NATGAS: Russian Gas Production Falls 11% y/y in February
Mar-26 16:32
Russian gas production fell 11% y/y to 55.7bcm in February, according to Bloomberg based on Federal Statistics Service industrial output data.
- Gas output for Jan and Feb combined fell 7.6% y/y to 118.3bcm. Data includes natural gas and associated gas output.
- LNG output fell 5.9% y/y to 2.7m tons in February while Jan-Feb production fell 4.4% y/y to 5.7m tons.
- The decline in gas production from the previous year follows the drop in pipeline supplies to Europe with the halt of Ukraine gas transit flows at the end of December 2024.
- Several rounds of sanctions have also been imposed on some current and all future Russian LNG projects since 2024. The Arctic LNG 2 project remains heavily sanctioned and had to halt operations amid a struggle to find buyers for LNG cargoes.
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CROSS ASSET: BlackRock II Refresh Their "Big calls" for 2025
Feb-24 16:31
- Increase overweight US equities - tapping into beneficiaries outside of the tech sector
- Stay overweight Japanese equities - Brighter outlook for the economy, driving improved shareholder returns
- Stay selective in fixed income - inflation, deficits in US make them more positive on FI elsewhere, underweight L/T US Treasuries and prefers European credit over US. Prefers quality income in S/T credit, likes L/T UK bonds given BoE to cut more than the market is pricing
- Sees opportunities in infrastructure equity due to valuations and "mega forces"
- Favours EM over DM, with India and Saudi Arabia offering opportunities.
OPTIONS: Larger FX Option Pipeline
Feb-24 16:28
- EUR/USD: Feb26 $1.0400(E1.1bln), $1.0420-35(E2.4bln), $1.0450(E1.9bln), $1.0465-70(E1.1bln), $1.0495-00(E1.3bln); Feb27 $1.0440-50(E1.2bln); Feb28 $1.0396-00(E2.8bln)
- USD/JPY: Feb26 Y151.95($1.0bln); Feb27 Y150.00($1.6bln), Y151.00-05($1.2bln); Feb28 Y150.00-10($1.0bln)
- AUD/USD: Feb28 $0.6500-10(A$1.2bln)
- USD/CAD: Feb26 C$1.3500($1.2bln), C$1.4390-00($1.4bln); Feb27 C$1.4200-10($1.1bln), C$1.4350($1.0bln); Feb28 C$1.4290-00($1.5bln)
- USD/CNY: Feb26 Cny7.3500($1.2bln)
US TSY FUTURES: Carry-Over Safe Haven Plus Fund Rotation Out of Stocks
Feb-24 16:20
- Treasury futures have reversed early session weakness and extending session highs in late morning trade. Safe haven buying amid ongoing concerns over the Trump administration's trade policy and stocks reversing early support to new multi-week lows were cited by trading desks.
- Currently, Mar'25 10Y futures are through initial technical resistance of 109-24 to 109-28.5, nearing a Bull Trigger level at 110-00. Next resistance at 110-14 (High Dec 14). Curves are mixed, 2s10s still flatter: -1.771 at 21.133%, 5s30s +.597 at 41.026%.
- Projected rate cuts through mid-2025 look steady to firmer vs. this morning's levels (*) as follows: Mar'25 steady at -0.5bp, May'25 at -7.7bp (-7.1bp), Jun'25 at -19.1bp (-17.3bp), Jul'25 at -26.1bp (-23.6bp).
- Cross asset update: Crude mildly higher (WTI +.09 at 70.49; Gold climbing 7.20 at 2943.25; Bbg US$ index little lower at 1286.06 (-.17).
- Pre-auction short sets ahead today's Treasury supply and rate lock hedging on a heavy corporate issuance docket also reported.
