US NATGAS: Henry Hub Eases Back from High of Around $4.65/MMBtu
Nov-27 12:47
Henry Hub eases off the high of nearly $4.65/MMBtu amid thin volumes today with the US Thanksgiving holiday. Prices remain strong supported by record LNG exports, current cold weather and data showing a larger than expected storage draw yesterday.
- The EIA weekly gas inventories for the week ending Nov. 21 showed a withdrawal of 11 bcf compared to the seasonal five-year average of 25 bcf. Total stocks are down to 3,946 bcf, 23 below last year and 146 above the 5-yr avg.
- Lower 48 natural gas demand is estimated 5.07 bcf/d higher today at 95.59 bcf/d compared to the five-year seasonal average of around 85.5 bcf/d, Bloomberg shows.
- Average Lower 48 temperatures are forecast below normal through the coming week but could rise back above normal into the second week of December. NOAA shows below normal temperatures centred in the Midwest and north East. The GFS 6z 15day is over 12 HDD lower nationally.
- Feedgas supply to US LNG export terminals is unchanged on the day at a record high of 18.89 bcf/d.
- US domestic natural gas production is estimated 501 mmcf/d lower today after reaching a new high of 113.64 bcf/d yesterday, according to BNEF. North Dakota output is down again on the day to the lowest since June at 2.28 bcf/d.
- Export flows to Mexico are estimated 44 mmcf/d lower today at 6.64 bcf/d compared to the 30-day average of 6.51, BNEF shows.
- Nymex Henry Hub daily aggregate traded futures volume was 447k on Nov. 26.
- US Natgas JAN 26 down 0.2% at 4.55$/mmbtu
- US Natgas FEB 26 down 0.1% at 4.18$/mmbtu
- US Natgas DEC 26 up 0.4% at 4.75$/mmbtu
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FOREX: EURGBP Approaching Key Resistance at 0.8769
Oct-28 12:27
- Renewed pessimism for GBP has been on show Tuesday, amid increasing signs that UK Chancellor Reeves will have to raise income tax at the November 26 budget to fill a widening fiscal hole. Associated upward pressure on EURGBP (+0.31%) has prompted the cross to trade within 4 pips of key resistance and the bull trigger, located at 0.8769.
- Furthermore, the FT reported yesterday evening that the OBR is expected to cut its trend productivity forecast by 0.3pp, larger than the 0.1-0.2pp that had been expected by most analysts/independent forecasters and providing an additional sterling headwind.
- Moving average studies remain in a bull-mode position for EURGBP, highlighting a dominant technical uptrend. A break of 0.8769 would bolster bullish conditions, paving the way for a move towards 0.8835, the May 3 2023 high. The first support to monitor lies at 0.8685, the 50-day EMA.
- There is no tier 1 UK data this week which puts us at the mercy of external events and domestic fiscal headlines to some extent. In our latest Gilt Week Ahead, we round up the most relevant fiscal headlines, their impacts and their potential costs: https://mni.marketnews.com/3J8GNMl
OUTLOOK: Price Signal Summary - Fresh Cycle High In Gilts
Oct-28 12:15
- In the FI space, Bund futures are trading closer to their recent lows. The bear phase that started on Oct 17 is considered corrective and is allowing an overbought trend condition to unwind. Initial key support at 129.45, the 20-day EMA, has been breached. This exposes the 50-day EMA, currently at 129.08. For bulls, a reversal would refocus attention on the key resistance at 130.59, the Oct 17 high.
- A bull cycle in Gilt futures remains intact. The recent clearance of 93.17, the Oct 17 high, and a fresh cycle high high today, confirms a resumption of the uptrend and signals scope for an extension towards the 94.00 handle next and 94.24, a 1.618 projection of the Sep 3 - 11 - 26 price swing. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Note that the contract is overbought, a pullback would allow this condition to unwind. Firm support to watch lies at 92.27, the 20-day EMA.
