US NATGAS: Gulf Coast Gas Daily Fundamentals – Sep 02nd
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Agua Dulce rose 3 cents and HSC rose 8 cents yesterday, bringing the AD-HSC spread to -$0.04/MMBtu. Transco Z4 fell $1.74/MMBtu and TGP 500 fell $1.38/MMBtu, both trading around $5/MMBtu outright.
- Weather is expected to remain above normal over the next 10 days. For the 5-day outlook compared to normal, Corpus will be 16 days higher, Houston will be 23 days higher, and NOLA will be 13 days higher.
- Gulf Coast demand is down 220 MMcf/d overnight at 26.9 Bcf/d. LNG demand is down 542 MMcf/d and non-LNG demand is up 322 MMcf/d. LNG demand is driven by lower flows to Sabine, and Calcasieu Pass, both in the path of Tropical Storm Edouard. Flows likely declined due to dock and shipping impacts from the storm.
- Production is down 0.5 Bcf/d to 24.4 Bcf/d after a 0.5 Bcf/d upward revision yesterday. Haynesville production is down 532 MMcf/d overnight and Eagle Ford volumes are down 77 MMcf/d. If HV volumes hold intraday, it will be the lowest level since the first week of July.
- Flows are down across the region. Southeast outflows are down 133 MMcf/d, Permian inflows are down 222 MMcf/d with Whistler declines being offset by PHP increases, and Northeast inflows are down 382 MMcf/d.
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US TSYS: Early SOFR/Treasury Option Roundup:Put Unwinds, Rate Hike Pricing Cools
SOFR & Treasury options trade outlined below: leaning towards low delta puts/put spds - two-way with some unwinds overnight. Underlying futures recovering from Friday's retreat - TYU6 back nearing Friday pre-open highs (TYU6 108-16, +16) with crude sliding (WTI -4.95 at $79.72/bbl) after Pres Trump held off on striking Iran over weekend (again) pledging a Hormuz Strait deal is close. Projected rate hike pricing eases vs. late Friday levels (*): Sep'26 at +15.7bp (+16.7bp), Oct'26 at 22.9bp (24bp), Dec'26 33.4bp (+35.9bp), Jan'27 37.4bp (41.5bp).
- SOFR Options:
- 1,000 0QZ6 96.25/96.62 1x2 call spds vs. 2QU6 96.18/96.43 1x2 call spds
- Block, 5,000 0QU6 95.50/95.75/96.00 put flys, 7.0 ref 95.805
- 1,700 0QU6 95.5/95.75/96.00 put flys ref 95.875
- 1,000 TYU6 108.5 straddles, ref 108-15
- 5,000 SFRU6 96.06/96.31 put spds, 15.75 ref 96.125
- 3,000 SFRU6 95.81/95.87/95.93 put flys, cab ref 96.125
- Treasury Options:
- +1,000 TYU6 108.5 straddles, 1-04
- over 10,400 wk1 TY 108 puts, 10 ref 108-14.5 (exp 8/7)
- -20,000 FVU6 106 puts, 17 ref 106-07.5
- Block, -4,000 TYU6 111 calls, 1 ref 108-13
- 1,500 TYU6/TYV6 112 call spds
- over 18,900 wk1 TY 109 calls, 4 ref 108-12
- -2,000 wk1 TY 108.25 calls, 24 ref 108-11.5 (exp 8/7)
- -2,000 TYU6 108/108.5 put spds, 13 ref 108-12.5
- +2,000 TYU6 107/108 put spds, 16 ref 108-12
- +2,000 TYV6 107 puts, 34 ref 108-02.5
- +5,000 TYU6 109/109.5/109.75 1x3x2 broken call flys, 4 ref 108-13.5
BUNDS: Looking to test Friday's high
- The German Bund is extending further gains as Desks unwind some of their positions.
- Seasonally, August is a Bullish Month, but the affairs in the Middle East will continue to be the main driver for Global Cross Assets.
- Friday's high is situated at 124.94. Above the latter would challenge last Tuesday's opening gap at 125.12, although most Desks will watch 125.25 which closely matched the 3.10% Yield level last Week.
EQUITY OPTIONS: EU Bank Call Spread
SX7E (18th Dec) 320/360cs 1x1.5, bought for 10.1 in 3k.
