NATGAS: Henry Hub Holds Intraday Gains
Dec-24 17:21
US natgas prices are holding most of their gains on the day, hovering near a 23-month high. Support comes from strong flows to LNG terminals, cold weather forecasts, and the resulting increased heating demand.
- US Natgas JAN 25 up 6.2% at 3.88$/mmbtu
- US Natgas FEB 25 up 3.5% at 3.46$/mmbtu
- LSEG estimates 376 heating degree days over the next two weeks, compared with 370 estimated on Monday.
- The amount of gas flowing to the eight big U.S. LNG export plants rose to 14.13 bcf/d today, compared to 13.97 bcf/d yesterday.
- LSEG said average gas output in the Lower 48 U.S. states rose to 103 bcfd so far in December from 101.5 bcfd in November.
- The forecast for average gas demand in the Lower 48, including exports, rose to 132.6 bcfd this week from 124.7 bcfd in the prior week.
- "The overnight weather data maintains a frosty weather system sweeping across the U.S. Jan 2-6, initially over the Midwest, then gaining territory to cover nearly all the U.S. besides portions of the West," NatGasWeather.com says in a note.
- Price rallies have occurred without sustained cold, which is a positive, as January and February are the coolest months and key catalysts for draws BNEF said.
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AUSSIE 3-YEAR TECHS: (Z4) Bearish Backdrop Building
Nov-22 22:45
- RES 3: 96.380 - High Mar 21 2023
- RES 2: 97.190 - High May 5 2023
- RES 1: 96.730/932 - High Sep 17 / 76.4% of Mar-Nov ‘23 bear leg
- PRICE: 95.920 @ 16:46 GMT Nov 21
- SUP 1: 95.760 - Low Nov 13
- SUP 2: 95.750 - Low 27 Nov ‘23
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
Prices hit a fresh pullback low at 95.760 across the global rates sell-off, extending losses on the break through 96.080 support. This confirms the downside bias, with support undercutting at 95.750 below ahead of major support of 95.480. For any corrective recovery to take hold, markets need to retake the 96.00 handle on a closing basis.
US TSYS: Underperforming Global Peers In Twist Flattening Move
Nov-22 20:10
Treasuries closed Friday little changed, underperforming global peers.
- Futures traded within Thursday's ranges, with data having little lasting impact: November flash services PMI was much stronger than expected and the highest since March 2022, though soft employment and output price inflation metrics softened the impact.
- Elevated final November UMichigan survey long-term inflation expectations saw Treasuries hit the worst levels of the day, but the move reversed.
- The limited move in yields stood in contrast to pronounced gains in Europe, where weaker-than-expected PMIs renewed concern over regional growth and boosted ECB rate cut pricing. That helped boost Treasuries in overnight trade, but as noted, the US rate move subsided.
- Futures volumes remained robust (2.4M TYZ4), though again it was largely quarterly roll-related.
- The curve twist flattened on the day, and Friday's moves left 10Y yields just 2bp lower on the week.
- Latest levels: The Dec 24 T-Note future is up 5/32 at 109-21, having traded in a range of 109-16.5 to 109-26.5. 2-Yr yield is up 1.8bps at 4.3665%, 5-Yr is down 0.9bps at 4.2948%, 10-Yr is down 1.8bps at 4.4041%, and 30-Yr is down 1.1bps at 4.5906%.
- MNI's weekly US macro wrap is here (PDF).
- Next week's schedule is condensed by the Thanksgiving holiday, with highlights including FOMC Minutes (MNI Preview here - PDF) and GDP/PCE data.
OPTIONS: US Options Summary
Nov-22 19:59
Friday's US rates/bond options flow included:
- SFRZ4 95.50/95.56/95.62c fly, bought for 0.75 in 5k total.
- SFRF5 95.75/95.62/95.50p fly, bought for 3 in 5k.
- SFRM5 96.50/97.00cs, sold at 5.25 in 8k.
- SFRM5 97.00/97.50c strip vs SFRZ5 97.50c, bought the strip for flat in 5k
- SFRZ5 96.125 ^ sold at 87.5 in 500
- 2QH5 97.25/97.50cs, bought for 1.5 in 5k
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