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Trend Trigger Factor (TTF)

DBW in TTF FM hourly. New up or Gap CloseThe TTF FM is trapped in a sideway movement. After a cone and SKS formation which was resolved bearish with the slump to 43,2 we now see a completed but still not active DBW. The ideal upper target (box) is 51, the statistical target is the equal to the important top at 49.5 The bearish breakout would be at 43,2 and would imply the gap close at 37. Typically DBW are most of the time bullish reversal/continuation figures, thus a bullish break out is the more likely case.
NYMEX:TTF1!
by NDD46
1
European Gas March 2023: Bullish and Bearish FactorsThe idea has two parts: fundamental and technical analysis . The latter is based on the weekly chart. On the fundamental side , several essential and minor factors affect and could affect March 2023 price change. Let's divide them into three groups. Bullish : Russian shutdown of gas supply to Europe Russia has cut its European flows for the last months so that a total shutdown would be possible. Russian gas remains crucial for the European economy despite the American armada of LNG ships. Freeport LNG plant Restart Shift The company plans to restore the plant in January 2023. A possible postponement would support TTF prices in the winter season. Limitations of US Gas Exports Last winter, some US Senate members suggested limiting or prohibiting US LNG export. They estimated that the change would increase US gas supply for the internal US market, especially for New England, which is dependent on the import of gas from the gas-production states getting gas via pipelines and LNG. They said the prohibition would reduce high gas prices for customers and industry. In July, LNG winter 2023 prices for New England touched a record high of $40/MMBtu, while Henry Hub traded at about $8.6/MMBtu. I suppose that senators would return to the idea, especially since the US elections are in November. Although the risk is low, its realization could dramatically affect the TTF price assessment. Analysts and think tanks have considered possible Russian gas cuts but haven't accessed a potential US gas supply reduction. French Nuclear Plants Outages Since the end of 2021, the French nuclear industry has been weak with planned and unplanned maintenance. As a result, nuclear output has lost more than 40% YoY of its output. While serious issues are unlikely to arise, new minor obstacles could buoy TTF prices. Dry Summer The continuation of the European 2022 dry summer led to abbreviated hydropower production. On the back of hydropower reduction, natural gas-power generation increases its output and gas consumption, driving subdued gas injection into storage facilities. Subdued gas injection in summer means less gas for winter, creating a possible gas deficit. Bearish: Slowing European Economy and Demand Destruction High inflation induced by the monetary policy of 2020-2021 provokes a decline in real incomes and makes some industrial production unprofitable or near break-even. These debilitate aggregate demand, particularly industrial output of fertilizers, ceramics, and other chemicals. Industries that are heavily reliant on gas are cutting their gas consumption today. Lasting historically high gas prices would promote a decrease in gas utilization. The demand destruction could happen among all consumers: power, industrial and individual. A new recession is near. ECB monetary policy with a growing rate also adds problems to the economy. The rate is still tiny, but debt bubbles are sensitive to interest rate change. The bust of bubbles would drop economic growth and curtail gas demand pushing TTF prices down. Slowing world economy The world economy suffers from high prices losing economic growth momentum. A move into a recession would trigger a decline in gas consumption lowering LNG gas prices and letting LNG producers increase LNG sendout to Europe. Voluntary Demand Reductions of 15% and Gas Rationing Energy ministers of Europe adopted plans to voluntarily cut gas demand by 15% from August until March 31, 2022. In case of emergency, like near zero Russian flows, the voluntary reduction changes to mandatory. i.e., gas rationing. The actions could divert rising prices. Covid Lockdowns in Europe Europe has prepared different measures to withstand possible gas issues in winter. Besides voluntary reduction or rationing Europe could return to the lockdowns of 2020, when gas consumption dramatically went down because industrial production of goods collapsed. Since June 2022, the media has published news about a new variant of Covid. Countries could impose Covid-related limitations this fall. Unstable gas consumption and gas shortage would drive for a Covid or climate lockdown. A good measure to cut gas demand and destroy the economy. Covid Lockdowns in China Despite possible lockdowns of 2022-2023 in Europe, lockdowns in China happened in the last months and could be imposed again. An effect of prohibitions has hit the Chinese economy and cut gas consumption resulting in freeing up the supply for