Fresh oil supply woes and pondering the agenda behind an AI "slowdown"

Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the hosts and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes only. Hey everyone, it's Monday, 14th of September, 2026. And almost overwhelming, I must say, to look at what I have on my sheet in front of me for today's podcast. There are so many things going on, huge stakes for the world, not just in geopolitics with this oil price that, of course, has set markets off to a really ugly start for the week, but this development with Anthropix CEO Amodei out talking about a slowdown and what is the agenda behind that. So many things. There's a lot of swirling around that and I hope to address it as well. But yeah, where do we start? And of course, wrapping up the whole CPI and the incoming FOMC and all this, let's rewind a little bit to Friday. So there's huge anticipation around that CPI print and everything was in line except for a slightly hot month-on-month print, which, you know, how do you interpret that when the year-on-year was as expected, I guess, nominally concerning nonetheless. And there was sort of an algorithmic reaction to that. You saw the dollar. It was shooting up. You saw treasury yields bobbing higher. And then that was immediately erased and we went on to trade at lows for the day, at least in terms of the treasury yields before deciding, no, maybe this mattered after all. And we ramped back higher in yields into the close. And then we get – the setup going into the weekend was we were hoping for some kind of meeting in Oman with Iranian officials that would see maybe something opening the flows of oil through the hormones. So we're going to see what happens in the next couple of days. And we have this east-west pipeline, of course, shut down in Saudi Arabia after material damage that is, according to at least one source I saw, could take more than a month to repair. With only a few days of exports now having accumulated at this Yanbu port on the Red Sea coast, with also the Houthis very much active, capturing islands, you know, just running roughshod over the opposition as Ole Hansen said. So we're going to see what happens. And as Ole Hansen put it, when you have people that believe in something, as the Houthis apparently do, the people who set up and arrayed against them may be a little bit less convicted of – with less conviction in their case, a runaway at the first signs of trouble. So to say the least, this is very concerning. And we have markets in a very different place. I just threw a whole bunch out there. Let's see. Let's pick it out one thing at a time. Of course, oil up much sharply, around 108 bucks is what I saw this morning coming in the November Brent. We've had WTI well over $100 per barrel at that front contract at least, which is rolling into expiry. And gasoline prices, of course, higher. Diesel in the U.S. onshore, $6.20 per gallon is the national average at the retail, at least as of the Friday close. I'm sure it's going to be even more expensive today. I looked at the Danish pump price today and converted that to U.S. dollars just for perspective. Over 11 bucks a gallon. For diesel in Denmark. And then we have, of course, the yields bob back higher. There's a relationship with the oil price there. And we're basically just under this 5% level for the 10-year. That's one of the key focal points. The two-year is going to have a hard time going much higher unless we get some kind of signal from the FOMC this week. And those odds, by the way, of the FOMC rate hike up to 90%. And I think it's less interesting. At this point about whether the FOMC hikes, the only loud signal now with it mostly fully priced in is if you get either dovish guidance because of the, you know, I think partially true or very much true risks to the economy from a supply shock like we're seeing in energy prices. But of course, the loudest would be if they simply didn't hike at all. That would be the only signal that could really shock. I think the markets, at least that's my take on the incoming FOMC. I also got, I mean, this is just a, you know, a sideshow, but it, and not a big surprise. The Michigan, the September preliminary Michigan, University of Michigan, that is, sentiment survey, seeing that dip in the expectations down to the second lowest reading ever. I believe the lowest was right around that month of the Liberation Day tariffs. And, you know, with this latest spike higher in energy prices, I wouldn't be surprised if we get also an equity market that was more broadly spooked, if that could end up getting revised lower and we could actually set a new low watermark. But just briefly to round out the macro and effects and all this FOMC anticipation, what are we really expecting from the FOMC? You know, there's supposedly this drama around this week's hike. Now that's priced in. And then, you know, it's about, oh, is it one more beyond that or is it slightly more? It's not about whether the Fed is about to launch into a determined series of rate hikes to tighten the, to tighten policy. And