Spreads Are Nowhere Near

(Reuters) - U.S. natural gas markets bracing for an autumn price crash caused by overflowing storage may be in for a shock this summer. Some regions unable to cope with rocketing production are set to fill up by July, leaving a glut of stranded gas that could send already depressed prices into an unprecedented tailspin much earlier than expected. The 4.1-trillion-cubic-feet U.S. storage system comprises three separate storage regions -- the east, west and south. Total capacity is unlikely to fill up until October. Still, if just one oversupplied region reaches capacity, the resulting cavern closures and pipeline restrictions could send shockwaves across the whole U.S. market, prompting a sharp fall in next-day gas prices of the likes not seen before. Based on last year's injection rates, ...

(Reuters) - Asian shares fell and the euro hit a fresh 16-month low against the dollar on Friday on worries that the euro zone debt crisis is crippling European banks, with players hoping U.S. jobs data later in the day will improve sentiment. MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS fell 1.2 percent and was set to end the first week of 2012 only marginally higher, after shedding 18 percent last year. Financials generally weakened as European woes hurt confidence, even though Asian banks are nowhere near as exposed to toxic euro zone assets as European banks. Japan's Nikkei .N225 also slipped 1.2 percent. .T European markets are expected to open little changed, with financial spreadbetters expecting London's FTSE .FTSE, Frankfurt's DAX .GDAXI and Paris' ...

The Week Ahead : 24/12/2011 Highlights Final trading week of 2011 Data and event highlights ECB liquidity measures highlight fragility of EU banks Final trading week of 2011 Next week sees the final trading week for the year and we expect market interest to be significantly reduced due to major holidays on each end, likely leading to largely sideways drift. But reduced market participation also has the tendency to see spikes in volatility on news headlines and data reports, as fewer traders seek reduced liquidity in response to breaking events. In particular, we would note month/quarter-end fixing flows late in the week, where asset managers rebalance currency hedges. Our proprietary models suggest moderate USD selling overall against other major currencies. Fixing flows ...

(Reuters) - Asian stocks and the euro rose on Wednesday after upbeat U.S. and German data and strong demand for Spanish debt tempered risk-aversion, with investors' focus turning to a European Central Bank tender as a gauge for euro zone funding strains. MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS climbed 2.7 percent to a one-week high, recouping all of its losses from Monday, when news of the death of North Korean leader Kim Jong-il raised fears of regional instability and triggered a broad sell-off in riskier assets. The risk-sensitive materials sector .MIAPJMT00PUS was among the best performers, rising more than 3 percent, while Taiwan .TWII led the pack with a near 5 percent rally, as the government authorized a state fund to step to support prices. " ...

Forex News and Events: Another day where the lack of news suggesting any progress in the European sovereign crisis, translated into further pullback for risk correlated FX trades. There are clear signs Eurozone fears have increased and contagion spreads unchecked. While Italy and Greece seemed to have successfully instituted new technocratic governments, and Greece and Spanish short term auctions went off without any major glitches, it seem like investors are just not taking any chances. European yields continued to climb, while CDS prices suggest a high level of contagion is spreading. Spanish, French and Italian CD prices in 5yr vehicles hit new record highs. Italy's 10 yr yields are now safely back above 7.00%, with the ECB nowhere in sight. There is additional fears that the ...

Forex News and Events: There was a high level of disbelief as Italian yields ripped through the 7.00% barrier with not so much as a peep from European policy makers or the ECB. At this point we need to be asking is Italy really too big to fail. In last night’s US republic primary debate the candidates echoes what we suspect is the general feeling in the USA, which is Europe needs to bailout Europe. There are significant examples that stress in Italy is now a contagion risk. Yield spreads across the Europe Late in the day there were rumors of an emergency ECB meeting, but central banks spokespeople declined to comment. Risk rushed out of the markets with the EURUSD collapsing to 1.3523 from 1.3850 and indices on both sides of the Atlantic sold off. The temporary relief provided by news ...

The Week Ahead Highlights Risk sentiment steadies post-Jackson Hole Grasping at straws on QE3 Eurozone financial stresses continue to appear Key data & events to watch in the week ahead Risk sentiment steadies post-Jackson Hole As we suggested last week, Fed Chairman Bernanke failed to deliver any new measures to support the economy and instead voiced optimism the pace of recovery would still improve into the end of the year. We find it difficult to share his optimism, but markets thought otherwise and turned disappointment into a surprising rebound in stocks and commodities. All in all, however, major markets remain in consolidation mode after the large sell-off earlier in the month. Heading into the last week of the month, we still think risk assets remains vulnerable ...

Forex News and Events: Trading is getting nasty. Yesterday's move to safe-haven trades highlights that the markets are unconvinced that the solution being proposed by US and EU policymakers have any real problem solving capabilities. There has been steady buying of safe haven, with the EURCHF going into free fall to 1.10127, while USDCHF dropped to 0.7731, both new all time lows. JPY has also seen heavy supply entering the market, pushing USDJPY to 77.18. Equity markets were sold off across the board with the S&P falling -0.41% and Asia regional indices followed the trend with Shanghai down 1.25% today. Implied Vols. in FX have risen in many funding currencies, all but killing the fragile carry trade. Interestingly, it seems that the market is focused on deteriorating growth, rather ...

(Reuters) - Investors sought protection in options on Wednesday as fears of a U.S. credit rating downgrade intensified. This week's decline in U.S. stocks has been accompanied by a steady rise in the CBOE Volatility Index .VIX as lawmakers struggle to agree to raise the debt ceiling with less than a week to go before the government hits its borrowing limit. Wall Street's favorite barometer of anxiety, the VIX, ended 13.59 percent higher to 22.98, the highest in more than a month. The increase in volatility has been gradual, a sign investors are at present more worried about the United States losing its prized triple-A credit rating than a technical default that could roil markets. "If there was really concern about a default, the VIX would be higher," said Frederic Ruffy, options ...