Crude Crashes Abruptly, North Korea Vows More ‘Good-Looking Boys’ For ‘American Bastards’

We just hit technical levels that were a bridge too far at this stage.

That’s from Ole Hansen, head of commodity strategy at Saxo Bank and he imagines that largely explains this:

One-minute volume on Brent jumped to ~2.8k lots at 9:52am in London and WTI dropped by a similar amount on one minute volume of 4.6k lots. We’re blaming that on Brent not being able to push above $50.

“News has not been supportive, OPEC and Russia not contemplating any additional steps to cut,” the above-mentioned Ole Hansen said. “The failure to push through $50/bbl was likely most significant driver.”

I see.

Well whatever the case, it comes on the heels of oil slamming on the brakes after its longest run of gains this year (for Brent the longest run since 2012), a run which itself followed crude’s collapse into bear market territory last month. Between news that OPEC production rose to its highest this year in June and Russia refusing to back any proposal for deeper production cuts, the tone has turned bearish again.

“The environment at the moment isn’t conducive for prices to extend the rally,” says Daniel Hynes, Sydney-based analyst at ANZ. “Supply dynamics are against the market. It’ll probably be a bit of a wait-and-see period to evaluate the impact of sub-$50 oil”

Don’t tell Citi: OIL GAINS MARK START OF `SUSTAINABLE RALLY’: CITIGROUP

Meanwhile, Yuji Saito, executive director at Credit Agricole’s foreign exchange department figures the fact that there isn’t an all-out nuclear war going on yet is as good a reason as any to fade any “transient” safe-haven bid.

“The firing of ICBM was something new for the market to absorb and the fact that Tillerson confirmed this heightened tensions, but this doesn’t mean both countries will head into war,” Saito said overnight.

USDJPY initially took a dive on Tuesday evening after Kim Jong Un (literally) said the following:

[The] U.S. must be upset with gift package that I sent for its Independence Day. I will send more in future.

We also got these headlines:

N.KOREA KIM: WON’T NEGOTIATE UNLESS U.S. SCRAPS THREATS: YONHAP
N. KOREA SAYS ITS ICBM CAN CARRY LARGE NUCLEAR WARHEAD: YONHAP
N. KOREA AIMS TO DEVELOP ICBM CAPABLE OF HITTING U.S. IN 2017

Just read this hilarious recap of the North Korean propaganda from The Guardian:

While Trump’s secretary of state, Rex Tillerson, attempted to galvanise world opinion, the KCNA’s description of Kim “feasting his eyes” on the ICBM and breaking into a “broad smile” — complete with photos of him punching the air in the company of delirious generals — would not have been out of place had he been attending an inter-Korean football match, with the North 3-0 up with only minutes on the clock.

According to KCNA, he described the ICBM as a gift for the “American bastards” as they celebrated the anniversary of their country’s independence. Kim did not stop there, blithely urging his nuclear scientists to “frequently send big and small ‘gift packages’ to the Yankees” in the form of yet more missile and nuclear tests.

After inspecting the Hwasong-14 missile, he “expressed satisfaction, saying it looked as handsome as a good-looking boy and was well made”.

So there’s that.

And here’s the yen:

In Europe, Markit’s composite PMI printed at 56.3. That’s down from 56.8 in May, but ahead of the estimate of 55.7. The number suggests Q2 economic expansion of 0.7%, Markit says.

Global equities were higher, because as you can clearly see from everything said above, nothing could go wrong on the geopolitical front. The Fed minutes are on deck.