 - Nov 5 price swing
EURUSD remains in a clear downtrend and the pair is trading just above its recent lows. Note that the trend is oversold, however, a clear reversal signal is required to highlight a short-term base. Recent weakness confirmed an extension of the impulsive bear leg, and moving average studies remain in a bear-mode position. Sights are on 1.0484 next, a Fibonacci projection. Initial firm resistance to watch is 1.0742, the 20-day EMA.
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