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Where's The Limit

Zero Rss
2 months 1 week ago
Where's The Limit

By Stefan Koopman, senior market strategist at Rabobank

The ancient Greeks left a rich intellectual legacy, as our global strategist Michael Every showed last week in The Hormuz Odyssey. The same fertile ground also produced a famous set of puzzles that have challenged thinkers for centuries. These are the paradoxes of Zeno. In the Dichotomy Paradox, Zeno argued that a runner can never reach the finish line on a straight track. The logic is simple. The runner must first cover half the distance to the goal. Once there, he must still cover half of what remains. After that, he must cover half of the new remainder, and so on, and so on. At each step, some distance remains. In Zeno’s telling, the runner is never able to reach the finish line.

US‑Iran talks follow the same logic. Washington and Tehran have broadly agreed on the outline of a deal: a 60‑day ceasefire extension, a reopening of the Strait of Hormuz, and a trade of sanctions relief for nuclear constraints. Officials on both sides also describe an agreement as imminent. Yet each apparent breakthrough produces a new obstacle. Negotiators still haggle over language, sequencing and enforcement, and have even yet to settle the basic question of who signs first. Like Zeno’s runner, the two sides keep halving the distance to a deal – closing in on it step by step – without seeming to ever arrive.

The resolution to Zeno’s paradox lies in the concept of limits. So when will President Trump and Ayatollah Khamenei reach theirs? When is enough, enough? Markets still assume that moment is close, with the front‑month Brent contract hovering just above six‑week lows. But the longer Washington and Tehran fail to reach an agreement, the more they open the door for disruptors to shape events, from US‑Iran skirmishes in the Strait of Hormuz to Israeli strikes in Lebanon.

Every time an Iran deal is close, it moves away again. I’d described this crisis as a polytropos Odyssey, but it also matches Zeno’s Achilles & the 🐢 paradox - ever closer but never reached.

If so, markets pricing oil lower is… ZENOHEDGE.

(Sorry, the pun was irresistible!) https://t.co/tY8moivdXn

— Michael Every (@TheMichaelEvery) June 1, 2026

The past 24 hours indeed showed how fragile this equilibrium is. Iran’s IRGC‑linked Tasnim agency reported that Iranian negotiators would halt talks with the US in response to Israeli attacks in Lebanon against Hezbollah. It also warned that the “resistance front” could be activated, including potential Houthi involvement in the Bab al‑Mandeb Strait. Oil prices jumped 7%, the dollar strengthened, and equity futures turned red. Within hours, however, Trump said he had spoken to both Hezbollah and Netanyahu (all while saying he “really doesn’t care” if talks collapse) and claimed that Israel and Hezbollah would stand down. He also added that talks with Iran were proceeding at a “rapid pace”, a line we have now heard for weeks.

Oil prices quickly reversed, but scepticism is warranted. Trump again appears to negotiate with himself. He claims progress while trying to contain escalation on fronts he does not control. From Tehran’s perspective, that urgency weakens the US position. Why offer concessions that fall short of core strategic interests if they believe they can roll the US president a bit further? The past day suggests Iran does not see itself as the side under decisive pressure. It appears to believe that the US and its partners have at least as much at stake in avoiding further instability. In that setting, President Trump does not seem to hold the stronger hand. And while Zeno’s runner never arrives, the real world does have real limits, and we are moving steadily closer to physical supply hitting effective tank bottom.

It cannot be stressed enough: the longer this drags on, the bigger the problems become. The PMIs made that clear yesterday. The US manufacturing ISM rose to 54, its highest level in four years, but that headline is deceptive. Much of the strength reflects companies bringing forward orders and activity to build inventories and protect against supply chain disruptions. That boost is likely to prove temporary but inflationary.

The details of the euro area manufacturing PMI, which printed at 51.6, are equally unconvincing. The survey shows costs rose at the fastest pace in four years, driven by higher energy and raw material prices, while more frequent supply chain delays added further upward pressure..

Higher prices for inputs, packaging and logistics will push up euro area goods inflation in the months ahead. But as factories pass these higher costs on to customers, they face weaker demand than in the immediate post‑pandemic period, when the previous supply shock hit the economy. The PMI suggests that order books are already starting to stall after an initial boost from front‑loading and precautionary bookings. This points to a clear trade‑off. The ECB will raise rates next week to signal vigilance, but it will also need to stay cautious about how far it goes as demand starts to weaken.

The ECB’s consumer expectations survey showed a slight easing in April. Consumers expect prices to rise by 2.9% a year over the next three years, down from 3.0% in March. One modestly positive signal for the ECB is that the distribution around this three‑year expectation has normalised somewhat. Last week, Schnabel warned that a rightward shift in inflation expectations could signal de‑anchoring risks that “must be monitored carefully.” Expectations for the next 12 months stayed at 4%, while five‑year expectations held at 2.4%, still above the ECB’s 2% medium‑term target.

Tyler Durden Tue, 06/02/2026 - 11:00
Tyler Durden

Shocking JOLTS: Job Openings Soar By 731K, 9-Sigma Beat, As Quits Bizarrely Plunge To 6 Year Low

Zero Rss
2 months 1 week ago
Shocking JOLTS: Job Openings Soar By 731K, 9-Sigma Beat, As Quits Bizarrely Plunge To 6 Year Low

We had to do a double take when the BLS reported today's JOLTS job openings: with consensus expecting no change from last month's print of 6.866MM, and near the lowest in two years, moments ago a flashing red headline revealed that in April the US added a stunning 731K jobs to 7.618 million, up from an upward revised 6.887 million, and up 520K from a year ago.

For context, this was a 9 sigma beat to expectations, the biggest beat in history.

WTF!?...  and how is this possible at a time when companies are mass laying off thanks to AI? Well, according to the BLS,the number of job openings increased in professional and business services (+668,000), and also rose in manufacturing, manufacturing, and - alas - government. Jobs stumbled in finance and insurance (-135,000). 

This was the biggest monthly increase in professional and business services by a huge margin. It wasn't clear what exactly job category prompted this surge.

Meanwhile, the draining of the swamp appears to be officially over with government jobs jumping by 47K to 777K, the biggest monthly increase this year.

The historic surge in April job openings, coupled with the modest increase in unemployed workers means that after 9 months of labor surplus, there were 245K more job openings than unemployed workers in April, a reversal to the "deficit" regime observed since last July.

The surge in openings also means that after falling back to 0.9x in March, in April the ratio of job openings rose back to 1.0x and was the highest since January 2025.

But while the job openings number was a shock, this month we saw a reversal of last month's surge in hires and quits, and in April both the number of Quits and Hires, tumbled once more. Specifically, hires plunged by 419K to 4.899 million, while quits - or the "take his job and shove it" indicator - plunged by 183K, or 5.8%, to 2.977 million, the lowest since 2020 and the biggest percentage drop since April 2025, as Americans are suddenly allergic to leaving their jobs on their own.

It goes without saying that a surge in job openings even as nobody is leaving their jobs, leads one to scratch their head just what is going on here, besides data massaging of course.

In any case, since this hires number feeds directly into the payrolls calculations (after netting out separations) this explains why the April payrolls report slumped to 115K from 185K in March. 

Overall, this was a shockingly strong JOLTS report - so strong in fact one wonders who at the BLS had a fat finger incident when calculating the professional and business services job openings, and shows that after some significant weakness in late 2025, US labor market has continued to stabilize in early 2026. Of course, the report also lags the payrolls report by a month, which is why it gives us little insight into what Friday's jobs report will be. 

Tyler Durden Tue, 06/02/2026 - 10:44
Tyler Durden

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