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Asia Session: Markets Slow Stepping The Sideways Shuffle

Asia Session: Markets Slow Stepping The Sideways Shuffle

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US markets retreated following overnight testimony by Dr Anthony Fauci at a senate committee hearing that reopening America’s states and cities risked serious consequences if done too quickly. Dr Fauci himself is in self-quarantine after one of his staff tested positive for COVID-19. Refreshingly, he appears to be much more inclined to speak his mind when not sharing a podium with the US President, who has a mostly opposite view.

It is the timing of Dr Fauci’s comments, rather than their content, that spooked markets though. He is, of course, stating the obvious in no uncertain terms. The comments came though, after an extended bull run in “risk-on” assets in which markets had unceremoniously been ignoring similar warnings for the past two weeks. It suggests that for now, most of the peak-virus global recovery trade, maybe baked into financial markets and that we are entering a period of sideways consolidation. Investors should be wary of being whipsawed by the daily flip-flops in global sentiment over the remainder of the week.

An insight into the challenges that lie ahead may come from down-under. New Zealand has been lauded for its efforts to contain COVID-19, its economy is due to almost fully reopen in the coming days. That, however, did not stop the Reserve Bank of New Zealand this morning announcing it was doubling the amount of monthly quantitative easing to NZD 60 billion per month. In addition to leaving interest rates unchanged at 0.25%. The global economy will remain on central-bank life support for quite some time to come, make no mistake.

Another reality check is the New York, Atlanta and St Louis Federal Reserve’s GDP Nowcasts. Depending on which one you look at, they are suggesting the US GDP for Q2 is on track to fall by 30 to 40% annualised! You have read this correctly. Admittedly, with partial reopening’s commencing, those numbers should improve, but have a mountain to climb in the next six weeks. But if anyone needed an example of just how “forward-looking” markets have become on the peak-virus trade, the evidence is right there.

That is not to say that better days do not lie ahead in the near-term for equity markets. The street will become much more headline sensitive going forward though, leading to markets chasing their tail more.

Equities in Asia are following Wall Street lower.

The waning of upward momentum saw US investors lightening up recent long positions following headlines concerning the risks of reopening the economy too early. The timing and not the content of the headlines probably had a more significant effect, coming after a multi-week bull run. The S&P 500 fell 2.05%, the NASDAQ dropped 2.06%, and the Dow Jones fell by 1.73%.

Asia has duly followed Wall Street south after its own extended multi-day rally, complicated y concerns of secondary coronavirus outbreaks in South Korea and China. The Nikkei 225 has fallen 0.85% with the Shanghai Composite down 0.40%, the CSI 300 by 0.20%, with the Kospi flat on the day. Regionally, the Hang Seng has fallen 0.15%, the Straits Times by 0.30% with Australian and New Zealand lower by 0.70%.

Overall, the reaction in Asia has been modest, suggesting the price action is corrective and not a wholesale change in sentiment. We expect trading ranges to be choppy for the remainder of the week as investors chase headlines in a broader consolidation phase.

Currency markets refuse to follow the noise from equities.

The US Dollar ignored the negative price action in equity and oil markets, with the greenback continuing to ease versus the major currencies. The dollar index fell 0.28% to 99.96 with the Euro a notable gainer. Currency markets have not joined into the peak-virus hype seen elsewhere, and thus are less inclined to reverse the Dollar’s gentle retreat sharply.

Most attention this morning has been on the New Zealand Dollar which has fallen sharply this morning as the Reserve Bank puts out uber-dovish comments following its unchanged rate decision. The RBNZ doubled its quantitative easing target to NZD 60 billion a month with officials stating they are not looking for a v-shaped recover and telling banks to be prepared for negative rates by the end of the year. The New Zealand Government has also announced a national interest test to all foreign investment. I suspect New Zealand is the first developed economy out of the blocks on this front, and governments around the world will follow in the months ahead.