other consumers, i.e., Europe. New Chinese lockdowns would mean more gas for Europe. Joker : The joker that could be a bullish or bearish driver is the weather. They can't predict winter weather today. Lasting temperatures above season norms in winter could be a lifesaver for Europe, dropping gas consumption and its prices. Cold spells and lingering temperatures under the winter season average would lift prices significantly. Near-average temperatures would put the significance of the factor on hold. While in summer, it is vice versa. Temperatures above the norms slow gas storage injection and slightly increase a lack of gas risk in the winter season. On the technical side , there are no resistance levels cause the contract is traded near its record high. Only psychological levels like €200/MWh , €300/MWh , and higher. On the bulls' side, there are many support levels. For those practicing buy a bounce trading , essential levels are €125/MWh , €100/MWh , and €86/MWh . The last one developed in the December 2021-April 2022 period. I estimate that Gazprom made a significant contribution to its existence. Gazprom's export price to Europe, which was pegged to a fusion of lagged prices of fossil fuels, including TTF, was near to €86/MWh . So when the market price rose significantly above the level, market participants cut their demand because Gazprom sold cheaper. When the price tried to break through €86/MWh and went down, Gazprom trimmed its flows to Europe. All in all, this helped the company to control its revenues on the same level. Since then, it has not been the case because Gazprom has changed its approach. Finally, I am afraid to forecast the price on the expiration date. I suppose the price would remain volatile, and we could see spikes above €200/MWh in the winter season. Thank you for your reading, and have profitable trading! Comment your thoughts!
ICEEUR:TFMH2023
by Nikita_Kalinin
NATURAL GAS🔥 breakoutNG1! broke down out of the raising wedge (yellow) and I expect further downside. It will prolly not be in straight line, pullbacks along the way expected. Actually now we are sitting at the support zone 7.78 - 7.55, so bounce up or sideways before next leg down is possible. Target being the support zone 6.46-5.95 and potentially the lime uptrendline. Also there is a upward channel (blue) on the log scale: Will we test the channel lower edge? Let me know in the comments how much has your gas bill risen if you already pay new price. Check my other stuff in related ideas. Please boost🚀, comment🗣️, follow me✒️, enjoy📺! ⚠️Disclaimer: I'm not financial advisor. This is not a financial advice. Do your own due dilingence.
NYMEX:NG1!Short
by bizmark
9
EUR/USD analysis: US-EU natural gas gap narrowsRecent moves in the EUR/USD exchange rate have been driven primarily by the price differential between natural gas in the United States and Europe, rather than by the ECB's historic rate hike last week. Over the last 90 days, the correlation coefficient between EUR/USD and US-EU gas price differentials is 0.88, indicating a very strong relationship between the two variables. The price of gas in Europe has decreased drastically over the course of the past week, with the Dutch TTF benchmark falling by nearly 40% from its highs of €330/Mwh to its current level of €190/Mwh. This was aided by higher-than-expected EU gas storage levels at this time of year, as well as speculation in Europe about a natural gas price cap. When measured in dollars per million British thermal units ($/MMbtu), the European Dutch TTF is around $61/MMbtu right now, or about $53 more expensive than the US Henry Hub gas price, but significantly lower than the previous price-gap peak of $92/MMbtu. The narrowing Henry Hub-TTF price spread from $92/MMbtu to $53/MMbtu has helped the EUR/USD rally from 0.987 to 1.011. What next can we expect? This week, European nations are expected to announce long-awaited energy emergency measures aimed at lowering skyrocketing gas prices and alleviating the pressures associated with a complete Russian gas shutdown. If the market sees the announcements about energy policy as bad news for European gas prices (Dutch TTF), the spread between European and US gas prices may continue to narrow, which would sustain the euro in the short term. However, despite the fact that the price difference between European Dutch TTF and US Henry Hub gas has narrowed, European gas is still nearly eight times more expensive than US gas. This continues to be a significant drag on the European growth outlook, thus capping the euro's upside potential in the medium term. Idea written by Piero Cingari, forex and commodity analyst at Capital.com
by Capitalcom
2