what I'm most curious about, besides, I'm really not that curious. Actually, about the FOMC itself is, is, is Trump's reaction. So has, has this rate hike, should it happen, been sort of coordinated, not coordinated, but sort of discussed with Treasury Secretary Bessent and is Bessent about to, or set up or already has delivered the news to Trump that it will happen? Or is this something that Trump will say, look, we can't have this. This is terrible. We should be, you know, back to the same line of criticism that he was always pursuing when Powell was Fed chairman. So that's, I'm super curious about as well, the, the sort of political reaction to it. Not that we necessarily will see, you know, this impacting worse, but it has to affect things at the margin. All right, let's see. We got to pick apart a couple of things and geopolitically, super interesting. I'll get to the, well, I've already sort of discussed what's driving oil price higher. And this continues to be a huge source of market risk. If this oil price continues to gallop higher, what are we supposed to make of this? Is it clearly the East West? This pipeline closure means there's massive pressure immediately into focusing again on the hormones of straight traffic. If we're going to be sidelined for a month, this is millions of barrels of oil per day. So as long as nothing is opening up traffic wise, and of course we could get some clear, you know, some bolt from the blue with an agreement sitting down talking that suddenly sees a raise of sunlight and lower oil prices. It just doesn't feel that way, but that's what the focus is there. Then in geopolitically elsewhere, we're going to be seeing a lot more of that. We're going to be seeing a lot more of that. I'll put the link to that in the podcast episode description, but linking that to the story of an attack on a train near the Polish border in Ukraine and apparently the train that was just behind a train that Boris Johnson was on on some kind of visit to Ukraine with, I believe there was accusations from the Russian side that the train was carrying, quote, military cargo, unquote, but it does show the capabilities of the military. I'll put the link to that in the podcast episode description, but linking that to the story of an attack on a train near the Polish border in Ukraine and apparently the train that was just behind a train that was carrying, quote, military cargo, unquote, but it does show the capabilities of the Russian side. I'll put the link to that in the podcast episode description, but linking that to the story of an attack on a train that was carrying, quote, military cargo, unquote, but it does show the capabilities of the Russian side. US-based outfits are doing. there is the risk that these models are essentially commodities, and it's just about scaling. So how do you protect all of your investment in these frontier models? You get a regulatory regime that gives you some high walls. Oh, you can't do your AI unless you're using our certified model with all the safety checks and things that are expensive that we have to perform. They get a monopoly. The walls and the barriers to entry go shooting up. And of course, this includes China and the Chinese outfits that are doing AI. And this is sort of a key path to their longer-term business model. I think that's a very credible angle on that. The other is maybe more immediately that these expenses are just skyrocketing, and this is a way to sort of deliver the message that we're going to stop spending as much, and there's going to be a slowdown because of the risk and balance sheet impacts. That's another interpretation. But I'll read up what the – almost always skeptical. We always have to put a filter on things and understand where people are coming from. But Michael Berry put on his ex-account, he says, let's all take a moment to understand how self-serving it is for open AI, anthropic, and other execs of big hyperscalers to talk of slowing things down. One, LLMs are not AI and won't be artificial general intelligence. There is nothing AI to slow down. Two, LLMs are not AI and won't be artificial general intelligence. Two, competition is coming up fast, slowing the benefits to incumbents. Three, IPOs need hype and puffery. Quote, we are so awesome it could become dangerous, unquote, is hype and puffery. Four, cover for real uncontrollable slowing growth as IPOs look to be pushed out. So obviously a rather damning way to look at things. I think there could be some elements of truth in that. But justifiably, the market is pulling up the reins here. It's saying, whoa, slow down. What is going on? And what does this all mean? So we have NVIDIA off a couple of percent, just looking at the pre-market action, overnight action. AMD off more than 4%. Marvel Technology off more than 5%. SanDisk down over 5%. And Micron down well over 4%. So the market has spooked here. How much is this the anthropic? And how much is the oil price? General concern about yields. There are a lot of moving parts. And they're all aimed squarely at risk. Sentiment, which really tried to stay