The NZD/USD has fallen 0.90% to 0.6015 this morning, just above support at 0.5995, a multiple daily low and the 50-day moving average. A break of this level opens up further losses to 0.5900 initially with daily resistance now distant, at 0.6160.

Elsewhere across Asia, major and regional currencies are trading almost unchanged for the day.

Oil eases in Asia.

Oil also refused to buy into the profit-taking seen on US equities, with both Brent crude and WTI edging higher in the New York session, supported by extra Saudi Arabia production cuts. Subdued trading seeing both Brent and WTI around 1.50% higher at $29.90 and $26.00 a barrel respectively.

Both contracts have given ground this morning as equities moved lower in Asia, Brent crude has fallen 50 cents to $29.50 a barrel, and WTI has dropped 30 cents to $25.30 a barrel.

Like equity markets, a lot of good news has been baked into oil prices over recent weeks. The price action of yesterday and today has a distinctively consolidative look about it. Like equities, the danger is that investors get whipsawed chasing their tails on intra-day sentiment. If anything, though, with momentum waning, oil is perhaps more vulnerable to negative headlines now than it has been in recent weeks.

Gold remains marooned midrange.

We may have to rename gold the castaway at this rate, as the precious metal continues to trade each side of its $1700.00 an ounce mid-range level quietly. Gold rose slightly overnight to $1702.00 an ounce and is unchanged in Asian trading today.

Gold has fallen of investors radars for now although its longer-term fundamentals point to much higher levels ahead. Gold will need to break out of its longer-term range of either $1650.00 or $1750.00 an ounce to stimulate investor interest again.

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Elon Musk’s says the Boring Company to reach $1 trillion market cap by 2030

Musk said there’s really only one roadblock to this company achieving this mega-cap value.

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Elon Musk wants to create and control an artificial superintelligence and guide humanity in an effort to colonize Mars. But before we get there, he wants to solve the problem of traffic right here on Earth. 

In 2016, the tech billionaire tweeted himself into a new company: "Traffic is driving me nuts. I am going to build a tunnel boring machine and just start digging..." he wrote. A series of tweets followed this proclamation as the idea germinated and cemented in Musk's head: "It shall be called 'The Boring Company.' I am actually going to do this."

Related: Elon Musk is frustrated about a major SpaceX roadblock

The firm's goal is to "solve the problem of soul-destroying traffic," by creating a series of underground transportation tunnels. Taking transportation underground, the company says, should additionally "allows us to repurpose roads into community-enhancing spaces, and beautify our cities."

The tunneling company broke ground on its first project in Feb. 2017 and has since completed three projects: the Las Vegas Convention Center (LVCC), the Hyperloop Test Track and the R&D Tunnel. It is currently working on a 68-mile Las Vegas Loop station that will eventually connect 93 stations between Las Vegas and Los Angeles. Once in operation, the Vegas Loop will transport 90,000 passengers every hour, according to the company. 

More Elon Musk News:

Part of Musk's proposition is that, with the right technology, he can make tunneling a quick and relatively inexpensive process. The company's Prufrock machine allows Boring to "construct mega-infrastructure projects in a matter of weeks instead of years." The machine can mine one mile/week, with new iterations expected to further increase that output. 

Elon Musk is looking to transform traffic and transportation with one of his many ventures. 

Bloomberg/Getty Images

By 2030, Youtuber and investor Warren Redlich wrote in a post on X, Boring will have more than 10,000 miles of tunnel. By 2035, he said, that number will rise to 100,000. With that increase in tunnel space, Redlich thinks that Boring will IPO by 2028 and hit a $1 trillion market valuation by 2030. 

Musk said that this bullish prediction might actually be possible. 

"This is actually possible from a technology standpoint," he wrote in response. "By far the biggest impediment is getting permits. Construction is becoming practically illegal in North America and Europe!"

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AI increases precision in plant observation

Artificial intelligence (AI) can help plant scientists collect and analyze unprecedented volumes of data, which would not be possible using conventional…

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Artificial intelligence (AI) can help plant scientists collect and analyze unprecedented volumes of data, which would not be possible using conventional methods. Researchers at the University of Zurich (UZH) have now used big data, machine learning and field observations in the university’s experimental garden to show how plants respond to changes in the environment.

