With the economic data out this morning the fears of tapering are once again running rampant through the market. The fear is overblown and certainly misplaced in our view because if these economic numbers hold up it certainly indicates that rates can in fact move higher and not impact the economy significantly. What seems to be lost upon the market is that we are talking about tapering, not ending. Any tapering action would only signify the beginning of the end, not THE END. That is a huge difference that the market seems unable to distinguish between right now but should become apparent later on.
Commodities are seeing some pressure this morning with the metals taking the brunt of the hit.
Chart of the Day:
Gold remains under pressure and is taking the biggest hit as investors worry about the outlook for the yellow metal with low inflation and an easy
The irony about karma is that you sometimes do not know if you are on the receiving end of bad or good karma. And fortunes can change in mid-flight. Oil markets in this context are fascinating right now. This year, oil-consuming nations have witnessed the heavy footprint of OPEC over global oil markets lighten.
News of Iran's potential slow ramp up of oil supply resounded with a downward small ping in prices, later to bounce back based on supply realities and economic growth. Iraqi oil supply keeps increasing, averaging about 3 million barrels per day, a new high in the last 20 years from sanctions lifted from the Saddam Hussein days and the passing of time of the U.S.-led incursion. Iraq plans to keep pumping - growing production 500,000 - 750,000 barrels more per day in 2014. Iraq's output relative to OPEC production hovers near 10%, from around 7.5% in
Well, crude oil inventories were bound to decline at some point. After ten straight weeks of increases, crude oil inventories finally declined this week. While traders were expecting stockpiles to fall by 500 thousand barrels, the actual decline was more than eleven times that, at 5.585 million barrels! That was the largest weekly decline since July.