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Dollar Consolidates Amid Rate Volatility

Overview: The dollar is consolidating its
recent moves as interest rate swings continue. The US two-year yield has traded
in a nearly 28 bp range in the…



Overview: The dollar is consolidating its recent moves as interest rate swings continue. The US two-year yield has traded in a nearly 28 bp range in the first two sessions this week, and near 4.88% now, it is 18 bp lower since last Friday's close. The 10-year yield is slipping below 4.50%. It reached almost 4.70% on Monday and had fallen to almost 4.40% yesterday. Part of this reflects the shift in overnight rate expectations. The implied yield of the December 2024 Fed funds futures has traded between almost 4.70% to 4.42% and is now about 4.49%. Separately, a continuing resolution into early next year will prevent a partial US government shutdown tomorrow.

The dollar bloc currencies are the poorest performing G10 currencies today, while the dollar has steadied above JPY151.00. European benchmark 10-year yields are mostly 4-6 bp lower. Spain's Socialist Party's Sanchez looks to have a new political lease on life with disparate coalition but there seems to be little market reaction. Spanish bonds have marginally underperformed in recent days. Japan's 10-year yield is below 80 bp and is near the lowest in a month. Equities are trading with a heavier bias. Taiwan, South Korea, and India are exceptions in the Asia Pacific region. Europe's Stoxx 600 is threatening to end a three-day advance. US index futures are also trading lower. Gold is firm, but within yesterday's range. Resistance is seen in the $1970-80 area. US oil inventories are at three-month highs, and this helped send December WTI 2% lower yesterday. Follow-through selling today saw the contract today to almost $75.65. A low near $74.90 was seen last week. Before then, it has not been below $75 a barrel since July.

Asia Pacific

Japan's trade balance swung back into deficit in October (-JPY662.5 bln or ~$4.4 bln) from a JPY72 bln surplus in September. The deficit has averaged about JPY856 bln a month this year. The average monthly shortfall in the first ten months of 2022 was JPY1.68 trillion. The weakness of the yen notwithstanding, exports rose 1.6% in the year through October, while imports fell 12.5% year-over-year. Net exports shaved Japan's Q3 GDP by 0.1 of a percentage point after flattering it by 1.8 percentage points in Q2 and subtracting 0.2 percentage points in Q1 23. Japanese exports to China are off 4% year-over-year in October, while exports to the US are up 8.4% and shipments to Europe have increased 8.9%.

An important agreement was struck yesterday that will likely influence the outcome of January's election in Taiwan, which could have global implications. Simply put, the two main opposition parties, the Kuomintang and Taiwan's People's Party announced that will run a united ticket to defeat the more independent-minded Democratic Progressive Party. The DPP candidate, Vice President Lai Ching-te has been leading in the polls, but unified opposition ticket looks likely to close the gap. It will be decided over the weekend, following internal and public polls, whether the KMT candidate Hou Yu-ih or the TPP candidate Ko Wen-je will lead the fusion ticket. Foxconn founder, Terry Gou, is running as an independent after losing his bid for the KMT nomination. Polls showed him drawing less than 10% of vote before yesterday's agreement, which would seem to undermine his already poor chances.

Australia created 55k jobs last month, but it was not sufficient to prevent the unemployment rate from rising to 3.7% from 3.6%. The participation rate rose to 67.0 from a 66.8% (initially 66.7%). However, after losing 36.5k full-time positions in September (initially -39.9k), Australia recouped 17k. The bulk of the job gain was part-time positions (37.9k after 44.3k in September. RBA Governor Bullock recently acknowledged some easing in the labor market.

As US rates rebounded from what seemed like an exaggerated response to Tuesday's CPI, the dollar recouped most of its losses against the yen. It first tested the JPY150 area in early North American turnover, where options for $2.7 bln expire today, and after the slightly better than expected retail sales report and softer than anticipated producer prices, the greenback spiked to new session highs. It climbed to about JPY151.40 in the North American afternoon and has large held below it today. The dollar has also held above JPY151.00. The Australian dollar's rally stalled slightly above $0.6540, its best level since August 10, as the US dollar recovered more broadly after the US data. The Aussie fell to about $0.6485 before catching a bid that drove it back to around $0.6530. Yesterday's pullback was extended to almost $0.6460 today, meeting the (38.2%) retracement of the rally from last Friday's low (~$0.6340). The Australian dollar recovered to $0.6500 before stalling in the European morning. Range-trading seems the most likely scenario today in North America. The greenback is little changed against the Chinese yuan. It is trading quietly within yesterday's range, recording a lower high for the third day running. The PBOC set the dollar's reference rate at CNY7.1724 (vs. CNY7.1752 yesterday). The average projection in Bloomberg's survey was for CNY7.2453, practically unchanged from the previous day. 


