OIL: Oil End of Day Summary: WTI Set for Gains
May-09 18:24
WTI is set for gains on the day and on the week, amid a slightly improved sentiment towards loosening in US trade restrictions, with US-China talks to start this weekend.
- WTI JUN 25 up 1.9% at 61.05$/bbl
- US oil rig count according to Baker Hughes: 474 (-5) - down 23 rigs, or 4.6% on the year.
- Focus is on any signs that some kind of agreement from talks between the US and China with President Trump suggesting he remains positive. US Treasury Secretary Bessent and Trade Representative Greer will meet China’s Vice Premier Lifeng in Switzerland on Saturday.
- Donald J. Trump: @realDonaldTrump “80% Tariff on China seems right! Up to Scott B.”
- Downward pressure comes from market oversupply risks from an OPEC+ led increase in supply and concerns for an impact of a global slowdown on oil demand.
- Iran and the United States will hold a fourth round of indirect nuclear talks on Sunday in Oman senior members of the Iran team tell Tasnim.
- The US Treasury yesterday added 2 individuals, 11 entities and 6 crude oil tankers to its Iran-related sanctions list, including a third teapot refinery.
- China’s crude imports came in at 48.06m mt or 11.69 m b/d in April according to official data .
- Mexico’s Pemex is planning to reopen old wells to try and stop its declining oil production rates documents seen by Reuters show.
- Shell faces delays on two wells at offshore Perdido development in US Gulf: Reuters
- The OPEC+ policy shift is expected to weigh on oil prices taking the Brent forecast to $60/bbl end 2025 and $50/bbl by end of 2026: Capital Economics.
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US TSY FUTURES: BLOCKs: Additional Crosses Pre/Post Minutes
Apr-09 18:19
- Both appear to be buys:
- 7,000 TUM5 103-16.5, through 103-15.38 post time offer at 1400:13ET, trades 103-13.5 last (-16.5)
- 5,000 FVM5 107-25.75, post time offer at 1356:20ET, trades 107-16.25 last (-1-00.75)
TARIFFS: Current State Of EU, Mexico, Canada Tariffs Left Unclear
Apr-09 18:14
Is the EU part of the 10% / 90 day pause club? There is a lot of ambiguity in the announcement and Tsy Sec Bessent failed to clarify this (and also added to the confusion with MX and CA, see below). Having announced retaliation vs the US today, the EU could be considered excluded - however unlike China's retaliatory moves which are in place, the EU's retaliatory tariffs only go into effect April 15.
- And it seems that the main thrust of the announcement is to isolate China.
- So at the moment we (and the markets) are operating under the assumption that the EU is in the 10% / 90 day negotiation window though we await an official announcement.
- Re Mexico and Canada, per BBG's Canada reporter on X.com, @btaplatt: "It's going to take a bit to get clarity on whether any of this affects Canada. In theory it shouldn't, as Canada wasn't included in the reciprocal tariff order. Scott Bessent said yes when asked if Canada/Mexico are at 10% but, uh...we'll have to see whether he misspoke."
US TSYS: Post-March FOMC Minutes React
Apr-09 18:11
- Treasury futures remain near session lows, little react to release of FOMC minutes that note risks to increased inflation and elevated policy uncertainty.
- Focus remains squarely on Pres Trump tweet upping China tariff to 125% while granting 90 day pause for 75 other countries while lowering to reciprocal tariff level to 10%.
- Most notable for Tsys is the swing in curves - from new 3 year highs overnight (2s10s tapped 73.847) to -14.830 flatter at 41.283 at the moment.
- Projected rate hike pricing retreats: current levels vs. this morning (*) as follows: May'25 at -5.3bp (-11.8bp), Jun'25 at -19.1bp (-34.8bp), Jul'25 at -34.9bp (-58.4bp), Sep'25 -50.2bp (-76.2bp). Year end projection of 75bp total rate cut vs. full point this morning.
