NATGAS: Gas Summary at European Close: TTF Slips Back
TTF has risen to its highest level since July 1, extending today’s gains. Front month is likely seeing additional support from an ongoing heatwave in North Asia, coupled with a slight upward revision of NWE’s temperatures.
- TTF AUG 24 up 1.6% at 34.4€/MWh
- Temperatures in NW Europe are set to remain above normal to support cooling demand although could see a pullback closer to normal over the coming weekend.
- Norwegian pipeline supplies to Europe are almost unchanged on the day at 340.3mcm/d with Gassco showing outages falling to 10.7mcm/d tomorrow and just 1.1mcm in early August.
- European gas storage is up to 84.49% full on July 28 according to GIE compared to the five-year average of 75.3%.
- Net European gas storage injection rates in the week to July 28 have fallen back below the previous five-year average but stores are still on track to fill ahead of the upcoming heating season.
- The total estimated quantity of LNG on tankers that have not unloaded for at least 20 days increased by 16% last week to 4.59m mt as of July 28, Bloomberg estimated.
- Russia was close to overtaking the US as Europe’s top LNG supplier in July.
- Japan’s Eneos Holdings restarted the sole crude distillation unit at its 129kb/d Chiba refinery near Tokyo on July 28, said a company spokesperson cited by Bloomberg.
- Preliminary data suggests booming natural gas demand in India with H1 2024 growth of almost 20% y/y while LNG imports rose almost 30% yoy, according to IEA analyst Greg Molnar.
- Global LNG demand rose 2% on the week in July 22-28 to 6.77m metric tons mainly driven by Asia, according to BNEF.
- India's HPCL is looking for LNG import deals to support its expected 5m mtpa LNG terminal in western India by the end of 2024.
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USDCAD TECHS: Watching Support
- RES 4: 1.3977 High Oct 13 ‘23 and a key M/T resistance
- RES 3: 1.3899 High Nov 1 and a key resistance
- RES 2: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
- RES 1: 1.3734/3792 High Jun 27 / Jun 11
- PRICE: 1.3687 @ 16:29 BST Jun 28
- SUP 1: 1.3626/3590 Low Jun 25 / Low May 16 and a key support
- SUP 2: 1.3547 Low Apr 9
- SUP 3: 1.3512 50.0% retracement of the Dec 27 - Apr 16 bull cycle
- SUP 4: 1.3478 Low Apr 4
USDCAD has recovered from its most recent lows. Price has recently traded through the Jun 12 low of 1.3680, and 1.3677, the 50-day EMA. The break signals scope for a continuation lower, potentially towards key support at 1.3590, the May 16 low. Clearance of this level would threaten a bullish theme. The medium-term trend outlook is bullish and a stronger resumption of gains would refocus attention on key resistance at 1.3846, Apr 16 high.
US TSYS: Month/Quarter-End Positioning Outweighs Dovish Data React
- It appeared month/quarter-end positioning outweighed Friday's dovish reaction to Core PCE inflation that was on balance a little softer than expected in May, printing 0.08% M/M vs consensus of 0.1% that had tilted higher with an average unrounded 0.13% M/M.
- Treasury futures tracked higher after UofM Inflation expectations were revised lower: 1Y inflation expectations: 3.0% (cons 3.2, prelim 3.3) in June final after 3.3% in May; 5-10Y expectations: 3.0% (cons 3.1, prelim 3.1) in June after 3.0% in May.
- Support was short lived, however, as rates as well as equities reversed course, extended lows heading into the London close. No obvious headline driver, trading desks widely cited month end, positioning squaring ahead of the first round of French elections (June 29-30).
- Treasury futures extended lows: TYU4 taps 109-27 (-13) with attention on a firm short-term support at 109-26+, the 50-day EMA. A clear break of this average would signal scope for a deeper retracement, towards 109-00+, the Jun 10 low.
- Curves bear steepening: 2s10s +5.384 at -37.376 (lest inverted since the beginning of the month), 5s30s +4.490 at 17.151.
- In-line with the steepening, projected rate cut pricing through year end looks steady to mildly higher vs. pre-data levels (*): July'24 at -10% w/ cumulative at -2.5bp at 5.302%, Sep'24 cumulative -18.6bp (-17.5bp), Nov'24 cumulative -27.6bp (-26.6bp), Dec'24 -47.3bp (-45.3bp).
- Look ahead: shortened Fourth of July holiday week next week, FOMC minutes on Wednesday, Thursday closed, June employment data next Friday.
AUDUSD TECHS: Key Short-Term Resistance Remains Intact For Now
- RES 4: 0.6771 High Jan 3
- RES 3: 0.6751 76.4% retracement of the Dec 28 - Apr 19 bear leg
- RES 2: 0.6729 High Jan 12
- RES 1: 0.6714 High Jun 16 and the bull trigger
- PRICE: 0.6670 @ 16:28 BST Jun 28
- SUP 1: 0.6576 Low Jun 10 and a key support
- SUP 2: 0.6558 Low May 8
- SUP 3: 0.6539 50.0% retracement of the Apr 19 - May 16 bull leg
- SUP 4: 0.6497 61.8% retracement of the Apr 19 - May 16 bull leg
AUDUSD continues to trade inside a range that highlights two important levels; a key resistance at 0.6714, the May 16 high, and a key support at 0.6576, the Jun 10 low. Both levels represent important short-term directional triggers. Clearance of 0.6714, would open 0.6751, a Fibonacci retracement. A break through 0.6576 would expose 0.6558 initially, the May 8 low. Looking at MA studies, they are in a bull-mode set-up and highlight an uptrend.
