NATGAS: Gas Summary At European Close: TTF Falls
TTF front month remains under pressure, falling to the lowest since April 2024, amid ongoing mild weather and with LNG supplies edging higher after a dip at the weekend, while the market looks for any signs of progress towards a Ukraine peace deal.
- TTF JAN 26 down 3.3% at 26.6€/MWh
- Trump and European leader see a ‘critical moment’ for Ukraine, but a final peace agreement still appears elusive. Zelenskiy said today that “this week may bring news for all of us – and for bringing the bloodshed to an end.”
- Natural gas demand in NWE averaged 629 mcm/d for the week of Dec. 1-7, 5% lower w/w and broadly flat y/y, according to JPMorgan.
- EU ambassadors gave the greenlight on Wednesday to the bloc’s plans to phase out Russia gas imports by late 2027, clearing one of the final legal hurdles before the ban passes into law.
- A draft Italian decree includes a tool to align Italy’s gas contracts with benchmark European prices, to make gas and electricity prices cheaper for end-users, Bloomberg said.
- Aramco plans to start gas output from the Jafurah project by the end of this year, EVP Abdulkarim Al-Ghamdi said, cited by Bloomberg.
- Importers in India and Bangladesh purchased spot LNG shipments after a recent decline in prices made the fuel more attractive, according to Bloomberg.
- China’s LNG demand rose 3% y/y in November, ending a 12-month string of declines, according to ENN Group cited by Bloomberg.
- Egyptian LNG imports reached 1.5bcm in November – a record pace for the the month according to LSEG tracking.
- LNG stockpiles held by Japanese utilities increased by 5.31% on the week to Dec. 7 to 2.18m tons, according to trade ministry data.
- MNI Gas Weekly: https://media.marketnews.com/MNI_Gas_Weekly_Henry_Hub_Spike_Boosts_Spot_LNG_Favourability_6ce4cf617b.pdf
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EUROPEAN INFLATION: Lower Airfares In Greece Counters Other Countries' Evidence
Softer airfares within Greece October HICP push back against findings from other larger European countries (Germany, Spain, Belgium) that airfares were a material driver behind the upside surprise in Eurozone services inflation (3.35% Y/Y vs 3.2% September). We are reluctant to put too much weight on it, however.
- Greece "passenger transport by air" Y/Y HICP (6.3% Oct vs 11.5% Sep) had moved in the same direction as the Eurozone equivalent in 7 out of 9 months this year prior to the October data.
- Categories generally associated with persistent services items, such as communication, health or education, meanwhile saw mixed developments in Greece in October.
- Given Greece's 2.9% basket weighting in the Eurozone as well as its relevance as a vacation destination, potentially introducing idiosyncrasies, we would not overinterpret the data. It remains likely that at least some of the Eurozone services upside surprise was driven by volatile travel-related categories, downplaying its impact but with final details still to come.
- Remember that ECB President Lagarde in her October meeting press conference again hinted that the persistence of services inflation drivers are important.
- The final October HICP release is likely the last round of inflation data flowing into the ECB's December projections. Our full review of the October flash HICP round and some commentary on current ECB rhetoric can be found here.
- Netherlands final HICP for October is scheduled for publication tomorrow ahead of Wednesday's release from Germany.
US TSY OPTIONS: Large Jan'26 10Y Put Buyer
- +25,000 TYF6 111.5 puts, 22
US: Trump-Money Left Over From USD2k Payments Will Pay Down National Debt
President Donald Trump posts on Truth Social: "All money left over from the $2000 payments made to low and middle income USA Citizens, from the massive Tariff Income pouring into our Country from foreign countries, which will be substantial, will be used to SUBSTANTIALLY PAY DOWN NATIONAL DEBT. Thank you for your attention to this matter! President DJT"
