OIL: Crude Range Trading As Talks Continue On Numerous Issues
May-18 22:36
Oil prices had a mixed week driven by expectations on trade deals, Iran and forecasts for the outlook. On Friday they were higher as Iran’s foreign minister sounded less optimistic about an imminent deal with the US on its nuclear programme than another official earlier in the week. Meanwhile, an easing of sanctions on Russian fossil fuel is a long way off as it continues to bombard Ukraine despite the start of negotiations.
- WTI rose 1.4% to $62.49/bbl on Friday, close to the intraday high of $62.71, to be up 2.4% on the week and 7.4% in May to date. The downtrend remains intact and any rallies are seen as corrective. The bear trigger is at $54.67 and initial resistance at $63.46, 50-day EMA. The benchmark has started today 0.1% lower at $62.41.
- Brent was 1.2% higher at $65.33/bbl and 2.2% last week and 7.0% this week. It reached a high of $65.54 on Friday but still off Tuesday’s $66.81. It traded in a narrow range last week holding between initial resistance at $66.49, 50-day EMA, and $58.00, the bear trigger. Ongoing negotiations across the world mean that traders are hesitant to take on too much risk.
- The IEA continues to expect excess oil supply in 2025 and 2026, while the EIA said that it expects lower US output given current price levels. It estimates that a deal with Iran would increase global supply by 200-300kbd. The foreign minister noted on X that Iran was yet to receive an official US proposition and that the message has been “contradictory”, as cited by Bloomberg.
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-18 05:18
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
Apr-18 05:16
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
CHINA: Bond Futures Marginally Up Despite Liquidity Injection.
Apr-18 04:02
- China’s bond market reacted very little to a second day of sizeable liquidity injection.
- China’s 10YR bond future is up just +0.03 at 109.04 and remains firmly above all major moving averages. The nearest being the 20-day EMA at 108.61.
- The 2YR bond future is down -0.02 at 102.46; remaining below all major moving averages – the nearest being the 20 day EMA at 102.52.
- The 10YR CGB is marginally lower in yield at 1.64%