a recovery on Friday. One that didn't look super convincing because it didn't quite stick the landing into the close. NASDAQ was up almost a percent. A Russell 2000 up half a percent. They had been up a bit more intraday. And I was emphasizing on Friday. It really felt like an either or a moment. Friday's action suggested the market was trying to take a stand in terms of sentiment around key support. And now that support is under attack. If you look at the NASDAQ, 100 range, if you look at that pivotal S&P 500 area, which we'd kind of violated with the recent sell-off, but not fully, you know, this is sort of a we're in that zone and below the zone that was key. And now this overnight action has us back into that downside tilt zone down there around 7,600 on the cash index, et cetera. NASDAQ has been off, you know, pushing on 500 points overnight at times. Let's see how all this shapes up, folks. It's very, it looks very touch and go at the moment. But I think this AI story, you know, you could have the oil situation suddenly improve, and I'm not going to say it will, but that still leaves this slow down question. What is the agenda here? And does this start to mutate into something much bigger and more persistent level of concern? All right. I think I forgot to mention that we have with this CPI reaction with the yields back on high and with risk off, not a huge surprise to see the dollar firmer. And we're kind of breaking down here in some of the key dollar pairs. Your dollar is breaking down below that 115.70-ish area that was tested on Friday, but didn't break. And now it's been breaking this morning. Cable, so sterling versus the dollar looking quite ugly. Dollar yen still range bound. There's so much more range to work with, but we got to keep an eye on that 155 shenanigans there. Some of the other yen crosses did look like the yen was establishing the upper hand, but let's see. And then over just a couple other things to wrap up. Geopolitically, there was a BRICS summit. China's trying to, you know, there's a big pitch on open source AI, and clearly China wants to be at the center of that universe. By the way, I have also a link to an interesting post on X. Now, this is from a guy that's super, I would argue, pro-China, very skeptical of the West's agenda and its way of posturing in this new geopolitical reality. I'm not on the same page, to put it shortly, of many of his observations. But if he's right here, and this is not really political as much as it is about an actual data center build-out going on in China's, what are these called, region or area of Inner Mongolia, where they are building something on a scale of a thousand times of what Elon Musk's colossus can do, according to at least his report here. There's a longer Substack article, which is pay only, but a lot of the specifics on the scale of this, which is absolutely staggering, by the way, suggests that China is really trying to build something on the hyperscaling front that goes far beyond what even the rest of the world is doing. So clearly China finds this as a strategic build-out that needs to happen. And I would very much relate that story to the idea of throwing up regulatory walls and barriers of entry by Anthropic and others to prevent the world from just saying, well, we need to have cheap AI, therefore we'll just use Chinese providers and skip our own domestic ones. That was that one. And that's, again, back to the BRICS summit. So China with its open source AI pitch. Modi, somewhat interestingly, so India's prime minister, arguing and warning against the weaponization of minerals. Critical minerals. That's maybe an interesting sort of sign of a little bit of discord there within the BRICS. That's all I have to say on BRICS. Then there was a Swedish election at the weekend. Forgot to highlight that into the weekend. With the outcome very uncertain. It looks like the left block is gaining the slight upper hand or has the slight upper hand, but I don't understand why, but I thought they were a bit quicker and better to count the vote. In Sweden, but there's something like 5% or 6% remaining to be counted. And apparently there's been quite a momentum shift in favor of the right in the later voting counts. The longer that goes on, the more the conspiracy theories, I think, are going to start to swirl, by the way. But the outcome here is quite interesting in terms of potential ruling coalitions, because the left block is just not on the same page sufficiently. If you take the seats that they could have for a majority, because the farthest left-leaning party is considered beyond the pale of what the most centrist left-leaning party is willing to tolerate. So there is no block, if you will. And it would argue that any coalition would have to go across the middle and include at least one right party, or at least centrist right party, a sort of grand coalition idea. So we could be seeing a long, ugly slog towards a forming a government there, could increase uncertainty. The Swedish krona is very weak, and I think in part due to this, but mostly about the backdrop of