Into The Vortex – EIA Reports Natural Gas Storage Decreased 151Bcf Last Week

EIA reported a net withdrawal of -151Bcf from storage last week. There was a revision for weeks ending January 13 and January 20 from -91 Bcf to -86 Bcf. Stocks drew -261Bcf in the same week last year with a five-year (2017-2021) average decline of -181Bcf. Salt Dome Cavern stocks added -13Bcf from +3Bcf last week. Milder temperatures bring inventories back in line with the five-year and we have seen US benchmark HH Natural gas futures continue to be in … Continue reading “Into The Vortex – EIA Reports Natural Gas Storage Decreased 151Bcf Last Week”

ECB Raises Rates Another 50bps, Lagarde Says Another 50bps in March

ECB raised key rates by 50 bps in its February monetary policy decision following a 50-bps rate hike in December, and matching expectations from most analysts.  EU borrowing costs are at the highest level since late 2008 and ECB President pledged to deliver another 50bps rate hike at its next monetary policy meeting in March. The deposit facility rate is now 2%, the refinancing rate 2.5% and the marginal lending to 2.75%, a level not seen in fourteen years. The central bank … Continue reading “ECB Raises Rates Another 50bps, Lagarde Says Another 50bps in March”

Bank of England Raises Interest Rates 50bps to 4.0%, Projects Inflation Likely Peaked

The Bank of England MPC at its December meeting Thursday raised the key bank rate by 50 bps from 3.50% to 4.00% as expected. It was the 10th consecutive rate hike and BoE’s benchmark rate puts the cost of borrowing at the highest level since late-2008. The vote was 7-2 (Tenreyro and Dhingra voted to keep rates unchanged, similar to the December meeting). The BoE’s projections again suggested CPI inflation has reached its peak, with the central bank dropping its pledge … Continue reading “Bank of England Raises Interest Rates 50bps to 4.0%, Projects Inflation Likely Peaked”

Hong Kong’s Monetary Authority Raised Interest Rates 25bps Lockstep with US Federal Reserve

The Hong Kong Monetary Authority (HKMA), Hong Kong’s de-facto central bank, raised its benchmark interest rate for a eighth time this year, following the US Federal Reserve, by 25 basis points to 5.00% on Thursday. The latest move brought borrowing costs in the city to the highest level since January 2008. Hong Kong raises rates in line with the Fed due to the Hong Kong Dollar’s peg to the US Dollar. Hong Kong’s economy is not a strong position with … Continue reading “Hong Kong’s Monetary Authority Raised Interest Rates 25bps Lockstep with US Federal Reserve”

Brazil Central Bank Left Rates Steady for Fourth Month at 13.75%, Cautious Due to Fiscal Risk

Banco Central do Brasil​ kept its benchmark interest rate unchanged for the fourth consecutive meeting in February 2023, in line with market expectations. The Central Bank last year having aggressively hiked its benchmark interest rate with twelve consecutive interest rate hikes since 2021 when the bank began its current tightening cycle early last year, the Selic was at a record low 2%. The lending rate is now at its highest level since 2017. Policy makers are seeing signs of easing … Continue reading “Brazil Central Bank Left Rates Steady for Fourth Month at 13.75%, Cautious Due to Fiscal Risk”

Federal Reserve Raises Rates 25bps as Expected, Disinflationary Process has Started

The Federal Reserve raised rates by 25 bp to a target range of 4.50-4.75% in unanimous vote at their February meeting as expected. Market Fed futures pricing suggested a 96% chance of a 25 bps hike. The markets focused on “ongoing increases in the target range will be appropriate.” Fed says “Inflation has eased somewhat but remains elevated.” in a change from “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price … Continue reading “Federal Reserve Raises Rates 25bps as Expected, Disinflationary Process has Started”

Around The Barrel – US Crude Oil Stocks Continue to Build, Adding 31.2Mbbls in just 4 Weeks.

The relentless build in US crude oil inventories continued this week with another +4.140Mbbls, bringing the last 4 weeks build to 31.242Mbbls. Stocks have been building rather stoically in 2023, specifically at the Cushing WTI futures Hub. The EIA reported another +2.315M build there, following +4.267Mbbls, +3.646Mbbls and +2.511Mbbls the prior weeks. Gasoline also had another sizeable build of +2.576M following +1.763Mbbls +3.483Mbbls and +4.114Mbbls the prior weeks. Crude builds have been +533Kbbls, +8.408Mbbls and +18.161Mbbls the weeks prior. Futures … Continue reading “Around The Barrel – US Crude Oil Stocks Continue to Build, Adding 31.2Mbbls in just 4 Weeks.”

January ISM Manufacturing PMI Lowest Since May 2020, Third Straight Month Sub-50.0%

The January ISM Manufacturing Index dropped to 47.4% (consensus 48.0%) from 48.4% in December, reflecting a general contraction in manufacturing activity. The ISM hit its lowest level since May 2020 and marks the third straight month with a sub-50.0% reading. The result was consistent with the regional Chicago PMI’s fifth consecutive month of contraction in business activity in the Chicago region. Clearly the cumulative effect of rate hikes around the globe is adversely impacting demand, evidenced by the fifth straight … Continue reading “January ISM Manufacturing PMI Lowest Since May 2020, Third Straight Month Sub-50.0%”

US Job Openings Rise to Most in 5 Months in December to 11.0 million

Job Openings (JOLTS) in December of 2022 were reported as rising to 11.0 million, the most in 5 months and above market expectations of 10.25 million. The report follows the prior reported 10.33 million being revised higher to 10.512M. For perspective note this report lags the BLS jobs report by one month, which is released Friday. The ratio of openings to unemployed people rose to a near record-high 1.9 from 1.7 a month earlier and compared to 1.2 before the pandemic. … Continue reading “US Job Openings Rise to Most in 5 Months in December to 11.0 million”

ADP Reported US Private Businesses Created 2 Year Low 106K Jobs in January

Private payroll company ADP reported that US jobs grew the least since January of 2021 with 106,000 private payrolls in January 2023. The addition of jobs was much lower than the consensus 170,000 and lower than December’s 235,000 new jobs. The tight labor market, rising interest rates and elevated inflation are the main catalysts for weakness. The slowdown in jobs was led trade/transportations and utilities losing 41K jobs. The goods-producing industry lost 3K jobs due to construction (-24K) and mining … Continue reading “ADP Reported US Private Businesses Created 2 Year Low 106K Jobs in January”