NATGAS: TTF COT: Funds Cut Shorts Again as Firms Extend Bearish Bets
Investment funds decreased their net short positions for ICE TTF for the second consecutive week, while firms continued to extend their short bets for the third week, according to latest CoT data as of 24 December.
- European gas prices edge higher on Wednesday with strong supply weighed against colder weather.
- Investment Firm net short position increased to -185.355mn from -183.785mn.
- However, Investment Funds net short position dropped to -78.619mn from -84.113mn in the previous week.
- Commercial Undertaking net long position decreased to be at +266.724mn from +268.283mn.
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EGBS: Natixis Add SPGB/RAGB Spread Tightener Recommendation
Peripheral outperformance has been a multi-year theme in the EGB space, with a mix of economic growth, fiscal and sovereign credit rating outperformance driving spread tightening vs. core and semi-core EGB peers.
- Many sell-side desks maintain peripheral spread tightener recommendations, as they expect this outperformance to continue.
- Natixis recommend entering a long SPGB vs. RAGB trade via SPGB 3.25% 30-Apr ‘34 vs. RAGB 2.40% 23-May 34.
- They recommend initiating the trade with a 12-month holding horizon, identifying attractiveness for real-money investors.
- Natixis target a move to 0bp, with a stop set at 20bp.
- They suggest that that the relative fiscal outlook for the next five years has not yet been reflected in spreads. They also highlight that “Austria remains close to recession, with a high deficit and the debt-to-GDP ratio is expected to rise further”.
- On the SPGB side, they write “improving fiscal fundamentals means that the country is likely to exit the Excessive Deficit Procedure soon, while we don’t expect political risk to stop the Bono outperformance”.
EQUITY OPTIONS: BNP Option Vol trade
BNP (18/12/26) 60^, trades for 19.67 in 2.1k.
COMMODITIES: Trend Condition in Gold Remains Bullish, Key Resistance at $4381.50
Recent weakness in WTI futures highlights a bearish theme. A resumption of the bear leg would open the key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Note that it is still possible a bullish corrective cycle remains in play. The contract has recovered from its latest low, resistance to watch is $61.84, the Oct 24 high. A clear break of this hurdle would signal scope for a stronger correction. The trend condition in Gold remains bullish and the bear phase between Oct 20 and 28 appears to have been a correction. Note that the recovery since Oct 28 signals the end of the corrective cycle. Key support to watch lies at the 50-day EMA, at $3991.7. Clearance of this EMA would signal scope for a deeper retracement. Sights are on key resistance and the bull trigger at $4381.5, the Oct 20 high.
- WTI Crude up $1.2 or +2.05% at $59.75
- Natural Gas down $0.07 or -1.53% at $4.773
- Gold spot up $9.12 or +0.22% at $4247.49
- Copper up $1.6 or +0.3% at $528.8
- Silver up $0.82 or +1.45% at $57.299
- Platinum up $10.19 or +0.61% at $1680.77
