NATGAS: Mid-Day Gas Summary: TTF Falls
Nov-19 12:10
TTF front month has pulled back to reverse gains from earlier this week with milder weather expected next week while the market also digests renewed US efforts to strike a Ukraine peace deal.
- TTF DEC 25 down 2.5% at 30.92€/MWh
- Axios reported that the US has put together a new 28 point Ukraine peace plan after closed US-Russia discussions. It has been presented to the Ukrainians.
- The framework could be agreed by all parties by the end of the month, a senior White House official told Politico, and possibly as soon as this week.
- Slovakia is considering legal action against the European Union over the planned suspension of Russian gas supplies, Prime Minister Robert Fico said, cited by Bloomberg.
- Natural gas demand in NWE averaged 446 mcm/d for the week of Nov. 10-16, 2% lower w/w and 22% lower y/y, according to JPMorgan.
- Temperatures in NW Europe are forecast below normal in the coming days but expected to recover closer to normal next week. CWE wind generation has been revised up for late this week/early next week but will decline again mid/late next week.
- NW European LNG sendout has risen to 302mcm/d on Nov. 18, the highest since March and compared to an average of 263.9mcm/d over the previous week, Bloomberg shows.
- European gas storage was down to 81.68% full on Nov. 17, according to GIE data, as net withdrawals rise above normal and to the highest since March. The previous five-year seasonal average is 90.2% full.
- Russian LNG producer Novatek has dropped the prices on its Arctic 2 LNG cargoes by 30-40% since August to encourage Chinese buyers, Reuters sources report.
- LNG stockpiles held by Japanese utilities rose by 13.8% on the week to Nov. 16 to 2.23m tons, according to trade ministry data.
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CHF: EURCHF Nearing Key Support Ahead Of Inaugural SNB Meeting Notes
Oct-20 12:09
- Price action last week saw EURCHF break notably below 0.9300, a support level that has broadly been respected over the last six months. Spot has subsequently narrowed the gap to a crucial cluster of support between 0.9206-22, with Friday's 0.9219 print further strengthening the significance of this area from a technical viewpoint. Clearance of the lows would place EURCHF at its lowest since the peg removal in 2015.
- Domestically in Switzerland, last week's SECO forecasts would be consistent with an SNB policy rate of 0% for the foreseeable future. In real, trade weighted terms, the Franc stands only around 0.7% below the April highs. Clearance of these highs could prompt the SNB to harden their language on the Franc once again, having maintained their usual currency rhetoric in recent months that they remain “willing to be active in the foreign exchange market as necessary".
- This brings particular focus on the inaugural edition of the SNB meeting minutes, which will be published this Thursday. In the minutes, alongside any view on FX valuations, we will look for more insight on whether Chairman Schlegel's non-mention of side effects of potential negative rates in his September opening remarks was a dovish or hawkish policy signal.
- Société Générale write today they "remain in wait-and-see mode" but that "there is merit in […] the safe -haven qualities of the CHF, relative to the EUR and GBP".
- Given the illiquidity back in 2015, support levels below 0.9200 are hard to pin-point. Fibonacci projection levels would place immediate attention on 0.9099 and 0.9032. USDCHF cycle lows at 0.7829 remain the key medium-term support level for the pair.
STIR: Repo Reference Rates: Retreat
Oct-20 12:02
- Secured Overnight Financing Rate (SOFR): 4.18% (-0.12), volume: $3.022T
- Broad General Collateral Rate (BGCR): 4.16% (-0.09), volume: $1.180T
- Tri-Party General Collateral Rate (TCR): 4.16% (-0.09), volume: $1.145T
- (rate, volume levels reflect prior session)
SWEDEN: Mandates 2028 USD Bond Via Syndication
Oct-20 11:59
"*MANDATE: KINGDOM OF SWEDEN $BENCHMARK 1/2028 BOND OFFERING" Bloomberg
"*NEW DEAL: SWEDEN $BENCHMARK JAN. 2028 BOND SOFR MS+30 AREA" Bloomberg
- This is the second foreign currency syndication of the year. In June, Sweden sold E2bln (~SEK21.8bln) of the 2.00% Jun-28 Sweden EUR bond.
- Riksgalden's May borrowing report noted that "the Debt Office will issue two foreign currency bonds in 2025 instead of one. The two loans together correspond to around SEK 39 billion. In keeping with the plan from November, we are also planning a loan in 2026 corresponding to approximately SEK 19 billion".
- With the EUR sale earlier this year raising almost SEK22bln, a transaction size totalling USD1.75-2.00bln (i.e.around SEK16.5 - SEK19bln) seems reasonable.
- A reminder that Riksgalden's November borrowing report, which will have to account for the Government’s expansionary 2026 budget plans, will be released in late November.
