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April 9, 2025
"People wanted to be optimistic and eventually realized they didn't have a good reason," ~Melissa Brown, managing director, investment decision research, at SimCorp.
Morning everyone,
Equity markets opened higher yesterday, giving a glimmer of hope for a break, but collapsed going into the close.
Looks like the selling is set to resume with crude down another 3% and Asian markets heading lower.
Just to see if things can get more complicated, Zelensky has claimed that Ukrainian troops have captured Chinese nationals fighting for Russia in Ukraine.
"Russia's involvement of China, along with other countries, whether directly or indirectly, in this war in Europe is a clear signal that Putin intends to do anything but end the war"
What's in this issue:
Energy Market Recap
EIA Expectations
Headlines
| Crude Oil (May) | $59.58 | -1.12 | -1.85% |
| Natural Gas (May) | $3.465 | -0.190 | -4.74% |
| Copper (May) | $4.1440 | -0.0420 | -1.00% |
| S&P 500 | 4,982.77 | -79.48 | -1.57% |
| Dollar Index (DX) | 102.70 | -0.27 | -0.26% |
Energy Markets
🛢️WTI ended lower by 1.85% yesterday and is already down another 3% as I write this. The brief pause in markets caused by optimism of deals is unraveling as an escalating trade war with China is becoming apparent.
Now, with prices well into the $50s an OPEC looking to unleash production, eyes will be out for how the shale patch responds.
EIA Expectations
The EIA will release crude oil inventory data later today. Reuters consensus estimates are for a build of 1.4 million barrels in crude, a build of 0.3 million in distillates, and a draw of 1.5 million in gasoline.
Andy Lebow of CRG is going against the grain this week, predicting a draw of 1.0 million barrels in crude.
WTI Spreads
May/June: +0.48
Jun/Dec: +1.38
Dec5/Dec6: -0.30
🔥 Natural gas shed 4.74% as risk-off trades took everything lower.
Natgasweather.com is posting moderate demand for the next week. But it’s hard to see that making much difference in this market.
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Headlines
“The answer may be that bond traders are reflexively pricing in the simplest scenario—a short-term economic shock followed by a rapid return to the status quo.”
+Stocks Are in Turmoil, but Treasury Yields Are Stubbornly High - WSJ
“Trump has designated Bessent to lead talks with Japan and South Korea, the first big US trading partners in line for an accord to potentially reduce the levies, alongside Jamieson Greer, the US trade representative.”
+Scott Bessent takes the lead as Trump advisers spar over tariffs - FT
“The Volkswagen Group more than doubled its deliveries of battery-electric cars in Europe in the first quarter to over 150,000 from 74,400 in the same period last year, the carmaker said on Wednesday, in another sign that EV demand is picking up.”
+Volkswagen's Europe EV sales more than double in first quarter - Reuters
“Cal-Maine Foods reported net income of $508.5mn on Tuesday for the quarter covering December through February, a 247 per cent increase from a year prior. The company credited an 80 per cent increase in the average price of eggs from year-ago levels for the results.”
+Largest US egg seller reports soaring profits amid price-fixing inquiry - FT
Economic Calendar
Monday -
Tuesday - NFIB Optimism Index
Wednesday - Crude Oil Storage Report, Fed Minutes
Thursday - Initial Jobless Claims, CPI, Natural Gas Storage Report
Friday - PPI