Monday's Market Minute: Oil, Economic Data In Focus

We begin the week with the focus on crude oil: the WTI contract traded to $75 overnight in reaction to Saudi Arabia’s decision to cut production unilaterally by 1mbpd in July. This comes with the 2-year at 4.5% to begin the week as the U.S. Treasury now has the green light to issue an enormous amount of bills; today we’ll see some $123B of 3- and 6-month bills being sold. Many see higher crude prices and the debt issuance further driving up rates and inflationary pressures, something to keep an eye on into the Fed meeting next week.

In terms of data due out this week, we have the PMI Composite Final, Factory Orders, ISM Services Index, and the auctions mentioned above today. Wednesday, the MBA Mortgage Applications, the EIA weekly inventories, and Consumer Credit are scheduled for release. Thursday and Friday we have weekly Jobless Claims, Wholesale Inventories, the Quarterly Services Survey, and Baker Hughes Rig Count figures.

We have a few companies reporting quarterly results worth taking note of: Ciena CIEN, Casey’s General Stores CASY, ABM Industries ABM, Campbell Soup CPB, GameStop GME, and DocuSign DOCU are all opening their books to investors, but clearly this round of big names is winding down now.

Lastly, the U.S. dollar and Treasuries are gearing up for a Fed decision later this month. Last week’s mixed message from Fed officials has the dollar comfortably holding around 104 the middle of the range we established last year. The 10-year yields are holding inside the range we've been in since last fall—keep in mind a market that's rangebound is a market that's waiting for more information. As a result, we may have to wait for the Fed and comments From Fed Chair Jerome Powell before we see real conviction.

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