JAPAN DATA: Offshore Investors Buy Most Japan Bonds Since April 2025

While much of Europe has started the week with freezing temperatures and snow, gas prices fell 5.0% to EUR 27.55 on Monday as the west of the region is forecast to shift milder next week and deliveries are expected at the turn of the month as signalled by Bloomberg ship tracking data. European gas is also being impacted by other lower energy prices with crude trending lower and US Henry Hub down 21% since the end of November. 

• Europe is a major importer of US LNG and lower US prices are likely to feed through to European consumers.
• Storage in Europe is now below 60% at 59.8% well below the seasonal average of 73% with this week’s cold snap likely to drive further drawdowns making the arrival of supplies in coming weeks important.
• US gas was also lower falling 3.5% to $3.490 but off the intraday low at $3.355. The shift lower has been driven by forecasts for milder weather in the second week of January. Gas consumption is trending lower as heating demand drops.
• Bloomberg reports that the 14-day RSI is at 35.5 close to 30 which signals overbought. 

• MNI: UK DEC BRC SHOP PRICES +0.0% M/M, +0.7% Y/Y

• RES 3: 140.08 - High Jun 13  
• RES 2: 139.05 - High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 132.11 @ 16:55 GMT Jan 5
• SUP 1: 132.03 2.0% Lower Bollinger Band
• SUP 2: 131.87 - Low Jan 5
• SUP 3: 131.22 - 1.0% 10-dma envelope  

Prices traded to new pullback and cycle lows again Monday, weighed by building expectations of a BoJ rate hike cycle and a breach of support in futures prices. This affirms the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal.