Crude Oil

News That Matters

"We are still in a very cautious environment for emerging-market currencies and unless there is a sharp turnaround in commodity prices or capital flows, I still think there’s going to be pressure on the ringgit and the rupiah."

The big overnight story was certainly the BOJ's announcement at 11pm Eastern whether or not the Japanese central bank would boost QE. This is how we previewed it: "now all eyes to the BOJ when tonight around 11pm Eastern, Japan's central bank is expected do and say precisely... nothing." Sure enough, nothing is precisely what the BOJ delivered, leading to a big, if brief tumble in the USDJPY suggesting many were expecting at least a little tip from the BOJ.

News That Matters

According to several trading desks, the pre-war jitters in (and above) Syria are finally catching up to some, and there has been a distinct geopolitical-risk oil bid in the past two hours, on concerns the proxy war involving the US, Russia and, increasingly, Saudi Arabia and Iran, will finally spill over leading to forced supply cuts by middle-east nations, and a sharp, if transitory, spike in crude oil prices,

The best headline to summarize what happened in the early part of the overnight session was the following from Bloomberg: "Asian stocks extend global rally on stimulus bets." And following the abysmal data releases from the past three days confirming that the latest centrally-planned attempt to kickstart the global economy has failed, overnight we got even more bad data, first in the form of Australia's trade deficit, and then Germany's factory orders which bombed, and which as Goldman said "seems to reflect genuine weakness in China and emerging markets in general and this will weigh on the German manufacturing sector."

News That Matters

Without government intervention the “invisible hand” of the world oil market will simply bankrupt US shale companies and with it destroys the US shale oil industry.

While gold remains unchanged, silver prices are surging higher this morning as crude oil jumps supposedly on geopolitical tensions... but technical resistance looks key.

" we are this morning making the bold… indeed, for us, the very bold … statement that the bearish run in global stocks is over; that the bearish run to the downside in US shares is over and that we are henceforth to err bullishly of shares, diametrically opposed to the position we have had for the past several months wherein we erred steadily… almost relentlessly… bearishly.... we are now finishing the trifecta as we turn bullish of stocks."

The oil patch is full of conundra currently... crude price declines globally to near 2009 lows but supertanker day-rates (demand) soaring over $100,000 for the first time since 2008. However, today's news that Saudi Arabia is slashing its price (to a $3.20 discount to the bechmark with the largest price cut since 2012) suggests in an effort to shore up tumbling reserves and capture more market share amid dwindling demand (and excess supply) - a price war has begun led by US ally Saudi Arabia... and China is hording crude at these low-low prices.

Following Friday's disastrous payrolls report, which confirmed all the pre-recessionary economic data and signaled that instead of approaching "lift-off" and decoupling from the rest of the world, the US economy is following the emerging markets into a slowdown in what may be the first global, synchronized recession since 2008, the market saw its biggest intraday surge since 2011 and the sharpest short covering squeeze in history, we are happy to announce that the "market" is now solidly back in "bad news is good news" mode.

The poor jobs report weighed on the dollar, but the greenback recovered as the session progressed.  It is not clear the jobs report was a game changer.  Stay tuned.