OIL: Pemex Fires May Support Mexican Crude Exports in May
Apr-25 07:47
After initially planning large crude supply cuts in May, Mexico’s Pemex may have more volumes to supply after two of its refineries were hit by fires Bloomberg sources said.
- Pemex is trying to make Mexico fully sufficient for oil product supplies by running its refineries at higher capacity and bringing new refineries online.
- A boiler at the Salina Cruz refinery caught fire and on Friday the Minatitlan refinery had a fire and explosion.
- Prior to the latest setbacks, Pemex was running its refinery utlisation at its highest rates in six years.
- Mexico’s decision to export more is sending prices of competing sour oils lower according to Syntex Energy. Mars crude produced in the Gulf of Mexico now trading at $1.70 less than benchmark Nymex WTI - the widest discount since October.
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AUD: AUDNZD fades from initial resistance
Mar-26 07:44
- AUDNZD is still fading lower after getting to some interesting level Yesterday afternoon and the 1.0900 mark, highest level since November, printed a 1.0902 high overnight.
- Further out, would have seen 1.0945, the November high, and highest level since June 2023, but for now AUDNZD is back at 1.0875.
STIR: SONIA Little Changed, Just Under 75bp of '24 Cuts Priced, Mann Due Again
Mar-26 07:43
SONIA futures are unchanged to 1.5bp lower.
- BoE-dated OIS shows ~74bp of ’24 cuts vs. ~75bp at yesterday's close.
- ~17bp of cuts are priced through the June MPC, representing ~68% odds of a 25bp cut over that horizon.
- Former BoE hawkish dissenter Mann will be interviewed by BBG at 09:00 London.
- Participants will be looking for more information re: the reasoning for her vote change (to no change in rates, in line with the MPC consensus). Monday saw Mann note that she had stated that her vote was “finely balanced” ahead of the March MPC, with no further details/thoughts provided.
- No meaningful local data releases are scheduled today.
- Local headline flow has been limited since yesterday’s close.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| May-24 | 5.148 | -4.3 |
| Jun-24 | 5.020 | -17.1 |
| Aug-24 | 4.868 | -32.3 |
| Sep-24 | 4.739 | -45.2 |
| Nov-24 | 4.578 | -61.2 |
| Dec-24 | 4.449 | -74.2 |
GILT AUCTION PREVIEW: 4.50% Jun-28 gilt
Mar-26 07:38
- The DMO will come to the market this morning to sell hold its final auction of the year with GBP3.0bln nominal of the short 5-year 4.50% Jun-28 gilt on offer.
- The auction will be the smallest since the auction was launched; all other auctions have been for GBP3.75-4.00bln but this auction has been downsized so that the DMO doesn’t overshoot its short-dated FY23/24 funding target (although it will be exceeded if there is any takeup in the ensuing PAOF).
- The auction will also be the last for the 4.50% Jun-28 gilt as the on-the-run 5-year gilt ahead of the launch of the new Jul-29 gilt that is due to be auctioned for the first time on 30 April.
- Given the smaller auction size, there is a good chance that we see a tighter tail and stronger bid-to-cover. The bid-to-covers have ranged from 2.19x to 3.34x since the launch (mean 2.58x) with tails ranging from 0.4bp to 2.1bp (mean 1.0bp).
- Note that the previous auction held on 21 February was the strongest auction to date for the gilt on both of these metrics.
- Timing: Results will be available shortly after the auction closes at 10:00GMT with a further GBP750mln available to successful bidders via the PAOF.
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