Continued Qatari gas shipments, mixed Eurobonds, and a slight decline in Hong Kong stocks

More LNG cargoes loaded from Ras Laffan reappeared outside the Strait of Hormuz over the weekend, after transiting the waterway; Which reinforces the recent increase in the movement of Qatari liquefied natural gas shipments despite the ongoing security risks associated with the Iran war.

Four liquefied natural gas tankers carrying Qatari cargo appeared again outside the Strait of Hormuz between October 2 and 3, according to ship tracking data from Kpler and LSEG.

Three of these tankers - “Bu Samra”, “Al Qattara” and “Al Sadd” - are linked to Qatar Energy Company. Tracking data for the “Al Qattara” tanker currently indicates that it is headed to Zhejiang, China, while the “Al Sadd” tanker unloaded its cargo at the “Daheg” terminal in India on October 3.

As for the fourth tanker, Al Kharsaa, it is managed by Sea Peak Maritime, an independent owner and operator of gas tankers.

The four tankers were last seen inside the Strait of Hormuz between September 18 and 27. Many ships crossing the strait carry out what is called a “dark transit” by turning off their Automatic Identification System (AIS) transponders to avoid detection.

Meanwhile, another LNG tanker, the Al-Marouna - also operated by Sea Peak Maritime - appeared sailing unloaded within the Strait of Hormuz off the coast of Qatar on October 2, after having previously been tracked outside the waterway.

Euro zone bond yields varied again on Monday, although the movements were less severe compared to the end of last week, in light of investors’ appetite for safe traditional assets, such as German bonds, at the expense of the bonds of the most indebted countries, amid escalating concerns about inflation and financial conditions.

The 10-year German bond yield fell by about 2.3 basis points to 3.4322 percent, and the 10-year Dutch bond yield fell by approximately the same amount, according to Reuters.

In contrast, the Italian 10-year bond yield rose 1.1 basis points to 4.6335 percent, while the French 10-year bond yield increased by about 1.8 basis points to 4.8832 percent. France and Italy are among the most indebted countries in the eurozone.

French government bonds are under strong pressure in light of rising debt levels and increasing political risks ahead of the presidential elections scheduled for 2027. This decline in bond prices comes in addition to broader concerns about rising energy prices, accelerating inflation, and rising interest rates, factors that have weighed on bond markets in recent weeks.

The French 10-year bond yield approached 5 percent last week, a level it has not exceeded since the early 2000s. The difference between the French 10-year bond yield and its German counterpart, which is considered a safe haven, rose to more than 158 basis points on Friday, its highest level since late 2011, before falling to about 145 basis points.

These moves raised concerns about the severity of the bond selling, and also prompted questions about whether the European Central Bank might need to intervene.

Short-term bond yields, which are more affected by interest rate expectations, declined in general, although the severity of the decline varied between countries.

The German two-year bond yield fell 5.3 basis points to 2.9964 percent, while the French two-year bond yield fell 3.3 basis points to 3.6816 percent, and the Italian two-year bond yield fell slightly to 3.5182 percent.

Last week, financial markets lowered their expectations for interest rates, and are no longer fully pricing in the possibility of the European Central Bank raising interest rates again this year. Markets are currently pricing in a 22 percent chance that the European Central Bank will raise interest rates at its next meeting in October.

In Spain, Prime Minister Pedro Sanchez called, on Monday, for early elections to be held on November 29; In an attempt to strengthen his political mandate, after a divided parliament last week rejected key government decrees on housing, amid widespread protests.

The Spanish 10-year government bond yield was largely stable, falling by about one basis point to 4.0799 percent.

Hong Kong stocks fell slightly during trading on Monday, amid limited trading volumes, after losses in real estate companies and major financial institutions overshadowed the gains achieved by technology and semiconductor stocks.

The standard "Hang Seng" index fell 0.08 percent by mid-session, while the "Hang Seng Chinese Enterprises Index" stabilized with little change. The poor performance came in light of the continued closure of financial markets in mainland China on the occasion of the National Day holiday, which extends from the first to the seventh of October (October), with trading to resume on the eighth of this month.

Sectors sensitive to interest rates were subjected to more pressure, as shares of real estate companies fell 0.9 percent, while a sub-index that includes major banks and insurance companies fell 0.7 percent.

On the other hand, the Hang Seng Technology Index rose 0.3 percent, supported by semiconductor and printed circuit board companies. Kingboard Laminates shares jumped 9 percent, while Hua Hong Grace Semiconductor shares rose 4 percent.

Investors are awaiting travel data and retail sales during the “Golden Week” holiday, searching for early indicators of strong consumer demand as the Chinese economy enters the final quarter of the year.

Citi analysts said that activity during the holiday appears “below expectations” based on preliminary data, suggesting a decline in retail and tourism spending per traveler despite the stability of visitor numbers.

In a remarkable move, Budweiser Brewing Company ABAC shares fell 2.1 percent to 5.555 Hong Kong dollars, the lowest level since its listing in September 2019.

The company said that it expects to record an exceptional tax cost of $52 million, as a result of an internal restructuring process that includes some of its units in mainland China, with the aim of improving capital efficiency.