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Asia Morning: Trump Heads Back To The Future

Asia Morning: Trump Heads Back To The Future

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3 years ago

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President Trump’s election strategy in November seems clear already, and it is already weighing on markets globally. The US President, and his coterie of officials, appear intent on deflecting any blame for their allegedly inadequate response to the COVID-19 pandemic domestically, instead, heaping the blame on China for everything. President Trump and Secretary of State, Mike Pompeo, have been busy pumping out rhetoric for the last four days to that effect. Populism to become popular appears to be back with a vengeance in Washington DC.

There may well be elements of truth to DC’s allegations. However, not one shred of concrete evidence has been presented by Washington DC to prove these allegations. Populist talk is cheap, and hard facts have never bothered the US President before I will grant. Still, the threat of deteriorating relations with China abruptly ended last week’s markets rally. For obvious reasons, the timing could not be worse for this to occur. President Trump also has today once again mentioned complying with the trade deal, tariffs and punishing China if necessary. The threat of a resumption of the US/China trade war hangs over financial markets in Asia this morning. President Trump needs to put some hard facts on the table, or risk sending the world into an L-shaped, trade-war driven recession on top of a recession, that even bottomless monetary and fiscal responses cannot soften.

The damage from COVID-19 was plain to see in Asia this morning. April Manufacturing PMI’s from Indonesia, Malaysia, Myanmar, Philippines, South Korea, Taiwan and Vietnam all collapsing this morning from their already poor March prints. In Australia, ANZ Job Ads for collapsed to -53.1% in April, following a 10.0% fall in March. Manufacturing PMI’s to be released across Europe and Latin America, are likely to paint a similarly daunting picture. Honk Kong GDP is expected to fall 3.0% YoY today, and US Factory Orders look set to fall by 10.0%.

US Composite PMI is likely to fall to around 27.0 tomorrow with EU-wide PMI’s and German Factory Orders likely to tell a similar story. Fridays US Non-Farm Payrolls for April are forecast to fall by a staggering 21 million jobs. The volte-face in sentiment – that I called completely wrong on Thursday – highlights just how fragile any rallies in asset markets are. Investors will run en masse for the emergency exits at the first hints of trouble. Last weeks rally always had an emperor’s new clothes look to it, too much UV (shaped recovery), being harmful to the skin. The economic damage from COVID-19 is evident, as are the dangers of too much UV. Someone needs to tell the US President before he rolls out his go-to populism strategy as an election strategy.

Liquidity will be affected in Asia this week with a number of holidays falling due. Japan’s will be away until Thursday for Golden Week. Mainland China does not return until Wednesday. South Korea is away tomorrow, and most of South East Asia absent on Thursday for Vesak Day.

Wall Street’s slide extends into Asia today.

Underwhelming results from Apple and Amazon, but most especially Trump China-bashing, abruptly ended the week-long equity rally on Friday. The S&P 500 fell 2.80%, the NASDAQ dropped 3.20%, and the Dow Jones fell 2.53%. The fragility of a rally driven by hope versus reality, has been cruelly exposed.

More anti-China rhetoric from Washington DC over the weekend and this morning, along with nightmarish manufacturing PMI’s across Asia, has seen equities fall deeply into the red. Nikkei 225 futures, which remain open today, are down 2.85%. NASDAQ and S7P 500 futures are both 0.80% lower.

Elsewhere, the Straits Times has fallen 2.70$%, the Hang Seng has collapsed 4.0%, with the Kospi 1.90% lower. Jakarta and KL have fallen by 2.0%. A lower Australian Dollar brings solace to Sydney, with the ASX 200 and All Ord’s eking out 0.80% gains.

President Trump’s threats to revisit tariffs and suspend the US-China trade agreement have spooked Asia today. It is hard to think of a worse piece of news for the region, even in rhetorical form. It is unlikely to be well received in Europe or the UK either. For that reason, we expect equities to remain heavily under pressure even if the COVID-19 data across the globe shows signs of improvements today.

Trumps trade uncertainty forces a rush into haven US Dollars.

The US dollar is broadly stronger this morning against both developed and developing market currencies, the Dollar Index rising 0.25% to 99.33 in early trading.

EUR/USD attempted and failed to break through its 100-day moving average on Friday, failing at 1.1000, and falling 0.30% to 1.0940 today. The single currency had a strong run higher last week and may need to correct further to 1.0900 before gathering the required strength to retest the recent highs.

The trade-sensitive Australian Dollar caught a severe cold from President Trump on Friday. Having tested and failed at its 100-day moving average at 0.6560, AUD/USD plummeted 1.40% to 0.6420. This morning, the sell-off continued, as it fell to 0.6398. Trade war threats are an anathema to the AUD, with its resource-driven base and high beta to China. AUD/USD could quickly retreat to 0.6300 before finding support again.

