NATGAS: Gas Lower, Europe Needs Hormuz Reopening To Refill Storage

TYU6 is dealing at 108-28, -0-05 from closing levels in today’s Asia-Pac session.

• Cash bonds finished showing a modest twist-flattener, with benchmark yields 3bps higher to 1bp lower.
• WTI has started Monday trading higher after the weekend's events in the Strait of Hormuz with Iran firing on commercial shipping and the US targeting Iran's military capabilities that threaten vessels. There have been two waves of US attacks on Sunday with the possibility of more. Iran has used force to drive vessels to use its route through the Strait rather than following Oman's coastline and on the weekend it closed the key waterway again.
• On Friday, projected rate hike pricing regained momentum around midday - rising vs. late Thursday levels (*) & October back to pricing first 25bp hike: Jul'26 at +8.4bp (6.5bp), Sep'26 at +21.6bp (+18.4bp), Oct'26 at +27.4bp (+23.8bp), Dec'26 +37.1bp (+33.2bp).
• No data today, focus is on next week's CPI and PPI data on Tuesday/Wednesday   respectively, as well as Fed Chair Warsh testimony to the Senate Banking Comm on Wednesday.

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NZGBs are unchanged after the long weekend.

• On Friday, US tsys finished showing a modest twist-flattener, with benchmark yields 3bps higher to 1bp lower.
• WTI has started Monday trading higher after the weekend's events in the Strait of Hormuz with Iran firing on commercial shipping and the US targeting Iran's military capabilities that threaten vessels. There have been two waves of US attacks on Sunday with the possibility of more. Iran has used force to drive vessels to use its route through the Strait rather than following Oman's coastline and on the weekend it closed the key waterway again.
• The BNZ-BusinessNZ performance of services index for June was 50.6, up from 48.0 in May, and 48.9 in April.
• Swap rates are little changed.
• RBNZ-dated OIS pricing is little changed across meetings. 21bps of tightening is priced for September, while February 2027 assigns 61bps.
• The Treasury announces the launch of a new 4.75% coupon 15 May 2038 nominal NZGB. Given the timing of the launch, the Treasury also announces the cancellation of the tender scheduled for 16 July 2026.
• The Treasury expects to issue at least NZ$5.0bn with the transaction capped at NZ$7.0bn. Initial price guidance is 6-10bps over the 15 April 2037 bond. The issue will be priced tomorrow.

WTI has started Monday trading higher after the weekend’s events in the Strait of Hormuz with Iran firing on commercial shipping and the US targeting Iran’s military capabilities that threaten vessels. There have been two waves of US attacks on Sunday with the possibility of more. Iran has used force to drive vessels to use its route through the Strait rather than following Oman’s coastline and on the weekend it closed the key waterway again. A resumption of the conflict boosted crude last week as uncertainty over global supplies returned and while it appears it’s giving ongoing support, prices remain well below the first half of June.

• While Iran has said the Strait is closed, the US maintains the Omani route is still open but with Iranian strikes, that remains a considerable risk and traffic has stopped.
• WTI fell 0.8% on Friday to $71.51/bbl but was still up 4.1% last week. It reached a high of $76.08 on Wednesday and then trended lower over the rest of the week as it was assumed that the flair up in tensions would be short lived. That is now in doubt but talks are apparently ongoing. WTI jumped to $74.20 on today’s open but is currently around $73.60.
• Brent was down 1.4% to $75.22/bbl but finished the week up 4.3%. It broke above $80 on Wednesday reaching a high of $80.59. It touched $79.00 at the start of Monday’s trading but is currently around $78.40, holding below $82.54, 50-day EMA.
• Technicals continue to indicate that oil benchmarks are in a bearish trend and any gains are corrective.