In today’s briefing:
- EA Disinflates March’s Excess
- Helixtap China Report: Short-term Downward Bias In China Demand Outlook Amid Tariff Tensions
- Asian Equities: India – Brace for Another Leg Down in the Near Term
- [US Nat Gas Options Weekly 2025/13] Henry Hub Rebounds on Declining Output and Rising LNG Exports
- [US Crude Oil Options Weekly 2025/13] WTI Climbed on Tariffs and Inventory Draws
- RBI Rate Decision: Impact on Nifty 50 and NSE Banks, Insights and Strategies
- Asia base oils supply outlook: Week of 31 March
- Challenges To The Dollar – Make For A Sell
- -50% Orange Juice Price Implosion
- Asia base oils demand outlook: Week of 31 March
EA Disinflates March’s Excess
- Euro area inflation slightly undershot consensus expectations in March, consistent with the correlation of surprises and energy prices. Yet it was 7bps above our forecast.
- Services prices drove core inflation down to 2.4%, creating some dovish space. However, the headline outcome reversed last month’s upside to match February forecasts.
- Resilience in the real economy still justifies more cautious easing close to neutral, so we expect graduated cuts to skip April for June, but the risk of an extra cut has risen.
Helixtap China Report: Short-term Downward Bias In China Demand Outlook Amid Tariff Tensions
- Trade war impacts the trade flow
- Arbitrage narrows on wintering
- Fluctuating inventory level indicates at a whimsical buying pattern
Asian Equities: India – Brace for Another Leg Down in the Near Term
- Indian equity’s recent spike overlooks near-term risks – possible cuts in consensus EPS estimates, risks arising from reciprocal tariffs and another bout of likely INR depreciation. Valuations are again expensive.
- Our analysis of sector fundamentals foretells earnings estimate cuts in most sectors. Financials, and to a lesser extent, consumer discretionary could see upgrades. Expanding trade deficit could drive INR decline.
- In the near term we are cautious about India. For country-dedicated investors we recommend increasing exposure to financials (particularly large cap private banks), select consumer discretionary, and defensives like utilities.
[US Nat Gas Options Weekly 2025/13] Henry Hub Rebounds on Declining Output and Rising LNG Exports
- For the week ending 28/Mar, U.S. natural gas prices gained 4.6% due to rising LNG exports and a drop in daily natural gas output.
- Henry Hub gained 1.7% on 27/Mar (Thu), driven by lower output, record LNG exports, and stronger demand forecasts, despite a build in U.S. natural gas storage.
- Henry Hub OI PCR decreased to 0.98 on 28/Mar from 1.05 on 21/Mar. Call OI fell by 10.1% WoW, while put OI dropped by 16.1%.
[US Crude Oil Options Weekly 2025/13] WTI Climbed on Tariffs and Inventory Draws
- WTI futures rose 1.6% for the week ending 28/Mar, driven by escalating trade tensions and declining U.S. crude oil inventories.
- The U.S. rig count fell by one to 592. The oil rig count dropped by two to 484, and gas rigs rose by one to 103.
- WTI OI PCR grew to 0.91 on 28/Mar from 0.90 on 21/Mar. Call OI increased by 7.0% WoW, while put OI grew by 7.3%.
RBI Rate Decision: Impact on Nifty 50 and NSE Banks, Insights and Strategies
- The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Wednesday 9 April 2025.
- Market Expectations: The market anticipates a 25-basis-point rate cut, supported by a strong consensus. However, the RBI has surprised markets in 28% of its rate decisions over the past decade.
- Index Sensitivity to Rate Decisions: Historical data shows the NSE Nifty Bank Index reacts more significantly to RBI announcements than the NIFTY 50 Index.
Asia base oils supply outlook: Week of 31 March
- Asia’s base oils prices extend dip versus feedstock/gasoil prices.
- Margins hold firm for heavy grades, pointing to still-strong supply-demand fundamentals.
- Firm margins partially cushion impact of weaker light-grade margins.
Challenges To The Dollar – Make For A Sell
- We still like the US dollar this year but medium to long-term the currency is challenged.
- The share of the dollar in international reserves is declining steadily.
- The biggest threat is not renminbi internationalisation by mBridge and other multi central bank digital currency platforms.
-50% Orange Juice Price Implosion
- -50% Orange Juice Price Implosion After a crazy price surge – orange juice futures traded at the ICE have more than halved since the start of the year.
- While reaching its temporary high of 539 USX in December, the forward contract is now trading at 247 USX.
- The price is now back at levels it was trading at the beginning of 2024. Compared to 2020 futures pricing is still up 150%. (yeah you read that right)
Asia base oils demand outlook: Week of 31 March
- Asia’s base oils demand could hold firm over the coming weeks as buyers replenish low stocks and lube consumption holds steady.
- Rising crude oil prices could provide additional support.
- Seasonal slowdown in demand from end of second quarter typically starts to curb buying interest several weeks before then.
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