LNG: Freeport Uncertainty Leading to Vessel Backlog

St Louis Fed President Musalem's first public remarks on monetary policy since becoming St Louis Fed president (speech link here) appear to put him toward the hawkish end of the FOMC spectrum, particularly with this comment regarding his criteria for supporting rate cuts:

• "I will need to observe a period of favorable inflation, moderating demand and expanding supply before becoming confident that a reduction in the target range for the federal funds rate is appropriate. These conditions could take months, and more likely quarters to play out." Most other FOMC participants have spoken in terms of "few" or "several" "months" as their core view for the time horizon, not "quarters".
• And "should evidence of alternative inflation scenarios begin to materialize, I would support an additional firming of monetary policy."
• He is not fully convinced that policy is sufficiently restrictive: "Policy appears less restrictive if the underlying rate of inflation is higher, say the 3.5% year-to-date PCE inflation rate that forecasters expect through May, or if the long-run neutral rate of interest is thought to be higher."
• "I believe the long-run neutral rate is higher than 0.5%" - that comment suggests that his addition to the Dot Plot in June was above 2.50%, thus was partly responsible for shifting up the longer-run Fed funds median to 2.75% from 2.56% in March.
• He is also unconvinced of the disinflationary signal provided by the May CPI data: "I am hopeful this could mark a resumption of progress toward 2 percent inflation. However, it takes more than one data point to establish a trend. Data for the first four months of 2024 indicated that inflation remained too high and was moving more sideways than down. Moreover, recent elevated readings on PCE inflation have been broad-based across expenditure categories of goods and services."

• RES 4: 1.2947 1.50 proj of the Apr 22 - May 3 - 9 price swing
• RES 3: 1.2908 1.382 proj of the Apr 22 - May 3 - 9 price swing
• RES 2: 1.2894 High Mar 8 and a key resistance
• RES 1: 1.2764/2860 High Jun 14 / 12
• PRICE: 1.2687 @ 16:14 BST Jun 18
• SUP 1: 1.2657 Low Jun 14
• SUP 2: 1.2584 Low May 15
• SUP 3: 1.2510 Low May 14
• SUP 4: 1.2446 Low May 9 and a key near-term support

The GBPUSD trend condition remains bullish, however, last week’s sell-off is a concern for bulls. Price is trading just above recent lows and attention is on key short-term support at 1.2671, the 50-day EMA. It has been pierced, a clear break of it would undermine the bullish theme and signal scope for a deeper correction, opening 1.2584 initially, the May 15 low. For bulls, a reversal higher and a break of 1.2860, the Jun 12 high, resumes the uptrend.

• RRP usage bounces to $375.542B from Monday's near 3Y low of $333.429B; number of counterparties at 68. Today's usage compares to $327.066B on Monday, April 15 -- the lowest level since mid-May 2021.

NY Federal Reserve/MNI