The intra-day story has been the US equity market bouncing on the increasing strength of credit markets while the commodities market continues to decline on fears of slower economic growth than what is currently priced in. The near month contract for light/sweet closed down 4% to the lowest level in over a month at $64/barrel while the equity market has gained back against the losses from earlier in the day.

Of course this could mean everything... or it could mean nothing. It is easy to chalk up the price action in crude to a rationalization back to supply/demand reality but it is also important to think about the implied expectations for unemployment and the USD (especially in light of last week's news releases). As always, the reality is somewhere in the middle but we have to think there is some truth to be uncovered here (especially with the sluggishness of the equity market's reactions to news releases). This week (and possibly the next) will determine who's telling the truth but for now we stick to dollar strength until we get more insight into what's going on.