Well, we have a winner - Oil broke to a 3 handle before 10Y rates hit a 1 handle (just - 10Y at 2.04%) following the 5th weekly rise in rig count (+2 to 674). Energy credit risk is soaring to record highs as investors realize 'there will be blood' in all those highly-levered loans. This is the first time the front-month crude contract traded below $40 since March 3rd 2009... just before QE was unleashed in all its asset-inflating, malinvestment-driving, zombifying glory.
This didn't help:
- *SAUDI LIKELY TO KEEP OUTPUT NEAR 10M B/D THROUGH 2016: BARCLAYS
And then the rig count data hit..
- *U.S. TOTAL RIG COUNT 885 , BAKER HUGHES SAYS
- *U.S. OIL RIG COUNT UP 2 TO 674, BAKER HUGHES SAYS
WTI Crude breaks below $40....
and Energy credit risk is exploding..