{"id":2802,"date":"2023-08-10T09:09:36","date_gmt":"2023-08-10T08:09:36","guid":{"rendered":"https:\/\/hcfx.sofyma.com\/?p=2802"},"modified":"2023-08-11T16:28:59","modified_gmt":"2023-08-11T15:28:59","slug":"continental-gas-prices-surge","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/it\/continental-gas-prices-surge\/","title":{"rendered":"Continental Gas Prices Surge"},"content":{"rendered":"
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TTF gas futures (the European benchmark) surged close to 40% during the course of yesterday\u2019s session breaching over \u20ac42 per megawatt hour. The rally was chiefly driven by supply-side concerns stemming Australia, after news emerged that workers at LNG plants were planning to conduct industrial action. Following the Russian invasion of Ukraine, the EU has become far more reliant on LNG with supplies increasingly coming from Qatar and the US (and to a lesser extent Australia). Hence, the EU is now far more sensitive to any disruption to the LNG market more generally, and the prospect of dampened supply from Australia raises the likelihood that Asian markets will turn to longer-dated LNG contracts from Qatar and the US, potentially outbidding their European counterparts.<\/span><\/p>\n <\/div>\n

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The latest news from Australia comes after a string of supply side concerns throughout the year, including the announcement of a potential closure of the Netherlands\u2019 Groningen gas field. Asian markets are also offering higher prices for US LNG contracts in September, October and November, raising fears that supplies may be diverted away from the continent.<\/p>\n

Presently, EU gas storage remains at around 87%, well above the average for this time of year as Brussels aims to meet its target of 90% storage by the onset of winter. While yesterday\u2019s surge represents one of the strongest rallies seen over the last year, TTF gas futures remain 80.72% down on the year.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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Deposits at Big Four Drop as Savers Look for Higher Interest Rates Elsewhere<\/h2>\n <\/div>\n
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The FT are running a piece on how deposits at the UK\u2019s Big Four banks have drop by some \u00a380bn over the last year as savers look for higher interest rates elsewhere. Data indicates that NatWest, Lloyds, HSBC and Barclays saw total outflows of about \u00a378bn in the 12 months to June 2023, representative of the largest fall over four quarters seen since June 2018. According to one analyst at RBC Capital Markets, \u201ccustomers are migrating from current accounts at the large incumbent banks into savings or fixed-term deposits at some smaller peers\u201d. The outflow follows deposits hitting an all-time peak of around \u00a31.5tn in Q2 2022.<\/p>\n

As we have looked at previously, the Big Four have faced calls to increase their saving\u2019s rates to households and businesses as their net interest margins (and incomes) have widened and surged. Indeed, earlier this month, HSBC saw their pre-tax profit for H1 2023 rise to $21.7bn as the bank benefited from a rising net interest margin (which increased from 1.69% in Q1 to 1.72% in Q2). Many banks have defended this by stating that their net interest margins have widened to shield them from a higher number of consumers defaulting on loans given the uncertain economic conditions.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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Markets Look to US CPI<\/h2>\n <\/div>\n
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Following last month\u2019s Fed rate hike, which brought the central bank\u2019s benchmark target rate to 5.25%-5.5%, all eyes are on the release of US inflation data at 13:30 today. The general market consensus is projecting a headline print of 3.3%, a slight uptick from last month\u2019s figure of 3%, though not a million miles away from their 2% target. Nevertheless, this uptick in headline inflation would buck the trend of decelerating inflation which has seen 12 consecutive months of declines. Meanwhile, core inflation is expected to come in at 0.2% on a month-on-month basis \u2013 in line with June\u2019s print. If realised, this may give markets more confidence that the Federal Reserve has achieved their terminal rate.<\/p>\n

Presently, money markets are pricing in around a 12% chance of a 25bps rate hike from the Fed. Nevertheless, following the Fed\u2019s rate hike, Powell delivered a relatively hawkish press conference which stated that that it was too early to tell whether their latest rate hike would be the final in the cycle and that any future decisions would remain data dependent. Powell reiterated this, maintaining that the FOMC will remain \u201chighly attentive to inflation risks\u201d and as such it is \u201ccertainly possible that we would raise funds again at the September meeting if the data warranted\u201d. As such, markets will be eagerly awaiting the latest data release and subsequent reaction from policy makers.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Surge in gas prices across the continent, drop in deposits at the Big Four, and looking towards the release of US inflation data.<\/p>","protected":false},"author":15,"featured_media":1205,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-2802","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/2802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/comments?post=2802"}],"version-history":[{"count":9,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/2802\/revisions"}],"predecessor-version":[{"id":2856,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/2802\/revisions\/2856"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/media\/1205"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/media?parent=2802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/categories?post=2802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/tags?post=2802"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/rp-language?post=2802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}