United States

WTI prices dumped on last night's surprise crude build but have limped back above $49 heading into the DOE prints this morning (although Russia sanctions headlines dipped it). DOE did not help as the report was a disappointment for the bulls with production rising to a new cycle high, crude inventories drawing less than expected but total U.S. oil inventories (that's crude plus all products, including the often volatile "other oil" category) rose by 1.1 million barrels last week.

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After several days of delays, which prompted speculation among politicians and the media why the White House is dragging its feet on the issue and was the topic of several questions during Rex Tillerson's Tuesday media press conference, moments ago the Donald Trump officially signed into law new Russian sanctions that prevent the president from acting unilaterally to remove certain sanctions on Russia and adds sanctions against Russia, Iran and North Korea.

President Trump has given China six months to prove that it is committed to preventing a nuclear-armed North Korea, and it seems his tolerance for China’s dithering has finally reached its limit. Now that President Xi Jinping has established that his government is unwilling to engage in a meaningful crackdown on its neighbor, the era of using carrots like improving trade relations to coax China into helping solve the “North Korea problem” has ended. It is now time for the stick.

Nasdaq 100 futures jumped 0.8% after Apple surged to record highs following a strong beat and optimistic projections ahead of the launch of the company's new batch of iPhones. Eminis are little changed, up 0.1% to 2,475, trailing Asian markets, while European stocks and crude oil fall.

Authored by Chris Whalen via The Institutional Risk Analyst,

“While the US and the UK have been mired in political chaos this year, the EU has enjoyed improved economic conditions and some political windfalls. The question now is whether this good news will inspire long-needed EU and eurozone reforms, or merely fuel complacency – and thus set the stage for another crisis down the road.”

 

Philippe Legrain, Project Syndicate