OIL: Russia's O&G Revenue to Hit Lowest Since August 2020
Dec-12 13:41
Russia’s oil and gas revenue for December is projected to fall to around 410 billion roubles, almost half the level of a year earlier, Reuters said.
- Lower crude prices and a stronger rouble have driven the decline, weakening the Kremlin’s main source of budget income at a time of heavy defence spending.
- Full-year revenue is expected to drop by nearly a quarter to 8.44 trillion roubles, undershooting the Finance Ministry’s forecast. The decline brings monthly income close to the record low seen in August 2020 during the pandemic-driven oil slump.
- Analysts warn that although December’s budget deficit will be covered by state bonds, 2026 will be more challenging. The budget assumes oil at $59/b and a rouble at 92 per dollar, far above current levels.
- The government may need to amend the budget in spring and tap the National Wealth Fund. Western efforts to restrict Russian oil earnings continue to add pressure.
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SNB: Unchanged Rhetoric From VP Antoine Martin
Nov-12 13:40
- Worth monitoring some headlines from SNB VP Antoine Martin – taken from presentation slides which are accessible here.
- In line with previous rhetoric so far: “Inflation seen rising slightly in next quarters”, re-upping the conditional inflation forecast from the September meeting.
EQUITY OPTIONS: Estoxx upside Call Spread
Nov-12 13:38
SX5E (19th June) 6000/6500cs 1x1.5, bought for 106.5 in 7k (7kx10.5k)
SWAPS: Several Factors Support Ongoing German Long End Swap Spread Widening
Nov-12 13:37
Buxl ASWs and swap spreads are set to register fresh closing highs for the current widening cycle.
- Today’s widening comes even as the long end lags in outright bond trade (Buxl yields little changed, ~2bp off session highs).
- While broader fixed income demand was noted in the wake of Tuesday’s U.S. weekly ADP employment data, the extension of the widening move was already in play before that data crossed.
- Elsewhere, the German debt brake proposal from the Bundesbank was a probably a secondary factor in late Tuesday/early Wednesday trade, with the bulk of Tuesday’s move taking place before those headlines crossed.
- Indeed, Commerzbank argue that “while it would fit the picture of long-term fiscal restraint, yesterday's noticeable 30-Year Bund swap spread richening was probably not directly triggered by the Bundesbank proposal. Speculation about looming Dutch paying flows in swaps could be behind it. While we see scope for more ultra-long Bund ASW richening in Q1, amid increased paying interest from Dutch pension fonds, the risk is that long UB positions are already a consensus trade”.
