Brent near $99 after Saudi strikes, with CPI and a Fed decision this week

Brent crude traded as high as $99.45 a barrel overnight after Houthi strikes on Saudi energy sites, and it is arriving in a week that already has a 162,000-job payrolls print, inflation reports on Thursday and Friday, and an FOMC meeting on September 15-16.

Houthi strikes and a bid without a barrel count

The attacks hit Abha, Jazan, Najran and Khamis Mushait, according to the Saudi-led coalition, wounding 73 people. The Houthis said they targeted industrial and Aramco sites as well as King Khalid Air Base. The southern region houses a 400,000-barrel-a-day refinery in Jazan. Saudi Arabia's energy ministry said fires had broken out and that operations at some oil facilities and utilities were temporarily suspended. It did not say how much output was lost.

As of 7:15 a.m. Eastern, Brent was at $98.54 a barrel, up 2.3%, after that $99.45 high. West Texas Intermediate was at $93.80, up 1.2%. That is a supply-scare bid, not yet a measured shortage. Until someone counts barrels, the honest reading is a headline premium sitting on top of a war that has already kept a chokepoint risk in the price.

Gold and the dollar are not pricing a shock

If $99 Brent were already being treated as a broad inflation shock, gold would not be slipping and the dollar would not be softer. Bullion was at $4,441 an ounce, down 0.8%, and the dollar index was at 98.99, down 0.2%. State Street's energy sector fund AXLE is 1.0% higher in premarket trading, after closing Friday down 0.9%. That is the bid the oil move would lead you to expect. The rest of the tape is not matching it.

The Dow industrials fund ADIA is 0.8% below Friday's close before the open. The S&P 500 fund ASPY is 0.3% lower. Invesco's Nasdaq-100 fund AQQQ is little changed. That is the same pattern Friday left on the board, before these strikes: the S&P 500 closed at 7,718.60, down 0.4%, the Dow at 53,414.25, down 0.5%, and the Nasdaq-100 at 29,544.15, up 0.2%, its third straight gain. Semiconductor funds closed a median 3.6% higher.

Prices are not treating the attacks as an inflation event. That reading holds only until Riyadh publishes a counted output loss, or until Brent is still near $99 when Friday's CPI prints.

CME FedWatch at 60.4% ahead of PPI and CPI

CME FedWatch on Tuesday put the probability of a September rate increase at 60.4%. Nonfarm payrolls rose 162,000 in August and the unemployment rate held at 4.1%. Today's session is not a data day: the Bureau of Labor Statistics has nothing scheduled, and the Fed's 11:30 a.m. event is a closed Board meeting to review advance and discount rates, not a policy decision. The producer price index for August is due Thursday at 8:30 a.m.; the consumer price index follows Friday at the same time.

BlackRock's long-Treasury fund BTLT is 0.3% lower in premarket trading, a modest move after the 10-year yield ended Friday at 4.78%. Treasury is scheduled to auction a three-year note and bills today. Canada's counter-tariffs of 15%, 25% and 50% on $27.6 billion of U.S. goods, concentrated in steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, took effect at 12:01 a.m. Eastern. Grocery wholesaler United Natural Foods and video-game retailer GameStop report today.

The yen firms as the Nikkei falls 1.7%

The yen traded as firm as 152.89 per dollar overnight, a move of as much as 1%, as Japan released growth and wage figures that added to expectations the Bank of Japan will keep raising rates. The Nikkei 225 closed at 65,269.33, down 1.7%. Japan equity funds carry that gap into a New York session that has not yet opened.