Oil Shock, Crude Surges 20%, Treasuries Untouched: One Is Wrong, Which One?
Oil Futures Up 20%
The Financial Times reports Oil prices jump 20% After Attacks Halve Saudi Output.
This is in the wake of a Saudi Oilfield Attack over the weekend.
By Yemen, Iraq, or Iran? Israel?
Production Back Up When?
See the above link for discussion.
Treasury Yield Flat
Meanwhile, I note US Treasury yields are flat.
As of 8:20 PM central Sunday evening, there is no change in 3-month, 5-year, 10-year, or 30-year treasury yields.
I propose there is little economic sense to this reaction.
Oil shocks are inherently recessionary.
Theoretically, this could be an inflationary recession like the 1970s.
Global Fairy Godmother
With stocks priced well beyond perfection, a collapse in global trade, a UAW Trade Strike Involving 48,000 Workers, and trade war threats between the US and Europe (and the UK and Europe), this all seems strange.
Then again, perhaps the Global Fairy Godmother will solve all the issues and restore global inflation (as measured by central banks).
Mike "Mish" Shedlock