US NATGAS: Baker Hughes Regional Rig Summary – Week of August 29th
Aug-29 17:58
Week-over-week, US rigs fell by two and Canadian rigs fell by five. This brings total US rigs to 49 below last years levels and Canadian rigs to 44 below last year levels.
- US oil rigs rose by 1 week-over-week, while gas rigs fell by 3.
- Permian rigs were flat for the third consecutive week, suggesting producers may have reached a new normal following downward pressure from benchmark oil prices earlier in the year.
- Haynesville rigs fell by 1 week-over-week and are 1 below last year’s level. With 30-day drilling times and a several month spud-to-prod time, this decline isn’t likely to hit production until year end. This week’s rig level is aligned with level 6 weeks ago (~37-38 rigs) before operators increase rigs to 40-41 between mid-July and mid-August. As a result of that increase, the market should expect to see that production hit the market just ahead of winter, assuming no delay in TILs.
- Canadian oil rigs fell by 2 week-over-week, while gas rigs fell by 1.
- Alberta rigs were flat, while the decline was driven by reduced activity in British Columbia.
- Rigs across AB, BC, and SK remain below last year’s levels and may hold around current levels until year end and activity ramps in January.
- Summary Charts and PDF found here: MNI_Baker Hughes Summary_2025-08-29.pdf
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FED: Likely URLs For July Fed Decision
Jul-30 17:56
Likely Fed URLs based on previous meetings:
STIR: Snapshot Of Fed Rate Path Pre-FOMC Decision
Jul-30 17:53
- Today’s mostly robust economic data have helped see Fed Funds implied rates shift back a little closer to recent hawkish extremes when it comes to 2025 meetings.
- The 44bp of cuts eyed to year-end is off last week’s 42bp which was the fewest cuts sustainably priced since February.
- With no rate change expected today (just 1bp priced), a snapshot of near-term meetings:
Cumulative cuts from 4.33% effective: 15.5bp Sep, 27.5bp Oct, 44bp Dec, 52.5bp Jan and 65bp Mar. - The SOFR implied terminal yield of 3.20% (SFRH7) is 3bp higher on the day, firmly within 3.1-3.3% range seen through July.
- President Trump shortly ahead of the meeting: "*TRUMP: I HEAR FED WILL CUT RATES IN SEPTEMBER" - bbg
BONDS: EGBs-GILTS CASH CLOSE: Flatter Curves Amid Heightened Data Flow
Jul-30 17:48
European curves flattened Wednesday.
- Early trade was constructive for EGBs and Gilts, stemming from the prior session's late strength in US Treasuries.
- A solid long-end Gilt tender and potentially some month-end dynamics also assisted. 10Y Gilt yields briefly hit their lowest intraday level since Jul 22; for Bunds Jul 24.
- Above-expected US data including private payrolls and GDP triggered a selloff in Treasuries that weighed across the Atlantic, seeing yields finish off their lows.
- Earlier, a slew of Eurozone data didn't really move the needle for markets: Euro Q2 GDP and July consumer confidence were slightly stronger than expected, while Spanish flash July inflation was slightly above-consensus and Belgian HICP decelerated. The ECB's forward looking wage tracker points to a continued decline in negotiation wage growth in Q1 2026.
- The German curve twist flattened, with the UK's bull flattening. Periphery/semi-core EGB spreads were mixed.
- The Federal Reserve decision will be a focus overnight, with Thursday bringing French, Italian, and German flash July inflation data (MNI's preview is here).
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 1.2bps at 1.954%, 5-Yr is up 0.3bps at 2.296%, 10-Yr is down 0.2bps at 2.706%, and 30-Yr is unchanged at 3.204%.
- UK: The 2-Yr yield is down 1.8bps at 3.876%, 5-Yr is down 2.6bps at 4.041%, 10-Yr is down 3bps at 4.603%, and 30-Yr is down 2.5bps at 5.416%.
- Italian BTP spread up 0.4bps at 81.4bps / French OAT down 0.3bps at 65.3bps
