NATGAS: Funds Increase TTF Net Long Positions Again in Week to June 14

• Fed Funds implied rates are unchanged from Friday’s close, consolidating a push further above pre-CPI/retail sales levels.
• Cumulative cuts from 5.33% effective: 1.5bp Jun, 7bp Jul, 20bp Sep, 28bp Nov and 43bp Dec.
• Today sees particularly heavy Fedspeak to compensate for a barren data docket, all from permanent voters or 2024 voters.
• On mon pol matters, we focus on Vice Chair Jefferson although Governor Waller should also be watched even if the format could limit headlines (Bostic and Mester both spoke last week) – both have had sizeable impact on markets in the past.
• Jefferson said May 13 (before PPI and CPI) that he was concerned the decline in inflation has attenuated and that it’s appropriate to hold rates steady until the Fed is more confident.
• Waller last meaningfully spoke Mar 27 when he said rate cuts are likely appropriate this year but not yet, and that the economy is giving us no reason to implement big cuts. We suspect Waller will leave the more impactful comments to tomorrow’s discussion on the US economy or Friday’s keynote address on r*.
• VC for Supervision Barr should also be watched for any new information around Basel III proposals.

Fedspeak schedule

• 0730ET – Bostic (’24) on BBG TV
• 0845ET – Bostic (’24) welcome remarks for financial mkts conference (text tbd)
• 0900ET – VC Supervision Barr (voter) gives keynote remarks on mon pol and bank regulation (text and Q&A)
• 0900ET – Waller (voter) welcoming remarks at conference for the USD’s international role (text, no Q&A)
• 1030ET – VC Jefferson speaks on US economic outlook and house prices (text and Q&A)
• 1400ET – Mester (’24 voter retiring June) on BBG TV
• 1900ET – Bostic (’24 voter) moderates keynote remarks

• RES 4: 110-16 50.0% retracement of the Feb 1 - Apr 25 bear leg
• RES 3: 110-06 High Apr 4
• RES 2: 110-00 Round number resistance
• RES 1: 109-31+ High May 16
• PRICE: 109-05+ @ 11:14 BST May 20
• SUP 1: 109-27+/108-15 50-day EMA / Low May 14 and key support
• SUP 2: 108-06 Low May 3
• SUP 3: 107-25 Low May 2
• SUP 4: 107-04 Low Apr 25 and the bear trigger

Despite the latest pullback in Treasuries, the short-term trend condition remains bullish. The contract last week moved through resistance at the top of a bear channel, drawn from the Feb 1 high. Note that resistance at 109-09+, the May 3 high, has also been cleared. This reinforces the bullish importance of the channel break and signals scope for an extension higher. Sights are on 110-00 next. Initial key support is at 108-15, May 14 low.

The combination of Friday's weakness in Tsy futures and preliminary OI data points to a mix of net short setting (TU, FV, UXY & WN futures) and long cover (TY & US futures) with the latter having slightly more impact in net curve DV01 equivalent terms.

• This came as markets continued to unwind Fed rate cut premium in a headline light session.
• Comments from ECB's Schanbel provided some pressure during pre-NY trade.
• A deeper overview of positioning in Tsy futures can be found in our weekly CFTC CoT round up.