NATGAS: Strike on Ukraine Gas Compressor Station Amid Gas Shortage Risk
Aug-21 10:49
Overnight strikes by Russia on Ukraine hit a gas compressor station in eastern Ukraine that plays an important role in pumping gas in storage facilities, according to Reuters sources.
- Russia and Ukraine have stepped up strikes on energy facilities against one another in recent weeks as uncertainty remains about the next steps in the peace process.
- Ukrainian energy ministry said a gas infrastructure facility came under Russian attack overnight and the damaged is being assessed.
- The strike follows an attack on energy facilities in the central Poltava region earlier in the week and on a gas pumping station in the southern Odesa region earlier this month.
- The strikes could undermine preparations for winter as Ukraine risks a gas shortage with low storage levels and amid significantly reduced domestic production.
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OUTLOOK: Price Signal Summary - Bear Threat In Oil Futures Remains Present
Jul-22 10:48
- On the commodity front, a bull cycle in Gold that started Jun 30, remains intact, and Monday’s bullish start to the week marks an extension of the recovery. $3395.1, the Jun 23 high, has been pierced. A continuation would open $3451.3, the Jun 16 high. Note that moving average studies are in a bull-mode position highlighting a dominant uptrend. The bear trigger is $3248.7, the Jun 30 low. An initial firm support to watch is 3282.8, the Jul 9 low.
- In the oil space, a bearish theme in WTI remains intact and the recovery since Jun 24 is considered corrective. The sharp reversal from the Jun 23 high continues to highlight scope for an extension lower. Support to watch is the 50-day EMA, at $65.68. The average has been pierced, a clear break of it would expose $58.87, the May 30 low. Initial resistance to monitor is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range.
US TSYS: Potential Trump Comments And Fed Regulatory Conference Headline
Jul-22 10:42
- Treasuries trade modestly bear steeper but remain within yesterday’s range, amidst thin volumes.
- It’s another quieter docket today before the calendar picks up towards the end of the week, although any regulatory remarks from a Fed conference could be of note.
- What’s more, President Trump has a busier schedule today, where we can expect comments from his meeting with the President of the Philippines (greeting 1100ET, meeting itself with White House press pool 1115ET).
- Cash yields are 0-1.5bp higher on the day.
- Curves are elevated by recent standards but remain within ranges, including 2s10s at 52.9bp (+1bp) and 5s30s at 103.8bp (+0.8bp).
- TYU5 trades at 111-01+ (-04+) on light cumulative volumes of 210k.
- It has eased a little further away from yesterday’s slowly found high of 111-09+, what’s now seen as initial resistance before a more notable 111-13+ (Jul 10 high). Whilst lower on the day, the contract still holds the shift away from key support at 110-08+ (Jul 14/16 lows).
- Data: Philly Fed non-mfg Jul (0830ET), Richmond Fed mfg Jul (1000ET)
- Fedspeak: Bowman on CNBC (0730ET), Powell welcome remarks at regulatory conference (0830ET), Bowman fireside chat with Sam Altman at the same conference (1300ET) – see STIR bullet
- Bill issuance: US Tsy $80B 6W bill auction (1130ET)
EQUITIES: European Stocks Hit New Lows into NY Hours on Tech Underperformance
Jul-22 10:35
- European equity markets head into the NY crossover at the day's lowest levels - pressuring the DAX future to trade with losses of 1%. US futures are steadier given the late sell-off after the European close yesterday, but tech names are clearly underperforming: The NASDAQ-100 future is off 0.25% while the Dow Jones is flat.
- NVIDIA shares are off 0.8% pre-market and the European semiconductors subsector is the poorest performer on the continent. Infineon Tech are off near 4% following NXP's after-market earnings report yesterday. The company met revenue expectations but the outlook missed forecast and may be a precursor to a tough quarter for tech names. NXP shares remain off by near 6% pre-market.
- Fed's Powell is set to give welcoming remarks at 0830ET, and while he'll steer clear of monetary policy inside the pre-meeting media black, Fed regulation is becoming an increasingly political topic. Not directly linked but a latest example was US Tsy Sec Bessent on X yesterday: "Today in a CNBC interview, I called for a review of the Federal Reserve [and] its non-monetary policy operations."
