AMERICAS OIL: US ENERGY – What to Watch: US Payrolls, Rig Counts & COT
Feb-07 12:28
US ENERGY – What to Watch: US Payrolls, Rig Counts & COT
- US nonfarm payrolls are due for release at 08:30 ET. January’s employment report will receive almost as much attention for comprehensive revisions as for the monthly nonfarm payroll gains, which are expected to slow to 170-180k from December’s strong 256k.
- The latest Baker Hughes rig count data is due for release at 13:00ET. The US oil rig count last week rebounded to 479 while the gas rig count edged down to 98.
- The ICE and Nymex commitments of traders reports are due for release after the close today at 18:30GMT and 15:30ET. Previous data showed funds cut the combined Brent and WTI net long oil positioning with a drop in WTI positions more than offsetting an increase in Brent. Funds cut net long ICE Gasoil positions on the and switched back to a narrow net short on Nymex diesel. Nymex gasoline net long positions fell again to the least bullish since October.
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GILTS: Latest Trump Tariff Speculation Keeps The Pressure On
Jan-08 12:28
Pressure remains, with the latest media speculation surrounding Trump’s tariff preferences supporting the USD and weighing on bonds.
- That limits any recoveries.
- Futures as low as 90.27.
- Yields 6-10bp higher, 10- to 30-Year zone leads the move. 10-Year yields hits the highest level seen since ’08.
- Next level of upside interest in 10s the Oct ’08 monthly high (4.798%), highs of 4.792% seen so far.
- A break above there would expose the June ’08 monthly highs located at 4.862%, which protects the 5.00% level.
- 30s as high as 5.355%. August ’98 monthly high (5.397%) presents the next level of upside interest.
Fig. 1: UK 10-Year Yields
Source: MNI - Market News/Bloomberg
US DATA: Higher Long-End Rates Continue To Weigh On Mortgage Activity
Jan-08 12:27
- MBA composite mortgage applications extended their recent slide, albeit with a more modest -3.7% last week after a cumulative -22% in the two weeks prior covering the Christmas holiday period (all figures SA).
- Refis saw some very mild stabilization (+1.5% after a two week decline of -36%) with purchases instead leading the decline in the latest week (-6.6% after -13% over two weeks).
- It comes as 30Y mortgage rates have continued to churn higher, albeit by only 2bps in the latest week to 6.99%. It’s up from 6.67% in early Dec and a recent low of 6.13% in mid-Sep for its highest since July.
- Interestingly considering expectations of looser regulation under incoming President Trump, the regular-jumbo spread at exactly 0bps (from -16bps the previous week) reached its highest since Nov 2023. It is however just a single week and would need to see similar readings in weeks ahead to confirm this trend.
BONDS: German Yields are through the next resistances
Jan-08 12:20
- With German Bund through 131.59, the Yield is testing 2.55%, and further out would see 2.60% next, this equates to 131.06.
- We noted earlier the 127.82 support in UBH5, which equated to the November high for the 30yr Yield at 2.753%, this is now being tested, printing a 2.758% high, highest since early July.
- French OAT has broken below the 122.00 figured, and the 10yr Yield will now be targeting the 2024 high in Yield.
