US Markets are closed in observance of Memorial Day - lets always honor those who served to keep the world safe.

Brent crude topped $120 this morning and WTI is approaching $116 - we think this is the most important variable of all - inflation can't be tamed with fossil fuel prices rising. The UK's windfall profit tax didn't help on the inflation front. Natural gas front month futures are around the $9 level. Any more fossil fuel pain will hit risk assets hard, and this is not discounted in market prices. As we noted last week, crypto recently has done well over the weekend. This weekend is no different, with Bitcoin up 5% in the last 24 hours; currently BTC trades at $30,675.

Nickel rose 7% on the LME in response to China's re-opening. European stock markets are quiet: the FTSE is flat with a 1 basis point change on the day, but the Stoxx Europe 600 is up 0.5%. Nasdaq futures rose as much as 1.2%, signalling that the bear market rally is still in play. If things open up that way tomorrow, we would urge caution, as this would be about 10% higher than the intra-day-bottom.

As an aside, over the last 2 weeks we are getting plenty of complaints from our contacts about the rising cost of living. Despite the strong employment market, we are also hearing complaints about not being able to easily reintegrate into the workforce after a year-long covid-type layaway. Last week's earnings is a harbinger of a bifurcated economy in the back half of 2022, with the higher end consumer humming along while lower end people struggle. What if gas prices don't come down this time?

German inflation is prompting discussion about an ECB hawkish response in mid-June. This mini-rally in risk assets should be taken skeptically.

Finally, the Colombian elections are not to be discounted. Hernandez is a populist (with 28% of the vote) running against frontrunner Petro (with 40%) who would phase out the oil & coal industries. From an investment viewpoint, Petro is bad as he would attempt to destroy Colombia's strong commodity based economy, but Hernandez is also scary as an unknown Latin American populist. Either way, it doesn't look good for food or commodities in Colombia.