Saudi Arabia

European shares remain lower, close to intraday lows, with the banks and autos sectors underperforming and food & beverage, retail outperforming. Tsipras hardens Greek stance after collapse of bailout talks. The Italian and Swedish markets are the worst-performing larger bourses, the U.K. the best. The euro is weaker against the dollar. Greek 10yr bond yields rise; Spanish yields increase. Commodities decline, with copper, nickel underperforming and natural gas outperforming. U.S. Empire manufacturing, net TIC flows, NAHB housing market index, industrial production, capacity  utilization due later.

Are we QE'd out??? It was supposed to be about the quality of growth,not helping the oligarchy protect their collective arses

It has been a mostly quiet overnight session with Europe solidly green on another bout of Greek hope even as Bundesbank's Weidmann warned that Greek insolvency risks are rising and Greece reporting that its unemployment rose once more from 26.1% to 26.6% in Q1, in which we got two more rate cuts by New Zealand (which sent the Kiwi crashing the most since 2011) and South Korea (the Won initially dipped only to rebound) but China stole the stage with its latest report on retail sales, industrial production, and fixed investment all of which showed a modest bounce from multi-year lows suggesting the PBOC's attempts to shock the economy into growth may be starting to work (which is bad news for the market).

When forecasting how much oil will be available in future years, most agencies, including EIA, IEA and BP appear to adopt a similar 'work-backwards from GDPO growth expectations' method. It seems that this approach has a fundamental flaw. It doesn’t consider the possibility of continued low oil prices and the impact that these low oil prices are likely to have on future oil production. Hoped-for future GDP growth may not be possible if oil prices, as well as other commodity prices, remain low.

OPEC's next task is to convince those making new investments in oil that rather than catching a bottom in oil prices, they have caught a falling knife. The cartel must dampen enthusiasm for investment for the long term if the organization's members are going to benefit. A crippled U.S. oil industry without friends in the investment world is the only way to assure that rising prices won't simply lead to a stampede back into U.S. shale deposits.

If Inventories down, then buy oil at the fastest pace in 2 months. That appears to be the algo logic as talking heads additionally blame Saudi airstrikes on Yemen for the over 6% surge in WTI in the last 2 days. However, as crude nears $62 (6 month highs) once again, we note that not only Saudi oil production just hit a new record high, but US production hit a new cycle high last week (DOE data today), and this is happening as China's energy demand grows at the slowest pace since 1998.

As reported yesterday, in the latest escalation of the "war on ISIS", Obama - winner of the Nobel peace prize for pulling US soldiers out of Iraq - was said to be sending even more US soldiers, pardon military advisors, to Iraq to halt the inexplicable, constant expansion of ISIS, now deep in Syrian territory. Earlier today, this was confirmed when Reuters reported that, as expected, the US will announce on Wednesday plans for a new military base in Iraq's Anbar province and the deployment of around 400 additional U.S. trainers to help Iraqi forces in the fight against Islamic State, citing an unnamed U.S. official.

As Russia adjusts to Western sanctions stemming from the conflict in Ukraine, Gazprom is now settling all crude sales to China in renminbi. At the intersection of the petrodollar's death and yuan hegemony is: the PetroYuan...

"U.S. President Barack Obama is weighing steps to bolster Iraq's battle against Islamic State," Reuters says, as senior military officials indicate an increase in the number of US "support personnel" may be necessary. Meanwhile, Congressional war hawks are beating the drum.

in a follow up piece to his stunning original investigative report, Nafeez Ahmed reveals that according to leading American and British intelligence experts, the previously declassified Pentagon report confirms that the West accelerated support to extremist rebels in Syria, despite knowing full well the strategy would pave the way for the emergence of the ‘Islamic State’ (ISIS). The experts who have spoken out include renowned government whistleblowers such as the Pentagon’s Daniel Ellsberg, the NSA’s Thomas Drake, and the FBI’s Coleen Rowley, among others. Their remarks demonstrate the fraudulent nature of claims by two other former officials, the CIA’s Michael Morell and the NSA’s John Schindler, both of whom attempt to absolve the Obama administration of responsibility for the policy failures exposed by the DIA documents.

We previously warned of the risks of escalation in The Middle East to something much more dangerous, but, as the Saudi ambassador to UK confirmed today, the risk of Wahhabis going nuclear is even higher than many expected, "...if [Iran will not offer assurances it will not pursue nuclear weapons], then all options will be on the table for Saudi Arabia... Iran’s nuclear program poses a direct threat to the entire region and constitutes a major source and incentive for nuclear proliferation across the Middle East, including Israel."

Following OPEC’s decision not to cut production at its June 5, 2015 meeting in Vienna, oil prices should likely continue their descent that began in early May (Figure 1). Prices may fall into the $50+ per barrel range since there is no tangible reason for their rise from January’s $46 low.

Sometimes we get the feeling the ruling elites are investing the laws they enact with a kind of impertinent, slap-in-your-face black humor. How else to explain the Orwellian names given to the liberty-crushing laws that have been put in place since the “war on terror” started?

On Saturday, Riyadh claimed Yemen's Iran-backed Houthis, in concert with forces loyal to former Yemeni President Ali Abdullah Saleh, for the first time fired a scud missile at Saudi Arabia.