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Wall Street Breakfast: Goldman's New Oil Forecast Drives Prices Higher

Crude is trading higher on the back of a rare bullish call from Goldman Sachs, which until now had been a long-time bear on oil and even warned of another price crash due to overflowing storage. The investment bank says the market has moved from a state of oversupply to a deficit, and believes major supply disruptions in markets such as Nigeria, Venezuela and China will sharply lower production levels. Crude futures +2% to $47.14/bbl.

Saudi Arabia suffered another cut to its credit rating on Saturday as Moody's Investors Service downgraded the country along with Bahrain and Oman because of the past slump in oil prices. "A combination of lower growth, higher debt levels and smaller domestic and external buffers leave the Kingdom less well positioned to weather future shocks," the agency said. But "ambitious plans" announced by Riyadh to diversify its economy could offer a route back to a higher rating level over time.

"Absolutely not," responded Bank of England Governor Mark Carney when asked on BBC's Sunday morning show if his recent Brexit comments overstepped the mark. "We... have a responsibility to explain risks," said Carney, outlining that he would be failing the public if he didn't flag dangers in advance. Last week, the BoE stated that Britain risked slower growth, higher inflation and a recession if voters backed leaving the EU, prompting criticism that the central bank was biased and destabilizing markets.

Not everyone agrees with the assessment. Former London mayor Boris Johnson, a leading campaigner for Britain to leave the EU, told the Sunday Telegraph that the union lacked democracy, a unifying authority and was doomed to fail. "Napoleon, Hitler, various people tried this out, and it ends tragically," he said during the interview. GOP presidential candidate Donald Trump also weighed into the Brexit debate, stating the EU has been "very bureaucratic, difficult and a disaster."

Chinese data over the weekend managed to miss market expectations for every single release: credit growth, industrial production, retail sales and fixed-asset investment, raising fears that the bounce seen in March is fizzling. "The miss on the activity front wasn't a huge surprise given we already saw a leveling off in the PMIs, but the dramatic slowing in credit growth will be raising some red flags in the already-reversing commodities space," wrote Angus Nicholson, market analyst at IG in Melbourne.

A sudden plunge by Chinese stocks in Hong Kong overnight had traders scrambling to find a trigger for the slump that coincided with a surge in futures volumes. The Hang Seng China Enterprises Index tumbled from an advance of 1% to a loss of 1.5% in about two minutes, before rebounding to a gain. Bloomberg's Kana Nishizawa attributed the move to a possible "fat finger" or a big hedge fund closing out its position.

Meanwhile, China is asking Britain for advice to create a financial super-regulator, signaling Beijing's growing willingness to seek outside help for improving oversight of its financial infrastructure. Regulatory weaknesses were exposed last summer when China's stock markets lost a third of their value in a month, having soared 150% in the year before.

After returning to the global credit markets last month, Argentina is set to issue its first major corporate bonds. Banco Hipotecario (OTC:BHPTY) will issue as much as $200M of debt due 2020, said Manuel Herrera, the bank's assistant chief executive, outlining that the order book will...