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How Slipping Oil Prices Are Hurting the Global Reflation Rally

  • Correlation of U.S. high-yield debt with oil has increased
  • Investors underweight junk bonds for the first time 2008
Bloomberg business news

Oil Market Seeks Demand as Price Falls Below $49

The global market rally is facing a familiar nemesis: feeble oil prices.

In the latest blow, Saudi Arabia announced Tuesday that it raised output back above 10 million barrels a day in February -- reversing about a third of the cuts made the previous month -- sending crude to the lowest level since late November. That pushed stocks and commodity-linked currencies, such as the ruble and the Norwegian krone, lower, while fueling demand for the relative safety of Treasuries.