higher energy prices, risk-off, concerns about growth, etc. But watch for that in Sweden. And then, sorry for the messy notes, but wrapping back a little bit around to the FX story, we have the latest Commitment of Traders report. This is the positioning in the U.S. futures market, showing in the case of FX, that it was just an absolutely titanic turnaround in the dollar-yen positioning. Not a huge surprise, given what happened technically on the dollar-yen chart. Like a 100,000 contract shift away from yen shorts, those positions getting squared. So the dollar-yen overall position is almost flat now, finally. I'm slightly positive for the yen now, and I'm sure it's shifted further since then. So that's been sort of erased, and then euro longs have been very heavily reduced. If you look sort of across the board at the broader euro positioning. All right, that pretty much takes me to the end of the podcast. Look at the podcast episode description for some of the links that I've talked about today. The Wall Street Journal article on Russian drones. I'll put a link in to Ula's cut report. You can look at the various positioning changes across the futures complex in the U.S. The Arno Bertrand post on this titanic build-out of a data center in Inner Mongolia. And then the latest. Enormously entertaining and very different take on this so-called hugging face incident. So this very famous incident where some testing, some security testing of software ended up seeing a hugging face, this site for hosting a lot of stuff, basically hacked during that testing. It could not be a more different take than the Dworkish Patel article that I passed around that sort of anthropomorphizes these. These AI agents and their behavior. Dr. O's saying that basically everything that these agents. did had total precedence in the training data and there's no intelligence here so the title of the article is llms are real uh llms are real ai is fake uh and this is really cool to see somebody that that sort of uh is coming from the opposite side of uh skepticism on ai versus the uh kool-aid drinking pro-ai folks who can kind of pick apart things in a technically competent fashion on what happened and and maybe give some people relief and hope uh those that are scared by headlines of uh you know the likes of that ai has a 10 chance of destroying humanity etc so highly recommended reading there and always always super entertaining as well by the way he he uh there's some really cool sub links in this article if you don't want to read doctor himself you can read some of the links in this article talks about this principle of nobus so n-o-b-u-s meaning none uh no one but us the principle of um somebody like the the national security or the nsa in the u.s where they're also doing all the kinds of testing of systems for security and they might uh sort of notify microsoft on occasion if they find a bug that could cause some mayhem across the u.s for example if if it was discovered but that particularly uh interesting uh hacks or other things that could cause some mayhem across the u.s for example if it was discovered but that particularly uh interesting uh hacks or entries into into microsoft software might be kept secret from the rest of the world so this nobus principle and there was a very famous case of something called eternal blue which was a hack into microsoft they decided after they discovered it to keep it secret but eventually it leaked out and it saw all kinds of ransomware cropping up all over the place where you know basically baltimore was shut down the city of baltimore in the u.s was shut down by ransomware as you know oil pipeline infrastructure hospitals british library and apparently there's a link to a long british library post on how this whole thing unfolded so you know these types of of things are dangerous llms can discover them agentic ai can discover them but uh you know is it is it ai or is it just uh brute brute force attacks and yeah i just you know highly critical uh doctor as always of this types uh this type of behavior so super interesting um overall article on the point specific to the hugging face incident this principle of nobus and then whether llms are even well whether llms are even any kind of intelligence uh i guess is the key point so lots to chew on today for everything from the nature of ai um you know what is the intent behind this slowdown announcement from the complex of key industry figures geopolitics the oil price pressure uh everything under the sun yields right at the cusp of their highs just ahead of an fomc it's it's a it's a heady cocktail i must say and i don't know where things are headed but i do encourage people to stay careful out there uh we'll see where things take us one day at a time and we'll be back soon with the next saxo market call this has been the saxo market call podcast thanks for joining today's episode we're always happy for your feedback and questions of all kinds to reach out you can drop us an email at market call at saxobank.com that's market call at saxobank.com saxo serious trading worldwide you