OPEC+ crude oil production jumped in October, led by a sharp increase in output from Saudi Arabia despite continued disruption to shipments through the Strait of Hormuz caused by the Iran war.
After Brent crude’s 10-day decline of nearly 25%, it’s tempting to say the market is pricing in peace. It isn’t. Rather than anticipating that hostilities between the US and Iran are over, traders are foreseeing no immediate risk of a third round of fighting. If the two countries reach a deal, however fragile, oil will trade significantly cheaper than its current value of around $90 a barrel.
Comments from the ECB’s Lane on inflation and policy guidance crossed the wires. We put a very high premium on consensus, would be difficult with dots. I would put high bar on directional forward guidance now. Important that ECB has an instrument for multiple equilibriums on bond market. Informative that underlying inflation hasn’t moved yet, it means it’s the usual delayed response. Underlying inflation is a guide to 1-year-ahead inflation. Energy prices already reversing, if that continues you can see headline inflation falling and underlying inflation rising. People should be looking out for whether inflation is coming in stronger or weaker than projections. Analysis Lane is keeping his options open on rates. The barometer for traders is how inflation comes in relative to the ECB’s projections, especially if headline and underlying inflation start moving in opposite directions. Lower
When frontier AI labs go public, ordinary people’s investments and pensions become tied to their valuations and stock prices. While excessive regulation could undermine a firm’s growth, catastrophic accidents caused by inadequate safety measures could do the same—and wipe out shareholder value.