Credit: UZH

Artificial intelligence (AI) can help plant scientists collect and analyze unprecedented volumes of data, which would not be possible using conventional methods. Researchers at the University of Zurich (UZH) have now used big data, machine learning and field observations in the university’s experimental garden to show how plants respond to changes in the environment.

Climate change is making it increasingly important to know how plants can survive and thrive in a changing environment. Conventional experiments in the lab have shown that plants accumulate pigments in response to environmental factors. To date, such measurements were made by taking samples, which required a part of the plant to be removed and thus damaged. “This labor-intensive method isn’t viable when thousands or millions of samples are needed. Moreover, taking repeated samples damages the plants, which in turn affects observations of how plants respond to environmental factors. There hasn’t been a suitable method for the long-term observation of individual plants within an ecosystem,” says Reiko Akiyama, first author of the study.

With the support of UZH’s University Research Priority Program (URPP) “Evolution in Action”, a team of researchers has now developed a method that enables scientists to observe plants in nature with great precision. PlantServation is a method that incorporates robust image-acquisition hardware and deep learning-based software to analyze field images, and it works in any kind of weather.

Millions of images support evolutionary hypothesis of robustness

Using PlantServation, the researchers collected (top-view) images of Arabidopsis plants on the experimental plots of UZH’s Irchel Campus across three field seasons (lasting five months from fall to spring) and then analyzed the more than four million images using machine learning. The data recorded the species-specific accumulation of a plant pigment called “anthocyanin” as a response to seasonal and annual fluctuations in temperature, light intensity and precipitation.

PlantServation also enabled the scientists to experimentally replicate what happens after the natural speciation of a hybrid polyploid species. These species develop from a duplication of the entire genome of their ancestors, a common type of species diversification in plants. Many wild and cultivated plants such as wheat and coffee originated in this way.

In the current study, the anthocyanin content of the hybrid polyploid species A. kamchatica resembled that of its two ancestors: from fall to winter its anthocyanin content was similar to that of the ancestor species originating from a warm region, and from winter to spring it resembled the other species from a colder region. “The results of the study thus confirm that these hybrid polyploids combine the environmental responses of their progenitors, which supports a long-standing hypothesis about the evolution of polyploids,” says Rie Shimizu-Inatsugi, one of the study’s two corresponding authors.

From Irchel Campus to far-flung regions

PlantServation was developed in the experimental garden at UZH’s Irchel Campus. “It was crucial for us to be able to use the garden on Irchel Campus to develop PlantServation’s hardware and software, but its application goes even further: when combined with solar power, its hardware can be used even in remote sites. With its economical and robust hardware and open-source software, PlantServation paves the way for many more future biodiversity studies that use AI to investigate plants other than Arabidopsis – from crops such as wheat to wild plants that play a key role for the environment,” says Kentaro Shimizu, corresponding author and co-director of the URPP Evolution in Action.

The project is an interdisciplinary collaboration with LPIXEL, a company that specializes in AI image analysis, and Japanese research institutes at Kyoto University and the University of Tokyo, among others, under the Global Strategy and Partnerships Funding Scheme of UZH Global Affairs and the International Leading Research grant program of the Japan Society for the Promotion of Science (JSPS). The project also received funding from the Swiss National Science Foundation (SNSF).

Strategic Partnership with Kyoto University

Kyoto University is one of UZH’s strategic partner universities. The strategic partnership ensures that high-potential research collaborations will receive the necessary support to thrive, for instance through the UZH Global Strategy and Partnership Funding Scheme. Over the last years, several joint research projects between Kyoto University and UZH have already received funding, among them “PlantServation”.


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How does voltage drive nonmetallic catalysts to perform electrocatalytic reactions?