Germany adopted a "debt-brake" after the Great Financial Crisis that limits annual net new borrowing to 0.35% of GDP. There are exceptions for emergencies, but the Merkel and now the Scholz government create off-budget facilities. There are around 30 off-budget facilities. Yesterday, Germany high court dealt a blow to the government's shift of 60 bln euros for pandemic relief to an off-budget fund for climate change, claiming it violated constitutional law. The court ruled that the off-budget fund (raised to 212 bln euros for the 2024-2027 period must be reduced by the 60 bln euros. It is not immediately clear if the court's ruling impacts the other off-budget special funds. Chancellor Scholz promised a quick response but acknowledged that there would be a significant impact on budget policy at state and federal levels. 

If investors are nervous ahead of tomorrow's Moody's rating review of Italy it is not evident in the markets. Italy's 10-year premium over Germany has narrowed by about six basis points over the past week and the two-year premium has narrowed by almost 10 bp. Indeed, the 10-year premium is below 180 bp, the smallest in nearly two months. The two-year premium is near 63 bp, around the 200-day moving average and the least in almost two months. The new EC forecasts project that Italy will have a budget deficit of 4.3% of GDP in 2025 rather than the 3.6% shortfall the government anticipates. That will translate into a debt burden of nearly 141% of GDP in 2025. Recall that Moody's rating of Baa3 puts Italy one step into investment grade status. The outlook is negative by the rating agency.

The euro pulled back to almost $1.0830 yesterday, as the single currency held on to the lion's share of Tuesday's 1.7% surge, and it is holding today too. The (38.2%) of its recent rally (from last Friday's low around $1.0655) is found near $1.08 and 200-day moving average is slightly above there. Some more consolidation seems the most likely scenario. Sterling's price action is similar. It gave back a cent to approach the $1.24 area. The losses were extended to almost $1.2375 today to meet the (38.2%) retracement of the rally from last Friday's low (~$1.2185) near $1.2385. The next retracement (50%) is closer to $1.2350, and options for about GBP450 mln expire today at $1.2360. 


US retail sales were a bit stronger than expect while the producer prices were weaker than anticipated. The net impact was to lift US rates after the sharp slide on Tuesday and lent the greenback support. October retail sales slipped by 0.1%, the first decline in seven months. Yet, excluding autos and gasoline, sales increased by 0.1%. Gasoline sales were off 7.5% as the average price fell by about 20 cents. Shoppers were more active in September than previously reported. Retail sales then were revised to 0.9% from 0.7%. Producer prices unexpectedly fell by 0.5% month-over-month, the largest fall since April 2020, led by weaker gasoline prices. Excluding food and energy, producer prices were flat last month. The 2.4% year-over-year increase in core prices was the least since the start of 2021. Producer service prices were flat after rising for the past six months. The two-year breakeven (difference between the yield of the conventional note and the inflation protected security fell to 2.11% yesterday, the lowest in nearly a month. The 10-year breakeven fell to almost 2.27%, its lowest since October 11 and near the 200-day moving average. 

This week's deluge of US data continues today. The most important is the October industrial production report, which is expected to have fallen and offset in full September's 0.3%. Manufacturing may be hampered by the auto strike. Import and export prices are falling on a year-over-year basis and are seen falling month-over-month in October. Weekly jobless claims have been 200k-220k for the past two months, but continuing claims continue to edge higher (seven consecutive weeks), which is consistent with slower hiring. The November Empire State manufacturing survey was stronger than expected (9.1 vs. -4.6 in October) and today sees the Philadelphia business outlook and the Kansas Fed manufacturing survey. The NY Fed updates its service activity survey. The TIC report on portfolio capital flows will be released late in the session.

After the large outside down day on Tuesday, the greenback's losses were extended to CAD1.3655 before corrective forces took hold. The US dollar recovered to around CAD1.3685 in choppy even if sideways price action. In a near-term consolidative/corrective, the greenback can recover into the CAD1.3725-50 area. There at $1.35 bln in options at CAD1.3750 that expire today. The greenback marginally extended its recent losses against the Mexican peso. It fell to about MXN17.29. Today, it has taken set a new low for the month slightly below MXN17.26 as the dollar extends its losing streak for a fifth consecutive session today. Brazil's markets were closed yesterday for a national holiday and Latam currencies were mixed. The Mexican peso was joined by its Chilean counterpart in edging higher against the dollar, while the Colombia and Argentina's pesos were the worst performing among the emerging market currencies yesterday, falling 0.8% and 1.35%, respectively. Colombia reported weaker than expected Q3 GDP (0.2%) which saw the year-over-year rate contract by 0.3%. The market is nervous ahead of this weekend's run-off presidential election in Argentina and many suspect another devaluation is likely soon.



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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…



Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),




Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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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…



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.


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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