OIL: Oil Falls for Third Week on US China Standoff
Oct-17 03:56
- Oil prices continued to fall today and is set for a third successive weekly fall.
- WTI is approaching being oversold after US China trade tensions challenge global growth assumptions, and news of the potential Trump / Putin meeting challenge assumptions on Russian supply.
- This comes as OPEC+ has ramped up production, agreeing to successive increases.
- WTI is down -2.7% at US$57.31 bbl week to date and on the 14-day Relative Strength Index, nears being oversold.
- Similarly Brent is down -2.9% this week and down 13% over the last three weeks.
- EU Commission has published updated guidelines on the documentation, due diligence required for complying with the import ban on refined products that have been processed from Russian crude oil, according to its website. The guidelines set out how importers should exercise due diligence when importing fuels to ensure it has not come from Russian crude (as per BBG).
- This comes as India's refiners have stated that they intend to reduce (but not stop) the purchase of Russian oil, as per comments from India's biggest refiners.
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JGBS AUCTION: Solid Demand Metrics For 20Y Auction
Sep-17 03:47
The 20-year JGB auction delivered solid results across key metrics. The low price outperformed dealer forecasts, which were set at 97.80 according to a Bloomberg poll. Moreover, the cover ratio jumped to 3.9974x from 3.0853 in the previous outing and the auction tail shortened to 0.10 from to 0.13.
- As noted in the auction preview, today’s offering featured an outright yield near its cycle high, 10bps above last month’s level.
- Moreover, the 10/20 yield curve remained near its recent high, its steepest since 1999.
- This result was an improvement on the lacklustre performance observed in the 30-year JGB auction earlier this month.
- Post-auction, the 20-year JGB is slightly richer.
JGBS AUCTION: 20-Year JGB Auction Results
Sep-17 03:39
The Japanese Ministry of Finance (MOF) sells Y614.9bn 20-Year JGBs:
- Average Yield: 2.654% (prev. 2.581%)
- Average Price: 98.00 (prev. 98.93)
- High Yield: 2.662% (prev. 2.591%)
- Low price: 97.90 (prev. 98.80)
- % Allotted At High Yield: 98.6020% (prev. 65.3666%)
- Bid/Cover: 3.9974x (prev. 3.0853x)
AUSSIE BONDS: Little Changed On A Data-Light Session
Sep-17 03:29
ACGBs (YM -0.5 & XM flat) are little changed on a data-light session
- Westpac’s lead index signalled slowing growth in August with the 6-month annualised rate turning negative (-0.16% down from July’s +0.11%) for the first time since September 2024. Almost all variables have eased over the last 6 months. It is signalling that growth on a 2q/2q basis could slow over the coming quarters.
- Cash ACGBs are little changed with the AU-US 10-year yield differential at +19bps.
- The bills strip is slightly weaker.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in September is given a 9% probability, with a cumulative 22bps of easing priced by year-end (based on an effective cash rate of 3.60%).
- The focus this week, however, will be on Thursday's August jobs data. Employment is forecast to rise 21k after July's +24.5k, with the unemployment rate expected to remain at 4.2%. It will also be important to monitor underemployment, the split between full-time & part-time and hours worked. The RBA is currently expected to leave rates unchanged on September 30 as it waits for Q3 CPI on October 29.
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