AMERICAS OIL: Recent Pause in US LNG Approvals Needs Reconsideration
Recent Pause in US LNG Approvals Needs Reconsideration: GlobalData Poll
• The decision was viewed as ill-timed as LNG exports were proving to be of strategic importance amid the war in Ukraine.
• The EU has sought to reduce dependence on Russian commodity imports, particularly natural gas. By 2023, it lowered its gas imports from Russia to 15% of its total imports, down from 45% before the conflict.
• US LNG was the biggest beneficiary of the shift, turning into a key supplier for markets in Europe and Asia. LNG terminals across Louisiana and Texas secured long-term contracts and US LNG exports hit record highs.
• GlobalData conducted a poll Oct-Dec 2024 and found 75% of respondents believed the pause in approvals of permits would be revoked and newer terminals would be approved based on merit. 9% thought only a select few could get approved in coming years. Only 6% thought the existing policy would continue. 10% couldn’t say.
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ECB: Weekly ECB Speak Wrap (Dec 13 – Dec 18)
Policymakers have been out in force following the ECB’s December meeting, where the bank cut rates by 25bps and dropped its pledge to keep policy “sufficiently restrictive” until inflation reached 2%.
- Although the changes to the policy statement and the December projections signalled the ECB’s intent to ease policy further, the market reaction was relatively hawkish.
- This seemingly reflected the lack of appetite for a 50bp cut amongst the Governing Council in December, and communique from President Lagarde that suggested a “gradual”, 25bp cutting pace remains appropriate.
- As the new year approaches, the key question for markets is how low the ECB can go, and how quickly will it get there.
- In the following publication, we provide a summary of ECB-speak from December 13 to December 18: 241218 - Weekly ECB Speak Wrap.pdf
OUTLOOK: Price Signal Summary - Impulsive Bear Wave In Gilts Extends
- In the FI space, the current bearish cycle in Bund futures remains in play and the contract continues to trade closer to its recent lows. Sights are on 133.98, 61.8% retracement of the Nov 6 - Dec 2 bull cycle. Clearance of this level would strengthen the current downleg. For bulls, a reversal higher would highlight the end of the correction. First key resistance to watch is 136.01, the Dec 12 high. A move above this level would expose 137.18, the Dec 2 high.
- A strong bearish theme in Gilt futures remains in play and this week’s extension reinforces current conditions. The move down has resulted in a breach of key short-term support at 93.40, the Nov 18 low. The break of this level highlights a stronger reversal. Sights are on 72.63, 3.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 93.64, the Dec 16 high and a gap low on the daily chart.
USD: USDJPY edges to session high
- USDJPY is edging towards the intraday high, the move is small and gradual, and taking its cue from the selling interest going through In Bonds.
- US Tnotes hovers at session low, as Desks await the FOMC later and look for less cuts in 2025 as Trump takes over.
- Resistance in the USDJPY is further out, past the 154.00 figure, at 154.48 High Dec 16.
