US NATGAS: Henry Hub Drifts Lower
Jul-09 12:08
Henry Hub front month has drifted down from a high of nearly $3.47/mmbtu yesterday as signs of a slightly cooler weather forecast combine with downward pressure from curtailed LNG exports and steady production.
- Lower 48 natural gas demand is estimated down 3.47 bcf/d to 77.53 bcf/d today after a revision yesterday to the highest since June 26 at 81 bcf/d, Bloomberg shows.
- The weather forecast for central US has cooled but the Pacific and East regions remain above normal, the NOAA 6-14 forecast shows. Average Lower 48 temperatures are above normal until July 16 before cooling slightly. The GFS 6z 15day has risen just under 5 CDDs nationally.
- US domestic natural gas production is estimated down 1.07 bcf/d to 105.3 bcf/d today, according to BNEF, although data could still be revised later in the day. The previous 30-day average is 106.3 bcf/d.
- Total feedgas flows to US LNG export terminals are down 274 mmcf/d on the day at 15.0 bcf/d today, Bloomberg shows. Gas supply into Corpus Christi LNG has been restricted since Saturday amid pipeline maintenance. Sinton Compressor Station maintenance is scheduled for July 8-10.
- Export flows to Mexico are estimated up 49 mmcf/d today to 7.25 bcf/d after falling to 6.57 bcf/d on June 6, BNEF shows.
- Nymex Henry Hub daily aggregate traded futures volume was 396k on July 8.
- US Natgas AUG 25 down 1.6% at 3.29$/mmbtu
- US Natgas SEP 25 down 1.4% at 3.32$/mmbtu
- US Natgas JUL 26 down 0.1% at 4.11$/mmbtu
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FOREX: Subdued Volumes Contain Spot, Limiting Vol and Boosting Carry Theme
Jun-09 12:01
- Currency volumes across G10 are unsurprisingly subdued considering the intraday range play across G10 FX, with JPY futures ~10% below average for this time of day, EUR futures ~20% below and GBP futures ~30% below.
- Risk and market activity should pick into the second half of the week with the US inflation prints, the 30-year Treasury auction, the UK spending review details and any potential outcomes of the US-China trade talks, but it's doing little to prop up implied vols - one-week JPY vols have dipped below 10 points today for the first time this month (with similar price action in the front-end of the GBP and EUR curves), a level that markets rarely hold below for any sustained period.
- This pressure on the front-end of the vol curve continues to work in favour of the dominant carry trade themes we've noted since US Liberation Day. While the long-held status of JPY as a funding currency has ebbed since last year's intervention, other currencies have stepped in to take advantage of regional dislocations (most recently HKD and CNY), which are compensating for falling policy rates among traditional carry targets such as the MXN, AUD and others.
SPAIN T-BILL AUCTION PREVIEW: On offer tomorrow
Jun-09 12:01
Tesoro Publico has announced it will be looking to sell a combined E2.0-3.0bln of the following letras at its auction tomorrow, June 10
- the 3-month Sep 5, 2025 letras
- the 9-month Mar 6, 2026 letras
OPTIONS: Larger FX Option Pipeline
Jun-09 11:58
- EUR/USD: Jun10 $1.1300-20(E1.5bln), $1.1400-05(E2.2bln); Jun11 $1.1400(E2.0bln); Jun12 $1.1350(E1.6bln), $1.1395-00(E1.3bln), $1.1440-50(E2.5bln), $1.1500(E2.2bln)
- USD/JPY: Jun12 Y143.85-00($1.0bln)
- AUD/USD: Jun12 $0.6475-85(A$1.1bln)
