NATGAS: Henry Hub Falls to Lowest Since Nov. 20
Henry Hub has fallen back to the lowest since Nov. 20 with strong production and mild weather across the US into mid-December likely to ease the current high demand.
- Lower 48 natural gas demand has eased from the highest since January but remains above normal at 101.6bcf/d today, according to Bloomberg. The NOAA 6-14 day forecast shows Lower 48 temperatures warming back above normal through the second week of December.
- US domestic natural gas production was at 105.0bcf/d yesterday to extend the increasing trend in place since mid-November, according to Bloomberg compared to an average of 104.7bcf/d in the previous week.
- US LNG export terminal feedgas supply rebounds to 14.00bcf/d today, BNEF shows, following a dip in supply to Sabine Pass yesterday.
- Export flows to Mexico are up slightly on the day to 60.9bcf/d today, according to Bloomberg.
- Nymex Henry Hub daily aggregate traded futures volume was at 470k on Dec. 3.
- US Natgas JAN 25 down 1.4% at 3$/mmbtu
- US Natgas JUN 25 down 1.1% at 2.96$/mmbtu
- US Natgas DEC 25 down 0.7% at 4.01$/mmbtu
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SPAIN AUCTION PREVIEW: On offer this week
Tesoro Publico has announced it will be looking to sell a combined E3.5-4.5bln of the following Bono/Oblis at its auction this Thursday, November 7:
- the new 2.70% Jan-30 Bono (ISIN: ES0000012O00)
- the 4.00% Oct-54 Obli (ISIN: ES0000012M93)
They have also announced they will be looking to sell E250-750mln of the 0.70% Nov-33 Obli-Ei (ISIN: ES0000012C12) at that auction.
Additionally, Tesoro Publico has announced it will be looking to sell a combined E4.5-5.5bln of the following letras at its auction tomorrow, November 5:
- the 6-month May 7, 2025 letras
- the new 12-month Nov 5, 2025 letras
GLOBAL POLITICAL RISK: Week Ahead 4-10 November
MNI's Political Risk team has published its Week Ahead article, looking at the major political events taking place over the coming seven days that could move markets. Comes as America decides on Trump or Harris; UK Chancellor faces budget grilling from MPs; hearings start on EU Commissioners-designate; and European leaders meet in Budapest for the European Political Community summit.
Full article PDF attached below:
BONDS: Off Lows Alongside Early NY Bid For Tsys
European & UK benchmarks are off session lows with EU supply in the rear-view. Further support provided by fresh demand for Tsys as NY participants joined the session, although bearish technical remain in play.
- Bunds away from lows after a break below Friday’s range. Support zone at 131.15/00 went untested, contract based as 131.26.
- Yields across the German curve 3bp higher to 3bp lower, curve twist flattens.
- German political and fiscal risks, covered earlier, leave Bunds wider vs, most European peers, even after the recovery.
- Comments from ECB hawk Holzmann due shortly.
- ~28.5bp of cuts priced for the December meeting.
- Gilt futures stick within Friday’s range, yields across the curve 0.5bp lower to 2.0bp higher, curve twist steepens.
- Early gilt tightening vs. Bunds vanishes, 10-Year spread now 1bp wider at 204.5bp. Scarring from the supply risks emanating from last week’s Budget a likely factor in the widening, keeping the spread above 200bp.
- Oil remains underpinned on the OPEC+ production decision and Middle East escalation risk noted over the weekend.
- Expect cross-market flows to dominate ahead of the U.S. election.
