ENERGY: US Oil and Gas Rigs Down 4 on Week at 555: Baker Hughes
Jun-13 17:07
The US total oil and gas rig count was down 4 rigs on the week at 555 rigs, according to Baker Hughes, a new lowest level since Nov. 2021.
- This puts total US oil and gas rigs down 33, or 5.6% on the year.
- See breakdown by type and week on week change:
- Oil: 439 (-3) - down 46 rigs, or 9.5% on the year.
- Gas: 113 (-1) - up 15 rigs, or 15.3% on the year.
- Miscellaneous: 3 (0) - down 2 rig on the year.
- Canada: 138 (24) - down 28 rigs, or 16.9% on the year.
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USD: Greenback Pops Higher on Source Report Concerning Currency Pledges
May-14 17:00
- A decent bump higher for the dollar in recent trade, as an article drops on Bloomberg suggesting US officials are not seeking to include currency policy pledges in trade deals, according to a person familiar with the matter.
- Markets remain sensitive to these types of headlines on Wednesday, as broader greenback pressure was seen earlier in the session as it was announced that The US and South Korea agreed to share a mutual understanding of the principles they hold for operating foreign exchange markets and to continue discussions on FX policy.
- USDJPY rallied from 146.50 to 147.11 on the headline but has reversed back to 146.70 at typing. The pair has remained within its impressive 206 pip range, having printed as low as 145.61 during the European morning.
STIR: Next Fed Cut Only Fully Priced For Oct Ahead Of Thu Data Deluge
May-14 16:55
- Fed Funds implied rates have pushed to new recent highs over the past two hours, with the Dec 2025 rate at levels last seen on Feb 24.
- Cumulative cuts from 4.33% effective: 2.5bp Jun, 9bp Jul, 22bp Sep, 34bp Oct and 49bp Dec.
- The SOFR implied terminal rate is at 3.48% (SFRZ6) at what would be its highest close since Mar 27.
- Headlines have been relatively light for the sustained move, although the step did come after Bloomberg headlines that China is suspending export controls applied to 28 US entities in a sign of some further trade de-escalation as some eye the likelihood of a temporary pause of 20% “fentanyl” tariffs.
- The moves came some time before the US and Qatar announced an economic exchange worth at least $1.2trn but with only vague details in the White House statement.
- Tomorrow sees a particularly heavy morning, with retail sales, PPI inflation, jobless claims plus Empire & Philly Fed manufacturing reports all at 0830ET.
- Powell then talks on the framework review at 0840ET which could limit its market impact but will be watched closely nevertheless.
FOREX: USD Index Fully Reverses Monday Surge Before Stabilising
May-14 16:44
- Tuesday’s theme of a weakening US dollar extended today, helped lower by major equity benchmarks consolidating their recent strength and headlines surrounding trade talks providing an additional greenback headwind. The US and South Korea agreed to share a mutual understanding of the principles they hold for operating foreign exchange markets and to continue discussions on FX policy. The headlines spurred some USDKRW weakness, which then filtered through to a broader dollar move against G10 peers.
- Price action prompted the USD index to bridge the gap to last Friday’s close, notably eroding the entirety of the US/China tariff reprieve inspired rally to start the week.
- Hardest hit on Wednesday was USDJPY, which has traded in an impressive 206 pip range. The Japanese yen had been trading in a relatively weak manner amid the risk sentiment surge, however, discussions on FX policy being discussed between other administrations prompted some speculative yen appreciation. USDJPY traded as low as 145.61, and was down as much as 1.27% before stabilising. The move did fall just shy of last Friday’s close at 145.37. Amid a broader stabilisation for the greenback, USDJPY has pared roughly half the moves and stands around 146.50 as we approach the APAC crossover.
- Elsewhere, the likes of AUD and NZD are underperforming (down around 0.45%), although they still remain among the best performers in G10 this week. For AUDUSD, Monday’s move lower was considered corrective and another test above 0.6500 today reinforces the underlying bullish tone. Further strength would open 0.6528, the Nov 29 high, although there appears scope for a more protracted recovery towards the US election related highs at 0.6688.
- Thursday’s APAC session will be highlighted by the Australian unemployment report, before the focus turns to UK GDP. In the US, PPI and Retail Sales data are scheduled, which will be followed by Fed Chair Powell speaking.
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