CHINA: "*CHINA HAD RECORD TRADE SURPLUS OF ALMOST $35B WITH EU IN SEPT." - BBG

"*RBA'S HUNTER: ARE CONCERNED ABOUT UPWARD TREND OF FUEL PRICES" - BBG

Over 6 months of elevated global fuel prices increase the chance of second-round effects to other prices increasing the possibility of monetary tightening.

European gas is 3.8% higher at EUR 82.554 in early Monday trading following the weekend’s closure of Saudi Arabia’s east-west pipeline due to a drone attack from Iraqi territory and Houthi control of the Bab al-Mandab Strait and Yemen’s Red Sea coast. Recent developments have made a resumption of Qatari LNG exports, the second largest exporter in 2025, even more remote. Europe’s heating season is approaching and storage is only 68.0% full compared with around 80% at the same time last year.

• Dutch TTF is up 18.2% in September and has exceeded Friday’s high today reaching EUR 83.20 earlier. On 1 September it was at EUR 69.685, already elevated. Increased power costs over winter are likely to weigh on European growth at a time of ECB inflation vigilance.
• A meeting between Gulf nations and Iran over Hormuz was due to take place but has been delayed, according to Oman, due to a request from the Gulf, according to Iran. It appears they want to reach a “consensus” before negotiating. Saudi Arabia submitted alterations to the Oman-Iran proposal as it is concerned it creates a new status quo. Oman-Iran talks over fees will continue.
• US natural gas is 1.7% higher at $2.88 today after falling 0.5% on Friday due to higher-than-expected storage injections. Mild weather is reducing domestic demand. It has continued to range trade with a high of $3.026 on 2 September followed by a low of $2.753 on 10 September.
• Chevron’s Australia President sees Australian LNG prices staying elevated especially given its location close to Asia and Qatari shipments remaining shut in the Persian Gulf. He said he has “a hard time seeing the prices come down”, according to Bloomberg. 

The pair are trading a little softer this morning as risk opens the week firmly on the backfoot. Considering a US hike is being priced in this week and the move in Oil is adding to the headwinds for risk, the price action in the US Dollar continues to lag. Does it eventually play catch up or is it telling us something more ?

• {AUDUSD Curncy} - 0.7150, -0.26%
• {NZDUSD Curncy} - 0.5795, -0.34%
• {AUDNZD Curncy} -  1.2337, +0.05%