OIL: OPEC+ Adds Supply, Prices Decline on Uncertainty.
Apr-03 22:22
- Whilst the tariff announcement may have provided certainty on what was to be levied, the create uncertainty as to the outlook for the global economy; pressurizing oil prices.
- Add to this, OPEC+ decision to add 411,000 barrels of supply from May created a perfect storm for oil prices.
- Oil declined the most in two years with prices down over 6%.
- WTI fell -6.64% to US$66.63 trading through all major moving averages.
- Brent fell -6.42% to $69.85 also trading through all major moving averages.
- With tariffs placed on India and China being more significant, the outlook for these two major crude importers is now uncertain and oil price movements have reflected this.
- The US Department of Energy is to announce the award of a contract in excess of $1bn for the management of the US Strategic Reserve, with an objective of restocking the depleted reserves. This could have significant implications for demand as the reserve has capacity of up to 700 million barrels and is less than half of that at present.
- Exxon Mobil says it may deliver a $2.7bn gain in quarterly profit as a result of higher prices last year.
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ASIA: Government Bond Issuance Today.
Mar-04 22:18
- Bank Indonesia to Sell 276D SUVBI Bills
- Bank Indonesia to Sell 95D SUVBI Bills
- Bank Indonesia to Sell 32D SUVBI Bills
- Bank Indonesia to Sell 367D SUVBI Bills
- Bank Indonesia to Sell 185D SUVBI Bills
- Thailand to Sell THB 7 Bn of 2072 Bonds
- Thailand to Sell THB 30 Bn of 2035 Bonds
- Vietnam To Sell VND 1.0Tln 2040 Bonds; (TD2540037)
- Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
- Vietnam To Sell VND 12.0Tln 2035 Bonds; (TD2535023)
- Hong Kong to Sell HK$1.5 Bn 5-year Bonds
- Hong Kong to Sell HK$0.5 Bn 20-year Bonds
- China to Sell 40 Bn Yuan 63-Day Bills
- Bank of Korea to Sell 2 Tn Won 2-Year Bonds
- South Korea to Sell 5.8 Tn Won 30-Year Bonds
- South Korea to Sell 2 Tn Won 63-Day Financial Bills
- India to Sell INR120 Bn 182-Day Bills
- India to Sell INR140 Bn 91-Day Bills
- India to Sell INR70 Bn 364-Day Bills
BONDS: NZGBS: Cheaper As US Yields Rebound Off Lows After Equity Reversal
Mar-04 22:03
In local morning trade, NZGBs are sharply cheaper after US tsys finished with a bear-steepener, yields 4-9bps higher.
- This came after US tsys reversed off Tuesday morning's yield lows as stocks rebounded off lows. Nasdaq firmly in the green before making a late retreat ahead of the close. Another factor was a retreat in Bunds amid reports officials were proposing an E500B "whatever it takes" defence fund.
- No substantive US data Tuesday, "I do factor in some effect of tariffs on inflation on prices. I do think we're going to see that later this year," Williams told a Q&A at a Bloomberg Invest event.
- Focus now turns to President Trump addressing the joint session of Congress tonight at 2100ET. Followed by ADP private employment data tomorrow morning at 0815ET.
- Late session chatter that President Trump wants to announce a minerals deal with Ukraine after all.
- Swap rates are 7-9bps higher, with the 2s10s curve steeper.
- Today, the local calendar will see ANZ Commodity Price data.
- On Thursday, the NZ Treasury plans to sell NZ$250mn of the 0.25% May-28 bond, NZ$200mn of the 4.25% May-36 bond and NZ$50mn of the 1.75% May-41 bond.
JPY: USD/JPY Touches 148.10 Before Rebounding Strongly, BoJ Dep Gov Speaks Today
Mar-04 21:59
Yen lagged broader USD shifts through Tuesday. USD/JPY tracks near 149.75/80 in early Wednesday dealings, losing a little bit of ground versus the USD for Tuesday's session. All the other majors have rallied against the USD, led by the EUR (up over 1.25%). Broader stagflationary concerns for the US economy weighed on dollar sentiment.
- USD/JPY broke below 148.60 support during Tuesday trade, a level that had been building in significance. Spot traded as low as 148.10 but bounced back ahead of the APAC crossover, tracking back towards 150.00 in latest dealings.
- Sentiment has been impacted by late US Tuesday comments from US Commerce Secretary Lutnick, who hinted tariff relief/compromise with Canada and Mexico could be announced Wednesday in the US during a Fox News interview. This has aided CAD and MXN sentiment and broader risk appetite. US yields also spiked late in US trade, the 10yr yield back to 4.25%, after touching 4.10% earlier in Tuesday trade.
- This moves have seen the traditional yen safe underperform through the latter stages of Tuesday US trade and early Wednesday Asia Pac trade. On the upside for USD/JPY, key short-term resistance has been defined at 151.30, the Mar 3 high. Clearance of this level is required to signal a base.
- Locally today we have the final Feb reads for the Jibun bank PMIs (services and composite). We also have a speech from Deputy Governor Uchida.
- In the option expiry space note the following for NY cut later: Y147.90-00($702mln), Y148.50($505mln), Y149.00($720mln), Y151.00-10($1.0bln), Y151.85-00($1.0bln).