EURUSD analysis: Gas price differences matter more than everEUR/USD fell below parity once again today CAPITALCOM:EURUSD , but this time the reason is more complex than a divergence in Fed-ECB interest rate policy. Recent price differences for natural gas between Europe and the US have become a key factor for the euro's decline, even more than 2-year Germany-US yield differentials. As Dutch TTF prices reached new record highs in the wake of the most recent disruptions to Nord Stream, the US Henry Hub natural gas discount to the European Dutch TTF widened to a record $63/MMBtu ( NYMEX:THD1! ). European gas prices are currently 7 times higher than US gas prices. In addition to maintaining higher inflation for longer, Europe's skyrocketing gas prices harm the relative competitiveness of European businesses and household spending power in comparison to the United States.. The Bundesbank says that a recession in Germany is now much more likely and Germany's inflation could reach over 10%, which would be the highest since World War II. If the price discount of the US Henry Hub to the Dutch TTF ( NYMEX:THD1! ) were to increase further, this could create further greater downward pressure on the EUR/USD pair. Idea written by Piero Cingari, forex and commodity analyst at Capital.com
by Capitalcom
1
EUROPE is going to enter into recession soonThe closer the winter, the stronger Russia leverages against Europe become. Main one being natural gas. Europe imports 90% of it's gas and Russia was importing 40% of it. Prices were much cheaper than LNG since it was transferred through pipes. Now, the biggest gas pipeline in Europe - Nord Stream is getting used by Russia as a weapon against European countries. By cutting supply to 20% of pipeline's power, Russia expects Europe to stop supporting Ukraine in it's attempt to defend the country. Surely, Russia plans to cut it completely in the near future when it will damage European economies the most. Compare this year prices with 2021 and you will be terrified because it grew more than 10 times. And remember that during summer natural gas prices are the cheapest. As winter approaches and when Nord Stream will shut down completely we can easily double in price. More than 25% of German businesses say they are considering temporary or complete shutdown. Already more than 8% of heavy industry in Germany were put on hold since factories stop being profitable because of increased manufacturing costs. Bottom line: Fundamentally natural gas prices will grow and European economies will suffer. By following fundamental analysis lets look at technical: We updated historical highs, but that was false breakout. It's wise to look for continuation of bullish trend, that's why I draw 2 scenarios. 1. From current price we approach top of the false breakout and after some range push higher. 2. We will be in range for a couple days, using bottom trendline as support. Closer to the end of formation we will squeeze to the previous level and break through it. What do you think of this idea? What is your opinion? Share it in the comments📄🖌 If you like the idea, please give it a like. This is the best "Thank you!" for the author 😊 P.S. Always do your own analysis before a trade. Put a stop loss. Fix profit in parts. Withdraw profits in fiat and reward yourself and your loved ones
RUS:NG1!Long
by Artem_Dishel
9
The best hedge - is growthINVESTMENT CONTEXT In the wake of robust demand despite mounting recession fears, Saudi Aramco hiked its crude oil prices for Asia's market to near record on July 5. In August Arab Light crude price will sit at USD 9.30/boe above the regional benchmark For the first time since May 11, WTI crude oil fell below USD 100/boe. According to Citigroup, oil price could plunge to USD 65boe by the end of this year, while JP Morgan forecasts oil at “stratospheric” USD 380/boe On July 5, the ambassadors of 30 NATO States signed Accession Protocols for Finland and Sweden, effectively kicking-off the ratification process, which usually takes one month Inflation in the U.K. hit a fresh 40-year high, standing at 9.1% in June compared with 9.0% in May. The political stability of the country has come under pressure after Chancellor of the Exchequer Rishi Sunak and Health Secretary Sajid Javid quit the Cabinet, citing divergences with Premier Boris Johnson in the matter of economic policy-making Prices of corn, soybean, wheat, and several other agricultural commodities fell by more than 20% in recent weeks, largely reverting to pre-pandemic levels as financial players unmounted bearish speculative positions Italy declared state of emergency for Northern regions facing the worst draught in 70 years, threatening 30% of Italian agriculture output. PROFONE'S TAKE Following the considerations about record high electricity prices in Europe, ProfOne's eyes are now set on nuclear plants, the development of which matches well with Europe's ambitious plan of energy transition and reduction of the reliance on Russian gas. Yet, as anticipated by ProfZero, a full-scale energy rotation will take time, and relevant capital investments, to happen. The nuclear plant of Olkiluoto in Finland entered construction phase in 2005 while that of Flamanville in France in 2007; both projects haven't been delivered yet, yet costs already exceeded original budgets by up to 3 times. With that in mind, and recalling that costs of renewable technologies based on solar and wind energy are declining, ProfOne understands why nuclear projects