OIL: Baker Hughes Maintain Forecasted Drop in Upstream Spending

• +15,000 TYX5 111/112 put spds 1 over 114 calls ref 112-22.5

StatCan's advance estimate of manufacturing sales for August is for a 1.5% M/M decrease, which if confirmed would mark the first decrease in 3 months and partially reversing the 2.5% rise in July (all in value and not volume terms).

• As usual with the advance estimate there were no further details available, though StatCan reports the largest decreases were in the transportation equipment and food subsectors.
• Even with the M/M decrease, the comparison with the sharp drawdown in March /April/May means that manufacturing sales were due to post a 6-month best -1.5% on a 3M/3M annualized basis.
• As with other indicators, though, this one suggests the nascent pickup in activity and sentiment in various sectors in the summer - after the worst of the US-Canada trade conflict concerns - has subsequently petered out, with activity remaining volatile.
• We get July GDP data on Friday, with expectations and the advance estimate showing +0.1% M/M after -0.1% in June. Per StatCan's advance GDP release, there were no notable mentions of July manufacturing output :"Increases in real estate and rental and leasing, mining and quarrying (except oil and gas) and wholesale trade were partially offset by a decrease in retail trade" in the month.
• July manufacturing sales were confirmed at 2.5% last week, with wholesale sales ex-petroleum growth reported at 1.2% - so three of the four major "sales" categories point to a pickup in July activity (retail sales fell 0.8% however), in line with the StatCan advance anecdote).
• For August, retail sales are estimated to have bounced (1.0% M/M).

RRP usage bounces to $29.172B with 22 counterparties this afternoon from $14.402B Tuesday. Compares to $11.363B on Friday, September 16 - lowest level since early April 2021. The year's high usage stands at $460.731B on June 30.