CNH: Outperforms USD Gains, CNH/JPY Remains In Uptrend, Inflation Data Out Today
USD/CNH held lower as Thursday's session unfolded, although support was evident sub 6.9800 for the p...
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LNG: Low EU Prices Driving LNG Imports Elsewhere, US Weather Unwinds Dec Rise
US gas was sharply lower on Tuesday as forecasts for higher temperatures later in December drove the unwinding of last week’s 10% gain. Henry Hub fell 6.8% to $4.579, which is still elevated. In contrast, European prices rose 1.9% to EUR 27.375 as inventory drawdowns continue. Prices are still down 5% this month after falling 8.6% in November and the fall is discouraging LNG shipments to Europe, which drove Tuesday’s increase in gas.
- US prices could rise sharply if there is another cold snap, especially if it impacts gas production and transportation. Storage levels have been declining towards their 5-year average.
- European gas trended higher over Tuesday reaching EUR 27.700 before easing. Not only are LNG imports lower but there have been disruptions to flows from Norway with both driving storage levels down which were 0.5pp lower on Monday at 71.8% and 10pp below the seasonal average.
- A mild start to the heating season has helped inventories, which started lower than in 2024, but some models are signalling that there could be a shift colder across northern Europe in the next week, according to Bloomberg.
AUD: AUD/JPY - Accelerates Higher, Looks To Challenge 105.00 Next
The overnight range was 103.57 - 104.39, Asia is currently trading around 104.15. The pair accelerated higher overnight given a double whammy of a hawkish RBA and USD/JPY moving higher in reaction to the move in US yields. On the day dips should continue to be supported, the first buy zone is back toward the 103.50-70 area. The market is looking to test the 105.00 area initially where we could see some initial resistance, above here and it will turn its focus toward the decade long highs around 108.00-110.00.
- The AUD/JPY Average True Range(ATR) for the last 10 Trading days: 74 Points
Fig 1: AUD/JPY spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUSSIE BONDS: ACGB Dec-30 Auction Result 2025
The AOFM sells A$1000mn of the 4.75% 21 April 2027 bond, #TB136:
- Average Yield (%): 4.3532 (prev. 3.5254)
- High Yield (%): 4.3550 (prev. 3.5275)
- Bid/Cover: 2.6630x (prev. 2.7625x)
- Allotted at Highest Accepted Yld as % of Bid at that Yld (%): 69.9 (prev. 86.4)
- Bidders 36 (prev. 32), successful 16 (prev. 13), allocated in full 7 (prev. 7)
