OIL: OPEC+ Delegates Don’t See Plan Change at Aug. Meeting

Jul-18 2024 07:53

OPEC+ delegates expect the group’s monitoring session next month to be routine, with no changes to plans for a supply hike from Q4, Bloomberg said.

  • The bloc agreed in June to gradually restore 2.2m b/d of supply from October. However, OPEC+ cautioned that a committee due to gather on Aug. 1 could postpone the hike.
  • The previous caution on the roadmap was used to shore up prices after an initial slump to OPEC’s supply hike announcement.
  • Even without a change in August, OPEC would theoretically have a few more weeks to take a decision – up until cargo allocations must be sent to customers in early September.
  • OPEC+ has been withholding supply for almost two years to prop up prices and counter rising US output.
  • Some expect that OPEC will have to at least partially pause its roadmap amid cooling demand growth from China and stabilising stockpiles in Q4.

Historical bullets

GILTS: Futures Little Change After Friday’s Low Held Late On Monday

Jun-18 2024 07:30

Gilt futures trade either side of late Monday levels, last printing essentially unchanged at 98.34.

  • Friday’s low in the contract (98.21) held late on Monday.
  • Zooming out, last week’s rally in gilt futures instilled a bullish theme, resulting in a print above the May 16 high (98.89). A clear break of this hurdle would reinforce bullish conditions. Conversely, initial firm support is seen at the 20-day EMA (97.45).
  • Cash gilt yields are little changed to 1bp lower on the day.
  • Overnight local headline flow won’t have been market moving, with political headwinds for PM Sunak and the Conservative Party still dominating.
  • Labour’s tax policies continue to get plenty of airtime, with Shadow Chancellor Reeves providing background details on some of the more niche aspects of her party’s fiscal policy preferences.
  • Kantar’s food price inflation metric moderated for a sixteenth consecutive month, printing +2.1% Y/Y, a welcome sign for policymakers.
  • GBP4bn of 4.125% Jul-29 gilt supply is due today.
  • Brightmine wage data will hit in the early hours of Wednesday morning.
  • Further out, tomorrow’s CPI data and Thursday’s BoE decision headline this week’s UK schedule.

SCHATZ: Swap related trade

Jun-18 2024 07:27

Schatz Swap related trade, suggest payer:

  • DUU4 7.7k at 105.71.

USD: USDJPY tests 158.00

Jun-18 2024 07:20
  • AUD is still leading against the Yen, up 0.38%, with the Aussie in the green across the majors following the Hawkish tilt from the RBA earlier.
  • While AUDJPY is just off its new intraday high, market participants will be watching the USDJPY, which is making an attempt at the 158.00 handle.
  • Initial area of interest is still at 158.43, now trading above 158.00, at 158.09.