Deutsche Bank Warns of Global ‘Time Bomb’ Coming Due to Rising Inflation… Traders Bet on Return of $100 Oil… China & Russia To Increase Gold Reserves

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Traders Bet on Return of $100 Oil…

Traders have alighted on what some believe to be a one-way bet in the world’s most important commodity market: oil prices going to $100 a barrel.

They have scooped up call options tied to Brent and West Texas Intermediate crude-oil prices reaching $100 by the end of next year. Oil prices haven’t topped that milestone since 2014, when a gush of U.S. crude depressed energy markets.

Owners of $100 options—now the most widely owned WTI call contracts on the New York Mercantile Exchange—are making a leveraged bet that oil prices will hurtle higher after already surging more than 40% this year. The roaring rally, goosed by thawing coronavirus restrictions, has lifted WTI prices to their highest level since 2018 at almost $70 a barrel and average U.S. gasoline prices above $3 a gallon, according to GasBuddy.

Outstanding West Texas Intermediate call options with $100 a barrel strike priceSource: QuikStrikeNote: Sum of open interest in $100 contracts with different expiry dates.

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Surging Lumber Prices Puts Buying Home Out Of Reach For Many…

Deutsche Bank Warns of Global ‘Time Bomb’ Coming Due to Rising Inflation

Inflation may look like it will go away but is more likely to persist and lead to a crisis in the years ahead, according to Deutsche Bank.

The Federal Reserve Is Risking a Full-Blown Recession: Former Fed Bill Dudley

The US Federal Reserve’s new approach to managing inflation, unveiled last summer, makes a lot of sense: By seeking to achieve an average of 2% — that is, by allowing inflation to overshoot enough to offset previous undershooting — the central bank should be able to keep people’s expectations better anchored around the 2% target.

But, unfortunately, the way the Fed is putting this long-term monetary policy framework into practice is likely to result in more volatile interest rates and more risk of recession.

Economist Who Said Inflation Was Dead Now Thinks It’s Alive: Bloomberg

A quarter of a century after declaring the death of inflation, Roger Bootle is seeing signs of its rebirth.

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China’s Gold Reserves Rose to US$119.02 Billion

China’s foreign exchange reserves, the world’s largest, rose more than expected in May, official data showed on Monday, as the U.S. dollar weakened.

Russia To Increase Gold Reserves On Shift From U.S. Dollar

Russia announced it will eliminate the dollar from its oil fund to reduce its vulnerability to Western sanctions. The news comes just weeks before Putin and President Biden are scheduled to meet at an upcoming summit. Finance Minister Anton Siluanov noted that the dollar holdings will now be shifted to euros, yuan and gold.

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