have become less attractive for investors. Nuclear requires the elaboration of new financing models and scaling strategies. Some near-term relief may be achieved through expansion of new small reactors, which are faster and easier to build; yet the vast majority of these assets have not fully come online yet. PROFZERO'S TAKE Robin Brooks, chief economist at the Institute of International Finance, aptly summarized what does it concretely mean to change economic paradigm: "Germany's growth model has been to import cheap energy from Russia, use that to assemble manufactured goods and export those goods to the rest of the world". Now that Russian natural gas deliveries are sputtering, Germany has posted its first monthly trade deficit since 1991, and the country has entered phase 2 of its 3-step energy emergency plan. ProfZero prefers to resist the urge of calling for capitulation; after all the country can re-activate coal-fired while it speeds up the construction of much-needed LNG regasification assets. Yet zooming out, the theme of energy independence is what actually is making the whole difference between the U.S. and the EU - and shall be a likely recurring theme for the next growth paradigm of the entire Western world Seeing crude oil plummeting 10% in one single trading session can only mean that markets are bracing for a recession. Fundamentals don't lie: according to EIA, the world in 2022 will produce more crude oil than it really needs, with forecasted supply at 100.1mboe/d, and demand at 99.6mboe/d. ProfZero points out that one of the virtues of commodity markets lies in price-formation mechanisms strictly tied to basic supply-demand interplay. Sadly, the disruptions in European natural gas are preventing the same from happening; yet should frictions be erased, it is all too rational to expect also TTF to briskly retrace
CME:BTC1!
by ProfZero
The heat may be offINVESTMENT CONTEXT Inflation in Eurozone climbed from 8.1% in May to 8.6% in June, growing in 17 of 19 countries, with the notable exception of Germany (slide from 8.7% to 8.2%) and the Netherlands (from 10.2% to 9.9%). ECB officially scrapped its EUR 20bn/months bond-buying program on July 1 S&P 500 energy sub-index fell 17% in June, ranking as the worst-performing within the index While U.K. Prime Minister Boris Johnson and Chancellor Rishi Sunak announced “the single biggest tax cut in a decade”, estimated in of GBP 6bn (USD 7.4bn), France slashed its forecast for GDP growth in 2022 from 4% to 2.5% After lifting objections, Turkey said that it could still block Finland and Sweden’s accession to Nato in case if Nordic countries failed to meet the demand of Kurdish separatists extradition. Inflation in the country is still just a hair below 80%, as the Central Bank refuses to raise interest rates, leaving analysts to presume capital controls may be introduced to stop the bleeding On July 3, Russia announced its full control of Luhansk region in Eastern Ukraine, after seizing the city of Lycychansk, the last Ukrainian holdout in the area Digital asset brokerage Voyager Digital suspended trading, deposits, loyalty rewards and withdrawals on July 1, after sending a default notice to hedge fund Three Arrows Capital (3AC) U.S. markets closed on July 4 for Independence Day; European markets regularly open PROFONE'S TAKE Global equity markets recorded their worst half of a year since 1970, with S&P 500 and Nasdaq collapsing 21% and 30%, respectively. Deep risk-off sentiment still grips most areas of the market, fueled by growing inflation (8.6% in June after 8.1% in May in Eurozone; U.S. print expected in the coming days) and next steps of tightening monetary policy (in July, both the Fed and the ECB are expected to hike rates by 75 bps and 25-50 bps, respectively). The correction in energy and industrial metals prices was caused by mounting recession fears, while also a potentially better than forecasted harvest season in some parts of globe (U.S., Europe, Australia) could ease the pressure on consumer prices. Still, Profs don’t see the emergence of any major catalyst that could trigger a sustained reversal: for instance, on the macro front, there are no clear-cut signs of a ceasefire happening in Ukraine, thus leaving the threat of supply chain disruptions looming. PROFZERO'S TAKE As early as May 6, ProfZero placed global credit markets on particular watch, as much of the global pressures could be expected not only to raise the costs of business financing; but in more dire terms, to trigger defaults on weakest borrowers. On May 20, Sri Lanka defaulted for the first time in its history, as the economy was crushed by unsustainable fuel and food prices; at the time of writing, also the State of Laos faces fuel shortages and growing default risk. ProfZero is not particularly concerned by Russia's technical default, which has been clearly caused by the effect of sanctions; in contrast, what catches its attention is the state of financial health of several European countries, and chiefly Italy, who relied excessively on both low interest rates and the ECB role of