For the 7th week in a row, Cushing inventories saw a build (+545k) pushing to new record high stockpiles but that was offset by a smaller-than-expected build in overall crude (+1.3m vs +3.2m and less than API overnight). Smaller-than-expected draws in Gasoline and Distillates are helping to fade the early gains in crude.
DOE
One reason given for the contention that investors should fade Draghi’s latest “package” is that, to quote Deutsche Bank, “we are one hawkish Fed statement away from a re-pricing.”
The argument is essentially this: the Fed reminds the market that more rate hikes are still in the cards (even if there isn’t one today), that leads to dollar strength, which in turn triggers a renewed downturn in commodities and thus a return to the same dynamics that waylaid markets earlier this year.
Here’s how Goldman put it last week:
The Bank of Korea is aiming for a “cashless society” by 2020. The bank’s officials plan to provide South Koreans with cards instead of coins, since consumers are increasingly becoming comfortable with cashless payments due to the prevalence of mobile wallets, smartphones and mobile banking. Koreans now carry less cash as it gives way to credit cards and fintech payments. Now if a consumer were to purchase a 9,500 won item and pays cash using a 10,000 won banknote, the shopper would be credited 500 won to his or her prepaid card instead of getting a 500 won coin in change.
Coming at the same time as an inflationary report which showed Core CPI rising at 2.30%, or the highest rate since October 2008, and one which will put further pressure on the Fed to hike rates as shelter inflation is now simply too big to sweep under the rug, we also got February's housing starts and permits, which while painting a mixed picture of the US housing market suggested further strength in the US housing sector in the past month.
Following last month's inflation 'jolt' to the marketplace, Core CPI increased 2.3% YoY in Feb - the biggest jump since October 2008 (led by the biggest monthly surge in apparel prices since 2009). Bond & Stock markets are dropping in the news as it corners The Fed further into a hawkish stance, despite the recessionary warning signals screaming from the manufacturing (and increasingly Services) sector.
The Core CPI print has not been higher since October 2008...
CPI Breakdown...