OIL: Mid-Day Oil Summary: Crude Slightly Higher
Dec-10 12:12
Crude is slightly higher but still holding on to most of Tuesday’s losses and near the lower end of the recent range ahead of the US Fed decision and weekly US inventory data due later.
- Brent FEB 26 up 0.5% at 62.27$/bbl
- WTI JAN 26 up 0.6% at 58.62$/bbl
- Crude markets were softer yesterday with focus switching towards market oversupply risks as a Ukraine peace deal appears elusive but Russia is likely to continue to find ways around sanctions. IEA and OPEC are due to publish updated projections for the future market balance on Thursday.
- The global oil supply surplus is forecast to be around 2m b/d in 2026, according to ING.
- The EIA has cut its forecast for global oil demand in 2025 by 0.2m b/d to 103.9m b/d, according to its December STEO. Demand for 2026 is unchanged at 105.2m b/d.
- A US Fed rate cut is widely expected later today, which is positive for US energy demand, but a hawkish tone regarding the policy outlook would likely weigh on oil prices.
- A mooring at a CPC terminal in the Black Sea should be repaired by Dec 15, 2 days later than initially planned sources told Bloomberg.
- Kazakhstan will redirect some oil from its Kashagan field to China after a recent CPC drone attack by Ukraine its energy minister said on Wednesday Reuters reports.
- Kazakhstan’s oil output decline slowed in early December after a Ukrainian drone strike on the CPC disrupted flows, Reuters reports citing an industry source.
- Four of India’s seven refiners are now in the market for discounted non sanctioned Russian crude although Reliance continues to avoid the barrels, Bloomberg said.
- Shell said output from two of its Gulf of Mexico platforms was temporarily shut in on Tuesday due to a shutdown of its Hoover Offshore Oil Pipeline System (HOOPS).
- API data yesterday showed a US crude stock draw of 4.8mbbl and with Cushing unchanged on the week. Gasoline stocks rose 7.0mbbl and distillates rose 1.0mbbl.
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UK: MNI Gilt Week Ahead
Nov-10 12:01
For the full document click here.
- We look at how the BOE has changed market drivers and focus in the coming weeks and what you need to watch going forward.
- We also look at the upcoming events for the week ahead including the syndication and weekend fiscal highlights.
- There continues to be focus on UK lending operations with RONIA spiking once again, we look at this in a bit more detail but expect that RONIA will remain elevated until Thursday's STR operation.
- We also summarise the latest BOE MaPS survey - with early expectations for the remit revision and a drop in the median expectation of the neutral rate to 3.00% for the first time since early 2024.
- In addition we include balance sheet trackers, issuance calendars and an updated DMO issuance profile.
OUTLOOK: Price Signal Summary - Key Support In Gold Remains Intact
Nov-10 11:54
- On the commodity front, the downleg in Gold that started Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Price remains above a key support area at the 50-day EMA, at $3880.7. Clearance of this EMA would strengthen a short-term bear theme and signal scope for a deeper retracement. Initial resistance is at $4161.4, the Oct 22 high. A stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.
- The latest pullback in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that a bullish corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.87, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low.
US TSYS: Lower On Shutdown Hopes, Front-Loaded Supply Headlines Docket
Nov-10 11:53
- Treasuries have pared losses but still sit comfortably lower on the day in response to improved odds of the government shutdown ending after eight centrist Democrats on Sunday voted with Republicans on a new CR to fund the US government through Jan 30.
- Today’s docket focus should be on front-loaded supply ahead of Veterans Day tomorrow, with a 3Y auction along with heavy bill issuance.
- Cash yields are 2.4-3.3bp higher on the day, with increases slightly led by the belly possibly ahead of that 3Y supply.
- TYZ5 trades at 112-20 (-07+) off an earlier low of 112-15 on reasonable overnight volumes nearing 340k.
- Resistance is seen at Friday’s joint high of 113-02 (Nov 5 & 7 highs, a key level), but a bear threat is still present at 112-06 (Sep 25 low) before which lies 112-09+ (Nov 5 high) and other various support levels.
- Data: No releases of note.
- Fedspeak: Daly on Bloomberg TV (0830ET), Musalem on Bloomberg TV (0945ET)
- Coupon issuance: US $58B 3Y Note Auction - 91282CPK1 (1300ET). Last month’s 3Y auction stopped through by 0.8bp although saw both the bid to cover and indirect take receded.
- Bill issuance: US Tsy $86B 13W & $77B 26W bill auctions (1130ET) and $95B 6W bill (1300ET)
- Politics: Trump in bilateral meeting with President of Syria (1100ET), Trump participates in swearing-in ceremony for Ambassador to Republic of India (1500ET)
