NATGAS: TTF Set for Weekly Gain After Trump-Xi Call and on Supply Risks
TTF front month is set for a net weekly gain amid optimism around easing US China trade tensions after a Trump-Xi call, with the two sides agreeing to meet for further trade discussions soon. Supply risks from seasonal outages in Norway and the US have also been supportive this week.
- Temperatures in NW Europe are forecast to drift slightly below normal over the coming weekend before warming back above normal into the second week of the outlook.
- Norwegian pipeline supplies to Europe are nominated up slightly to 273.1mcm/d today, Bloomberg shows. Gassco shows planned unavailable capacity around 80mcm/d today and tomorrow before a brief dip to 60.8% on June 8.
- European gas storage is up to 49.88% full on June 4, according to GIE compared to the previous five-year average of 60.7% full. Net injection rates continued to hold just above the previous five-year average.
- NW European LNG sendout remained almost unchanged on the day at 208.3mcm/d on June 3 but below an average of 227mcm/d over the previous week, Bloomberg shows.
- Algeria gas flows to Italy at Mazara remain strong at 64.2mcm/d today, Bloomberg shows.
- ICE TTF futures aggregate trading volume was 244k on June 5.
- TTF JUL 25 up 0.3% at 36.51€/MWh
- TTF Q3 25 up 0.4% at 36.8€/MWh
- TTF WIN 25 up 0.4% at 37.78€/MWh
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AUDUSD TECHS: Northbound
- RES 4: 0.5682 High Nov 12 ‘24
- RES 3: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 2: 0.6528 High Nov 29 ‘24
- RES 1: 0.6515 Intraday high
- PRICE: 0.6486 @ 07:53 BST May 7
- SUP 1: 0.6379/6333 20- and 50-day EMA values
- SUP 2: 0.6275 Low Apr 14
- SUP 3: 0.6181 Low Apr 11
- SUP 4: 0.6116 Low Apr 10
AUDUSD had traded to a fresh short-term cycle high, today. A bullish theme remains intact. The recent breach of 0.6450, the Apr 29 high, confirms a resumption of the uptrend and maintains the current sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position, highlighting an uptrend. Sights are on 0.6528, the Nov 29 ‘24 high. Initial key support to monitor is 0.6333, the 50-day EMA.
STIR: 95bp Of Cuts Still Priced Through Dec, Tomorrow's Guidance Eyed
GBP STIRs are little changed this morning, looking through the previously covered Chinese policy easing announcement and reports pointing to the U.S. and UK nearing a trade accord.
- SONIA futures flat to +1.5.
- BoE-dated OIS is within 1bp of yesterday’s closing levels, showing 95bp of cuts through year-end. A reminder that ~88.5bp of cuts were priced through year-end early yesterday after over 100bp of easing was priced over the same horizon last week.
- The next 25bp cut is still fully discounted come the end of tomorrow’s decision.
- An outcome other than a 25bp cut would be surprising but there will be a number of things to watch: any changes to the guidance and the inflation/growth forecast changes, the vote split and the introduction of new scenarios.
- For the guidance we expect "restrictive" and "careful" to remain but we question whether "gradual" will be removed and talk through the rationale for this potential change.
- On the vote split, consensus expects 8-1 but neither Dhingra nor Mann dissenting for a 50bp cut would be a huge surprise. Taylor or Ramsden are plausible possible dissenters that would be more noteworthy - and any other member voting for a 50bp cut or for Bank Rate on hold would be a huge surprise.
- Click for our full preview.
- Expect macro news flow and cross-market moves to dominate between now and the BoE decision, with little of note on the UK calendar in that period.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
May-25 | 4.200 | -25.9 |
Jun-25 | 4.064 | -39.5 |
Aug-25 | 3.861 | -59.9 |
Sep-25 | 3.721 | -73.9 |
Nov-25 | 3.560 | -89.9 |
Dec-25 | 3.510 | -94.9 |
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