Three central banks raised rates inside of eight days, and the market went up. That tells you what's actually driving this tape, and it isn't the Fed. It's the price of oil.
Yesterday JPMorgan's commodity desk, the one the rest of the Street reads, put out a note saying it no longer has a baseline view on oil. First time since the war started. Their words: "We simply don't know how to model the endgame." Every threshold they assumed would force a deal has been crossed. $100 crude didn't do it. $5 gasoline didn't. Four percent inflation and a 10-year over 5% didn't. Ten million barrels a day are disrupted and there's no exit in sight.
Their fair value on Brent is $90. It trades at $106. That's $16 of fear in every barrel, and fear is the one input that can leave overnight. The State Department approved visas yesterday for Iran's president and foreign minister to attend the UN meeting in New York next week. That's the first door either side has opened in months.
So both tails are live. A headline next week can take $16 out of crude in a session, and a bad weekend can put it right back. Diesel doesn't care either way; that problem is refining capacity, not the war premium.
In energy, the move is to wait. If crude gets sold hard into next week's diplomacy, oversold on that group has been a buy all year. Let them dump it first.
