LNG: China’s LNG Demand Tepid as Summer Starts: Platts
May-30 09:34
China's LNG demand remains weak heading into summer - traditionally a peak consumption period - amid subdued downstream demand and ample alternatives, Platts said.
- Typically, Chinese buyers begin spot LNG purchases in May; as of late-May, only Zhejiang Energy has made a spot purchase for June delivery.
- Mild temperatures in southern China have dampened residential power demand.
- Furthermore, power generation demand for gas is low due to cheaper alternatives like hydropower and coal.
- Industrial LNG demand is also sluggish, impacted by the US-China tariff dispute, which has weakened export manufacturing and slashed to LNG-truck demand.
- Moreover, NOCs have reportedly secured adequate pipeline and LNG inventories, cutting spot imports.
- April LNG imports fell 26% year-on-year, while pipeline gas and domestic production rose 24% and 8% respectively.
- Spot LNG remains uncompetitive compared to pipeline gas in China, with buyers unwilling to pay above $10.50/MMBtu – the price for pipeline gas. By comparison. JKM is around $12.5/MMBtu.
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FOREX: USD/JPY Struggles on Approach to Recovery High Ahead of GDP
Apr-30 09:26
- JPY is weaker against all others early Wednesday, however USD/JPY is yet to make any meaningful test on the Friday recovery high at 144.03. With tariff limbo still in place, and no trade negotiations to speak of between the US and China, G10 currencies are awaiting the next macro cue or headline to trade with any real conviction. That said, EUR/GBP continues its losing streak, with the cross hitting a new lower low of 0.8482 in overnight trade.
- Moves follow the cross trading through a major support area we flagged last week at 0.8520-31 - marking both the early April pullback low as well as the 50% retracement of the tariff-inspired upleg off 0.8323.
- Meanwhile, Australian CPI for Q1 came in toward the upper-end of expectations, helping AUD/USD recover well into the European morning. Spot faltered on the approach toward yesterday's 0.6450 highs, however, meaning the pair has traded either side of the 0.64 handle for eight consecutive sessions. The 200-dma defines the first topside level, at 0.6460.
- US data picks up Wednesday, with MNI Chicago PMI for April seen moderating further to 45.9 from 47.6 previously. Advance GDP, Personal income, spending and the latest PCE stats for March are also due. Central bank speak sees BoE's Lombardelli, ECB's Villeroy & Makhlouf as well as the BoC minutes. The Fed remain inside their pre-decision media blackout period.
GILT AUCTION RESULTS: Decent 4.375% Mar-28 auction
Apr-30 09:13
Decent 4.375% Mar-28 auction: 3.48x bid-to-cover ratio for the GBP4.5bln issued. That’s the highest bid-to-cover for this Gilt since the November 2024 launch. The auction size was also larger than the previous issues (which ranged between GBP4-4.25bln).
- The 0.2bp tail was the joint tightest on record for this line, alongside the January re-opening (0.4bp tail in March, 0.5bp in Feb).
- Lowest accepted price of 101.438 above the 101.4305 pre-auction mid-price. The secondary market price has moved up to 101.467 following the publication of the results.
AUSTRIA AUCTION PREVIEW: On offer next week
Apr-30 09:10
Austria has announced it will be looking to sell a combined E1.75bln of the following at its auction next Tuesday, May 6:
- the 2.95% Feb-35 RAGB (ISIN: AT0000A3HU25)
- the 3.15% Jun-44 RAGB (ISIN: AT0000A0VRQ6)
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