A calm morning period saw nearby prices again struggling to pull very far from the 18.00 area, though with macro movements largely positive our own limited movements took this lead and the price reached 18.11. For the flat price it was very much a case of following the spread lead once again, and while we remain in the midst of the index roll it is fair to say that a good deal of a bumper morning spread volume was coming from the trade as they push the spread out to new highs. Inevitably the Americas morning marked an increase in the volumes being traded, with continued pushing higher taking the spread to 0.40 points while the Oct’22 contract reached only to 18.25. As the afternoon moved forward, so the volumes increased ever more for the spread, increased selling from the index sector as they sell their longs forward bringing the volume above yesterdays total while pushing the spread back in to 0.33 points. The situation remained stable until the closing call, when aggressive buying appeared for the spread once again, taking it from 0.34 points to a new high at 0.45 points on the post close, with settlement value at 0.39 points. Volume for the spread was a mighty 110,000 lots with more to follow from TAS activity, and with the open interest having already crossed to show March’23 as the largest position this likely represents that a significant percentage of rolling is now concluded. Oct’22 settled at 18.22 to leave the flat price still comfortably within recent parameters and eyes will remain focussed on the spread to see how much further the trade may look to squeeze.
The day got underway with some mixed trading either side of unchanged levels, and as things settled down it became a reversal of recent action with Oct’22 drifting off while the rest of the board started to edge higher. Dec’22 made it up through $538.00 before pausing to consolidate, and even though the front spread was retracting a little there remained good sentiment for the market. It was early afternoon before the market made another leg upward and nudged $540.00 for Dec’22, the movements further extending the 2023 white premium values, Dec’22/March’23 up to $146.00 and March/March’23 reaching $116.00. By now the spot Oct’22 contract was also on its way back with another round of spread buying extending the differential ever closer to $50. The later part of the day saw new highs recorded for all sectors, the flat price strength helping the Oct/Oct’22 premium to $188 and March/March’23 to $117, while the spread went out at a widest $49.90. Dec’22 settlement at $539.60 maintains its positivity and brings recent highs at $543.40 into view.
