OIL: Potential Restart Of Kurdish Flows Could Ease Heavy Sour Shortage In Med.
Feb-19 12:25
Restart of Kurdish flows may ease heavy sour crude shortage in the Mediterranean, but traders are sceptical that an increase will take place as planned, Bloomberg reports.
- There have been no offers of Kurdish oil yet, traders involved in the market told Bloomberg.
- The sour crude market in the Mediterranean is very tight with supplies from the Middle East being offered at very high prices, traders said.
- Despite high prices, there were not many cargoes available, especially from the Middle East.
- The restart of Kurdish flows may also put downward pressure on Johan Sverdrup, one of the few heavy sour grades in the North Sea, Bloomberg reports.
- Johan Sverdrup was last traded at a premium of $1.70 to Dated on Feb. 12, the highest in more than a year. The grade is now more expensive than most light sweet grades in the North Sea, according to Bloomberg.
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CROSS ASSET: Core Bonds are testing their respective lows
Jan-20 12:24
- Bund is now testing Friday's low of 131.50, and {us} US Tnotes (TYH5) is also seeing some selling interest at the low, just git sold in 3k.
- Further downside in Bund future would see next support at the 131.00 figure.
- The French OAT sees Friday's low at 122.02, so far printed a 122.08 low.
- No Impact in the USDJPY as of Yet, the move in Bonds is very gradual, 1 tick at a time and nothing fast, but still worth keeping an eye on Tnotes.
OUTLOOK: Price Signal Summary - S&P E-Minis Bull Cycle Still In Play
Jan-20 12:11
- In the FI space, the trend in Bund futures is unchanged, it remains bearish. However, the Jan 15 rally highlights a short-term reversal signal - a bullish engulfing candle. It suggests scope for a continued corrective phase that would allow an oversold trend condition to unwind. A continuation higher would open 132.47, the 20-day EMA. The bear trigger has been defined at 130.28, the Jan 15 low, a break would resume the downtrend.
- The trend condition in Gilt futures is unchanged, the direction remains down. However, strong gains last week highlight the start of a corrective phase and if correct, signals scope for a continuation higher near-term. Attention is resistance at the 20-day EMA, at 91.55. This average has been breached, a clear break would suggest scope for a stronger retracement. On the downside, the bear trigger has been defined at 88.96, the Jan 13 low. First support lies at 90.68, the Jan 16 low.
US TSYS: Modestly Cheaper To Start Inauguration Day
Jan-20 11:45
- Cash Treasuries are closed today for Martin Luther King Day whilst futures markets are set for an early close at 1300ET.
- Focus is firmly on Trump’s inauguration, due to be sworn in at 1200ET and with eyes on executive orders that may follow. See our political risk team’s schedule for the day: https://media.marketnews.com/MNIPOLRISK_Inauguration_Day_Schedule_07a11994f9.pdf
- TYH5 pushed through Friday’s low overnight with 108-10 (currently 108-12+, -05) but still carries some of the impact from a dovish Waller on Thu and all of Wednesday’s CPI impact. Cumulative volumes are unsurprisingly extremely thin, at 165k.
- Gains are considered corrective against a medium-term bearish trend condition. Resistance is seen at 108-27+ (Jan 17 high) whilst support is seen at 108-00 (Jan 13 low).
- Fed Funds futures meanwhile price a cumulative 7.5bp of cuts for Mar, 13bp for May, 23bp for Jun, 26bp for Jul and 38bp for 2025 (the latter vs 32bp pre-CPI).
