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Remember the discussion over petrol prices, lower, higher, that we had well the trade is developing increasingly to the upside.

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More than likely, prices are correlated to this data:

Gasoline Inventories 071013

Which might suggest that the US summer driving season is higher than might have been expected. Is this a sign of a marginally improving economy? Along with improving vehicle sales [Ford], possibly. It might also just be a blip based on some of the liquidity being pumped into the financial markets, leaking out into the real economy.

With earnings season underway, this quarter should see some, if any, of the effects of the sequester. Expectations are very low, most of the earnings growth is posited in the financials, so, the market could digest lower growth and still move higher.

10yr

Higher petrol, oil and interest rates. Not a good thing if you are looking for higher stock prices surely?

Inflation is alive and well. The rate of inflation is the only argument that can be spun by the Fed et al, in that it is slower than would be expected for the amount of liquidity provided. This is the CPI data, which based in the real economy has energy and food prices stripped out of it…how real is that you might ask.

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