OIL: Saudi May Cut Dec. Arab Light OSP to Asia Towards Yearly Low
Oct-31 08:50
Saudi Arabia may cut its December Arab Light OSP to Asia by $1.25/bbl, a Bloomberg survey shows, while a Reuters survey expects a reduction between $1.2-$1.5/bbl.
- The cut would take the OSP to near the lowest seen this year due to ample supplies although concern for Russian exports and increased demand for spot barrels from China and India could limit the cuts, Reuters sources said.
- December OSPs for Arab Extra Light, Arab Medium and Arab Heavy could also fall between $1.2-$1.5/bbl compared with November following a monthly drop in cash Dubai's premium to swaps.
- The Bloomberg survey showed a range in responses from -$0.8 to -$1.5/bbl.
- The November Arab Light OSP differential was unchanged on the month at a premium of $2.20/bbl to the Oman-Dubai benchmark.
- Saudi crude OSPs are usually released around the fifth of each month.
- An OPEC+8 meeting on Oct. 2 is likely to see another 137kb/d increase in the output target for December as it unwinds previous curbs and would add to already elevated supply.
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FOREX: USDJPY Extends Lower as Shutdown/Tankan Weigh
Oct-01 08:45
- USDJPY has extended this week’s bearish theme overnight, extending the pullback from last week’s highs to around 2%. Today’s price action has resulted in a break of 147.60, the 50-day EMA, with the pair sliding back below 147.00 in recent trade. This places the focus back on pivot support at 145.49, the Sep 17 and post-Fed low.
- US government shutdown concerns have been one of the major drivers this week, and given the expectations that NFP will now be pushed back, there will be heightened significance on today’s ADP employment release and the ISM manufacturing PMI report.
- Additionally, domestic tailwinds may be playing their part in the renewed optimism for the Japanese yen. First of all, Wednesday’s Tankan survey indicated solid business sentiment and earnings in September. The survey is likely to support a rate hike and increase the odds of an October move, although final decisions will depend on incoming data, with BOJ Governor Kazuo Ueda’s upcoming speeches closely watched for any shifts in the Bank’s “no-rush” stance, MNI understands.
- Separately, frontrunner to win the LDP leadership election Koizumi says that "It is important for the government and the BOJ to share the same overall direction", and that "the government's economic policy and the Bank of Japan's monetary policy will work together to realise a virtuous cycle in the economy."
FOREX: FX OPTION EXPIRY
Oct-01 08:39
Of note:
EURUSD 3.12bn at 1.1750/1.1775.
EURUSD 2.85bn at 1.1785/1.1800 (thu).
AUDUSD 1.87bn at 0.6600 (thu).
AUDUSD 1.6bn at 0.6600 (fri).
EURUSD 1.02bn 1.1750 and 1.69bn at 1.1820 (tue).
- EURUSD: 1.1700 (1.74bn), 1.1710 (619mln), 1.1735 (350mln), 1.1750 (1.51bn), 1.1760 (797mln), 1.1775 (811mln), 1.1791 (460mln), 1.1800 (1.17bn).
- USDJPY: 146.50 (1.09bn), 146.85 (286mln), 147.50 (687mln).
- USDCAD: 1.3900 (489mln).
- AUDUSD: 0.6600 (869mln).
EURIBOR OPTIONS: Calendar Call Spread
Oct-01 08:36
ERM6/H6 98.31/98.43cs calendar, bought the June for 1.25 in 5k.
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