The story is much the same for its Antipodean neighbour the New Zealand Dollar. NZD/USD has fallen 1.50% from the highs on Friday, to 0.6040 this morning. Having failed ahead of 0.6200 last Thursday, the Kiwi could well retreat to near 0.5900 before finding a stable perch.

Todays continued fall in oil prices, as well as the trade war threats emanating from the US over the weekend, have seen the resource heave Indone4sian Rupiah and Malaysian Ringgit underperform. The USD/IDR has climbed 1.10% to 14,990.00 this morning, with a move back through 15,000.00 likely. USD/IDR has strong resistance at 15,500.00.

MYR has given back over half of its gains from last week versus the US Dollar this morning. USD/MYR has risen nearly 400 points, or 1.0%, to 3.3350 from a 4.2950 open. USD/MYR has strong resistance at 4.3500, but a failure there opens the possibility of more losses to 4.4000.

Emerging markets, with their heavy manufacturing and export bias, and especially those with an oil bias, are the most vulnerable to increased US-China trade war fears. It seems nonsensical that such a thing could even be possible in the middle of a global pandemic, but until that sentiment subsides, emerging markets will remain unloved. We expect haven currencies such as the US Dollar, Swiss Franc and Japanese Yen to outperform.

Oil edges lower with trade tensions but is surprisingly resilient.

Oil finished modestly higher on Friday, weathering the storm in equity markets as the OPEC+ production restrictions officially started. Comments from President Trump about punishing China over COVID-19, as well as trade threats, have seen the diverging price action between Brent and WTI in Asia.

Brent crude initially fell 90 cents to $23.00 a barrel today, but those losses have since been erased. Brent crude is now unchanged at $23.90 a barrel. With the OPEC+ production cuts starting last Friday, a steady stream of headlines implying robust compliance appears to be supporting Brent crude today. The absence of China and Japan also affecting liquidity. With Brent being the international pricing benchmark for oil, OPEC+ compliance has a more significant effect on Brent prices than the much more US-centric WTI contracts.

WTI futures have not fared as well. The Trump trade rhetoric has seen near date WTI take fright, falling 3.50% to $19.10 a barrel this morning.

A potential renewal of trade war hostilities is the last thing oil markets need right now. Even without the drumbeats from Washington DC, the economic data released this week will undoubtedly give markets a hard dose of reality. Both oil contracts have recovered impressively over the past two weeks, but much of the easy-win good news is now built into prices. Further gains will be hard going from here, and both contracts are now vulnerable to sharp pullbacks.

Gold’s great range-trade continues.

Gold caused a haven buying tailwind on Friday, rising 0.90% to $1701.00 an ounce. But that just leaves gold dead-centre of its one-month range between $1650.00 and $1750.00 an ounce. Gold looks set to continue its range-trading purgatory for some time yet. Traders will look to fade the extreme ends of the broader range, or quietly accumulate on dips until the day gold’s fundamentals reassert themselves.

Either way, a lot of zen-like patience will be required.

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Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation

Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation

Canadian Prime Minister Justin Trudeau and Ukrainian President Volodomyr…

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20 mins ago

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September 24, 2023

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Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation

Canadian Prime Minister Justin Trudeau and Ukrainian President Volodomyr Zelenskyy - who commands a battalion of neo-Nazis - honored an actual WWII Nazi with a standing ovation on Friday.

Yaroslav Hunka, 98, fought in a Third Reich military formation accused of war crimes.

On Friday, he was honored during a session of Canadian parliament in which Zelenskyy addressed the lawmakers to thank them for their support since Russia invaded Ukraine, saying that Canada has always been on "the bright side of history."

Hunka stood for standing ovation and saluted, according to Canadian television.

According to the Associated Press, Hunka "fought with the First Ukrainian Division in World War II before later immigrating to Canada," another name for the 14th Waffen Grenadier Division of the SS, the Nazi party's military wing, also known as the SS Galichina.

Related:

Formed in 1943, SS Galichina was comprised of Ukrainians from the Galicia region in the western part of the country. It was armed and trained by Hitler's Nazis and commanded by German officers. The next year, the division received a visit from SS head Heinrich Himmler, who had high praise for the unit's effectiveness at slaughtering Poles.

The SS Galichina subunits were responsible for the Huta Pieniacka massacre, in which they burned 500 to 1,000 Polish villagers alive.

One of several photos on a blog by an SS Galichina veterans’ group that shows Yaroslav Hunka, the Ukrainian immigrant honored by the Canadian Parliament during a visit by Ukrainian President Volodymyr Zelenskyy. Hunka is in the front row, middle.

