For May’23 it was something of a subdued morning as prices held a band either side of 20c (19.96/20.13) until noon, with traders clearly content to wait and see whether the US specs would look to push the market once more. The March/May’23 spread was remaining firm through this period, and with buyers continuing to maintain the recent strength we saw March’23 on the front foot. The early afternoon remained calm which led to some new lows as some questioned whether the market had the stamina to continue the recent push, though soon afterwards the answer arrived, and it was a resounding yes with May’23 pushing back up through 20c and then all the way ahead to 20.28 with selling still proving to be sporadic on the way through. March’23 was firmer still and briefly printed to new life of contract highs at 21.89, while the March/May’23 spread reached a huge 1.62 points alongside as fund/index spread sellers once again benefitted from the trade led buying. Once the buying eased there was a sharp pullback with long liquidation hitting into a vacuum, and though efforts were made to renew the push during the final hour they had limited success, leading to further selling on the close as traders tidied their books for the weekend. May’23 settlement at 20.04 showed only small change, though March’23 was firmer at 21.58 and the spread at 1.54 points. The fallout from the ION issues means that there will still be no COT data published at the present time, clouding some views as to how much further the market can push with the limited knowledge as to current holdings. Next week will also see the March’23 options expire on Wednesday, a factor which could well influence short-term movements.
The first hour saw some price volatility as May’23 quickly gave back its initial gains and dropped back down into the mid $560’s. As things calmed down it was the lower end of the range where the market was able to consolidate, leading to some calm trading across the rest of the morning. New lows were then seen during the early part of the afternoon with May’23 slipping to $562.30 but as so often is the case ahead of a weekend the specs look to defend their efforts and did so again with some fresh buying. This took the market higher at a decent pace to trade marginally above the morning high at $571.80, though the movement fell shy of both this weeks high and the contract high. Long liquidation followed which sent prices negative once again though in amongst see-saw action there were efforts made during the final hour to limit the damage. May’23 worked back to unchanged prior to the close before encountering some pre-weekend position squaring, ending the week a touch lower at $566.90. As we move towards Mondays March’23 expiry there was again some volatile trading for the spread, thin liquidity contributing to the moves as March/May’23 recovered from a lower start to push as wide as $9.00 before ending the day unchanged at $3.90. OI continues to reduce and stands at 7,625 lots as we look towards a small tender on Monday evening. The ICE exchange today announced that effective Tuesday 14th February the board will be extended by a further 6 prompt months, bringing the total on exchange to 14 positions. This will extend the board to October 2025, matching the current length of the No.11 board.