buyer of last resort. Analysts have already dubbed ECB President Christine Lagarde messages on fragmentation as "vague" - and nothing irritates traders more than ambiguity, save, perhaps, short sellers, who indeed are piling up bear positions (Ray Dalio's Bridgewater has amassed some USD 10.5bn sell-side positions). Europe is the epicenter of this bear market - and ProfZero unfortunately sees scant chances for a quick turnaround ProfZero is also unfazed by the purported fall in commodity prices. While certainly the prices of cotton, wheat, copper and iron ore are are down even up to more than 30%, European natural gas is trading at EUR 155/MWh for 1-month deliveries - compared to EUR 22.11/MWh on July 4, 2021. Inflation is certainly receding from certain corners of the economy - but the European energy tangle remains far from being undone
by ProfZero
1
It's the energy, babyINVESTMENT CONTEXT Inflation in the UK reached 9.1% in May, up a tad from 9.0% reading in April IEA warned the EU to brace for a potential full cut of energy supply from Russia, with outsized repercussions on the bloc's GDP Germany’s finance minister called the EU ban on sales of combustion engines cars by 2035 a “wrong decision” Goldman Sachs upped its latest forecast for probability of a recession over the next two years from 35% to 48%; ARK's CEO Cathie Wood identified in the Fed's excessively tightening monetary policy a cause that could plunge the economy into recession On June 21, ProShares launched its Short Bitcoin Strategy ETF (BITI), the first inverse exchange-traded fund linked to BTC, which allows investors to bet against the world's largest cryptocurrency by market cap Crypto exchange FTX extended a USD 250mln credit line to crypto lender BlockFi, shortly after bailing out crypto broker Voyager Digital with a USD 485mln loan PROFZERO'S TAKE All Profs timely highlighted the criticality of energy driving the next steps of the ECB monetary policy - other than hopefully accelerating replies from the industrial side, in an effort to ensure greater security and diversification of supply to the continent. Now those warnings are coming to the fore. The Central Bank of Spain estimates a full halt of energy supplies from Russia would plunge EU GDP by between 2.5% and 4.2%; Goldman Sachs locates the crunch at 2.2%, with sizable impacts in Germany (-3.4%) and Italy (-2.6%). Risk management predicates the "build back better" doctrine - when a major crisis strikes, opportunities arise for decision makers to rebuild infrastructures, making them more resilient. Profs really hope this time the EU won't turn a blind eye to the opportunity of pursuing for once a coordinated, integrated, energy strategy The escalating narrative between U.S. President Biden and the energy sector majors regarding lifting energy output is starting to look paradoxical to ProfZero. According to EIA, U.S. crude oil production was 17.44mboe/d in Q2 2020, at the trough of the pandemic (on April 20, 2020, WTI futures closed on negative territory at USD 37.65/boe below zero); it took 5 quarters for the industry to add 1.5mboe/d, setting production at 18.94mboe/d in Q3 2021, and yet 3 more quarters to add another 1mboe/d (output in Q2 2022 is estimated at 19.94mboe/d). U.S. production broke through 20mboe/d only once in history, on Q4 2019 - at the peak of the previous economic cycle. President Biden demand to hike internal output in a bout to put a lid on retail fuel prices looks therefore hazardous; it would heavily backtrack on the much-touted energy transition off from fossil fuels, while amassing capital investment in a sector that has been demonstrated to require entire quarters before its output may adjust. Even deeper into detail, U.S. refining capacity plummeted from all-time high in - guess when - Q2 2020 at 17.72mboe/d to 15.56mboe/d in Q1 2022, owing exactly to the energy transition kicking older plants off the industry, while leaving higher margins ("crack spreads") to those who stayed. As much as soft commodities, the move off from crude oil into natural gas has been taken for granted for too long. Policy makers were swift to point the finger to the bad guys; but too little was done to build the infrastructures of the energy of the future. A few more refinery runs won't make up for the problem PROFTHREE'S TAKE Out of the crude oil frying pan, into natural gas fire - mindful of coal burn. The Netherlands lifted limits on its three coal-fired power plants from 35% to full capacity until 2024; similar measures were undertaken by Austria, Germany and Italy as Russia goes all-out on natural gas curtailments. European Commission President Ursula von der Leyen urged Europe not to "backslide" its long-term commitment to cut fossil fuel usage, and to remain focused on "massive investments in renewables". ProfZero and ProfThree's eyebrows are as high as TTF gas prices - with but 4 months ahead of winter season, and the notorious impossibility for renewable energy to be stored, Profs are in fact fearing a much more worrisome backslide for the EU - one into full energy recession
CME:BTC1!
