COMMODITIES: Crude Finds Support, Gold Unchanged, Copper Declines
Aug-27 18:18
- Oil prices found support on Wednesday, supported by a slightly larger than expected US crude stock draw.
- A breakdown in E3 talks with Iran also added support earlier in the session, along with growing threats from the EU to further sanctions on Russia – though its options remain limited.
- WTI Oct 25 is up by 1.4% at $64.2/bbl.
- A bear cycle in WTI futures remains intact and the latest round of short-term gains appear corrective - for now.
- Initial support is at $61.99, the Jun 30 low, which has recently been breached, strengthening a bearish theme. Initial resistance to watch is at $66.56, the Aug 4 high.
- Elsewhere, spot gold is broadly unchanged on the session around $3,395/oz, after rallying off session lows following the IAEA-Iran headlines that flagged that monitors have not yet returned to damaged Iranian sites. Reports also suggested that Iran isn’t providing adequate access to inspectors.
- The medium-term trend condition for gold remains bullish, with initial resistance seen at $3,409.2, the Aug 8 high, followed by $3,439.0, the Aug 23 high.
- Meanwhile, copper has fallen by 0.9% to $449/lb today.
- Copper futures are in consolidation mode, with initial resistance at $488.17, the 50-day EMA. On the downside, a continuation lower would signal scope for a test of key support at $418.85, the Apr 7 low.
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PIPELINE: Corporate Bond Update: $2.75B RBC 3Pt Launched
Jul-28 18:15
- Date $MM Issuer (Priced *, Launch #)
- 07/28 $12B #Mexico 5Y +170
- 07/28 $2.75B #RBC $1.25B 4NC3 +62.5, $500M 4NC3 SOFR+88, $1B 6NC5 +73
- 07/28 $2B #Deutsche Bank $1.7B 6NC5 +98, $300M 6NC5 SOFR
- 07/28 $1.5B Community Health Systems 8.5NC3 9.5%a
- 07/28 $750M #M&T Bank 10NC5 +143
- 07/28 $600M #Ally Financial 8NC7 +137
- 07/28 $650M EW Scripps 5NC2 investor calls (expected to launch 7/29)
US: Favourability Of Democratic Party Drops To Multi-Decade Lows - WSJ
Jul-28 18:14
A Wall Street Journal survey has found that the Democratic Party’s image “has eroded to its lowest point in more than three decades, with voters seeing Republicans as better at handling most issues that decide elections.”
- The Journal notes: “The new survey finds that 63% of voters hold an unfavorable view of the Democratic Party—the highest share in Journal polls dating to 1990 and 30 percentage points higher than the 33% who hold a favorable view.”
- Democratic pollster John Anzalone said: “The Democratic brand is so bad that they don’t have the credibility to be a critic of Trump or the Republican Party. Until they reconnect with real voters and working people on who they’re for and what their economic message is, they’re going to have problems.”
- Axios writes of the report: “For all the talk of President Trump's plunging approval rating, voters still trust Republicans over Democrats on immigration (+17), inflation (+10), foreign policy (+8) and more.”
Figure 1: Net Favourability of Each Party
Source: Wall Street Journal
US TSYS/SUPPLY: Fairly Narrow Range Of Expected Borrowing Estimates (2/2)
Jul-28 17:43
Our estimates made last week for borrowing requirements ($950-1,000B in Jul-Sep aka FYQ3, $600B for Oct-Dec aka FY Q4) appear to chime with several estimates we've seen since then (note it's almost unanimous that a $850B end-September cash target will be included in today's estimates). These include:
- Deutsche: Q3 borrowing requirement $960B, Q4 $680B
- Jeffries: Q3 borrowing requirement $957B, Q4 $575B
- Wrightson ICAP: Q3 borrowing requirement $980B, Q4 $650B
Estimates that we included in our refunding preview:
- CIBC: Marketable borrowing requirement of $942B in Jul-Sep on $471B financing need, Oct-Dec $726B marketable borrowing on $649B financing need
- JPMorgan: $1,087B and $572B borrowing requirements this quarter/next quarter respectively
- TD: $1,051B Jul-Sep quarter, $534B Oct-Dec. Tariffs could mean cash flows more positive.
- Wells Fargo: Marketable borrowing in Q3 $946B ($393B cash balance, $413B budget deficit); Q4 $592B
