OIL: Mid-Day Oil Summary: Crude Falls
Nov-19 12:07
Brent has softened as the market digests signs of renewed efforts by the US to strike a Ukraine peace deal.
- Brent JAN 26 down 1.9% at 63.67$/bbl
- WTI DEC 25 down 2% at 59.52$/bbl
- 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 report is based on comments from both US and Russian officials and includes plans for peace, security guarantees for Ukraine and Europe, and the prospect for US relations with Russia & Ukraine.
- 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. However, given failed previous attempts, a deal still seems a long way off.
- US/EU sanctions against Russian majors Rosneft and Lukoil come into effect on Friday amid signs of refiners looking to alternative sources.
- The volumes of crude on tankers reached a fresh high with 1.4 billion barrels either sailing to destinations or in floating storage, Vortexa data showed cited by Bloomberg.
- Most of India’s state-run refiners have kept long-term oil supply from Iraq steady for 2026, according to Bloomberg sources.
- At least 7.7 mn bbls of Russian Urals linked to Rosneft/Lukoil are set to reach India’s shores after the US restrictions take effect on Nov. 21, according to Kpler.
- South Sudan said it had resumed oil shipments after attacks on energy facilities in neighbouring Sudan disrupted activity, Bloomberg reports.
- The economic opportunity for selling West of Suez crudes into the west coast of India is getting wider, but compatibility issues could limit the grades’ blending potential, according to Sparta Commodities analyst June Goh cited by Bloomberg.
- API data yesterday showed a US crude stock build of 4.45mbbl but with a 0.8mbbl draw at Cushing. Gasoline stocks rose 1.55mbbl and distillates rose 0.577mbbl.
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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.
FOREX: USD Index Hits New Daily High Into NY Crossover
Oct-20 11:57
The USD Index heads into the NY crossover at the highest levels of the day, topping Friday's high in the process. This puts EUR/USD briefly back below 1.1650 and has GBPUSD testing the 1.34 handle, adding to the evidence that the USD found a base on the back of Trump's optimism around a China deal, particularly as he called additional tariffs on Chinese imports as "not sustainable".
- With no tier one data due this week until Friday's rescheduled CPI print, and the Fed inside the media blackout period, market focus remains on geopolitics and leaders' meetings in the coming weeks (particularly Trump-Xi next week) and any prepwork that may take place this week.
- Vol markets are under pressure - particularly at the front-end of the curve. EURUSD one-week implied is pressured well toward YTD lows and saw very little benefit from capturing Friday's inflation print. This may signal markets seeing CPI as pretty inconsequential, particularly as the government shutdown drags on and the Fed's cutting cycle is well priced for 2 consecutive 25bps rate cuts.
