Spot Nat gas

Plenty of spot nat Gas prices throughout the country,here is the price of the Boston/New England city gate.This is a proxy for  East coat Demand.You can see  there are a few days with no prices  due to No change from prior close.Take a look at today prices it has jumped 50% from it last update on 12/12. This is indicative a big jump in Demand for one of the most populous parts of the country

nat-gassss

Here is the graph of these prices.  Very impressive move higher indeed.This will have a bigger impact on the front month prices then any worries about  Early Jan Cold.Also Prices touched the highest in 21 Months,

grega

 

Natural gas rally

Around 7:20 this morning Nat Gas spiked higher and continued to run.At one point higher by 7%!Accurate reason hard to come by, but  speculation is that January Forecast have been revised colder,Talk about A harsh cold winter in China that may result in an uptick of LNG exports,Tomorrows storage  number will be a massive 207

Watching mid day weather  for next catalyst.

morning 12-21

Spoos 4 handle range, Euro Stoxx Vix 2 year low, Spanish banks lower as a court rules against them in mortgage scandal, same old worries about Italian banks. In Europe Financial service sector -.86% banks -.6%. In fact 18-19 Stocks sectors are lower. Spain’s stock market Down.9% Italy-.7% Dax unchanged. Swedish central bank Extended QE by sek30 bln and said greater chance that rates will be cut than raised. Dollar is lower by 40 ticks but for no specific reason other than position squaring, holiday markets. Euro +40 and Yen also +40 ticks. Crude oil has a small bid but trading in a very narrow 33 tick ranges. Yesterday’s API storage numbers showed a bigger than consensus draw from Oil Supplies but that is not unexpected for this time of year. Base metals mixed copper +.4%, Zinc -.5% and Gold Up a touch. Very quiet again so far today. ECB QE ends today for the year as they too celebrate Holidays, it will pick up after the first of the year. German Yields are lower and Spain and Italy higher. Let’s see if we can get Dow 20K today.
Existing home sales and Oil numbers today.

Holiday Markets

Spoos  have 5 handle range since 8:30 open ,overnight Currency vol down  29% For Yen due to post BOJ relief.1 week vol for Euro -6%,Pound -4%.Vix  stands little changed at 11.5 as Expiration  is tomorrow.The Push for Dow 20K ran out of steam at 19987,close but no cigar.

There  is some trade in the Livestock  complex as  the bullish Environment has resulted in some overbought conditions in both front month hogs and Cattle.RSI for  February Cattle at 73  equalling the highest in months.February lean hogs RSI stands at 79  is the highest in months!cattle on feed report,Quarterly Hogs report and Cold storage report all due Friday at 11:00.These are a big deal for the Cattle  and Hogs  similar to monthly Jobs report  for Bonds and stocks.Quite possibly expecting a Bullish number.This is a rareity on Friday as  Cattle reports are  Normally released after the close.

European Stock Futures drifting higher into cash close.Bonds have been heavy all day  blah

Morning 12-20

News overnight:
1) BOJ policy meeting overnight where rates and QE left unchanged Summary from Reuters “-BoJ’s Kuroda (Press Conference): Japanese economy will grow above it’s potential from now on; inflation expectations weakening; will adjust policy to maintain inf towards 2% tgt; continuing with easing most appropriate for achieving 2% tgt; not ruling out debt purchases in any maturity; doesn’t think Yen has weakened significantly – will debate yen impact at nxt meeting; LT JGB tgt not a cap or a floor – is ~0%; ETF purchases are necessary to achieve their 2% inflation tgt; not expecting yen weakness ahead
My take away “Will discuss yen at next meeting” it is getting too weak now. Economy improving but Inflation still slow to increase. NKY Closed higher by .5%, Yen lower by 64 tick’s futures and JGBs yields lower across the curve with the long end showing biggest declines down 6Bps.
2) German PPI turned positive on an M/M basis for the first time since June 2013.PPI increases are associated with “reflation trade” market needs to see if this is a blip or a trend. Regardless of the strong PPi Euro down 47 ticks, below last weeks lows and trading closer to 102 handle. In a Thin holiday market the path of least resistance is lower for Euro.1 week Vols lower but 1 month, capturing next ECB meeting have blipped higher. Yield spreads between Germany/USA also supporting Dollar. Next target for Euro 103.Bunds are steady volume in the complex has been lower compared to prior day for 4 days in a row. German Finance agency said Germany will not sell a 50 year bond in 2017.This has given Buxl a small lift.
3) Deutsche bank said it will be decreasing the size of its Derivatives book (per Bloomberg). No time frame given but any inexplicable move in prices will now be blamed on DB unwinding its Book.
Stronger dollar having an impact on all commodities with the exception of oil as markets leaning towards a possible hefty draw in today/tomorrows storage numbers. Yesterday’s string of terrorist attacks did nothing to dent the rally in stocks and we see that continuing today. There was some type of incident in Jordan overnight but again market has ignored it. GBP -65 ticks even with a retail sales number that beat expectations.
• No economic releases today
• No fed speakers till the New year
• Soybeans may finally be breaking out to downside trading at lowest levels in 3 weeks
• Average to above average temps predicted for end of month are weighing on nat gas

