US NATGAS: Henry Hub Ticks Higher Ahead of EIA Storage Data
Jul-03 11:27
Henry Hub front month ticks higher to extend the recover from a low of $3.293/mmbtu on July 1 ahead of the updated EIA storage data and 4th of July holiday tomorrow.
- The EIA weekly gas inventories for the week ending June 27 will be released today at 10:30 ET. EIA gas inventory change forecasts (bcf): +47 (BBG), +53 (RTRS), +51 (WSJ) and +49 (NGI). The seasonal five-year average shows a net injection of around 61bcf.
- Lower 48 natural gas demand is estimated down 1.98 bcf/d to 74.2 bcf/d today, Bloomberg shows, but still above the previous seasonal five-year average of around 69 bcf/d.
- Average Lower 48 temperatures are forecast to rise further above normal through the coming weekend. The NOAA 6-14 day forecast shows above normal across the US except for central areas. The GFS 6z 15day has edged down just 0.5 CDDs nationally.
- US domestic natural gas production is estimated almost unchanged on the day at 107.44 bcf/d today compared to the 30-day average of 106.15 bcf/d, according to BNEF.
- Total feedgas flow to US LNG export terminals are estimated 135 mmcf/d higher today at 14.1 bcf/d, Bloomberg shows. A drop in Corpus Chirsti supply, reversing the increase earlier in the week, was offset by a recovery in Freeport feedgas.
- Export flows to Mexico are estimated 74 mmcf/d lower at 7.52 bcf/d today, BNEF shows.
- Nymex Henry Hub daily aggregate traded futures volume was down to 316k on July 2.
- US Natgas AUG 25 up 2% at 3.56$/mmbtu
- US Natgas SEP 25 up 2.1% at 3.58$/mmbtu
- US Natgas JUL 26 up 1.2% at 4.18$/mmbtu
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LOOK AHEAD: Tuesday Data Calendar: Factory Orders, JOLTS Jobs, Fed Speakers
Jun-03 11:26
- US Data/Speaker Calendar (prior, estimate)
- 03-Jun 1000 Factory Orders (3.4% rev, -3.0%), ex-Trans (-0.4% rev, 0.2%)
- 03-Jun 1000 Durable Goods Orders (-6.3%, -6.3%), ex-Trans (0.2%, 0.2%)
- 03-Jun 1000 Cap Goods Orders Nondef Ex Air (-1.3%, -1.3%), ship (-0.1%, -0.1%)
- 03-Jun 1000 JOLTS Job Openings (7.192M, 7.100M)
- 03-Jun 1000 JOLTS Job Openings Rate (4.3%, --)
- 03-Jun 1000 JOLTS Quits Level (3.332M, 3.271M), rate (2.1%, --)
- 03-Jun 1000 JOLTS Layoffs Level (1.558M, 1.614M), rate (1.0%, --)
- 03-Jun 1130 US Tsy $60B 6W bill auction
- 03-Jun 1245 Chicago Fed Goolsbee moderated Q&A
- 03-Jun 1300 Fed Gov Cook economic outlook (text, Q&A)
- 03-Jun 1530 Dallas Fed Logan, Fed listens event (text, no Q&A)
CANADA: USDCAD Focus on 1.3643 Support, BOC Rate Decision Wednesday
Jun-03 11:21
- USDCAD (+0.15%) is exhibiting a relatively tight range on Tuesday, despite the more constructive tone for the greenback. Although off recent cycle lows, USDCAD posted its lowest daily close since October on Monday, keeping the CAD’s recent resilience in focus as we approach this week’s BOC rate decision.
- We believe that better-than-expected GDP and a pickup in core inflation should tilt the balance toward a hold tomorrow. MNI’s full preview is here: https://mni.marketnews.com/3HqClXT
- Price action backs up the prevailing bear trend for USDCAD evidenced by the 20-day EMA capping the pair’s gains well last week. Sights are on 1.3643 next, the Oct 9 low/Sep high and below here, attention will be on 1.3579, a Fibonacci projection.
- The break-even on an overnight straddle sits at +/- 50 pips, suggesting markets see little risk of a significant breakout over the BOC, and place greater attention on Friday’s US employment data.
- Scotiabank points to CPI expectations remaining elevated, tariff related risks and the fact the markets aren’t pressuring the BOC as bolstering the case for a hold. Goldman Sachs think CAD could benefit from a slightly more hawkish BOC and believe better growth will be a larger positive impulse for the currency in the medium-term.
BONDS: The BTP/Bund spread is testing the September 2021 low
Jun-03 11:20
- The BTP/Bund continues to find some support at the September 2021 low, situated circa ~97.7bps.
- For now the spread sits just a small 0.4bp wider but at 97.6bps.
- Further tightening bias would still target the Psychological 90.00bps level next, printed a 90.4bps low in 2021, its lowest since mid March 2015.
- It is Worth keeping an eye on how we progress from here.
(Chart source: MNI/Bloomberg).
