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Asia Session: The Peak-Virus Trade Goes Viral

Asia Session: The Peak-Virus Trade Goes Viral

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Asian asset markets are positive this morning as headlines continue to be dominated by Moderna’s trial vaccine headlines. I most certainly hope that Moderna has managed to help the planet avoid a bullet. The result of the news was entirely predictable, equities rose sharply, the US Dollar faded, oil jumped and gold, quite significantly fell and avoided an outside reversal day by the narrowest of margins. That story may yet contain heartbreak for bulls. Sectors I would characterise as “the little shop of horrors,” comprising big oil, airlines, leisure industries such as cruises, and consumer discretionary in general, all, unsurprisingly, outperformed.

As ever, in my role as the voice of reason, floating alone on a sea of non-thinking FOMO-ness that characterises the world’s financial markets in this day and age, I should point out a few things. Moderna’s trial is terrific news, but the sample size was eight. Not statistically significant. The experiment was to make sure that dosages didn’t make recipients fall over dead, or otherwise suffer serious side effects. It didn’t, which is pleasing. At least two more large scale trials will be required, and Moderna’s CEO himself said that he was hopeful of results by the end of the year. After that, even with fast approval, the vaccine would have to be manufactured on a previously unimaginable scale, and then the whole world will have to receive it.

Thus, in the best-case scenario, it will probably be another year before normal life will make a comeback, at best. That is a long time in this day and age, especially if you are unemployed or shortly to be; or a company that is running tight on cash flow in the next few months. The zombie apocalypse may well finally occur, in the shape of many corporations existing on paper as zombies only due to central bank and government life support. The amount of debt issued by governments globally, and will continue doing so, will compete for capital with private sector requirements for a generation. Let’s all hope for some decent inflation to make it inflate away, as markets price in return to normal life by July. Did I also mention we have a US Presidential election in November?

Climbing off my soapbox, alone in speakers’ corner, and back into the here and now, the peak-virus trade has been supercharged by last night’s news. That sentiment is unlikely to fade anytime soon and has left some interesting set-ups, to my wizened eyes, in various markets—more on that below.

In other news, the Euro out per-performed overnight, as did the Eurostoxx 600, as France and Germany agreed on a EUR 500 billion recovery package for the region. Although only members of a larger grouping, everyone is sure to fall into line behind the two biggest kids in the playground. The elegant solution allows the EU to borrow cash through an EU entity, which will then give it all to Italy, I mean those countries within the EU that need it to rebuild devastated economies. The solution elegantly circumvents EU countries jointly guaranteeing Italy’s I mean the broader groups national debts.

Attention today will be focused on Indonesia’s latest rate decision due at 1530 SGT. The Indonesian Rupiah has staged a spectacular, if quiet, comeback since the start of April, and give the Bank of Indonesia (BOI) plenty of breathing room to cut rates again. We are expecting a 25-basis reduction to 4.25%, as the BOI will have one eye on the currency still. Fifty bps, though, is not out of the question.

UK unemployment and Germany’s ZEW survey are expected to print at nightmarishly poor levels this afternoon. Luckily for both, the results will be largely ignored as both expected, and irrelevant in the context of the peak-virus sentiment sweeping financial markets. They should both be sending thankyou note to the Moderna CEO.

Equities march boldly forward on peak-virus sentiment.

The Moderna news spurred the peak-virus trade to new heights overnight, with European markets and Wall Street enjoying an out-sized positive day. The S&P 500 leapt by 3.15%, the NASDAQ rose by 2.44%, and the Dow Jones, home to many previously unloved stocks, jumped an impressive 3.85%.

Asia has needed no second chance, and markets across the region are a sea of green today. The Nikkei 225 and the South Korean Kospi are 1.80% higher, as are the Hang Seng, Straits Times Index and Jakarta Composite. China’s Shanghai Composite and CSI 300 are 1.0% higher> Australia’s ASX 200 and All Ordinaries have climbed 2.0%.

We expect the positive momentum to be maintained through the remainder of the Asian session. Europe had an excellent day yesterday, and with no data surprises on the horizon that haven’t already been priced in, that should continue today. The peak-virus trade continues to gather momentum after last night’s Moderna headlines, and there is no reason to doubt that will not continue.

The US Dollar retreats as haven positioning is reduced.

