JET FUEL: Jet Fuel Demand to Drop for Fourth Week: BNEF
Sep-05 17:35
Global passenger jet fuel demand is set to drop for the fourth week in a row, to 6.96m b/d, BNEF said.
- This represents a 1.3% week-on-week decline in implied demand.
- Asia and North America are poised to lead the decline, cutting 48.5k b/d and 28.5k b/d of demand respectively.
- China’s scheduled domestic flights are set to fall 5% for the week from Sep. 3. The international flights of key Chinese airlines down 0.7% their annual growth and recovery from Covid-19 levels slows.
- Oceana is the only region on track to buck the bearish trend with a marginal uptick of 0.1% on the week.
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Historical bullets
GBPUSD TECHS: Bear Threat Remains Present
Aug-06 17:30
- RES 4: 1.3044 High Jul 17 and the bull trigger
- RES 3: 1.2968 High Jul 19
- RES 2: 1.2938 High Jul 24
- RES 1: 1.2838 20-day EMA
- PRICE: 1.2701 @ 16:32 BST Aug 6
- SUP 1: 1.2673 Low Aug 6
- SUP 2: 1.2672 50.0 retracement of the Apr 22 - Jul 17 bull cycle
- SUP 3: 1.2613 Low Jun 27 and a key support
- SUP 4: 1.2584 50.0 retracement of the Apr 22 - Jul 17 bull cycle
GBPUSD remains in a bear-mode condition. Last week’s move down resulted in a break of the 50-day EMA - at 1.2790 - and a breach of a trendline at 1.2771, drawn from the Apr 22 low. The clear break of the EMA and the trendline, suggests scope for an extension towards 1.2672 next, a Fibonacci projection. On the upside, initial resistance to watch is at 1.2838, the 20-day EMA.
STIR: Fed Rates Continue To Retrace Post-Payrolls Slide
Aug-06 17:25
- Fed Funds implied rates have seen a further sizeable push higher today, aided by a continued recovery in equity indices and the NY Fed’s debt report not showing anything particularly troubling for Q2 delinquencies in a further pushback of yesterday’s recession concerns-linked price action.
- Cumulative cuts from 5.33% effective: 45bp Sep, 77bp Nov, 106bp Dec and 127bp Jan.
- The Dec’24 implied rate has fully reversed yesterday’s initial risk-off slide and starts to retrace the initial payrolls drop. It has seen 27bp of cuts trimmed since a generally solid ISM Services report, although at 106bp of cumulative cuts it remains some way off ~89bp pre-payrolls.
- Emergency cut odds are fully back at pre-payrolls levels at just 1.5bps in the August contract.
- There haven’t been any unscheduled Fedspeak appearances today, with limited post-payrolls appearances sticking to a theme of cautioning an overreaction to a single data print.
- Scheduled Fedspeak ahead looks particularly light. Barkin (’24 voter) is potentially next of interest on Thu at 1500ET but with jobless claims data likely more of note.
US TSY FUTURES: Extending Lows
Aug-06 17:18
- Treasury futures are extending lows in the minutes after the 3Y Note auction came out near in-line with WI of 3.809% w/ 3.810% high yield.
- Futures decline most likely unrelated to the Tsy supply, slips lower while equities climb to session highs (S&P Eminis +104.5 at 5322.00). Sep 10Y futures at 113-09 (-25.5) nearing Friday's pre-NFP levels around 113-00. Still above itinitial technical support at 112-21, Aug 2 low. Curves mildly steeper, 2s10s +2.402 at -11.812.
