NATGAS: Mid-Day Gas Summary: TTF Falls on Week
Dec-06 12:19
TTF is trading lower again, with slightly milder temperatures for H2 December, while LNG import flows have increased this week. Upside from supply risk also eased with Russia allowing more flexibility to gas payments following sanctions on Gazprombank.
- TTF JAN 25 down 0.9% at 46.13€/MWh
- TTF Q1 25 down 1.1% at 46.01€/MWh
- Temperatures in NW Europe are forecast to fall below normal into next week before holding at or slightly below normal through mid-December.
- Norwegian pipeline supplies to Europe have recovered up to 338.5mcm/d today, according to Bloomberg.
- European gas storage withdrawals rose back above normal on the day as total stores fell to 83.61% full on Dec. 4, according to GIE, compared to the previous five-year average of 85.8%.
- On Thursday, Putin changed the way foreign buyers of Russian gas have to pay for supplies, in a bid to ease sanctions concerns for those using Gazprombank for supplies in Europe and Turkey.
- US LNG export terminal feedgas supply is estimated near the highest since January at 14.13bcf/d today,
- Germany’s SEFE signed a contract for the supply of half a million tonnes of LNG in 2026 from Angola LNG according to a press release on Friday.
- Ukraine’s DTEK/D.Trading could receive its first US LNG cargo with the arrival of the Gaslog Savannah into the terminal at Revithoussa on Dec. 27, according to ICIS.
- Some Chinese state-owned and second-tier oil and gas companies have been looking to sell LNG cargoes for Jan-Feb 2025 to alleviate pressure from growing inventories and weak demand, Platts said.
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FOREX: Renewed Weakness for EURUSD, Pressuring 1.07 Handle
Nov-06 12:16
- Greenback strength finding another tailwind in recent trade as US 30-year yields rise by 22bps to the highest level since late May. Single currency weakness continues to standout across G10, briefly extending session losses to 2% against the dollar.
- The sharp sell-off today in EURUSD has resulted in a clear reversal of the recent Oct 23 - Nov 5 correction. The breach of 1.0761, the Oct 23 low, confirms a resumption of the downtrend.
- Below here, attention turns to 1.0666, the June 26 low and a key support. Protracted weakness would place focus on 1.0611, the 38.2% retracement of the Sep ‘22 - Jul ‘23 bull cycle.
- The Eurozone data calendar remains light for the rest of the week, whereas in the US, tomorrow’s Fed meeting highlights. The FOMC is on course to cut the Fed funds rate by 25bp as it takes another step in paring back restraint.
EQUITIES: EU Bank call spread
Nov-06 12:13
SX7E (20th Dec) 155/162.5cs, sold at 0.65 and 0.55 in 20k.
US DATA: Refis Slide Further On Continued Mortgage Rates Climb
Nov-06 12:11
- MBA composite mortgage applications slid -10.8% last week (sa), a sixth consecutive weekly decline after broadly pausing the week prior when higher new purchase applications offset lower refis.
- The story was much clearer cut this week, with refis tumbling -18.5% after -6.3% and new purchases -5.1% after +5.0%.
- Refi applications have more than halved since late September for their lowest since May, unwinding a rebound that had been seen as mortgage holders had looked to benefit from lower rates.
- Instead, 30Y conforming rates increased a further 8bp to 6.81% after the prior week’s 21bp jump, for a 67bp increase from late September levels. A further headwind is in store for applications with 10Y Treasury yields currently 18bps higher than the 4.28% averaged in the week to Nov 1.
- Note that on regular-jumbo loan spreads, the previous week’s sizeable increase to -4bps looks to have been an anomaly with the spread widening back to a more typical -17bps.
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