US NATGAS: Northeast EOD – Demand Revised Lower Loosening the Balance
- Northeast demand revised 600 mmcf/d lower to 34.3 bcf/d. Demand is 1.75 bcf/d below the 30-day average.
- To the east, compared to the previous GFS 15day forecast, NYC added 7 HDDs, for a total of 34 HDDs. This is 33 less than the 10yr normal.
- To the west, compared to the previous GFS 15day forecast, Columbus OH lost 11 HDDs, for a total of 12 This is 41 HDDs less than the 10yr normal.
- Within the region, total End User demand revised 390 mmcf/d lower to 11.79 bcf/d. Comprised of 30% power generation, 52% rescom, and 18% industrial.
- Net outflows from the region are unchanged at 19.67 bcf/d.
- Production in the region revised 60 mmcf/d higher to 36.12 bcf/d, all in the Appalachian shale
- Exports to Canada are flat at 701 mmcf/d today.
- Feedgas exports to Cove Point LNG is flat at 840 mmcf/d.
- This puts the daily supply surplus at around 0.68 bcf/d widening by 0.52 bcf/d on the day.
- The NE region refers to New York, Ohio, Pennsylvania, Virginia, West Virginia, and Maryland. All flow and production data is from Bloomberg.
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TARIFFS: Post-Liberation Day Tariff Levels Remain, But Borne By China
The EU is implied to be included in the US's announcement of a 90-day pause/10% rate, per a White House official cited by Bloomberg - though the article doesn't address the Mexico/Canada ambiguity mentioned earlier: "Countries that were hit with the higher, reciprocal duties that went into effect Wednesday will now be taxed at the earlier 10% baseline rate applied to other nations, with the exception of China, according to a White House official."
- Ex-CEA Chief Economist Ernie Tedeschi makes the following observation, on X.com: "Folks, a 10% broad tariff on everything plus 125% on China, is a 25pp increase in the effective tariff rate, even accounting for USMCA exemptions. That's almost exactly where 2025 tariff policy was this morning. It was just less concentrated on China & more weighted overseas".
- That math checks out, roughly speaking: China represented around 13% of US goods imports in 2024, so every 10% effective increase to the Chinese tariff rate = 1.3pp to the US overall effective import tariff rate. The pullback in the ex-China rate to a blanket 10% (not taking into account sectoral carveouts) for the 87% more or less offsets the 70bop China increase from 54% to 125%.
STIR: Late SOFR Option Adds
Bearish - call unwinds and vol sales:
- -10,000 0QM5 97.00/97.50 call spds, 5.0 ref 96.51 (paper +50K yesterday)
- +12,000 0QJ5 96.25 puts, 0.5 ref 96.56
- -5,000 SFRM5 96.50 calls, 4.5 ref 95.92
- +5,000 SFRJ5 96.00 calls, 2.0 ref 95.92
- -10,000 0QM5 97.00/97.50 call spds, 5.5 ref 96.535
- -4,000 SRH7 96.50 straddles, 120 ref 96.52
USDJPY TECHS: Resumes Its Downtrend
- RES 4: 151.30 High Mar 3
- RES 3: 150.16/151.21 50-day EMA / High Mar 28 and reversal trigger
- RES 2: 148.74 20-day EMA
- RES 1: 148.18 Low Mar 20
- PRICE: 144.86 @ 15:44 BST Apr 9
- SUP 1: 143.43 Low Oct 2 ‘24
- SUP 2: 142.95 1.00 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 3: 141.65 Low Sep 30 ‘24
- SUP 4: 141.00 1.236 proj of the Feb 12 - Mar 11 - 28 price swing
USDJPY is trading sharply lower Wednesday, resulting in a break of support at 144.56, the Apr 4 low and bear trigger. This confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position highlighting a dominant downtrend. Sights are on 142.95, a Fibonacci projection. Initial firm resistance to watch is 148.74, the 20-day EMA.