Russia follow up

Turkey said that Russian Ambassador and  shooter have both  died.Waiting to hear response from Putin.Jpy ,Bunds and bonds all caught a small bid in the aftermath of incident.Supposedly the shooter yelled things about interfering in Syria  just rumors for now.Mayor of Ankara says attack directed at ruining Russia-Turkish relations.Spoos paid little attention to these headlines  weakening a touch  but that is it.

Wonder if trump will respond /Comment via twitter

 

Risk Off!

(BN) *RUSSIAN AMBASSADOR SHOT AT IN TURKEY, CNN-TURK SAYS

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*RUSSIAN AMBASSADOR SHOT AT IN TURKEY, CNN-TURK SAYS
2016-12-19 16:14:30.838 GMT

managed money net longs

cffdjmmn-index-cftc-ice-cotton-2016-12-19-09-59-44

A grid of net longs in  the cotton Complex,They are near 7 year highs.What have we learned over the years as the boat leans in one direction the response in the other is usually severe.China said they will limit imports and Focus on State supplies for the near future and Brazil said  crop will rebound some 10%  this  year.Prices trading Below  major support area so hopefully press to lower prices will continue.Long and wrong hopefully

cffdqmmn-index-cftc-nymex-crude-2016-12-19-10-02-15

Above Crude oil managed money net longs  ,futures only .They hover near a 2.5 year high .Similar to Cotton story  An inverse reaction to positioning will be more severe than a go with.Maybe a break of $52   will cause some worries for the bulls  $51.10 is the Big area to watch  as a break of this levels I believe will cause serious concerns for those hoping for higher prices.

Morning 12-19

base-m-002

Snap Shot of base metals overnight. China without some comments saying they want to stem asset bubbles in 2017, Place greater importance on prevention of financial risk. This was enough to worry the speculators in metals and caused an across the board response. Dollar was trending lower for most of the morning but it appears it has found some buyers as U.S. traders make their way into work. Dollar unchanged now on day. Yen staying strong though sits higher by 56 pips and has given back very little of overnight gains. NKY closed lower for first time in 9 days. BOJ starts a 2 day meeting and appears some position squaring ongoing with yen Crosses .Euripy -100,Audjpy -100 GBPJPY -200 ticks. Stronger Yen usually indicates stronger bonds and that is what we have today. Some worries about Italian banks has That Sector down 1% and basic resources down 1.13%.Reuters telling us of a Big Put trade in U.S. tens that they believe is liquidation of Current long position .trade =47k 121.5 and 10k of the 123 strikes both January. Bunds +40 ticks. Holiday markets are here as this is the last full week of trading for the year.
Oil market has given back most of the overnight gains that were due to Libya backtracking on increasing output. Turn around in the dollar cause for weakness in Oil. Managed money in Oil are the longest in over 2 years. Gold pressing higher today but let’s see how long that lasts with dollar rallying.
• Yellen speaks at 12:30 to the University of Baltimore about state of Job market.
• Markit Services PMI at 8:45
• IFO Business climate from Germany beat expectatio