US NATGAS: Gulf Coast Natgas Fundamentals - Apr 21st
MNI Take: Agua Dulce and Houston Ship Channel both closed up 10 cent yesterday, maintaining a -10 cent spread between the hubs. The Gulf Coast is expected to be warmer than normal, allowing for CDDs to be up 15-24 CDDs above normal for the rest of the week. This deviation from normal with temps in the upper 80s should spur some incremental cooling demand in the region. Demand is holding flat this morning, but exports to Mexico and outflows to the Southeast are both up. With inflows not offsetting the demand strength, basis is likely to see support today.
- Houston week ahead weather forecasts are calling for warmer than normal weather. Houston cumulative CDDs increased by 15.2 compared with the prior forecast.
- Houston cumulative CDDs count for the next 5 days is 61.04, up 24 days from the 10-year normal, while the count for the next 14 days is 198.78, up 65.53 days from the 10-year normal.
- Corpus Christi cumulative CDDs count for the next 5 days is 67.43, up 15.89 days from the 10-year normal, while the count for the next 14 days is 219.39, up 41.97 days from the 10-year normal.
- Brownsville cumulative CDDs count for the next 5 days is 79.22, up 12.52 days from the 10-year normal, while the count for the next 14 days is 255.75, up 34.2 days from the 10-year normal.
- Gulf Coast demand is 22 Bcf/d today, up 0.03 Bcf/d from yesterday and down 0.04 Bcf/d from last week.
- Gulf Coast supply is 19.3 Bcf/d today, down 0.08 Bcf/d from yesterday and down 0.97 Bcf/d from last week.
- Permian inflows are 10.6 Bcf/d today, down 0.29 Bcf/d from yesterday and down 0.69 Bcf/d from last week.
- Gulf Coast exports to Mexico reached 3.5 Bcf/d today, up 0.24 Bcf/d from yesterday and up 0.23 Bcf/d from last week.
- MidCon net imports are 2.5 Bcf/d today, up 0.32 Bcf/d from yesterday and up 0.16 Bcf/d from last week.
- Outflows to the Southeast are 4.2 Bcf/d today, up 0.62 Bcf/d from yesterday and down 0.18 Bcf/d from last week.
- All fundamentals data is BNEF. Current figures as of publishing.
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USDCAD TECHS: Key Resistance Remains Intact For Now
- RES 4: 1.3845 High Jan 22
- RES 3: 1.3800 High Jan 23
- RES 2: 1.3753 High Mar 03 and key resistance
- RES 1: 1.3748 High Mar 19
- PRICE: 1.3714 @ 17:00 GMT Mar 20
- SUP 1: 1.3670/3526 20-day EMA / Low Mar 09
- SUP 2: 1.3482 Low Jan 30 and the bear trigger
- SUP 3: 1.3420 Low Sep 25 ‘24
- SUP 4: 1.3400 50.0% retracement of the 2021 - 2025 uptrend
Attention in USDCAD is on key near-term resistance and a bull trigger at 1.3753, the Mar 3 high. A clear break of this hurdle would confirm a range breakout, highlight a stronger bull cycle and confirm a clear breach of the 20- and 50-day EMAs. This would open 1.3800 initially, the Jan 23 high. For bears, a reversal would refocus attention on 1.3482, the Jan 30 low and bear trigger.
AUDUSD TECHS: Trend Needle Points North
- RES 4: 0.7284 High Jun’22
- RES 3: 0.7256 2.500 proj of the Nov 21 - Dec 10 - 18 price swing
- RES 2: 0.7208 61.8% of the Feb 25 ‘21 - Apr 9 ‘25 bear leg
- RES 1: 0.7187 High Mar 11 and the bull trigger
- PRICE: 0.7039 @ 16:59 GMT Mar 20
- SUP 1: 0.6979 50-day EMA and key support
- SUP 2: 0.6944 Low Mar 3
- SUP 3: 0.6897 Low Feb 6
- SUP 4: 0.6834 Low Jan 23
The trend condition in AUDUSD is unchanged, it remains bullish and the pair continues to trade above key support at 0.6979, the 50-day EMA. A clear break of this average would undermine the current bullish theme. The moving average set-up is in a bull mode position and this continues to highlight a dominant medium-term uptrend. A resumption of the trend would open 0.7208 next, a Fibonacci retracement point.
BOE: Summary of Analyst Views
- Just over half (11/21) of the analyst reviews that we have read still look for the next move from the MPC to be a cut. 4/21 look for a hike while 6/21 look for the Bank to remain on hold for their forecast horizon.
- In terms of those expecting hikes Daiwa, JP Morgan and Rabobank all look for the first hike in April with the former two looking for a 4.25% peak and Rabobank looking for a one-and-done. NatWest Markets look for the first hike in Q4-26 but then expect two further hikes in Spring 2027 to the highest peak of 4.50% seen in any analyst base case that we have seen.
- Note that of these analysts, 3/4 (all except NatWest Markets) expect cuts back to a least current levels within their forecast horizon.
- In terms of those looking for the next move to be a cut, none look for a move in April with 5 analysts expecting a June cut, 1 for July, 2 for November and the remaining 3 looking for cuts to begin in 2027.
- UniCredit has the lowest terminal rate, continuing to look for 2.75% while 4/21 analysts look for 3.00% terminal, 6/21 analysts look for 3.25% and 1/21 analyst looks for 3.50%. As noted above, NatWest Markets looks for hikes with no reversal but the remaining 8/21 analysts look for no moves from 3.75% throughout the forecast horizon.