In fact, during the Nuremberg Trials, the Waffen-SS was declared to be a criminal organization responsible for mass atrocities.

Following the war, thousands of SS Galichina veterans were allowed to leave Germany and resettle in the West - with around 2,000 moving to Canada. By that time, they were known as the First Ukrainian Division.

A blog by an association of its veterans, called “Combatant News” in Ukrainian, includes an autobiographical entry by a Yaroslav Hunka that says he volunteered to join the division in 1943 and several photographs of him during the war. The captions say the pictures show Hunka during SS artillery training in Munich in December 1943 and in Neuhammer (now Świętoszów), Poland, the site of Himmler’s visit. 

In posts to the blog dated 2011 and 2010, Hunka describes 1941 to 1943 as the happiest years of his life and compares the veterans of his unit, who were scattered across the world, to Jews. -Forward

So, the same leftists who called Trump supporters Nazis for years are now honoring an actual Nazi - while Germany has notably locked up several concentration camp guards in their 90s for their involvement in Nazi activities.

University of Ottawa Political Scientist Ivan Katchanovski lays it out...

Meanwhile, here's Ukraine's Azov Battalion of neo-Nazis that everyone with a Ukraine flag in their bio is supporting...

Odd, they don't look like Trump supporters.

Maybe these Nazis can shed some light? Careful, "X" thinks this is sensitive material (that might redpill people?).

Meanwhile...

Tyler Durden Sun, 09/24/2023 - 14:25

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Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City

Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City

Authored by Nathan Worcester via The Epoch Times,

While…

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20 mins ago

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September 24, 2023

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Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City

Authored by Nathan Worcester via The Epoch Times,

While addressing an Atlantic Council meeting on nuclear energy, U.S. Climate Envoy John Kerry made it clear he doesn't think wind and solar alone will be sufficient to meet global energy needs while achieving policy plans to rapidly scale back the use of hydrocarbons in the name of addressing climate change risks as outlined by the United Nations.

"You will have to have some component of nuclear—yet to be determined how big or where it'll go. That's going to be a market-based reaction," said Mr. Kerry, who served as a Democratic senator from Massachusetts before serving as Secretary of State under former President Barack Obama.

The 2004 Democratic candidate for president said that "most scientists will tell you" the goal of Net Zero 2050 cannot be achieved "unless we have a pot, a mixture of energy approaches."

"Clearly, we're going to need nuclear to be a part of that," he said on Monday.

Mr. Kerry's pro-nuclear remarks come as climate-related diplomacy and other climate-themed events overtake New York City.

Over the weekend, protesters demonstrated against fossil fuels in the streets of New York City, with Rep. Alexandria Ocasio Cortez (D-N.Y.) among the participants.

Mr. Kerry voiced support for those demonstrators in his speech to the Atlantic Council.

In addition, the U.N. will hold its inaugural Climate Ambition Summit on Sept. 20.

A U.N. statement on the event states it "will showcase leaders who are 'first movers and doers' from government, business, finance, local authorities, and civil society who have credible actions, policies and plans to keep the 1.5°C degree goal of the Paris Agreement alive and deliver climate justice to those on the front lines of the climate crisis."

The Climate Ambition Summit comes ahead of the next annual United Nations Climate Change Conference, which will begin in late November. It's taking place in Dubai, United Arab Emirates.

Even as he praised climate protesters, Mr. Kerry noted that a previous generation of environmental activists had fought hard against nuclear power, now seen as a pragmatic solution by many climate hawks.

"In my state of Massachusetts, where there was a huge fight over Seabrook Nuclear Plant in New Hampshire, we now happily get about 20 percent of all our energy from Seabrook, and nobody's complaining—maybe about the prices a little bit, because that's normal in today's world," he said.

A view of the Seabrook Nuclear Power Plant in Seabrook, N.H., on March 21, 2011. (Emmanuel Dunand/AFP via Getty Images)

"The United States is now therefore committed, based on experience and based on reality, to trying to accelerate the deployment of nuclear energy, as part of the Biden program," he added.

The diplomat, who came under fire from Republicans earlier this summer for his unwillingness to share details of his staff at a Congressional hearing, commented positively on Bill Gates' TerraPower, which plans to build the next-generation Natrium nuclear reactor in Wyoming.

He also drew attention to his recent trip to Romania, where he visited a control room simulator for a small modular reactor developed by the American firm NuScale.

Mr. Kerry took issue with the continued construction of unabated coal-fired power plants and with the existence of subsidies for fossil fuels.

