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On October 21st, the overnight Shibor (Shibor) rate was at 1.3170%, unchanged from the previous trading day. The 7-day Shibor rate was at 1.4260%, up 0.80 basis points; the 14-day Shibor rate was at 1.5040%, up 3.60 basis points; the January Shibor rate was at 1.5570%, unchanged from the previous trading day; and the March Shibor rate was at 1.5860%, up 0.40 basis points.Hong Kong-listed consumer stocks weakened, with Pop Mart (09992.HK) falling more than 5%, Gu Ming (01364.HK) falling more than 4%, and BRUCO (00325.HK), Laopu Gold (06181.HK), and Mixue Group (02097.HK) following suit.Futures data from October 21st revealed that as of October 20th, the mainstream benzene market in East China closed at 5,535 yuan/ton, down 220 yuan/ton from 5,755 yuan/ton at the beginning of October. Looking at the post-holiday market, major ports in East China maintained a steady pace of destocking in early October, but concerns about crude oil oversupply intensified, with Brent crude futures falling to a five-month low and weakening market sentiment. Coupled with a lack of downstream market support, exacerbating losses, and a lack of new orders from end users, secondary downstream inventories remained high and difficult to reduce, creating significant price transmission resistance. The market may face downward pressure in late October.Futures News, October 21st: Crude oil prices have recently continued to decline, with overall weakness predominating. Market concerns are mounting about a global oil glut. On the one hand, Saudi Arabia has been increasing crude oil production, albeit at a slower pace, but the cumulative increase has been significant. On the other hand, the US has entered its seasonal off-season, resulting in lower oil demand and significant pressure on oil inventory. Zhuochuang Information predicts that the decline in oil prices reflects the realization of some negative factors. The market is focused on the progress of Sino-US trade negotiations. Current market news suggests expectations for a deal are stronger than previously anticipated, potentially providing support for oil prices. Whether this can stabilize remains to be seen.The Hang Seng Tech Index continued its strong performance, rising over 3%. Tech stocks performed strongly, with Bilibili (09626.HK) rising nearly 10%. The Hang Seng Index is now up nearly 2%.

Natural Gas: XNG/USD bears continue to monitor $2.13 in advance of EIA inventories

Daniel Rogers

Mar 30, 2023 15:59

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Natural Gas (XNG/USD) price fluctuates near the intraday low of $2.23, declining the previous day's corrective rebound off a five-week low ahead of Thursday's European session. In doing so, the energy instrument fails to bolster expectations of increased demand from China in the face of inflation concerns, hawkish central bank actions, and a stronger US dollar.

 

China's willingness to import 65,000 tonnes of Liquefied Natural Gas (LNG) from the United Arab Emirates (UAE) and Premier Li Qiang's upbeat comments have supported the XNG/USD. Premier Qiang of China stated that the economic situation in March is even better than in January and February. However, the policymaker also increased geopolitical tension by opposing trade protectionism and decoupling, which indirectly target the United States and stimulate the Natural Gas bulls.

 

On the other hand, rumors that German gas pipelines are once again reliable for transporting energy, following previous challenges from Russia, impact on the XNG/USD exchange rate. In addition, the majority of central bankers defend their prior bias regarding inflation, exerting downward pressure on the commodity. In addition, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, stated on Thursday, "Urgently need faster, more efficient mechanisms for providing debt support to vulnerable countries." Her remarks revive previously alleviated banking concerns.

 

The US Dollar Index (DXY) adheres to modest gains while S&P 500 Futures struggle around a one-week high set the day before. In addition, the yields on the 10-year and 2-year US Treasury bonds grind higher after tantalizing bond purchasers the day before.

 

Moving forward, Weekly Natural Gas Storage Change data from the US Energy Information Administration (EIA), preceding -72B, may influence XNG/USD price action. Nonetheless, the headlines surrounding inflation and the banking system, as well as China, should be given the utmost focus for direction.

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