In today’s briefing:
- Trade Avoidance Easing Shocks
- Risk-On Mood Continues Setting an Upbeat Tone for Japan SPE (Again)
- India Steel Monitor – May 2025: Prices Fall, Demand Weak, Outlook Diverges
- FY 2025 Marks Shrinking Margins For Indian Tire Majors
- [US Crude Oil Options Weekly 2025/23] WTI Rebounded on Supply Risks and Trade Optimism
- Inflation Concerns Overdone
- Drought & Planting Update
- [US Nat Gas Options Weekly 2025/23] Henry Hub Surged on Bullish Summer Demand Outlook
- Bearishness Persist in Soybeans Despite Rebound Hopes
- Actinver Research – Macro Daily: Inflation Forecast (2h-May)
Trade Avoidance Easing Shocks
- China’s crashing exports to the US partly reflect avoidance measures, including rerouting through other countries and marking down import prices to subsidiaries.
- Exports to the EU and UK are only trending slightly higher, making little difference to disinflation. ASEAN countries, and especially Vietnam, are seeing trade surge again.
- The US may clamp down on avoidance measures that have eased the shock so far. It could make a painful example of one to encourage concessions from all trade partners.
Risk-On Mood Continues Setting an Upbeat Tone for Japan SPE (Again)
- Apple WWDC failing to excite, but suppliers trade better on iPad software revamp news
- Bullish broker comments focused on Sandisk’s cheap valuation should help the even cheaper Kioxia
- Less known Nomura Micro Science running +7.2% yesterday as a play on the burgeoning Indian semi-industry
India Steel Monitor – May 2025: Prices Fall, Demand Weak, Outlook Diverges
- Steel prices declined for 5 straight weeks; long products like rebar and wire rod saw the steepest fall amid weak spot market sentiment.
- Companies expect higher Q1 FY26 realizations, but spot trends remain weak, highlighting a lag between optimism and transactional reality.
- Auto and housing demand is softening; only two-wheelers, EVs, and commercial real estate offer near-term support to steel consumption.
FY 2025 Marks Shrinking Margins For Indian Tire Majors
- MRF stages recovery in margin in Q4, others suffer
- CEAT breaches US$1.51 billion for the first time in revenue in FY25
- High raw material costs eat into profits of majors
[US Crude Oil Options Weekly 2025/23] WTI Rebounded on Supply Risks and Trade Optimism
- WTI futures rose 6.2% for the week ending 06/Jun, as supply disruption fears and U.S.-China trade optimism outweighed concerns over the OPEC+ output hike.
- The U.S. rig count fell by four to 559. The oil rig count fell by nine to 442, while gas rigs grew by five to 114.
- WTI OI PCR remained at 0.83 on 06/Jun compared to 30/May. Call OI rose by 4.1% WoW, while put OI grew by 3.9%.
Inflation Concerns Overdone
- For Trading Post a global recession has never been on the cards, nor a resurgence in inflation.
- If mainstream economists continue to raise alarms about a tariff induced inflation surge, it reflects a fundamental misunderstanding of how inflation works and what drives it.
- Current trends in broad money growth, credit cycles and monetary policy settings simply don’t support the prevailing inflation narrative.
Drought & Planting Update
- Corn crop looks good but slightly worse than 2024
- Spring Wheat is looking okayish, but conditions are worse than during the three previous years
- Soybean conditions aren’t that visible yet, but analysts expect solid to good conditions at the moment
[US Nat Gas Options Weekly 2025/23] Henry Hub Surged on Bullish Summer Demand Outlook
- For the week ending 06/Jun, U.S. natural gas prices gained 9.8% on the back of forecasts of a hotter-than-expected summer and rising LNG exports.
- For the week ending 30/May, the EIA reported that U.S. natural gas inventories rose by 122 Bcf, higher than analyst expectations of a 111 Bcf build.
- Henry Hub OI PCR fell to 0.85 on 06/Jun compared to 0.86 on 30/May. Call OI increased by 6% WoW, while put OI grew by 4.4%.
Bearishness Persist in Soybeans Despite Rebound Hopes
- Bean prices have been oscillating on shifting trade war sentiments. Easing leads to rally followed by pull back in prices when tensions seemingly peak.
- Present sentiment remains cautious amid policy uncertainty & robust planting progress, with 84% of the U.S. soybean crop planted as of 1/Jun, above the five-year average of 80%.
- Despite the recent pullback in futures, skew (Up Var minus Down Var) has reached a YTD high, signalling market expectations of a spike in bean prices.
Actinver Research – Macro Daily: Inflation Forecast (2h-May)
- We expect inflation for the second half of May to stand at 0.15% biweekly (4.58% YoY).
- Although core inflation this period may be low due to Hot Sale seasonal discounts, our price monitoring detected widespread pressures in agricultural products.
- Typically, inflation for this period averages 0.10% biweekly.
Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
Unlock all research summaries