Who is responsible for the attack on Saudi Oil Infrastructure is the question providing a bid into bonds. A spike higher in oil prices normally would cause Bonds to trade lower as a possible rise in inflation worries investors. President Trump Blames Iran and says a U.S. response is “locked and loaded” Iran denies involvement and Yemen’s Houthi rebels have claimed responsibility. The energy Sector of stocks is bid but since its weight in the SPX is quite low not providing that much help for the whole index. Spoos down nine handles, trading 16 handles off session lows though. Another source of worry was Econ data out of China, which showed Industrial output and retail sales missing expectations. Per Mizuho Currencies of Oil suppliers ae higher while those of consuming nations are lower.
Per trading economics, Oil prices jumped on Monday following a drone attack on Saudi Arabia’s oil facilities during the weekend, which cut crude output by 5.7 million barrels per day. Brent climbed as much as 20%, the most in three decades, to above USD71 per barrel in the seconds after the open, before pulling back about half of the initial surge. The US crude oil rose as much as 16% to above USD63 per barrel. The main concern for oil market is the speed in which Saudi Arabia can repair damage and get production back up to pre-strike levels. Saudi Arabia believes that at least 50% of lost production can come on liner rather quickly,the longer it takes to restore full production the longer the impact on oil prices.
Fed meeting on Wednesday expectations are still for a .25% cut in rates ,second tier economic data this week unlikely to change the Feds decision what could change it though is if oil prices stay elevated.
Cl and Brent +10% Rbob +9.85% Heating oil +8.5% Nat gas +2.5% as Summer weather continues, Copper -.9 Gold +.8% on a slight flight to safety trade and palladium touched another new all-time today. Trump blasting Fed this morning likely to continue until Wednesday Decision.