Shipping Essentials Weekly

Transcription

1 Shipping Essentials Weekly Macro and Events in Brief The GDP figures for the Eurozone came out at,3 % q/q in q4 lasted weeks figures showed, slightly above expectations. Germany was the main driver, growing at,4 %. The data supports our view that the ECB will not ease further in March. This week s flash PMIs from the Eurozone will be probably attract market attention. According to consensus Euro composite PMI is expected to increase further driven by service PMI, while manufacturing should stay flat to slightly lower. A reading around 53 is equivalent to GDP growth of.3% q/q. From the US the hearings in the Congress of new Fed chairman Janet Yellen provided no new signals of monetary policy. This week we get the minutes from the January FOMC meeting which are expected to indicate that tapering of the Fed s asset purchases will likely continue in measured steps, and that a rate hike is not imminent. Discussions around the forward guidance will be followed closely. Also US inflation is due this week. CPI headline inflation is expected to rise from 1.5% y/y in December to 1.6% in January, which would be the strongest yearon-year rate since July. The recent low was 1.% in October. Dry Freight The physical cape market saw some activity in the Pacific but the Atlantic remained quiet resulting in a relatively flat index. The paper market started the week well bid but with little going on in physical, rates came off again mid-week and remained range-bound for the rest of the week. In panamaxes, it was a tale of two oceans with the Atlantic under pressure while Pacific rates have turned and ended the week with some decent gains. As a result, the PM4TC index was relatively flat which led to a correction lower in prompt FFA contracts mid-week but with the South American grain season around the corner losses were limited. The supra market seems to have turned a corner with the index climbing this week and FFA rates pushing higher. Oil and Fuel Brent crude and front month HSFO cracks in North West Europe were little changed w/w, with most action in the currently tighter LSFO market due to increased demand from North America (from utilities on cold weather) plus reduced supply and blending according to Platts. LSFO have outperformed HSFO prices in the front end with the spread between the two at the highest level since late-november. This should prove transitory and the forward curve is steeply downwards sloping for the Hi-Lo spread. Demand for LSFO will fall towards end year (~3kb/d) as stricter sulphur content fuel regulations come into force from 1 Jan 215, effectively forcing ships within the Emission Control Areas to either burn distillates (MGO, MDO), clean the exhaust through scrubbing or run on alternative fuels. Interest Rates Weak US data releases last week were again blamed on the weather, and judging by the market reactions, interest rate markets are currently buying this explanation. Both longer bond yields and interest rate swap rates continued to rise last week. Currently, the 1-year swap rate has climbed from almost 2.7% early this month to around 2.85% currently. In the near term, the upward move may continue, but clear downside risks remain. Speculative short positions remain high, which leaves the market vulnerable for another move lower in yields, in case weak data continues or risk sentiment takes another hit. As the Fed is unlikely to deviate easily from the tapering path it has set, last October s lows of around 2.45% in the 1-year Treasury yield (just above 2.6% in 1Y swap rates) should be seen as strong support levels. The highlights in this week s calendar are the Fed minutes on Wednesday and January inflation numbers on Thursday. In addition, regional manufacturing confidence numbers will be watched carefully after the surprise plunge seen in the manufacturing ISM index. Foreign Exchange EURUSD higher last week, now soon about to challenge year highs around Weak US key figures, strong European ones and risk appetite returning get to take the blame. With EURNOK also coming down USDNOK is now close to the levels where it has stopped on the downside several times last half a year. Table 1: Foreign exchange Date: Spot 1w chg 1w chg % YTD chg YTD chg % EURUSD 1,3693,6,4%,5 3,8% USDNOK 6,8 -,1-1,6%,51 9,2% GBPUSD 1,67,3 2,%,5 3,% USDJPY 11,8 -,5 -,5% 15,5 17,3% USDSGD 1,26 -,1 -,7%,4 3,1% Table 2: Interest rates Date: USD 1w chg NOK 1w chg EUR 3M *IBOR,2359, 1,72,3,287 6M *IBOR,329, 1,82,5,386 2y swap,44,2 1,91,7,433 5y swap 1,64,6 2,49,8 1,17 7y swap 2,26,4 2,82,7 1,423 1y swap 2,84,3 3,16,7 1,898 5y 5y swap 4,27, 3,95,7 2,8798 Table 3: Fuel and crude oil Date: Fuel swaps (USD/tonne) Front month 1w chg % CAL 214 1w chg % Fuel oil 3.5% FOB Brgs ARA 581 -,6% 578 -,6% Fuel oil 1% FOB Crg NWE 618,7% 66,% Sing 38 cst. 67 -,4% 61 -,4% Sing 18 cst ,2% 68 -,4% ICE gasoil swap 922 -,1% 912 -,1% Crude futures (USD/bbl) 1st month 1w chg % Dec' 214 1w chg % ICE Brent 19,8,2% 15,49,3% Table 4: Freight Date: Tanker rates (USD/tonne) Spot 1w chg % Front Qrtr 1w chg % TD3 - Arabian Gulf to Japan 17,8 3,7% 15,51 18,5% TD5 - West Africa to USAC 11,52-18,3% 13,6-1,4% TD7 - North Sea to Continent 7,9-4,5% 7,87-12,% TC2 - Continent to USAC 18,51-12,5% 19,83-3,1% TC4 - Singapore to Japan 14,95 1,5% 14,86 -,8% TC5 - Middle East to Japan 28,46 6,% 29,18 4,7% Dry bulk T/C (USD/day) Spot 1w chg % Front Qrtr 1w chg % Capesize ,3% ,2% Panamax 1 56,9% ,8% Supramax ,4% ,% Handysize 9 689,1% 1 71,7% Baltic Dry Index ,4% Shipping Essentials Weekly 1 of 5

