ENERGY SECTOR: ENERGY: What to Watch: ARA & US Oil Inventories and US CPI
Sep-11 07:19
- The latest Genscape European ARA crude inventories will be released today at 09:00BST. Stocks last week rose back in line with the previous five year average at 54.3mbbl.
- The EIA weekly petroleum inventory data for the week ending Sept. 6 is due for release today at 10:30ET (15:30BST). A Bloomberg survey expects a 0.71mbbl build in U.S. crude stocks, a 0.07mbbl build in gasoline and a 0.09mbbl build in distillates while refinery utilisation falls 0.8%.
- The US CPI data, due at 08:30ET, is expected to show headline easing to 2.5% y/y with core stable at 3.2%.
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ECB: Back To Pricing 2 Further Cuts For 2024
Aug-12 07:16
ESTR OIS is back to pricing in two full ECB cuts for the remainder of 2024, having last week gone as far as to price in three including an October cut.
- Last week's dovish re-pricing was risk-driven and did not reflect a material shift in fundamentals facing the ECB.
- Commitment to the 'meeting-by-meeting' and 'data dependent' approach suggest that the GC will look through market volatility, unless there are signs of systemic stress that could undermine growth and inflation.
- Given President Large's repeated assertions that the ECB will not necessarily lower policy rates in a linear fashion ( which would otherwise imply back-to-back cuts), an October cut would require a material change in assessment of the inflation outlook - particularly the trajectory of wages and domestic price pressures.
- Market based measures of inflation expectations such as the EUR 5y5y forward inflation swap and inflation breakevens continue to hover around recent lows. However, as we stressed last week, the ECB's focus on the in-house inflation criteria has further deprioritised market expectation measures.
CROSS ASSET: US and EU Yields edge higher
Aug-12 07:14
- Bund and Tnotes are drifting lower, paring some of Friday's gain, after both contract edged higher on Friday to reverse US IJC's sell off.
- Both contracts are also seeing way below average volumes with desks on the sidelines awaiting this week's data.
- For TYU4, support will be seen at 112.16+, Friday's low.
- USDJPY takes another leg higher, as Yields push higher.
GILTS: Opening calls
Aug-12 06:57
Gilt opening calls, 99.41/99.44 range.
