NATGAS: TTF Pulls Back as Healthy LNG, Mild Weather Enables Storage Build
Nov-05 08:00
TTF front month has pulled back from a high of €32.575/MWh yesterday with upside limited by rising LNG imports enabling a small build in underground storage levels while mild weather and rising wind next week ease demand pressures.
- Temperatures in NW Europe are forecast above normal in the coming week although could gradually cool back towards normal around mid-month. CWE Wind is anticipated to be on a general upward trend from Nov. 11 after low levels forecast this weekend.
- NW European LNG sendout is estimated up again to 280.2 mcm/d on Nov. 3 and the highest since March compared to an average of 262.6mcm/d over the previous week, Bloomberg shows.
- Norwegian pipeline supplies to Europe are steady at 333.4 mcm/d today. Gassco shows total planed unavailable capacity of 14mcm/d until Nov. 12.
- European gas storage was up on the day to 83.02% full on Nov. 3, according to GIE data. The previous five-year seasonal average is 92.2% full.
- Algeria gas flow to Italy at Mazara are 46.1mcm/d today compared to an average of 50.5mcm/d over the previous week, Bloomberg shows.
- ICE TTF futures aggregate trading volume was 293k on Nov. 4.
- TTF DEC 25 down 1.5% at 32.07€/MWh
- TTF Q1 26 down 1.3% at 32.12€/MWh
- JKM Dec 25 down 1.5% at 11.02$/mmbtu
- US Natgas DEC 25 down 2.6% at 4.23$/mmbtu
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GILTS: Bear Steepening
Oct-06 07:59
Gilts open lower on global cues, after the JGB curve steepened as a new PM was elected and with OATs struggling as French political risks deepen.
- Futures pierce Thursday’s low, basing at 90.51.
- Bears remain in technical control at this stage, particularly with UK fiscal risks lingering. Initial support and resistance in futures still located at 90.26 & 91.28, respectively.
- Yields 2-6bp higher.
- 10s still comfortably within their recent 4.60-4.80% range, last 4.73%.
- 2s10s and 5s30s stick within their respective multi-week ranges, trading ~7bp and ~10bp below their cycle closing highs. Steepening trends intact.
- BoE-dated OIS still shows ~5bp of easing through year-end and is not discounting the next 25bp cut until the end of the April MPC.
- We continue to believe that markets underprice the odds of a Q4 rate cut.
- Comments from BoE Governor Bailey are due today.
- They will be closely scrutinised (even though he spoke as recently as Friday), particularly after Deputy Governors Ramsden & Breeden failed to push back against the idea of rate cuts last week.
- We have previously suggested that Bailey and those two Deputies would probably have to join dovish dissenters Dhingra & Taylor if we were to see a cut in Q4.
- Lower tier construction PMI data is due today.
- Elsewhere, the BoE will sell GBP775mln of short bucket gilts from its APF (3- to 7-Year).
OAT: 10-year OAT/Bund Spread Pierces December 2024 Closing High
Oct-06 07:53
The 10-year OAT/Bund spread has pierced the December 2024 closing high of 87.8bps following Lecornu’s resignation. The spread is now 7bps wider on the session.
- While the timing of Lecornu’s resignation has come as a surprise, his prospects were appearing bleak amid opposition from both sides of the political spectrum during his short (less than 1 month) tenure in office.
- President Macron is now faced with a familiar dilemma in needing to appoint another PM (or face calling a fresh legislative election). Our Political Risk team will provide more colour in due course.
- Clearly, the EC’s deadline for 2026 budget drafts (October 13th) is extremely unlikely to be met by France, further delaying hopes of needed fiscal consolidation.
EUR: EUR/USD Slips Through Horizontal Support on Lecornu Resignation
Oct-06 07:52
- EUR extends losses on the back of that resignation: EUR/USD now through earlier lows as well as the Oct02 low at 1.1683. French equities also see weakness - with the CAC40 easily the underperformer in Europe.
- Lecornu's resignation opening up more criticism from other parties: National Rally's Bardella says the government have shown they have understood "nothing" regarding the country's problems.
- Next major support in EURUSD crosses at 1.1646, the late Sept low. Weakness through here snaps the weak uptrend posted off the August 1st low.
