Trading was calm throughout the morning as a marginally lower opening acted as a precursor to some unchanged trading, with interest limited outside of the front two prompts and the array of pre-expiry activity. It was only with the arrival of the US based specs that the market started to break from its tight range, their efforts seeing the market explore back through 26c and the recent highs which lay beyond. With the macro showing positively and Tuesdays Unica news a distant memory the market pushed through to the highest levels seen since 16th May, triggering off an assortment of buy stops along the way to a high at 26.41, though it should be noted that buying remained thin throughout. With a good deal of new buying now being seen for Oct’23 there was no tangible widening of the front month spreads, and in fact the Jul’23 spreads came under pressure as the market corrected back into the range. With buyers few and far between the picture changed dramatically with the pullback wiping out all the day’s gains, moving back to 25.76 before stabilising against some day trader short covering (a sign that small traders were being whipped around). This bounce proved to be short-lived and in a remarkable turnaround the market found itself trading to new lows as we moved through the final hour before once more surging back up, rebounding from a 25.60 low towards 26c, clearly motivated by some intentions ahead of tonight’s Jul’23 option expiry. Settlement was reached at 26.00 precisely, and while this positive close will encourage the longs, the volatility seen today shows that further solid support will be needed for the market to be able to sustain additional upward movement in the longer term.
The market was under pressure again through the early part of the day, reacting to lower No.11 values with a dip to $682.40 before easing back towards overnight levels. Despite pulling away from the lows there remains very limited buying interest at the front of the board and so the next few hours were spent drifting quietly either side of unchanged on low volume, the only notable change being a narrowing of the Aug’23 spreads. Moving into the afternoon the market started to pick up a little, but as with recent moves it was being dictated by the US specs, the market pushing in conjunction with the No.11 movements to rally back up through the range. The pace of increase was lagging in comparison to No.11 and so there was another narrowing for the Aug/Jul’23 white premium to $112.50 despite the Aug’23 contract reaching to $695.00. Aug/Oct’23 was still narrowing in the meantime, and though the decline was orderly against light volume the differential narrowed towards flat with an afternoon low at $0.30 premium. That was by no means the end of things for the spread with daily lows recorded at -$1.30 in amongst the late volatility which saw Aug’23 jump from the lows to settle some $6 above at $685.00 following some closing shenanigans. Overall it was another uninspiring effort from the whites, emphasising a continuing reluctance to rally at the present time regardless of external factors.
