love taps
market vibes
May 8…)
NFP is expected to rise 60k to 70k this morning. Headline unch at 4.3%, AHE .2 vs .3 and avg work-week 34.2 vs 34.2. In other words, the oil crisis had zero impact on the American economy.
For reference this is ADP’s outlier surge in April employment… in other words, according to ADP… the US economy boomed as the world fretted and clutched their pearls. I wonder what is happening in China?
Well well… look at that. China is importing 3.5 million fewer barrels per day according to BBG this morning. Premiums for export barrels to Asia have suddenly vanished.
In other news
Mamdani is getting a dose of budgetary FAFO in the Big Rotten Apple. Mythos is an amoeba crawling out of the primordial mud. The velociraptors are coming soon.
Faith Birol says Canada has a golden opportunity to scoop the oil markets. Trump approved the resurrection of the mini Keystone yesterday. Once these work-around projects are funded they will all come to fruition. Yanbu in KSA, Fujairah in the UAE, Kuwait and Iraq will build alternate exits. Even if the Strait of Hormuz opens its future will be dry cargo… or Khargo (lol).
The real casualty in this Iranian affair is Lloyds of London. Not only has global shipping lost $100’s of billions of daily insurance risk to pipelines, the US government is competing with them for underwriting what’s left of seaborne risk when the Strait opens. Schadenfreude?
China is rolling out the red carpet for Trump.
in the markets
Open interest in WTI crude oil has risen 103,000 lots since the May expiration on April 21. So, the pot is full. The longs are in again, the sheep are lining up and ready to be shorn of their wool, imo.
The June/July front spread is motionless, waiting as all markets are waiting for the terms of the deal. I doubt it will be an unconditional surrender. The cost of achieving it is too high. The final blows to the IRGC will be, must be… dealt by the Iranian people. However, it’s likely the IRGC’s days will be fraught with reprisals and payback.
The technical construction of oil futures is still inconclusive. The IRGC may have one last “love tap” to caress its foes. I doubt it considering the trends in geopolitics are leaning towards detente.
Gold and silver from a high level up next…Next chart…
