DIESEL: Decline in Houthi Attacks Would be Bearish for Diesel: FGE
Jan-22 14:54
A decline in Houthi attacks in the Red Sea will be bearish for diesel due to a potential drop in freight rates, according to FGE cited by Bloomberg.
- “Among the potential returning tonnage is that which in 2024 has carried anywhere from 0.8-1.5m b/d of middle distillate flow to the West around the Cape of Good Hope.”
- The journey reduction would improve the competitiveness of Eastern gasoil/diesel in Europe.
- An increase in Eastern flows to Europe could be bearish for USGC refiners. The US refiners have been clearing significant excess gasoil/diesel barrels in NW Europe.
- The cautious approach from shipping on resuming passage through the Red Sea is expected to continue in the coming weeks.
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STIR: Just Over 60bp Of BoE Cuts Priced For ’25, Path Looks A Little Flat
Dec-23 14:53
SONIA futures flat to -5.0 given the weakness in the long end.
- Little net movement in BoE pricing on the day, with ~61bp of cuts priced through ’25.
- The market-implied rate cutting cycle still looks a little shallow to us, although it is far more realistic than the ~45bp of cuts briefly priced ahead of last week’s BoE decision.
- February and May cuts are still looking likely.
- Beyond there, the Bank will be on the lookout for evidence of the scale of 2025 wage increases (Q1/April data available by the June MPC meeting) and the passthrough to annual indexation for services CPI (April/May data also available by the June MPC meeting).
- UK news limited since this morning’s marginal mark lower in final Q3 GDP data.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Feb-25 | 4.544 | -15.6 |
Mar-25 | 4.513 | -18.7 |
May-25 | 4.395 | -30.5 |
Jun-25 | 4.345 | -35.5 |
Aug-25 | 4.247 | -45.3 |
Sep-25 | 4.206 | -49.4 |
Nov-25 | 4.133 | -56.7 |
Dec-25 | 4.092 | -60.8 |
EQUITIES: Mixed Start, Tech Outstrips Staples, Utilities
Dec-23 14:47
- Cash equity markets open mixed, with the Dow Jones opening flat-to-mildly-lower, the S&P higher by 10 points or so, but the NASDAQ-100 is a standout: higher by 0.6% through the opening bell.
- Tech names are outperforming defensives including utilities and staples, with NVidia carrying tech higher with opening gains of 1.7%, while megacaps META and Tesla buoy indices more broadly (both are higher by over 1.5% apiece).
- Tariff talk out earlier today (Biden's USTR launching fresh probe into Chinese legacy semiconductors) failed to materially suppress prices, despite the investigation likely clearing the route for more punitive tariffs on the sector through 2025.
- The e-mini S&P found firm support ahead of the 100-dma support at 5857.00 on Friday (5861.00 today) and has bounced well - with the price anchored by the 6018.00 50-dma across the past few sessions.
FED: US TSY 26W AUCTION: NON-COMP BIDS $1.585 BLN FROM $72.000 BLN TOTAL
Dec-23 14:45
- US TSY 26W AUCTION: NON-COMP BIDS $1.585 BLN FROM $72.000 BLN TOTAL
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