The Moderna vaccine headlines accelerated the rotation out of defensive positioning in currency markets overnight. The US Dollar fell across the board with the dollar index of developed currencies falling 0.78%. Both the GBP and EUR made notable advances, GBP/USD rising 0.77% to 1.2200, and the EUR/USD rising 0.95% to 1.0915. In Euro’s case, the potential EUR 500 bio EU support package also supported the single currency.

EUR/USD is notable, as it has been tracing out a symmetrical triangle pattern since the nadir of mid-March. Today, the top of the triangle lies at 1.0955, and a daily close above that level implies that the EUR/USD could rally strongly, targeting the 1.1400 region. GBP/USD must still overcome strong resistance at 1.2250 before the technical picture swings strongly positive. Brexit and data nerves may temper its gains.

Light at the end of the return-to-normal-life tunnel saw the trade-sensitive and China proxy Australian Dollar, strongly outperform overnight. AUD/USD rose 1.70% to 0.6525 in overnight trading. Although unchanged this morning, it looks set to test resistance nearby at 0.6570. A daily close above sets up the Antipodean for further advances.

Locally, the Indonesian Rupiah has now recovered around 65% of its mid-March losses. It is trading at 14,800 this morning, having fallen to a low of 16,750 during the March asset market capitulation. That will allow the Bank of Indonesia to cut rates today, but may also, therefore, temper further gains to what has been a mighty rally.

Currency markets are, for the most part, sedate and unchanged in Asia today. More than likely, they are awaiting the arrival of London, from whence we expect to see the US Dollar once again, pick up steam.

Vaccine hopes propel oil aggressively higher.

Oil continues to bask in a combination of falling production from OPEC+, a return to regular consumption by China, a short squeeze in the WTI futures, the ending of lockdowns globally and, as of last night, hopes that a COVID-19 vaccine is on the horizon. It is no surprise, therefore, that Brent crude and WTI strongly outperformed overnight. Brent crude rose 9.0% to $35.40 a barrel, and WTI leapt 10.60% higher to $32.55 a barrel.

Both contracts have seen profit-taking in Asia tempering the overnight gains, with Brent and WTI easing by just over 1.0%. The dips are shallow, however, and appears technical. Brent crude will be eyeing resistance at $36.50 a barrel, and a daily close above there implies further gains to $40.00 a barrel. WTI has resistance at $33.00 and $36.00 a barrel, with $40 a barrel also the target if the later gives way.

Today, the June WTI deliverable futures expiry. Open interest fell once again overnight, from around 55,000 contracts to 34,000 contracts. That still leaves a significant position that needs to either be closed out, rolled, or delivered by today. Interestingly open interest fell by 12,000 contracts in the July tenor, but rose by around the same in the September one, implying that being exposed to the front-month contract remains. The squeeze has definitely been on short positioning in the June contract, and thus, sharp spikes higher cannot be ruled out into the expiry today. That is in complete contrast to last month’s expiry.

Gold narrowly avoids an outside reversal day implying heartbreak for long positions.

Gold avoided an outside reversal day by the narrowest of margins overnight. Having traced out new highs at $1765.00 an ounce, gold then plunged on the Moderna vaccine news to close at $1733.00 an ounce. That was a mere two dollars above the previous days open.

Although the reversal pattern has been narrowly avoided, investors should be alert to the possibility that gold could now suffer a sharp reversal as peak-virus sentiment reaches new levels. A failure of support around $1725.00 an ounce sets up further losses to the next support at $1700.00 an ounce. I also note that gold has tested, but failed, to close above $1750.00 an ounce for two days in a row.

Gold has risen slightly by 0.25% in Asia, mostly driven by profit-taking flows from short-term traders after the overnight drop. Caution should be exercised though; gold could potentially suffer an aggressive downward whipsaw price correction following the price action overnight.

Bitcoin has failed multiple times at the $10,000 mark.

Bitcoin has tested and failed to close above $10,000 multiple times during May. With the Moderna vaccine hopes invigorating the rotation into recovery positioning and out of defensive plays, Bitcoin is vulnerable to a deeper downward technical correction. Bitcoin is trading at $9,542.00 this morning and a failure of the $9,500.00 region, sets up a potentially sizeable downward correction to $8,500.00, and possibly as far as $8,000.00.

Adding weight to this theory, a good friend of mine in Singapore, who has no experience with this market, asked me yesterday if it was a good time to invest in cryptos? Sell signals come in all sorts of forms. This is one of them.

The Bitcoin aficionados who believe 5G towers, or Bill Gates, are the original of COVID-19, should prepare to wrap an extra layer of tinfoil around their heads.

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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