US NATGAS: US Northeast Natgas Update

• Stocks continue to extend late session highs as concerns moderate over the Trump administration's trade policy, China tariff tit-for-tat notwithstanding. Currently, the DJIA trades up 153.9 points (0.35%) at 44573.8, S&P E-Minis up 41.5 points (0.69%) at 6063.75, Nasdaq up 241.9 points (1.2%) at 19633.39.
• Energy and Information Technology sectors continued to lead gainers in late trade, oil and gas stocks supporting the former: Marathon Petroleum gaining 6.75% after beating earnings estimates while lowering capacity to 85% to improve margins. Meanwhile, Valero +4.66%, APA Corp +4.47% and Phillips 66 +4.02%.
• After trading weaker the last few sessions, the Information Technology sector gained on support from semiconductor makers: Monolithic Power +4.13%, Advanced Micro Devices +3.96%, Enphase +3.93% and Nvidia +2.06%. Of note, software solutions heavyweight Palantir surged 22.63% on strong earnings and guidance.
• On the flipside, Utilities and Consumer Staples sectors continued to underperform in the second half, multi energy producers weighing on the former: Dominion Energy -4.21%, Edison Int -1.3% and NextEra Energy -1.25%. On Consumer Staples, Estee Lauder fell nearly 17% after announcing 7,000 job cuts and to book charges of $1.2 billion to $1.6 billion before tax. Elsewhere, Clorox declined 6.78%, PepsiCo -4.67% and Archer-Daniels-Midland -3.44%.
• Additional earnings announcements expected after the close: Snap, Alphabet Inc, Match Group, Amgen, Advanced Micro Devices, Lumen Technologies, Simon Property Group, Enphase Energy, Electronic Arts, Omnicom Group and Juniper Networks Inc.

• Gold hit a fresh record high on Tuesday, aided by continued safe haven demand amid the ongoing tariff uncertainty and a weaker US dollar.
• Spot gold is currently 1.0% higher on the session at $2,844/oz, taking total gains this year to over 9%.
• The move comes amid a further escalation of trade tensions between the US and China. In addition, President Trump's hardline approach on Iran has assisted the push lower in the front-end of the US yield curve, pressuring the greenback.
• For gold, next immediate resistance is seen at $2,845.2, a Fibonacci projection, which has been tested today. This is followed by $2,867.5, the 1.50 projection of the Nov 14 - Dec 12 - 19 price swing.
• There have also been some spillovers into silver, which has risen by 1.9% to $32.2/oz.
• For silver, sights are on $32.338, the Dec 12 high and a key resistance. Clearance of this level would highlight a reversal, opening $33.125, the Nov 1 high.
• Meanwhile, WTI erased most of its earlier losses after the headlines that the Trump administration was seeking “maximum pressure” on Iran.
• WTI Mar 25 is down by 0.5% at $72.8/bbl.
• Earlier losses today saw WTI futures pierce support around the 50-day EMA, at $72.32. A clear break of the 50-day average would suggest scope for a deeper retracement towards next support at $68.05, the Dec 20 low.

There is no expectation of any changes to nominal coupon sizes in the upcoming Feb-Apr quarter vs the previous quarter. Issuance is set to resume next week with sales of $58B in 3Y Note, $42B in 10Y Note, and $25B in 30Y Bond. 

• February is set to see $324B in nominal Treasury coupon sales, in addition to $10B in 30Y TIPS and $28B FRN for a total of $362B – slightly below the Jan total of $365B. See table below.
• When the upsizings are announced, with most expectations surrounding the August 2025 or - more prevalently - November 2025 refunding rounds, and perhaps not until 2026, they are expected to go on for multiple quarters. (Sizes were increased between Aug 2023 and May 2024, and held steady since).
• Expectations for the first upsizings are as follows:
  • BNP Paribas: By August
  • CIBC: November
  • Deutsche: November
  • Goldman Sachs: November
  • JPMorgan: November
  • TD Securities: August (November at the latest).
  • Wells Fargo: November