NATGAS: Henry Hub Extends Post EIA Sell-Off

From our BOC preview out Monday (PDF link here) : The Bank of Canada is likely to keep the overnight rate at 2.75% on Wednesday June 4 (decision 0945ET), holding for a second consecutive time after a streak of cuts at seven consecutive meetings (and 225bp of reductions). 

• As has become the norm for BOC meetings, opinion is split on the outcome: rate markets are pricing in roughly 20% probability of a 25bp reduction, but that’s down from closer to 30% prior to last Friday’s solid Q1 / April GDP report, and over 60% before mid-May’s inflation data for April.
• While several analysts came out of the April meeting anticipating a cut in June, on the eve of the meeting that number has dwindled to a handful (many of whom changed their minds after seeing the GDP data – the Bloomberg survey median shifted to a hold from a cut after Friday), though many cite a “close call”.
• At this stage, markets price just one more full 25bp cut the remainder of 2025, 40bp total – and not until September. That’s up from 45bp / July just prior to the CPI release. We note that the MNI analyst median for the terminal rate has edged up to 2.125% from 2.00% prior to the April meeting – reflecting a less dovish path with a split of opinions between 2.00% and 2.25% terminal.
• The shift in market pricing and analyst opinion is reflective not just of the incoming data, but in the BOC’s stated approach to monetary policy at a time of significant tariff-related economic uncertainty.
• As we wrote ahead of April’s hold, ”the BoC may prefer to maintain policy steady as it awaits greater clarity over the outlook.” Seven weeks have passed since April’s meeting but we’re not sure there would be much of a meaningful difference in that sentiment.
• Our preview goes through the data and developments since the April meeting, which on net are likely to keep the BOC waiting for further information in the subsequent 8 weeks to make a better-founded decision whether to ease.
• Statement / Press Conference: The BoC will emphasize once again that it is committed to maintaining price stability amid high levels of uncertainty. We wouldn’t expect any sort of firmer forward guidance.
• Monetary Policy Report / Projections: There is no MPR at this meeting – the next release is in July.

• RES 4: 150.49 High Apr 2   
• RES 3: 149.28 High Apr 3
• RES 2: 147.67/148.65 High May 14 / 12 and a key resistance
• RES 1: 144.27/146.28 20-day EMA / May 29 high   
• PRICE: 143.93 @ 16:22 BST Jun 3
• SUP 1: 142.12 Low May 27 and a key support
• SUP 2: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg
• SUP 3: 139.89 Low Apr 22 and a bear trigger 
• SUP 4: 138.82 1.50 proj of the Feb 12 - Mar 11 - 28 price swing 

A bear cycle in USDJPY remains in play and recent weakness reinforces current conditions. A reversal price pattern on May 29 - a shooting star candle - signals the end of the correction between May 27 - 29. Key short-term resistance has been defined at 146.28, the May 29 high. Sights are on 142.12, the May 27 low. Clearance of this level would confirm a resumption of the bear leg and open 139.89, the Apr 22 low.    

• Date $MM Issuer (Priced *, Launch #)
• 06/03 $3B *AfDB: $2B WNG 3Y SOFR+33, $1B WNG 10Y SOFR+64
• 06/03 $2.25B #NAB $750M 3Y +40, $750M 3Y SOFR+65, $750M 5Y +52
• 06/03 $2B #Bank of NY Mellon $750N 3NC2 +48, $500M 3NC2 SOFR+68, $750M 11NC10 +85
• 06/03 $2B *Prov. of Ontario: 10Y SOFR+95
• 06/03 $1.5B *CPPIB 5Y SOFR+54
• 06/03 $1.5B #GE Healthcare $650M +5Y +78, $850M 10Y +103
• 06/03 $1.25B *Kommuninvest +3Y SOFR+39
• 06/03 $1B *Hong Kong 5Y Green +50
• 06/03 $700M #Corebridge Global 5Y +85
• 06/03 $500M IADB 2030 tap SOFR+40
• 06/03 $500M *Autodesk WNG 10Y +87