Mid Terms Results

Initial indications seem to be that the Republicans have taken Congress, but the Dems have held onto control of the Senate. The party discipline in US politics has broken down so much that maybe this doesn’t matter, but it’ll be difficult to increase taxes or commit to new spending plans because of the gridlock. This is usually good for bonds, but Oxford Economics is predicting that the US federal government will hit their debt ceiling, which might freak out the bond market.

Today crude sagged because US wholesale inventories continued to grow. People are simply not driving as much as they used to. The Zoom effect?

For some reason, the curve steepened strongly, while oil went down. I guess the mid-terms must be the driver, but I don’t really understand why that should be the case. Maybe the Dems did better than expected. The Treasury curve has been in a ‘bear flattening’ phase for too long. At some point, JPoww is going to pivot, but the most certain thing in the universe is that he won’t give any ‘forward guidance’ on when.