US NATGAS: Western Canada Natgas Fundamentals

• Noted on the Eurex Roll, that the BTP was behind the pace, now some 22.72k spread trades in a 3 minutes Window.
• The BTP spread has been lifted in the past 30 minutes, and has moved from a 89 low to a 92 high at the time of typing.

• A combination of drivers have propelled USDJPY to a fresh one month high of 148.93 on Tuesday. On the topside, 149.12 is the next resistance (61.8% of the Aug 1 - 14 bear leg). However, should momentum continue to gather speed, investors will look to another retracement level at 149.81, followed by 150.92, the August 01 high and a key resistance.
• The initial impetus for the squeeze higher came from BOJ Deputy Governor Himino, who gave no guidance on the timing or pace of potential rate hikes, providing little confidence to yen longs.
• The dynamic of widening yield differentials underpinning the USDJPY rally was then exacerbated by a relief rally for JGB futures following a very solid 10-year auction (highest bid-to-cover since 2023) and the subsequent contrasting pressure on core fixed income that has seen US 10-year yields extend their rise to 7bp on the day.
• Political uncertainty also played its part in the yen sell-off, as a flurry of resignations from senior leadership positions within the governing LDP have followed an internal party meeting. It remains to be seen whether this proves a sufficient sacrifice to keep Japanese PM Ishiba in office.

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