market drivers

Oil maintaining its bid after Kuwait headlines  but not strong enough to get a foothold above $50.prices were rejected immediately once that level was broken.Headline below


Trump headlines saying Administration is looking at other ways to Punish Currency manipulators has caused a violent move lower in the dollar.These actions are not taken in a bubble,Any move by trump will cause a counter Move by other countries(china).

We also had our daily reminder from A Fed bank president that rates are moving higher.Today courtesy of  Cleveland Fed President Mester.

Trump on the attack today via twitter :


Morning 3-30

Yesterday Wires Reported “ECB sources” saying the Central bank was concerned about the hawkish interpretation of its last policy meeting. Sources want on to say that it is highly unlikely any policy change announcement will be made anytime soon. German CPI overnight was Weaker than expected and thus very well could portend lower EZ CPI to be released tomorrow. EURO continuing yesterday’s drop and sits lower by 30 Pips. European 10 year Bonds show Lower yields but the shorter term maturities, 2 years showing higher yields. Flatter yield curves. Treasuries following bunds because very little else going on. Yen also trading a little lower by 14 ticks and Dollar steady. NKY closed lower by .8% remember their Yearend is tomorrow. European Stock markets are steady, choppy, Weaker EURO and Renewed confidence of QE not be cut prematurely provide a reason to buy. Yesterday’s Stream OF Fed speakers all stayed on point hinting that 2 maybe 3 more rate hikes are appropriate for this Economy. This rhetoric may keep Short end treasuries steady to lower.
Crude oil sideways so far today. Gold a little lower and Copper down a touch. Politics are the driving force of these markets and overnight we had no “new” news .Growing in importance is the possible Government shutdown at the End of the Month. Reporting on this possibility is starting to pick up and should start to have some impact on the trade. Congress goes on a 2 week Easter break so very little time to try and get a budget that everyone agrees upon. Most likely scenario they pass a Continuing resolution where spending stays at current levels and they deal with this in 6 months. Kick the can down the road politics.
• 7:30 GDP second revision not a big deal
• Feds Mester 8:45,10:00 Kaplan.10:15 Williams,2:30 Dudley
• 10:00 trump and treasury Secretary Munchin meet

Oil Exports

Take a look at this Chart.This is US Oil Exports measured on a weekly basis.The wonders of Fracking turning the US into an Energy Exporter and Energy Independent.The Level of Exports is at highest levels since early 1970’s.I haven’t read much about it But I wonder if trump administration is working on ways to increase oil exports even further.

oil exports

Positive news for Oil

From Bloomberg

By Angelina Rascouet

(Bloomberg) — OPEC’s oil exports dropped further this month as several countries not bound by the group’s historic supply deal curbed shipments, according to cargo-tracking company Kpler SAS.

Iran, which was permitted to increase output in last year’s supply deal, led the declines with a drop in exports of 416,000 barrels a day to 2.185 million, according to cargo data compiled by Paris-based Kpler. Nigeria and Libya — exempt from the agreement — reduced shipments by a combined 209,000 barrels a day. The United Arab Emirates showed the first significant export drop since the accord came into force in January, with a reduction of 220,000 barrels a day.

The Organization of Petroleum Exporting Countries’ November agreement focused on curbing production rather than exports, but cargo-tracking data is often used as a way to monitor implementation of output cuts. The accord requires 10 out of OPEC’s 13 member countries to slash output by 1.2 million barrels a day from October levels for a period of six months starting Jan. 1. The group’s own data showed they exceeded that target in February.

Click here for a graphical overview of OPEC’s production cuts in February.

Total OPEC exports in March dropped by 1.18 million barrels a day from the previous month to 24.4 million, according to data from Kpler, whose clients include hedge funds, oil majors and physical traders. Compared with October, exports were down by just 800,000 barrels a day this month, the data show.


Daily oil volume

Below is  10 Day average volume for Crude Oil broken down into 5 minute bars.The vertical Lines are time of day used for Reference.The volume spike after 9:15 is due to  weekly Oil numbers,WE understand the spike at 1:30 as option pit closed.Interesting to step back and look at when  the most volume is traded .The period between 9:30 and 11:00 each day appears to be the Sweet spot for trading.


volume o

EIA review… Gasoline!

Inline Oil Storage numbers  but the Bigger then expected draw in Rbob stocks driving the action. Rbob rallied ~200 ticks post release and dragged Brent,Cl and HO with it. Gasoline Demand +3.5%  last week and total Refinery Inputs was also higher.The latter metric is an Overall products demand number.With Spring here  gasoline taking is traditional role as leader.



Morning 3-29

UK PM May ready to compromise as Brexit letter heads for Brussels – FT Headline .The 2 year countdown begins today as UK officially Starts Process of Separating Herself from the Single market of European union. Letter was delivered ~6:00 A.M and GBP put in a 3 Minute rally to show that Brexit is already priced in. It will be a bumpy 2 year Ride for Negotiations. Overnight markets were quiet and were left to their own drivers as again a macro theme was Nonexistent. This all changed after the famous ECB sources comments hit wires ~6:50
ECB sources basically said that the hawkish Interpretation of the last policy meeting in March was incorrect and that ECB Wary of making any policy shift at upcoming Meeting. Euro dropped about 40 Pips and European Bonds extended gains with Portugal’s yield down 6bps, Bunds and Spain -4Bps Yields across the curve lower throughout Europe. Markets were already showing lower yields overnight and that ECB sources story gave them an extra nudge. Treasuries were also steady to higher most of Night but they too got an extra boost on ECB story. Dollar pushing to sessions Highs +33 ticks and Yen higher as well.
Oil is steady to higher Yesterdays API numbers were neutral for prices. EIA today at 9:30.A small bid remains in complex as Lower Libyan oil production and growing thesis that Cuts will be extended another 6 months. Natural gas for April Expires today. A great Reuters article about how the US is becoming the World’s 3rd largest exporter of LNG by end of 2018, a decade ago we were an Importer. Also Bloomberg article saying we now Export a decent amount of Oil to China painting picture of US as an Energy powerhouse.
Another Quiet day on Economic calendar so the Movement again will come from any political commentary.3 fed speakers on calendar today,8;20 Evans,10:30 Rosengren,12:15 Williams may cause some volatility. Evans is the only voter this year so closer attention will be paid to him.