An International Monetary Fund (IMF) study identified $1.3 trillion in "explicit" subsidies for fossil fuels in 2022, a stark increase from $500 billion in 2020. Such subsidies are ascribed to fossil fuel prices when they are lower than they would otherwise be if producers fully bore supply costs. The IMF authors attributed a substantial proportion of the increase to "temporary price support measures," in line with surging fossil fuel prices during that period.

Whitehouse Touts ADVANCE Act

Mr. Kerry wasn't the only high-level Democratic politician who addressed the Atlanticist forum on Monday.

In pre-recorded remarks, Sen. Sheldon Whitehouse (D-R.I.) touted the bipartisan, nuclear power-related ADVANCE Act, which passed the Senate as part of the National Defense Authorization Act (NDAA) in July. The bill has not moved ahead in the House.

"Our legislation would strengthen the Nuclear Regulatory Commission's ability to safely and efficiently review the expected influx of applications and prepare them to license HALEU [high-assay low-enriched uranium] fuels," the lawmaker said.

Russia currently dominates the production of HALEU fuels, which are key for most next-generation nuclear reactors. Uncertainty about Russian supplies of HALEU has been a worry for TerraPower and a central motivation for the Nuclear Fuel Security Act, another successful NDAA amendment.

"We spend nearly $1 billion each year on Russian uranium. Russia uses these revenues to fund its invasion of Ukraine," Sen. John Barrasso (R-Wyo.) said in the Senate as the measure was under consideration.

Sen. John Barrasso (R-Wyo.) in Washington on Dec. 1, 2020. (Bill O'Leary-Pool/Getty Images)

'Decarbonize Beyond Electricity'

Other speakers at the event expanded on how nuclear energy could be used to cut carbon emissions.

"We need to decarbonize beyond electricity," said John Wagner, director of the Idaho National Laboratory. He cited industrial heating and hydrogen production as examples of such applications for nuclear energy.

Sama Bilbao y León, director general of the World Nuclear Association, concurred.

"Yes, we need to electrify as much as we can of our economy, but it is not going to be possible to electrify everything," she said.

Ben Pickett of Nucor Corporation, which operates mills that recycle scrap steel using electric arc furnaces, explained that his company's operations require "billions and billions of kilowatt hours per year."

Earlier this year, Nucor signed a memorandum of understanding with NuScale Power. The latter could potentially develop small modular reactors for use in conjunction with Nucor's steel production facilities.

"We've got customers now that are demanding much cleaner steels," Mr. Pickett said.

He conceded that the idea of running steel production on advanced nuclear has met with a "mixed" reaction in his industry.

Tyler Durden Sun, 09/24/2023 - 15:00

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Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help ‘Rebuild Schools’

Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help ‘Rebuild Schools’

Authored by Chris Menahan via Information…

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20 mins ago

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September 24, 2023

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Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help 'Rebuild Schools'

Authored by Chris Menahan via Information Liberation (emphasis ours),

Ukrainian president Volodymyr Zelensky is recruiting spirit cooker Marina Abramovic to serve as an ambassador for Ukraine and help "rebuild schools."

From The Telegraph, "Zelensky asks Marina Abramovic to be ambassador for Ukraine":

Volodymyr Zelensky has asked Marina Abramovic, the performance artist, to be an ambassador for Ukraine.

‌Ms Abramovic, a fierce critic of Vladimir Putin's illegal invasion, said the Ukrainian president had asked for her help in rebuilding schools.

[...] ‌"I have been invited by Zelensky to be an ambassador of Ukraine, to help the children affected by rebuilding schools and such."

‌She added: "I have also been invited to be a board member of the Babyn Yar organisation to continue to protect the memorial."

‌The Holocaust memorial centre to Jews murdered by Nazis in Ukraine was damaged by Russian missile attacks in March last year.

The "bombing" of the Babyn Yar memorial was confirmed to be a lie last year.

‌Ms Abramovic installed her work Crystal Wall of Crying at the memorial centre in Kyiv four months before Russia invaded Ukraine in February 2022.

‌The wall, 40 metres long and three metres high, is made of coal and has large quartz crystals sticking out of it. Visitors can touch the installation, which mirrors the western wall in Jerusalem.

Zelensky said last year his goal is to turn Ukraine into a "Greater Israel."

In Dec 2022, Zelensky made a deal with BlackRock's Larry Fink to help "rebuild" Ukraine after the war and just last week the Biden regime announced Penny Pritzker would become their Special Representative for "rebuilding" Ukraine.

Meanwhile, Abramovic's pals, the Clintons, are also salivating over helping to 'rebuild' Ukraine.

Tyler Durden Sun, 09/24/2023 - 16:10

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