US NATGAS: Henry Hub Rallies on Day
Henry Hub has rallied following the expiry of the July futures contract yesterday, recovering from downside pressure after EIA data showed larger than expected US gas storage injections.
- US Natgas AUG 25 up 6.2% at 3.75$/mmbtu
- US Natgas SEP 25 up 6% at 3.76$/mmbtu
- Baker Hughes rig count: Gas: 109 (-2) - up 8 rigs, or 7.9% on the year.
- Lower 48 natural gas demand falls again on the day by 3.5 bcf/d to 74.3 bcf/d, Bloomberg shows. Demand is still above the previous seasonal five-year average and 30-day average around 71 bcf/d.
- The GFS 6z 15day has risen over 5 CDDs nationally.
- US domestic natural gas production was at 106.2 bcf/d yesterday compared to the 30-day average of 105.77 bcf/d, according to BNEF.
- Total feedgas flows to US LNG export terminals are estimated down 236 mmcf/d to 14.75 bcf/d today, Bloomberg shows, with a small dip in Sabine Pass supply as the facility returns from maintenance.
- Bahrain is expected to take around eight LNG cargoes per year, likely focused over the warmer summer months, according to ICIS analyst Alex Froley.
- China has completed construction of a 15 bcm/y gas pipeline, Bloomberg reports.
- Asian spot LNG prices fell this week from a four-month high as a ceasefire between Israel and Iran reduced the risk of supply disruption, Reuters reports.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MNI: Fed should take cautious approach - may minutes
- MNI: FED SHOULD TAKE CAUTIOUS APPROACH - MAY MINUTES
- FED: WELL POSITIONED TO WAIT FOR MORE CLARITY ON OUTLOOK
- FED: TARIFFS BOOST RISKS TO INFLATION, EMPLOYMENT
EURGBP TECHS: Fresh Short-Term Cycle Low
- RES 4: 0.8557 High Apr 28
- RES 3: 0.8541 High May 2
- RES 2: 0.8493 High May 9
- RES 1: 0.8447 50-day EMA and a key near-term resistance
- PRICE: 0.8387 @ 16:19 BST May 28
- SUP 1: 0.8373 Low May 27
- SUP 2: 0.8359 1.236 proj of the Apr 11 - 16 - 21 price swing
- SUP 3: 0.8316 Low Mar 28 and a key support
- SUP 4: 0.8277 1.618 proj of the Apr 11 - 16 - 21 price swing
A bear cycle in EURGBP remains in play and a fresh cycle low yesterday reinforces this theme. Resistance to watch is at the 50-day EMA at 0.8447. A clear break of this average is required to highlight a stronger reversal and shift attention to resistance at 0.8541, the May 2 high. On the downside, a resumption of the downtrend would pave the way for a move towards 0.8359, a Fibonacci projection.
BONDS: EGBs-GILTS CASH CLOSE: Yields Continue To Back Up
European yields backed up Wednesday, continuing their rise from Tuesday's lows, with Gilts underperforming Bunds.
- A soft long-end Japanese bond auction overnight set a weaker tone for global core FI early.
- In data, ECB 1-year ahead inflation expectations surprisingly rose but longer-term expectations were steady, muting the impact.
- On the day, the UK curve leaned bear steeper to the 10Y segment, with 30Y outperforming. The German curve more clearly bear steepened.
- BTPs led broader gains in much of the session, with 10Y yields falling to the lowest levels since February. 10-year EGB periphery/semi-core spreads tightened 0.3-1.0bps vs Bunds on the day.
- Thursday's calendar includes an appearance by BOE's Bailey; in data we get Spanish retail sales, and Italian confidence indicators and industrial sales.
- Attention for the week is on Friday's flash May inflation readings from Germany, Italy and Spain.
Closing Yields / 10-Yr EGB Spreads To Germany:
- Germany: The 2-Yr yield is up 0.6bps at 1.797%, 5-Yr is up 1.4bps at 2.107%, 10-Yr is up 2.2bps at 2.554%, and 30-Yr is up 2.9bps at 3.031%.
- UK: The 2-Yr yield is up 5.5bps at 4.075%, 5-Yr is up 5.4bps at 4.206%, 10-Yr is up 6.1bps at 4.727%, and 30-Yr is up 4.5bps at 5.48%.
- Italian BTP spread down 0.4bps at 98.1bps / French OAT down 0.5bps at 67.3bps
