OIL: Oil Drops to In-day Low on Saudi Headline
Apr-30 15:51
Crude has sunk to new daily lows following a Reuters headline indicating that KSA can sustain a prolonged period of lower oil priced.
- Brent JUN 25 down 1.7% at 63.14$/bbl.
- WTI JUN 25 down 3.3% at 58.43$/bbl. WTI had been around $60/b before the headline.
- The Reuters headline said:
- "SAUDI ARABIA OFFICIALS IN RECENT WEEKS HAVE BRIEFED ALLIES, INDUSTRY EXPERTS, THAT KINGDOM CAN SUSTAIN PROLONGED PERIOD OF LOW OIL PRICES, FIVE SOURCES WITH KNOWLEDGE OF THE TALKS TELL REUTERS"
- This could indicate willingness from the de-facto OPEC+ leader that the bloc could continue or expand its planned output hikes, rather than trying to uphold prices to stabilise prices at a higher level.
- OPEC+ has significant spare capacity with which to boost oil output should it wish. It also needed to balance maintaining unity, with several members either struggling to keep at or below quota or pushing for additional production.
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STIR: ECB Spillover Sees Fed Rate Path Continue Intraday Lift
Mar-31 15:39
- Fed Funds implied rates have been nudged a little higher following a hawkish adjustment in ECB pricing on Bloomberg sources suggesting April is a closer decision than markets were pricing.
- Implied rates are a little above where they were prior to today’s mfg surveys, limiting the day’s decline having opened notably lower after the weekend.
- Cumulative cuts from 4.33% effective: 5bp May, 21.5bp Jun, 37.5bp Jul, 53.5bp Sep and 75bp Dec.
- May and June meeting implied rates are now 0.5bp from Friday’s close whilst Dec is 2bp lower vs 7bp lower as US desks filtered in this morning.
- The 75bp of cuts for 2025 still compares with 64bp prior to Friday’s PCE report and subsequent further ratcheting lower in the Atlanta Fed’s GDPNow – see the below table for a broader comparison.
- The MNI Chicago PMI was higher than expected at 47.6 (cons 45.0). Its prices paid index edged lower but was otherwise at its second highest reading since Aug 2022 whilst the new orders index technically increased to its highest since Nov 2023 but remained sub-50.
FED: US TSY 13W BILL AUCTION: HIGH 4.205%(ALLOT 90.20%)
Mar-31 15:32
- US TSY 13W BILL AUCTION: HIGH 4.205%(ALLOT 90.20%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 38.39% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 5.74% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 55.87% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 2.74
FED: US TSY 26W BILL AUCTION: HIGH 4.070%(ALLOT 51.15%)
Mar-31 15:32
- US TSY 26W BILL AUCTION: HIGH 4.070%(ALLOT 51.15%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 23.16% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 4.73% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 72.12% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 2.99
