US NATGAS: EOD US Northeast: slight revisions higher in production, warm weekend

• Crude has extended losses today after Presidents Trump and Putin appeared to agree to begin talks over ending the Ukraine war, a bearish move for oil markets. This added to existing pressure from an above-expectation US stock build.
• WTI Mar 25 is down by 2.7% at $71.4/bbl.
• US crude inventories rose 4.07mbbl, more than expected but less than suggested in API data, remaining below the five-year seasonal average. API data yesterday showed a large crude stock build of 9mbbl, according to Bloomberg.
• The move lower in WTI futures narrows the gap to key short-term support and the bear trigger at $70.43, the Feb 6 low. Below here, next support is at $68.05, the Dec 20 ’24 low.
• Meanwhile, spot gold has edged down by 0.1% to $2,895/oz, leaving the yellow metal almost $50 below yesterday’s record high.
• A bull cycle in gold remains in play, with sights on $2,962.2, a Fibonacci projection.
• Copper has rebounded today, with price up by 2.1% at $469/lb, unwinding yesterday’s losses and taking the red metal back to 4½-month highs.
• Copper futures remain in a bull cycle and the most recent gains have highlighted an acceleration of the uptrend.
• Price is through $461.24, 76.4% of the Sep 30 ‘24 - Jan 2 bear leg, with sights on $480.00, the Sep 30 high and bull trigger.

The federal budget deficit came in at $128.6B in January, well above the $94.8B expected and $21.9B in January 2024 (Dec 2024 was $86.7B)  This was the biggest January deficit since 2021.

• The fiscal accounts have clearly deteriorated in nominal terms vs the prior year: the deficit has totaled $840B in the current fiscal year to date, compared with $532B in the prior year. This is the biggest cumulative deficit yet recorded in the first 4 months of the fiscal year in nominal terms (see chart).
• On a 12-month basis, the fiscal deficit hit $2.14T, the highest over such a period since July 2023 ($2.326T).
• One culprit: interest costs on the public debt have increased by $45B in this fiscal year so far, from $357B in the prior year, and at roughly 3.1% of GDP on an annual basis could exceed early 1990s proportions (in nominal terms, debt payments are due to set a clearer record).
• But the deepening deficit is more broad-based: for the year to date, receipts are up 1% Y/Y to $1.60T but spending is up 15% to $2.44T.
• The growth of the economy has helped keep the deficit relatively contained as a percentage of GDP (around 7% on a 12-month rolling basis in January).
• But this is still an extraordinarily elevated figure that comes amid the Congressional process to pass tax cuts. The House's budget resolution just out includes $4.5 trillion for the House Way and Means Committee  to write up Trump's tax agenda, including the extension of 2017 tax cuts and  potentially new reforms to cover campaign pledges like exempting tipped  earnings from tax, while reducing mandatory spending by $2T and a $4T increase to the debt limit.

• RES 4: 158.87 High Jan 10 and a bull trigger   
• RES 3: 156.75 High Jan 23 
• RES 2: 155.89 High Feb 3 
• RES 1: 154.51/62 50-day EMA and a pivot resistance / Intraday high       
• PRICE: 154.47 @ 15:10 GMT Feb 12
• SUP 1: 152.38/150.93 Intraday low / Low Feb 07
• SUP 2: 149.69 Low Dec 9 
• SUP 3: 148.65 Low Dec 3 ‘24 and a key support 
• SUP 4: 148.01 Low Oct 9 ‘24     

USDJPY traded stronger Wednesday, extending the recovery from the Feb 7 lows. The move higher appears to be a correction and this is allowing an oversold trend condition to unwind. Key short-term resistance is seen at 154.51, the 50-day EMA. It has been pierced, a clear breach at the close would highlight a stronger reversal of the Jan 10 - Feb 7 bear leg. This would open 155.89, the Feb 3 high. Key support and bear trigger is 150.93, the Feb 7 low.