US NATGAS: Northeast – Balance Tightens Modestly, Outflows Tick Up
AGT begins planned maintenance at the Hanover interconnect with Tetco starting today and running through May 16. Flows are showing a redirection and pushing additional gas back into the Tetco M3 market in North Jersey and the Manhattan area. Net volume is restricted to 300 mmcf/d but intraday 1 cycle nominations are showing 333 mmcf/d, or above the stated restriction.
- Northeast demand revised 100 mmcf/d higher to 34.4 bcf/d, down by around 0.97 bcf/d. Demand is 2.55 bcf/d below the 30-day average.
- To the east, compared to the previous GFS 15day forecast, NYC added 8, for a total of 155 HDDs. This is 7 greater than the 10yr normal.
- To the west, compared to the previous GFS 15day forecast, Columbus OH added 3 HDDs, for a total of 140 HDDs. This is 108 HDDs less than the 10yr normal.
- Within the region, total End User demand revised higher 0.04 bcf/d, to 14.98 bcf/d. Comprised of 41% power generation, 43% rescom, and 16% industrial.
- Net outflows from the region revised 0.70 bcf/d higher to 15.18 bcf/d.
- Production in the region revised 0.05 bcf/d lower to 14.98 bcf/d all in the Appalachian shale play
- Imports from Canada are flat at 210 mmcf/d today.
- Feedgas exports to Cove Point LNG if flat at 859 mmcf/d.
- This puts the daily supply surplus at around 2.75 bcf/d widening by 1.56 bcf/d on the day.
- The NE region refers to New York, Ohio, Pennsylvania, Virginia, West Virginia, and Maryland. All flow and production data is from Bloomberg.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
