AMERICAS OIL: Americas Heavy Crude Market Outlook Bullish: Kpler
Jul-09 12:14
The outlook for heavy crude markets in the Americas remains bullish amid tightening balances over the summer, Kpler said, resulting from declining supplies from Venezuela and Mexico.
- However, seasonally declining US crude demand and robust output from Alberta’s oil sands in Q3 is likely to weigh on WCS crude differentials into the autumn months, Kpler added.
- Demand from US refineries appears to be robust, which should support prices in the near term.
- Refinery runs in PADD 2 have surged to a record 4.3m b/d, drawing crude inland and pushing down Cushing stocks to their lowest seasonal levels in over five years.
- WTI Cushing briefly traded at a premium to WTI Houston, indicating the strength of inland demand.
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STIR: Repo Reference Rates
Jun-09 12:10
- Secured Overnight Financing Rate (SOFR): 4.29% (+0.00), volume: $2.667T
- Broad General Collateral Rate (BGCR): 4.27% (+0.00), volume: $1.072T
- Tri-Party General Collateral Rate (TCR): 4.27% (+0.00), volume: $1.043T
- (rate, volume levels reflect prior session)
FOREX: Subdued Volumes Contain Spot, Limiting Vol and Boosting Carry Theme
Jun-09 12:01
- Currency volumes across G10 are unsurprisingly subdued considering the intraday range play across G10 FX, with JPY futures ~10% below average for this time of day, EUR futures ~20% below and GBP futures ~30% below.
- Risk and market activity should pick into the second half of the week with the US inflation prints, the 30-year Treasury auction, the UK spending review details and any potential outcomes of the US-China trade talks, but it's doing little to prop up implied vols - one-week JPY vols have dipped below 10 points today for the first time this month (with similar price action in the front-end of the GBP and EUR curves), a level that markets rarely hold below for any sustained period.
- This pressure on the front-end of the vol curve continues to work in favour of the dominant carry trade themes we've noted since US Liberation Day. While the long-held status of JPY as a funding currency has ebbed since last year's intervention, other currencies have stepped in to take advantage of regional dislocations (most recently HKD and CNY), which are compensating for falling policy rates among traditional carry targets such as the MXN, AUD and others.
SPAIN T-BILL AUCTION PREVIEW: On offer tomorrow
Jun-09 12:01
Tesoro Publico has announced it will be looking to sell a combined E2.0-3.0bln of the following letras at its auction tomorrow, June 10
- the 3-month Sep 5, 2025 letras
- the 9-month Mar 6, 2026 letras
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