Rates as of 0500 GMT

Market Recap

Judging from the stock markets, investors are in an allaround risk off mood. My equity screens are a sea of red, signifying declining prices. All major European and US markets were lower on Friday and most Asian markets are lower today as investors worry about the virus see below, USChina relations, and generally weak economic reports, particularly increased fears of inflation. Although US retail sales beat expectations, consumer sentiment unexpectedly turned lower while inflation expectations turned higher. This raises the possibility that the Fed starts to worry that its behind the curve and tightens too much.

OPEC reached agreement over the weekend. There are three parts to it

Raise production gradually by 400,000 barrels a day bd each month, starting in August.
Extend the production restraint agreement until December 2022 from April 2022.
Award higher baselines for calculating production to several countries.

On the surface, the news seems bearish for oil, because after all they did agree to boost production. However its really bullish, because the market was beginning to price in the possibility that the agreement would fall apart completely and there would be a production freeforall. Furthermore, the extension of the agreement means that supply will continue to increase only gradually. The news is therefore bullish for oil. Also, the cartel has not been keeping pace with the increase in demand for oil and so if the global…