United States

It is becoming increasingly apparent that the Fed, now data-independent, has just one mandate: keep hiking interest rates until markets break.

It was already a jittery day for fixed income investors, with a bond rout which started after today's French auction was poorly received, unleashing a selling scramble and sending Bund yields above 0.50% for the first time since January 2016, and breaking out above a key support level, then crossing the ocean and slamming both US stocks and bonds. And according to Jeff Gundlach, who recently doubled down on his vocal bond bearishness on Twitter...

Authored by David Stockman via The Daily Reckoning,

Back in the 1950s when GM had 50% of the auto market they always said that, “As General Motors goes, so goes the nation.”

Oil bounced notably overnight after a surprisingly large crude build reported by API, but there was some selling in QTI/RBOB into today's DOE data, but that ended quickly as DOE reported major inventory draws across the board sending WTI spiking above $46. However, after last week's drop, US crude production (in the Lower 48) soared by its most in 6 months.

API

After praising Poland’s conservative ruling party during his visit to Warsaw on Thursday, President Trump quickly shifted his focus back to the escalating missile crisis in North Korea, saying that he is contemplating “some pretty severe things” to retaliate against Kim Jong Un after he tested an ICBM on America's independence day, capable of reaching US territory.

“I have some pretty severe things we’re thinking about," Trump said at a news conference in Warsaw. "Doesn’t mean we’re going to do them. I don’t draw red lines."