Oil and bonds

Daily update

Oil prices continue to drift higher. US retail diesel prices are still near all-time highs, with no sign of mitigation from US administration policies. The news that the US is asking some of its diplomats to leave Saudi Arabia is not necessarily a positive signal about regional stability. Consumers should continue to consume despite the energy costs for the remainder of this year. Next year is when risks increase.
US initial claims enliven an otherwise lackluster data calendar. However, this data is not really suited to explaining the shifts in the modern labor market, as it does not properly capture weaker hiring (new entrants to the labor market being missed in the numbers).
French business sentiment is no more reliable than other countries’ sentiment polls. The data likely predates the recent protests, but protests do not necessarily have much of a real economic impact. Retail spending may take place at a different time, and tourism might be affected, but otherwise the economy tends to carry on.
Bond yields will remain in focus—French 10-year yields rising above 5% animates politicians because a round number is involved. However, global bond yields today tend to represent economic normality, after several years of bond holders getting less than they deserve.