by ProfZero
Dead cat's bounceINVESTMENT CONTEXT Markets reacted positively to the Fed's 75bps rates hike on June 15. Traders in particular appreciated the positive tone on 75-50bps increase next month According to the latest Fed forecast, inflation is expected to top 4.3% by the end of 2022 and 2.7% in 2023; unemployment is said to reach 3.9% in 2023 and 4.1% in 2024 On June 16 the Bank of England raised interest rates by 25bps to 1.25% U.S. retail spending including food and fuel decreased by 0.3% in May, against analyst expectations of 0.2% growth Russia increased the initial cut of gas supply on Nord Stream pipeline to 60%; supplies to Italy were reported by energy giant ENI to be down 15% already as of June 15 The leaders of France, German and Italy arrived on June 16 in Ukraine to discuss the country's bid to join the EU Blockchain assets mildly joined the broader markets rally. BTC regained USD 22k and all Layer-1 altcoins jumped by 10% on average PROFZERO'S TAKE "Dead cat's bounce" is a rather grim traders' jargon for abrupt asset price spikes after a steep selloff. ProfZero is not buying the broader narrative of an equity comeback - even yesterday's rally, while remarkably setting Nasdaq once again above 11k threshold, looks set to be fizzling out already by today, as live future quotes point to a rather harsh opening, with the S&P 500 and Nasdaq falling 1.78% and 2.24% in pre-market - in fact, giving back all yesterday's gains. If we look carefully, the very same thing happened on April 29 this year - Fed Chair Jerome Powell announced a widely expected 50bps rate hike; markets rejoiced for literally one session, before engaging one of the most spectacular one-day sell-offs since the onset of the pandemic in Q2 2020. The difference between a good trade and a bad trade is not in its profitability. Trading is not a one-day endeavor. It is not a daytime job. As shared with ProfThree back in the day, trading is a vocation. And like all vocations, it requires but one thing: consistency. ProfZero consistently called for calm, and to set eyes on value. And as of now, value is simply nowhere to be found, as the joint forces of commodity record-high prices, energy transition, China's fading role as "world's engine of growth" and crawling uncertainty in fixed income markets are questioning the very industrial model our reality is built upon. "Who you gonna call?" More than Ghostbusters, ProfZero would love to see a political and industrial class of reliable, committed agents gauging head-on re-industrialization, de-materialization and new energy. Too much too ask on a post-rally hangover morning? ProfZero is still kind of wondering what ultimately triggered the Fed's 75bps rate hike, after that no later than in May it committed to a series of 50bps raises in its upcoming meetings this year. Was it the negative surprise on inflation (8.6% in May vs. 8.3% in April)? Or was it rather June 13 market meltdown? And strictly related - are we going to be "surprised" again, when June inflation readings will be circulated in a couple of weeks? According to EIA, global demand for crude oil in 2022 will sit just below 101mboe/d - substantially restoring pre-pandemic consumption. A slight 0.7mboe/d oversupply would then act as trigger for prices to cool down - even considering 1.3mboe/d missing barrels from Russia. The picture for natural gas however looks less bright. Russia's acceleration on volume curbs to Europe is set to exacerbate pressures on energy transition - yet undermining near-term supplies right amidst stock-up season. European leaders have turned to new partners in Algeria, Congo, Egypt and Israel amongst others, and loosened restrictions on coal to endure the next winter season; yet the plan to have 45% of the energy mix from renewables by 2030 hinges on immediate layout of plants across the continent. Perhaps ProfZero did miss some news out there? Blockchain assets only timidly participated June 15 rebound, as investors keep shunning the riskiest corners of the market
CME:BTC1!
