AMERICAS OIL: Mexican Reforms to Offer Added Flexibility to Pemex:mericas
Jan-29 19:24
Mexico’s Pemex will be able to develop oil and gas fields in partnership with private operators as part of major energy sector overhauls, BNamericas reported.
- "Pemex will have the possibility of deciding whether to join with private companies in mixed contracts," energy minister Luz Elena Gonzalez said.
- Gonzalez said the new model will enable Pemex "to complement its capabilities and financing."
- Pemex produces 95% of Mexico’s oil and gas but is in debt of around US$100bn and another US$20bn owed to suppliers, meaning it lacks resources for significant investments.
- Pemex’s liquids output was 1.62m b/d in 2024, less than half of the 3.4m b/d peak in 2004. The current target is output of 1.8m b/d.
- Former President AMLO, in power 2018-2024, blocked private operators from upstream after a brief period of liberalisation following earlier reforms in 2013.
- The new legislation will enable Pemex to set up shareholding partnerships with other oil and gas companies to operate its fields.
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FOREX: EURJPY Sells Off Sharply on Lower Equities and Yields
Dec-30 19:22
- Lower US yields initially contributed to a lower greenback on Monday, with the likes of EURUSD and GBPUSD trading with a strong bid across the European morning. However, sharp weakness for equities abruptly altered the sentiment in currency markets, with the dollar paring losses and the Japanese yen then notably outperforming.
- This was best evidenced by the significant weakness for EURJPY (-0.80%), which fell around 200 pips from session highs to print a low of 162.82. Initial firm support for the cross lies at 162.34, the 20-day EMA and for now, the pullback is considered technically corrective with potential month/year end flow dynamics potentially contributing.
- For EURUSD, a session low of 1.0372 keeps bearish conditions firmly in play. The trend condition continues to highlight scope for a test of key support at 1.0335, the Nov 22 low and a bear trigger.
- The Swiss Franc was less interested by today’s moves across equity/bond markets, and notably USDCHF rose to fresh post-election highs of 0.9074, also representing the highest level for the pair since May. Above here, the year’s best level at 0.9224 remains the most obvious target should the trend continue.
- In emerging markets, USDMXN stands out having risen 1.5% to trade at a one-month high. Resistance to watch remains at 20.8313, the Nov 26 high, and a breach of this hurdle would confirm a resumption of the uptrend. In contrast, the Brazilian real trades higher on the session, with the central bank stepping in once more, auctioning 1.8 billion in the spot market to curtail the BRL weakness.
EURGBP TECHS: Monitoring Resistance At The 50-Day EMA
Dec-30 19:00
- RES 4: 0.8448 High Oct 31 and reversal trigger
- RES 3: 0.8376 High Nov 19 and a bull trigger
- RES 2: 0.8356 High Nov 27
- RES 1: 0.8317/29 50-day EMA / High Dec 27
- PRICE: 0.8297 @ 16:09 GMT Dec 30
- SUP 1: 0.8223 Low Dec 19
- SUP 2: 0.8203 Low Mar 7 2022 and a major support
- SUP 3: 0.8200 Round number support
- SUP 4: 0.8188 1.00 proj of the Oct 31 - Nov 11 - 19 price swing
EURGBP is holding on to the bulk of its recent gains. Resistance at 0.8317, the 50-day EMA, has been pierced - but failed to trigger a sharper move higher. A clear breach of the EMA would undermine the bear theme and highlight a stronger reversal. A resumption of the primary downtrend would pave the way for a move towards major support at 0.8203, the Mar 7 ‘22 low and the lowest point of a multi-year range.
US TSY OPTIONS: Scale Seller Mar'25 10Y Vol
Dec-30 18:54
- -10,000 TYH5 109 straddles, 209-211 ref 108-30.5
