OIL: Hungary’s MOL Sees Delay in Ability to Process Non-Russian Crude
Hungary’s MOL expect a delay in the ability of its refineries to process both Russian and non-Russian crude from early 2026 to the end of 2026, according to Reuters citing a senior MOL executive said.
- Refineries are investing in technology needed to diversify away from Urals, but progress has been slower than expected. Delays were due to unforeseen complexities in 24 planned upgrade projects and requirement for more logistical investments in storage and blending capacities.
- MOL can refine up to 30%-40% non-Russian crude at its refineries, MOL’s Viktor Sverla said, but could increase the share of non-Russian crude at its Slovak refinery to 50% if needed.
- The two refineries in Slovakia and Hungary are currently supplied with Russian crude via the Druzhba pipeline.
- MOL was in long-term contract talks with Croatia's oil pipeline operator Janaf for crude via the Adriatic pipeline, Sverla said.
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GERMAN AUCTION RESULTS: 2.60% Aug-34 Bund
| 2.60% Aug-34 Bund | Previous | |
| ISIN | DE000BU2Z031 | |
| Total sold | E4.5bln | E4.5bln |
| Allotted | E3.688bln | E3.673bln |
| Avg yield | 2.11% | 2.22% |
| Bid-to-offer | 1.74x | 1.66x |
| Bid-to-cover | 2.12x | 2.03x |
| Average Price | 104.31 | 103.39 |
| Low acc. Price | 104.31 | 103.39 |
| Pre-auction mid | 104.268 | 103.338 |
| Previous date | 21-Aug-24 |
EURIBOR OPTIONS: Upside structures are favoured
Upside via Options continue to be favoured, playing inline with some of the flattening bias in the Euribor future strip, with desks targeting upside in H5 and M5, also expressed via Mid Curve of late.
- ERH5 97.75/98.25/98.75c fly, bought for 5.5 in 3k.
GILTS: Rally Extends Further, Curve Bull Steepens
The rally in gilt futures has extended through round number resistance at 101.00, with the contract trading as high as 101.26.
- Softer-than-expected UK data added to the broader FI bid that was seen in Asia following the Harris-Trump debate.
- The data allowed the recent cross-market outperformance vs. Bunds to extend: https://marketnews.com/bonds-gilts-extend-recent-tightening-vs-bunds
- Bullish technical control deepens further on the move, with next resistance in futures noted at the August 5 high (101.46).
- The lack of concession for 10s made for relatively soft pricing and cover metrics at the latest DMO 10-Year supply, although pullbacks were limited.
- Yields 4.0-6.5bp lower, bull steepening.
- 30s and 50s probed early August risk-off lows, but gilt bulls have failed to force meaningful breaks there as of yet.
- SONIA futures have extended their early rally, last flat to +10.0, a little off session highs. M5 through H6 through early August peaks.
- BoE-dated OIS shows 48bp of cuts through year-end and ~134bp through Jun ’25 vs. closer to 45bp and 128bp late Tuesday.
- U.S. CPI dominates the macro calendar today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Sep-24 | 4.918 | -3.2 |
Nov-24 | 4.647 | -30.3 |
Dec-24 | 4.468 | -48.3 |
Feb-25 | 4.196 | -75.4 |
Mar-25 | 3.970 | -98.0 |
May-25 | 3.739 | -121.1 |
Jun-25 | 3.609 | -134.1 |