2 FX and Interest rates Chart 1: EURUSD and USDNOK Chart 2: GBPUSD and USDJPY 1,4 1,38 1,36 1,34 1,32 1,3 1,28 1,26 1,24 1,22 6,4 6,2 6, 5,8 5,6 5,4 5,2 1,7 1,65 1,6 1,55 1,5 1,45 1, ,2 16aug12 16des12 16apr13 16aug13 16des13 5, 1,35 16aug12 16des12 16apr13 16aug13 16des13 7 EURUSD USDNOK, rhs GBPUSD USDJPY, rhs Chart 3: USD 3m LIBOR fix and forward Chart 4: NOK 3m NIBOR and forward,45 2,2,4,35 2,,3 1,8,25,2 1,6,15 1,4,1,5 1,2, 23aug12 23feb13 23aug13 23feb14 23aug14 USD 3m LIBOR Implied forward (swap curve) 1, NOK 3m NIBOR Implied forward (swap curve) Chart 5: USD historical swap rates Chart 6: NOK historical swap rates 3,4 3,2 3, 2,8 2,6 2,4 2,2 2, 1,8 1,6 1,4 1,2 1,,8,6,4,2, 2aug12 2des12 2apr13 2aug13 2des13 USD 2y USD 5y USD 1y 4,1 3,6 3,1 2,6 2,1 1,6 16aug12 16nov12 16feb13 16mai13 16aug13 16nov13 NOK 2y NOK 5y NOK 1y Shipping Essentials Weekly 2 of 5

3 Oil and fuel Chart 7: ICE Brent futures (USD/bbl) aug12 2mar13 2okt13 2mai14 2des14 ICE Brent Fwd curve Chart 8: Gasoil.1% CIF Cargoes NWE swap (USD/tonne) aug12 15feb13 15aug13 15feb14 15aug14 Front month Fwd curve Chart 9: Fuel oil 3.5% FOB Barges Rotterdam swap (USD/tonne) Chart 1: Fuel oil 1% FOB Cargoes NWE swap (USD/tonne) Front month Fwd curve Chart 11: Fuel oil Sing 38 cst. swap (USD/tonne) Chart 12: Fuel oil Sing 18 cst. swap (USD/tonne) Shipping Essentials Weekly 3 of 5

4 Freight rates Chart 13: TD3 Arabian Gulf to Japan, spot and forward (USD/tonne) Chart 14: TD7 North Sea to Continent, spot and forward (USD/tonne) Chart 15: TC2 Continent to USAC, spot and forward (USD/tonne) Chart 16: TC5 Middle East to Japan, spot and forward (USD/tonne) Chart 17: Capesize T/C average, spot and forward (USD/day) Chart 18: Panamax T/C average, spot and forward (USD/day) Shipping Essentials Weekly 4 of 5

5 Freight rates Chart 19: Supramax T/C average, spot and forward (USD/day) Chart 2: Handysize T/C average, spot and forward (USD/day) feb13 15jun13 15okt13 15feb14 15jun14 15okt14 Commodities Strategy Bjørnar Tonhaugen, Senior Analyst bjornar.tonhaugen@nordea.com Fixed Income Jan von Gerich, Chief Analyst jan.von.gerich@nordea.com Strategy Research Ole Håkon Eek-Nielsen, Chief Analyst ohen@nordea.com Economic Research Joachim Bernhardsen, Analyst joachim.bernhardsen@nordea.com Commodities Trading Per Siversen, Senior Dealer per.siversen@nordea.com Credit Research Anders R. Karlsen, Senior Analyst anders.karlsen@nordea.com Nordea Markets is the name of the Markets departments of Nordea Bank Norge ASA, Nordea Bank AB (publ), Nordea Bank Finland Plc and Nordea Bank Danmark A/S. 'The information provided herein is intended for background information only and for the sole use of the intended recipient. The views and other information provided herein are the current views of Nordea Markets as of the date of this document and are subject to change without notice. This notice is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient. The information provided herein is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information contained herein has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results. Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction. This document may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Markets. Shipping Essentials Weekly 5 of 5