AMERICAS OIL: Alberta Wildfire Season Starts March 1 with 10 Active Fires
Feb-28 17:36
The number of fires is down from 60 at the same time last year, Todd Loewen, Alberta minister of forestry and parks, says in news release, cited by Bloomberg
- Fireguard projects are underway in the Bow Valley near Canmore, Cypress Hills Provincial Park, Hinton, Whitecourt and Slave Lake.
- Alberta wildfires can disrupt oil and gas production, with blazes in 2016 cutting 1m b/d of oil sands output and burning down parts of Fort McMurray, the oil sands production hub.
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FED: Instant Answer Questions for January FOMC
Jan-29 17:19
The Instant Answers questions that we have selected for the January FOMC statement are as follows (due to be released at 1400ET):
- Federal Funds Rate Range Maximum
- Number of dissenters on size of rate move
- Any change to the Fed’s description of inflation?
- Any change to guidance on rates in sentence that references “extent and timing” of additional rate adjustments?
BONDS: EGBs-GILTS CASH CLOSE: Early Yield Drop Reverses On Higher Energy Prices
Jan-29 17:08
European core yields saw an early drop reverse late in the session, leaving them a little higher Wednesday.
- Bunds and Gilts strengthened after an overnight trade, in line with a US Treasury rally that kicked off late Tuesday after a solid 7Y bond auction.
- However, a rise in European natural gas prices to 15-month highs amid supply issues and lower temperature forecasts in the region, applied pressure on the space toward the cash close.
- Spanish Q4 GDP came in firmer-than-expected; UK Chancellor Reeves' policy speech was longer-term focused, with little in the way of short-term implications or market movement.
- The German curve bear steepened modestly, with the UK's bear flattening.
- Periphery EGB spreads tightened. OATs underperformed the rest of the space, with spreads widening rift amid discord between the French government and Socialists.
- Focus after hours is on the Federal Reserve decision and communications, and of course Thursday sees the ECB decision (a 25bp cut remains nearly 100% priced - MNI's preview is here). We also get Spanish January flash inflation data (MNI's Eurozone inflation preview went out today, PDF here).
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 0.6bps at 2.278%, 5-Yr is up 1.6bps at 2.381%, 10-Yr is up 1.8bps at 2.583%, and 30-Yr is up 2.4bps at 2.804%.
- UK: The 2-Yr yield is up 2.1bps at 4.331%, 5-Yr is up 1.5bps at 4.325%, 10-Yr is up 0.8bps at 4.622%, and 30-Yr is up 0.3bps at 5.177%.
- Italian BTP spread down 1.6bps at 107.9bps / French OAT up 2.5bps at 74.6bps
EUROPEAN INFLATION: MNI Eurozone Inflation Preview - January 2025
Jan-29 16:59
We've just published our preview of the Eurozone January flash inflaiton round - PDF Analysis Here:
- The Eurozone January flash inflation round is split across two weeks, with Spain, France and Germany providing data on Thursday/Friday (Jan 30-31), before Italy and the Eurozone-wide prints cross on Monday.
- The data will set the tone for inflation developments through the rest of this year, with the annual basket reweighting taking place alongside regular annual price resets in several categories.
- The MNI median of sell-side forecasts points to headline at 2.4-2.5 % Y/Y (vs 2.4% prior) and core to remain at 2.7% Y/Y.
- Headline inflation is likely to be upwardly impacted by an acceleration in Brent crude and natural gas prices in January, while services inflation remains in focus for the core measure.
- The ECB are considered near-certain to cut rates by 25bps at its January 30 meeting, with a subsequent 25bp cut in March almost fully priced - but there remains uncertainty around the speed and magnitude of cuts beyond Q1, with inflation data a key input into those decisions.
