US NATGAS: Waha Falls on Day
The Waha gas hub in Texas is down by 12.5 cents/MMBtu today, according to NGI. High Permian production, lower local demand and falling US outflows are offsetting higher flows to Mexico.
- Total gas demand in the US Gulf region is down today to 34.27 bcf/d, compared to 34.95 bcf/d yesterday, according to Bloomberg. The 30-day moving average is 39.23 bcf/d.
- Permian output rose to 20.15 bcf/d from 20.05 bcf/d yesterday. The 30-day moving average is 19.31 bcf/d.
- Overall dry gas production in Texas remains strong, and is stable on the day at 30.84 bcf/d. The 30-day average is 28.74 bcf/d.
- Exports to Mexico from the US Gulf are stronger at 5.59 bcf/d, compared to 5.47 yesterday, Bloomberg said.
- Gas outflows from the Gulf region to other areas are down by 0.1 bcf/d to 10.5 bcf/d and compared to the 30-day moving average of 11.86 bcf/d.
- All flow numbers are from Bloomberg and are updated during the day. Current figures are as of the time of publishing.
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PIPELINE: $8.5B Mexico 3Pt Leads US$ Debt Issuance
- Date $MM Issuer (Priced *, Launch #)
- 01/06 $8.5B #Mexico $2B 5Y +170, $4B 12Y +230, $2.5B 30Y +255
- 01/06 $2.75B #NAB $750M 5Y +50, $750M 5Y SOFR+79, $1.25B 11NC10 +130
- 01/06 $1.75B #JBS $1B 10Y +135, $750M 30Y +162.5
- 01/06 $1.5B #Southern Cal Edison $850M 10Y +85, $650M 30Y +108
- 01/06 $1.5B #AerCap Aviation $750M 3Y +75, $750M 7Y +98
- 01/06 $1.5B #Williams Cos $1B 10Y +100, $500M 30Y +120
- 01/06 $1B #India Export-Import Bank 10Y +100
- 01/06 $900M #John Deere Capital 00M $2Y +25, $500M 3Y +35
- 01/06 $800M #Corebridge Funding $500M 3Y +58, 3Y SOFR+75
- 01/06 $750M #Sixth Street Lending 5Y +185
- 01/06 $600M #RGA Global Funding 5Y +85
- 01/06 $500M #Lincoln Financial 5Y +88
US-CHINA: Trump Faces Uphill Battle To Reduce China Trade Deficit
A recent report from Axios illustrates the 'historical headwinds' US President-elect Donald Trump is facing if he is to successfully reduce the US trade deficit with China, noting the trade deficit with China “has been larger than $200 billion since 2005."
- Axios: "It reached a record high of $418 billion in 2018, Trump's second year in office…. The tariffs imposed on China during the first Trump administration, which were then kept in place by President Biden, did relatively little to change that dynamic. During Trump's first term, when imports fell, exports fell too, blunting the effect on the trade deficit.”
- Axios adds: "For the time being, the market seems to be reasonably sanguine when it comes to the threat of a trade war. Maybe that's because no such thing has happened in the lifetimes of today's traders, and maybe it's because the sheer force of money flowing between China and the U.S. seems impossible to significantly disrupt..."
Figure 1: US Trade with China, 1992-2004
Source: Axios, USA Trade
EUROPEAN INFLATION: Swiss CPI Preview - Focus On Change in Services Y/Y [2/2]
For the March SNB meeting, markets currently price about 25bps of easing - one full, regular cut. Through the December 2025 meeting meanwhile, markets expect around 50bps of cumulative easing - which would take the SNB policy rate down to 0.0%.
- President Schlegel expressed discontent with the potential of a negative policy rate in the aftermath of the December policy meeting, so the bar to cuts below that neutral threshold appears quite high for the time being.
- In FX, EURCHF has bounced well from the double bottom formed around 0.9210 and has been oscillating either side of 0.9400 in recent sessions.
- More notably, and despite Monday's pullback, the underlying trend condition for USDCHF remains in firm bullish territory, after printing a seven-month high last week. 0.9158 and 0.9224 remain key medium-term targets, with initial resistance moving up to 0.8995, the 20-day EMA.