Understanding how voltage drives nanoscale electrocatalysts to initiate reactions is a fundamental scientific question. This is especially challenging…

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Understanding how voltage drives nanoscale electrocatalysts to initiate reactions is a fundamental scientific question. This is especially challenging when dealing with non-metallic electrocatalysts due to their low inherent carrier concentration, which leads to poor conductivity. When voltage is applied at the non-metal/solution interface, the situation becomes more complex than in the case of metal/solution interfaces. One notable complexity is the significant potential drop within the non-metal, causing the surface potential to often deviate from the back potential. Analyzing the driving force for chemical reactions by applying classical metal models to non-metals can result in substantial inaccuracies. Up until now, distinguishing the potential distribution between the nonmetallic catalyst and the EDL still relies on complex theoretical calculations. The actual potential drop across the semiconductor-electrolyte interface remains unknown, due to the lacks of in in-situ techniques. Moreover, conventional electrochemical characterization only provides the ensemble information for electrode materials, neglecting the spatial heterogeneity in the electronic structures of catalysts. Therefore, a spatially resolved in-situ characterization technique is highly needed.

Credit: ©Science China Press

Understanding how voltage drives nanoscale electrocatalysts to initiate reactions is a fundamental scientific question. This is especially challenging when dealing with non-metallic electrocatalysts due to their low inherent carrier concentration, which leads to poor conductivity. When voltage is applied at the non-metal/solution interface, the situation becomes more complex than in the case of metal/solution interfaces. One notable complexity is the significant potential drop within the non-metal, causing the surface potential to often deviate from the back potential. Analyzing the driving force for chemical reactions by applying classical metal models to non-metals can result in substantial inaccuracies. Up until now, distinguishing the potential distribution between the nonmetallic catalyst and the EDL still relies on complex theoretical calculations. The actual potential drop across the semiconductor-electrolyte interface remains unknown, due to the lacks of in in-situ techniques. Moreover, conventional electrochemical characterization only provides the ensemble information for electrode materials, neglecting the spatial heterogeneity in the electronic structures of catalysts. Therefore, a spatially resolved in-situ characterization technique is highly needed.

In a new research article published in the Beijing-based National Science Review, scientists at Dalian Institute of Chemical Physics, Chinese Academy of Sciences, Xiamen University, University of Chinese Academy of Sciences, Imperial College London autonomously constructed an in-situ surface potential microscope and successfully measured the surface potential of the basal plane of 2H molybdenum disulfide under various voltages. This achievement addresses the experimental challenge of directly measuring the potential distribution at the non-metal/solution interface. The research findings highlight a notable difference in how the surface potential of semiconductors changes with applied voltage compared to metals. When applying voltage from positive to negative, semiconductors shift from maintaining a stable surface potential to displaying variations, gradually resembling the behavior of metals. Scientists further clarified the differences in potential drop values at various applied voltages between the semiconductor (ΔVsem) and the double layer (ΔVedl). They vividly explained how, in a solution environment, the semiconductor’s Fermi level and band structure evolve, demonstrating a transformation of the semiconductor into a highly conductive semimetal.

To further investigate the role of voltage in electrocatalytic reactions, scientists employed atomic force-scanning electrochemical microscopy (AFM-SECM) to study electron transfer (ET) and hydrogen evolution reaction (HER) imaging on molybdenum disulfide. In ET imaging, the semiconductor’s basal plane exhibited strong electron transfer capability, comparable to that of the semimetal edge. However, HER imaging revealed catalytic inertness at the basal plane. Nano-electrochemical imaging results indicated that voltage only affects the ET step. Due to the absence of hydrogen adsorption sites on the basal plane (i.e., chemical sites), voltage cannot drive the electrons on the basal plane to further participate in chemical reactions. This work paves the way for the rational design of efficient nonmetallic electrocatalysts based on the understanding of how voltage acts on nonmetallic catalysts at the nanoscale.

See the article:

Visualizing the role of applied voltage in non-metal electrocatalyst
Natl Sci Rev 2023; doi: 10.1093/nsr/nwad166
https://doi.org/10.1093/nsr/nwad166


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