AMERICAS OIL: WTI crude is higher today but remains within the trading range
Jul-17 18:35
July 17 - Americas End-of-Day Oil Summary: WTI crude is higher today but remains within the trading range seen since Tuesday with focus on US trade talks, potential secondary tariffs on Russia, and near-term market tightness.
- US President Trump is said to be eyeing tariff rates of 10% -15% on more than 150 countries. The rate could be read as positive, providing some certainty for smaller countries with a lower rate than initially threatened, a Natixis economist told Bloomberg.
- Trump has also offered renewed optimism about prospects of a deal with Beijing on illicit drugs and hinted that a trade deal with India was close, while an agreement could possibly be reached with Europe as well, Reuters says.
- The FT reports that the EU is preparing a list of potential tariffs on US services as part of its possible retaliation if US trade talks fail.
- NBC reports that a US assessment has found that two Iranian nuclear sites could see a restart of operations within months.
- India is confident it can secure alternative supplies should Russian shipments decline due to ‘secondary sanctions’ considered by the US, Oil Minister Hardeep Puri said on Thursday, cited by Bloomberg.
- Iraq has approved a plan for its semi-autonomous Kurdish region to transfer oil to Iraq – a move towards restoring flows halted for more than two years.
- Drone attacks on oilfields in Iraq’s Kurdistan region have cut crude production by an estimated 140k to 150k b/d, two energy officials told Reuters on Wednesday.
- More than 40% of Nigeria’s crude for loading next month is still unsold, whereas Angola’s August supply is almost sold out, according to traders cited by Bloomberg.
- Press Secretary Leavitt said Russia will face steep tariffs if no deal is reached in 50 days and secondary sanctions apply to Russian oil buyers.
- US cracks are mixed with the gasoline crack modestly lower but the ULSD crack is higher amid strength in the underlying ULSD futures amid supportive US economic data.
- WTI Aug futures were up 1.8% at $67.54
- WTI Sep futures were up 1.6% at $66.25
- RBOB Aug futures were up 1.3% at $2.17
- ULSD Aug futures were up 3.1% at $2.46
- US gasoline crack up 0.2$/bbl at 23.62$/bbl
- US ULSD crack up 2.1$/bbl at 35.94/bbl
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USDJPY TECHS: Resistance Remains Intact
Jun-17 18:30
- RES 4: 150.49 High Apr 2
- RES 3: 149.28 High Apr 3
- RES 2: 147.67/148.65 High May 14 / 12 and a reversal trigger
- RES 1: 145.46/146.28 High Jun 11 / High May 29 and key resistance
- PRICE: 145.23 @ 15:46 BST Jun 17
- SUP 1: 142.80/12 Low Jun 11 / Low May 27 and a key support
- SUP 2: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg
- SUP 3: 139.89 Low Apr 22 and a bear trigger
- SUP 4: 138.82 1.50 proj of the Feb 12 - Mar 11 - 28 price swing
USDJPY is higher, but remains inside the broad range and below last week’s high. Recent weakness suggests the correction between Jun 3 - 11, is over. The trend direction is down - moving average studies are in a clear bear-mode position, highlighting a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low. Key short-term resistance is 146.28, the May 29 high. First resistance is 145.46, Jun 11 high.
US STOCKS: Late Equities Roundup: Risk-Off on Middle East Tension, Will US Join?
Jun-17 18:26
- Still off early Monday lows, stocks are retreating late Tuesday as Middle East tensions heat up. Following a series of social media posts around midday, wires said Pres Trump is considering joining Israel on striking Iran. Markets currently await a state Department press briefing.
- Currently, the DJIA trades down 320.42 points (-0.75%) at 42195.11, S&P E-Minis down 51.25 points (-0.84%) at 6038.5, Nasdaq down 185.9 points (-0.9%) at 19515.53.
- A mix of Health Care, Materials and Consumer Discretionary sectors underperformed in the first half, but it was a handful of Tech stocks led laggers: Enphase Energy -22.82%, First Solar -17.95% and AES -9.12% as the Senate looks to end wind & solar tax credits.
- Pharmaceuticals traded weaker as the WH considers cracking down on drug company advertising: Charles River Laboratories -4.56%, Bio-Techne -3.78%, IQVIA Holdings -3.15%, Thermo Fisher Scientific -2.93% and AbbVie -2.73%.
- The Energy sector outperformed as said geopol risk buoyed crude prices (WTI +2.804 at 74.57) in turn supported oil and gas stocks: Valero Energy +2.32%, APA Corp +2.17%, Diamondback Energy +2.15% and Chevron +1.92%.
SWAPS: Spreads Widen As Fed Set To Hold Open Meeting On SLR
Jun-17 18:07
The Federal Reserve has provided notice that it will hold an Open Board Meeting at 2pm ET on Wednesday Jun 25, with the subject: "Proposed revisions to the Board’s supplementary leverage ratio standards".
- While there were no more details provided, the announcement appears to have rekindled speculation that the regulatory authorities will soon align on an easing of SLR standards, which is seen to be supportive of demand for Treasuries vs swaps.
- The 10Y SOFR swap spread widened in Treasuries' favor by 0.9bp to -52.6bp. The spread remains tighter than the -50bp level that has prevailed since Treasury market turmoil in April.
- This is unlikely to be the end of the process: Gov Bowman who heads Fed supervision said earlier this month that the Fed will host a conference in July addressing several aspects of large bank regulation including SLR, though in a nod to broader reforms, she says there will also be potential changes discussed at the event including GSIB surcharges, Basel III capital requirements, and stress testing.
