Oil, EM, and European Rate Paradox AND more....

1. West Texas Intermediate (WTI) for December delivery is on an ascendant trajectory for its fourth consecutive session. Having concluded last week at an approximate $86.35, it's now teetering close to the $90 mark, marking a surge of around 10% in just a fortnight.

2. U.S. mortgage rates have soared to unprecedented heights, yet housing affordability remains elusive. Why? A primary factor is the acute contraction in supply, inducing a supply-led escalation in prices. Additionally, many buyers secured their mortgages at more favorable rates previously, creating an effective mortgage rate disparity: 3.5% versus the current 8% - a differential previously unseen.

3. Standard & Poor's opined, "Profound fiscal restructuring has recalibrated Greece's financial direction towards a definitive uptrend. This overhaul, in tandem with a swift economic resurgence, has enabled the Greek administration to consistently surpass its fiscal benchmarks, even as it amplifies social allocations."

4. In the realm of high yield: Current trends eerily mirror the period spanning 2003-2007 when yield ascended and spreads remained taut. Only upon detecting frailties in economic indicators did credit spreads commence their expansion.

5. Regarding Europe: The ongoing oil quandary, intensified by Middle Eastern political upheavals, amplifies the likelihood of another European Central Bank rate enhancement. Such a move could, however, escalate debt burdens for an already beleaguered Italian fiscal framework, potentially ensnaring it in a debt vortex. The yield differential between Italian and German 10-year bonds recently eclipsed 200 basis points.

6. A transformative shift is unfolding among predominant players in the U.S. Treasury markets. Due to stringent leverage constraints imposed on dealers, hedge funds and non-bank entities are emerging as replacements for primary dealers. This metamorphosis is instigating heightened volatility, particularly evident during the 'dash-for-cash' episode amidst the COVID crisis. Regulatory bodies ought to elevate their oversight to safeguard the stability of this paramount financial arena.

7. Surging U.S. Treasuries are amplifying interest burdens for emerging market debt, diminishing its relative allure—especially against the backdrop of China's protracted growth deceleration. However, following substantial downturns in 2021 and 2022, anticipated earnings growth over the ensuing year is on an upward trajectory for emerging markets, outpacing many developed counterparts, including the U.S.

8. After an extended period, the yield curve is exhibiting signs of emerging from its inversion, with the curve's tail steepening progressively. Yet, the very discourse surrounding lengthier highs intimates that we're possibly experiencing the gentle deceleration projected months prior. While equities might have been deemed overvalued recently, it's worth recognizing the mitigated risk of an impending profound recession.

9. India is emerging as an economic beacon, positioned favorably for the forthcoming decade, underpinned by these indicators:

a. Boasting both the largest and swiftest expanding youth demographic globally, India's consumer expenditure landscape promises robustness and variety, propelled by the spending vigor of its youth.

b. India is witnessing the world's most rapid urbanization, underpinned by a relatively modest mortgage-to-GDP ratio. This heralds potential growth in credit accessibility, auguring well for fiscal augmentation. Given its significant weighting in consumption-centric goods and services, India stands poised to seize the reins as global economic cycles rebound.

10. Interesting Charts: