AMERICAS OIL: WTI Crude Oil reversed earlier slight gains and is down on the day
Mar-25 18:34
March 25 - Americas End-of-Day Oil Summary: WTI Crude Oil reversed earlier slight gains and is down on the day as the market weighs a partial ceasefire agreement between Ukraine and Russia against the impact of announced US tariffs on countries that buy Venezuelan oil and signs of economic weakness including today’s disappointing consumer sentiment number.
- Ukraine today agreed to a partial ceasefire with Russia after US-Russia and US-Ukraine talks in recent days, involving a Black Sea and energy infrastructure truce.
- The API US oil inventory data is due at 16:30ET ahead of the EIA Weekly Petroleum Status Report tomorrow. A Reuters survey indicated a crude stock draw of 2.6mbbl in the week ended Mar. 21. Distillate stocks are seen down 2.2mbbl and gasoline stocks to draw 2.2mbbl. Refinery runs are expected up 0.3 percentage points.
- US crude stocks likely drew by 2.8m bbl in the week to March 21, according to Macquarie.
- U.S. President Trump signed an order to charge importers of Venezuelan oil and gas a 25% “secondary” tariff from April 2, whether it comes indirectly or directly. The supply accounts for just under 1% of global output.
- Trade in Venezuela’s oil to China stalled March 25 following Trump’s order threatening secondary tariffs on buyers of Caracas’ barrels, Reuters said.
- Chevron had its licence to produce in Venezuela extended to May 27 to give it more time to wind down its operations.
- Russian western port oil loadings are expected to rise 5%, or 100kb/d, to 1.97mbpd in April, according to Reuters sources.
- An explosion was reported this morning at the Co-op refinery complex in Sarnia, Ontario, according to the CBC.
- Mexico’s 340k b/d Olmeca (Dos Bocas) refinery will process 220k b/d by the end of March, according to El Economista citing Pemex CEO Victor Rodriguez.
- The NOAA 6–14-day outlook is bearish for heating demand but supportive of some cooling demand in the South through Apr7 with below-normal conditions on the West Coast and in the Upper Midwest and Northern New England with normal to above normal conditions elsewhere. Below-normal heating demand is likely in most of the country with above-normal demand in the northern reaches of PADD 2 and PADD 1 as well as PADD 5.
- US cracks were higher off weakness in crude oil prices while draws are expected in refined product stocks in the weekly inventory reports due out later today and tomorrow.
- WTI May futures were down 0.1% at $69.00
- WTI June futures were down 0.1% at $68.60
- RBOB Apr futures were up 0% at $2.21
- ULSD Apr futures were up 1.3% at $2.29
- US gasoline crack up 0.3$/bbl at 23.94$/bbl
- US ULSD crack up 1.1$/bbl at 25.22$/bbl
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GERMANY: Election Exit Polls Leave Some Uncertatinty On Coalition Possiilities
Feb-23 18:14
Exit polls on the German election so far leave some uncertainty on potential coalition outcomes, while the possibility of debt brake reform apperas likely as of now.
- Exit poll results stand at: CDU/CSU 28.9% (24.1% 2021), SPD 16.2% (25.1% '21), Greens 13.0% (14.8% '21), FDP 4.9% (11.5% '21), The Left 8.5% (4.9% '21), AfD 19.9% (10.3% '21), BSW 4.8% (new).
- Both FDP and BSW remain with some chances of gaining above 5% of votes ultimately - and would not get any Bundestag seats if they fail to do so as per a constitutional threshold.
- The "Grand Coalition" of centre-right CDU/CSU and centre-left SPD (which was seen as the most likely ahead of the election) would only have a Bundetag majority if both FDP and BSW will remain below named threshold. Current polls tilt towards that but leave some uncertainty.
- If pro-business FDP were to make it into Bundestag, that would make a "Germany" coalition (consisting of CDU/CSU, SPD and FDP) the most probable. Such a three-party coalition outcome would be seen to bring less stability to the government. Another option in that case would be the "Kenya" coalition (CDU/CSU, SPD and Greens) - which apperas rather unlikely, though, as CSU and Greens have partially opposing views.
- From a debt brake point of view, a 2/3rds Bundestag majority in favour of parties open for reform seems likely from current polls. However, the Left will likely be needed for such reform, and might push for some concessions from the governing parties then, complicating negotiations.
- More clear results are expected overnight.
STIR: July Fed Cut Priced Back In
Feb-21 21:14
The next Fed rate cut is again fully priced for the July meeting, following a 6bp futures-implied move today on the back of soft Services PMI data exacerbated in the afternoon by a risk-off move in equities.
- This comes following a run of mixed-at-best data (retail sales, housing starts, various consumer and business surveys) in the last week and is the first time a July cut has been priced since Feb 7 (just prior to January payrolls data) - previously it was priced for September.
- There's now almost two rate cuts priced through the end of the year (47bp through the December FOMC, an increase of 9bp on the day), the most seen since Feb 5.
- For the week, implied 2025 rate cuts have ranged between 35 and 48bp (the latter seen in the last hour of trade)
- See our US Macro Weekly for more on what to watch next week, with PCE and GDP the data highlights.
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 20) | Chg Since Then (bp) | End of Last Week (Feb 14) |
| Mar 19 2025 | 4.32 | -1.5 | -1.5 | 4.32 | -0.9 | 4.32 |
| May 07 2025 | 4.25 | -8.4 | -6.9 | 4.28 | -3.1 | 4.28 |
| Jun 18 2025 | 4.14 | -19.4 | -11.0 | 4.18 | -4.2 | 4.18 |
| Jul 30 2025 | 4.07 | -26.2 | -6.8 | 4.13 | -6.0 | 4.13 |
| Sep 17 2025 | 3.97 | -35.7 | -9.5 | 4.04 | -6.5 | 4.04 |
| Oct 29 2025 | 3.92 | -41.2 | -5.5 | 4.00 | -8.0 | 3.99 |
| Dec 10 2025 | 3.86 | -47.3 | -6.1 | 3.95 | -8.8 | 3.93 |
US TSYS: Late Risk-Off Support Lends to Weak Data Support
Feb-21 20:29
- Treasuries look to finish near session highs Friday, second half support spurred by risk-off sentiment as wires recirculated report of a new Covid strain out of China with "pandemic potential" (SCMP).
- Tsy Mar'25 10Y futures climbed to 109-24 high (+18.5), still shy of initial technical resistance at 110-00 (High Feb 7 and the bull trigger); 10Y yield fell to 4.4042% low; curves mixed: 2s10s -1.123 at 22.205, 5s30s +.956 at 40.929. Heavy volumes (TYH over 3.3M tied to quarterly roll action, June takes lead next Friday).
- Early Treasury support triggered by weaker than expected data: flash S&P PMIs w/ composite at 50.4 (cons 53.2) after 52.7 in Jan, services (49.7 vs cons 53.0, after 52.9); and existing home sales were softer than expected in January at 4.08m (cons 4.13m) after an upward revised 4.29m (initial 4.24m). UofM data showed a worrying rise in long-term inflation expectations alongside a deterioration in consumer sentiment.
- US stocks fell hard, DJIA back to January 21 levels while SPX Eminis and Nasdaq withdrew to last Thursday lows. Trading desks also cited today's call weighted option expiration that has historically leaned toward bearish price action in the week after.
- Late weekend focus on German elections take focus over the weekend, before New Zealand retail sales and German IFO data cross. There is a public holiday in Japan Monday.
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