NATGAS: Gas Summary At European Close: TTF Falls
Apr-10 15:26
TTF front-month prices have softened through the session, losing all gains from the early morning as the market focuses on demand concerns. Risks to the summer injection season remain, with the market awaiting clarity on the EU’s storage target legislation.
- TTF MAY 25 down 0.8% at 33.39€/MWh
- 90% gas storage capacity is achievable by the end of summer 2025, assuming no disruption to Russian pipeline supplies and sufficient LNG flows, EU gas TSO body ENTSOG says in their summer outlook.
- The TTF Q325-Win25 spread is showing the largest winter premium over summer contracts since October with the spread falling to a low of -0.6/MWh today, having shown near parity earlier this week.
- Temperatures in NW and central Europe are forecast above normal into the coming weekend. Temperatures are expected to drift lower next week but still hold above normal through the two-week outlook.
- Norwegian pipeline supplies to Europe are up again to 330.1mcm/d today, in line with end of March levels, Bloomberg shows. Gassco shows limited planned outages in the coming two weeks before a ramp up in seasonal maintenance from April 26.
- European gas storage was 34.97% full on April 8, according to GIE, compared to the previous five-year average of 45.8%, with small net withdrawals early in the week.
- LNG flows could soon favour Asia rather than Europe as the arbitrage narrows, Bloomberg reports.
- UK LNG arrivals have fallen to four cargoes so far in April from nine in the same period the previous month, according to Bloomberg ship tracking data.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US: SFR Call spread
Mar-11 15:24
SFRM5 95.75/96.00cs 1x2, bought for -4 and -3.75 in 4k.
BONDS: FX-Hedged Yields Remain Unattractive For Japanese Across Most Markets
Mar-11 15:17
In trend terms, Japanese investors continue to favour the safe haven status of U.S. Tsys and are willing to buy gilts on pullbacks, while they remain more cautious on EGBs.
- Across U.S. Tsys, the major EGBs and gilts, only BTPs offer a pickup vs. 10-Year JGB yields when rolling 3-month FX hedge costs are accounted for, although the gaps have narrowed in recent months.
- Japanese participants are relatively small players in the BTP market, with Japan’s monthly BoP data pointing to cumulative net selling of Italian paper in the 12 months through January.
- 10-Year OATs generate a small FX-hedged yield stepdown vs. 10-Year JGBs, which, when coupled with a political and fiscal uncertainty premium, may not make for an enticing investment offering for Japanese investors. Accordingly, BoP data shows Japan as net sellers of French bonds in 10 of the last 11 months.
- Japan is also a net seller of German paper over the last 12 months. The desire for looser fiscal policy in Germany is unlikely to reverse that trend in the short-term, although a further step up in yields could help entice Japanese participants when the German fiscal outlook becomes clearer.
- U.S. & UK bonds continue to benefit from Japanese inflows, with only fairly isolated rounds of monthly sales visible when going back over the last 12 months.
- Not all of these flows will necessarily be FX-hedged, given the stepdown in yields that hedging typically generates vs. JGBs.
Fig. 1: FX-Hedged Yields From The Perspective Of A Japanese Investor
Source: MNI - Market News/Bloomberg
EQUITIES: Estoxx Put Fly
Mar-11 15:15
SX5E (21st Mar) 5000/4900/4800p fly, bought for 2.5 in 20k.