by ProfZero
BTC gathering the bulls, but is inflation really under control? INVESTMENT CONTEXT President Joe Biden said America's goal is a "democratic, independent" Ukraine with the means to "defend itself against further aggression" In a move to counter EU's partial embargo on crude oil, Russia cut off more gas supplies to companies in Denmark, Germany and the Netherlands, stating they failed to make payments in RUB U.S. housing market witnessed a dramatic +20.6% surge in prices in March, as buyers rushed to close deals before higher interest rates hit mortgages. More recent data showed a slowdown in real estate activity German inflation hit 8.7% in May, above EU average, while retail sales plunged 5.4% on a monthly basis, vs. negative 0.2% expectation China unveiled a fiscal, monetary and industrial stimulus package to rev up its virus-hit economy Retail gas prices in the U.S. reached a new all-time high, clocking +52% year-on-year PROFZERO'S TAKE ProfZero's calls for caution were followed by an underwhelming first day of trading after the long Memorial Day weekend, with all major U.S. indexes closing the day in red mostly due to profit-taking after last week's relief bounce. Traders are showing unease at mixed macro data, with still tight job market triggering wage rises, thus putting prospective pressure on either consumer prices or corporate margins. ProfZero long warned about who's going to pick up the tab on inflation; we may already see that the next earning season China's manufacturing, as captured by the Caixin China General Manufacturing index, rose 48.1 in May, as compared to 46 in April. ProfZero is now awaiting data on Chinese consumption, in the hope to see some bright signs as the country slowly lifts COVID restrictive measures Despite giving back part of the gains, blockchain assets still trade at 2-week highs, led by BTC confidently holding above USD 31.5k. In fact, zooming out to 2021, we clearly see a double head-and-shoulders pattern just closing, marking leg (4) of a 2-year Elliott wave that could pave the wave to a sustained medium-term bull run PROFONE'S TAKE While appreciating the possible reopening of Ukrainian ports, and the ensuing unhindered distribution of cereals, ProfOne reminds that the fertilizers market is still in a deadlock. Western sanctions hit supply from Russia and Belarus, that combined account for 41% of global fertilizer exports. Output losses can’t be made up for in the short term due to the industrial lead time needed to bring new production assets online (average time to develop a new potash ore mine is between 5 and 7 years), with direct negative consequences on the availability of fertilizer, hence crops yield. Whilst a food and humanitarian crisis has been averted - soft commodity prices may not be expected to cool in the short term, even in developed countries PROFTHREE'S TAKE Extending on ProfZero's concerns that inflation is largely rooted in the energy space, ProfThree sees thermal coal as yet another commodity were prices are poised to stay at record highs. Breaking a 2-year bear market caused by calls for decarbonization, Newcastle FOB Australia benchmark now trades at USD 430/ton - 4.5x the 5-year average. The trend is not expected to buck anytime soon, especially after the EU imposed an embargo on Russian effective from August 2022, to be trailed by Japan. With the EU now also foreclosing two-thirds of crude oil imports from Russia; and natural gas curtailments being extended, it is hard to understand how exactly the EU intends to ensure energy security at yet affordable prices - now that it has to face Chinese competition on the demand side - while at the same time meeting carbon reduction goals
CME:BTC1!
