Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
You can access both of our platforms from a single Saxo account.
Natural Gas surge increasingly at risk of reversing
Ole Hansen
Head of Commodity Strategy
Summary: An early cold snap has left residents of the US northeast shivering and sent the price of natural gas way higher. But forecasters say the big chill won't last much longer, and neither should the inflated prices.
Natural gas has continued its surge higher today, almost reaching $5/term before running into some profit taking. At the current price of $4.63/mmbtu it is up by more than 40% during the past two weeks. It is being carried higher by strong momentum on the combination of unseasonal cold weather across the US northeast raising short-term concerns about production being disrupted due to freezing of the well heads together with stocks lingering at a seasonal 15-year low ahead of the withdrawal season that is about to kick off within the next couple of weeks.
However, once temperatures return to normal the front end of the futures curve could risk a major setback.
However, once temperatures return to normal the front end of the futures curve could risk a major setback.
According to the Tropical Tidbits the cold blast across the US northeast is expected to last at least until November 23 before returning to normal.
The problem with a cold blast so early and well before the peak demand season in January and February has raised concern about the availability of gas in underground storage facilities towards the end of the withdrawal season in late March.
This worry is clearly seen in the spread between the last winter month contract of March-19 and the first spring contract of April-19. Earlier today it reached $1.75/mmbtu before retracing to the current $1.32/mmbtu, still a colossal spread of more than 30% between the two contracts.
This worry is clearly seen in the spread between the last winter month contract of March-19 and the first spring contract of April-19. Earlier today it reached $1.75/mmbtu before retracing to the current $1.32/mmbtu, still a colossal spread of more than 30% between the two contracts.
A year of record production, but also record demand from domestic consumption and rising exports, has left storage levels precariously low with just a few weeks of injections before the withdrawal season begins. The next weekly storage change report is due Thursday at 15:30 GMT and a relatively small injection of 32 bcf is expected.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...