by ProfZero
Bulls roaring back! Is it really the bottom? Not so soon...INVESTMENT CONTEXT Russia's Minister of Foreign Affairs, Sergey Lavrov, said that "liberating" the Donbas region of Ukraine was still Russia's "unconditional" priority Germany's economy minister, Robert Habeck, warned the EU resolve on sanctions to Russia was starting to "crumble" Turkey President Recep Tayyip Erdogan is still expected to maintain his veto on Sweden and Finland joining NATO Stores and offices reopened in Beijing on Sunday, after officials announced COVID-19 outbreaks were under control. Similarly in Shanghai authorities announced loosening testing requirements to enter public places as new cases hit their lowest since March LUNA 2.0 launch is off to a rough start, with investors rocking the asset down 70% on the very day of the airdrop PROFZERO'S TAKE ProfZero welcomes the renewed risk-on attitude that seems to be permeating markets. With the S&P 500 finally breaking a 7-week red streak, and Nasdaq regaining 12k support, investors are trying to shrug off the worst of this year's meltdown. Yet, can we call the worst already to be behind? ProfZero thinks - not today. There are yet too many pockets of pent-up volatility to be resolved before buys may be considered organic - inflation is still being driven by energy and soft commodities, Fed and ECB have not completed setting up monetary policy to adjust interest rates and and the consequences of the war in Ukraine are inflicting pain to several developing economies in the Middle East and North Africa, potentially leading to unrests. The progressive reopening of China is definitely behind of the rebound in risk assets - yet ProfZero peacefully reminds that China announced literally last week that it will struggle to score positive growth in Q2. Markets are always 1 if not 2 quarters ahead - positive surprises would be all too welcome even ahead of that Crumbling European's resolve on sanctions to Russia is expected to erupt on May 30, as EU leaders are set to meet and discuss how to implement new restrictions on Russian energy still flowing to the continent. With a full-blown embargo now off the table, as it would cripple the energy security of the landlocked economies of Hungary, Slovakia and Czech Republic, talks are ongoing to limit seaborne imports while not touching volumes via pipeline. ProfZero has long indicated energy as the true table for negotiations to happen - with fading unity on crude oil, no better cohesion can be expected by the EU on gas down the road Russia apparently avoided default again on May 27 by delivering EUR 100mln interest payments on two Eurobonds - ProfZero sees this simmering narrative as a silent hope of diplomatic channels being open After failing to trail the market on May 27's rally, blockchain assets came roaring on May 30, on the back of broader investor enthusiasm. BTC reclaiming 30k mark and altcoins springing back from earlier lows are even more noteworthy as investors whiplashed LUNA 2.0 project relaunch - selection effects may now be once again at work after correlations peaked. ProfZero's are glimmering at the sight of markets - doing their job
CME:BTC1!
by ProfZero
Europe Pays for Its Mistakes as Gas Prices Go Sky-High AgainThis week started with rising fuel prices, as it is getting colder in Europe. The ICE Dutch TTF January gas futures’ prices are close to $160 per MWh and are above October all-time highs. The Weather forecast reports that the temperature will soon drop below zero centigrade in several European cities, and that may cause the power grid to exceed its capacity. But Europe became a victim of higher gas prices by its own fault. The European Union is moving towards green energy, and many details about this transformation have been overlooked, including gas pricing. But officials in Brussels are far from blaming themselves. Instead, the European commission moved to scrap long-term gas supply contracts after 2049. Russia, which is a major gas supplier, constantly called on Europe to extend such contracts to avoid high volatility of gas prices on the spot market. Even 2049 looks like a distant future now. This winter in Europe may be painful as gas supplies from Russia via the Yamal-Europe gas pipeline are close to zero. Warsaw refused to extend long-term contracts with Russia’s Gazprom, replacing it with spot gas auctions. Germany said it would not certify the newly built Nod Stream 2 pipeline until the second half of 2022, and it is also threatening to block the pipeline operations as part of sanctions against Russia in case Russian troops invade Ukraine. Whether there is a political reason behind this threat or not is not really important since Germany will just end up hurting itself. According to BBC polls energy bills will continue to rise. A cold winter and gas reserves shortage are two main reasons for this. Germany’s gas reserves are only 59% full and will not be enough to satisfy demand in case of a severe winter. On top of this market speculations may push gas prices above $200 per MWh in the beginning of next year. Some electricity producers in Germany like Neckermann Strom AG went bankrupt due to high production costs. Five more electricity producers in Germany filed for bankruptcy in October.
NYMEX:TTFF2022Long
by scavoanastasiia
Vermilion Energy is also a natural gas companyMany investors seem to be overlooking that Vermilion Energy's production is nearly 50% weighted to natural gas. From Q2 2020, 45% of corporate production was natural gas. Vermilion was suffering from an extensive Eurogas bear market thanks to unprofitable shale production flooding Europe's shores in addition to a warm winter in Europe and Asia. TTF and JKM gas prices collapsed to just about the same as Henry Hub. In addition, until last year, Alberta's AECO (basis for VET's Canadian gas production) was devastated with unfavourable differentials due to challenges on the NGTL system which were solved October 2019. So now we have a return of premium pricing back in Europe on TTF and NBP; in addition to a strong AECO gas market in Canada which has room for improvement. I added ahead of earnings on short positioning as I suspected they would get hammered overlooking fundamentals; however, the actual fundamentals didn't appear because of hedges, so hold onto this until 2021 and beyond. Q1 will be a great quarter for Vermilion Energy.
TSX:VETLong
by chriskanaan