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Dollar Recovers After Losses Extended in Asia

Overview: On the back of lower interest rates, the greenback’s
slide was extended in early Asia Pacific turnover, but it has recovered. As
North American…

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Overview: On the back of lower interest rates, the greenback's slide was extended in early Asia Pacific turnover, but it has recovered. As North American trading begins, the dollar is firmer against all the G10 currencies but the New Zealand dollar, which has been aided by the hawkish hold of the central bank, and an immaterial gain in the Swiss franc. Emerging market currencies are mixed. Central European currencies and the Mexican peso are softer. The Chinese yuan reached its best level since June. The greenback's recover is seeing gold reverse after reaching a near high a little above $2050. 

Many of the large equity markets in the Asia Pacific region fell, including Japan, Hong Kong, China, and South Korea. India's 1% gain leads the others. Europe's Stoxx 600 is rising for the first time this week. US index futures are also trading with a firmer bias. Interest rates are softer. The 10-year JGB yield is near 0.66%, having peaking near 0.95%. European benchmark yields are mostly 4-7 bp lower, though UK Gilts are underperforming. The 10-year US Treasury yield is off 2.5 bp to slightly below 4.30%. The US two-year yield is down around three basis points to 4.70%. Lastly, January WTI is extending yesterday's recovery, with the help of an estimated decline in US inventories. January WTI is trading near a four-day high slightly below $77.50.

Asia Pacific

Australia's October CPI slowed to 4.9% from 5.6%, a sharper decline that expected. The central bank meets next Tuesday, and, after this month's hike, it was widely recognized that it would stand pat. Still, Australia's two-year yield is off nearly 13 bp today to about 4.10%, the lowest since early October. Separately, the Reserve Bank of New Zealand delivered a hawkish hold. The cash rate was left at 5.50%, but its revised projections show a bias toward another hike, and no cut until mid-2025. The New Zealand dollar initially rallied more than 1% on the news (to almost $0.6210), but amid broader corrective pressures, unwound most of the gains, but is still firmer against the US dollar for the fifth consecutive session. 

Tomorrow, China reports November PMI and a small uptick is expected amid new official efforts to support the economy. More working days in November after the October holiday also favors an uptick. Better Taiwan, South Korea, and Hong Kong exports to China may also suggest some traction. On the other hand, the decline in demand from oil refiners has been a drag on prices. Japan reports October retail sales and industrial output. Recall that September retail sales were initially reported as -0.1% but were revised to 0.4%. A similar rise is expected in October. Industrial output rose 0.5% in September after falling by 0.7% in August and tumbling 1.8% in July. The median forecast in Bloomberg's survey looks for a 0.8% increase, which would be sufficient to lift the year-over-year rate back into the black after contracting in Q3. Upticks in retail sales and industrial production would lend credence to ideas that the Japanese economy is returning to growth after contracting by 2.1% in Q3. Lastly, India will report Q3 GDP. India's economy is slowing from the 7.8% year-over-year pace in Q2 to around 6.5% in Q3. The risk seems to be on the upside as the industrial sector more than makes up for the slowing of agriculture.

Pressed by the sharp drop in US interest rates, yesterday the dollar approached the low set last week near JPY147.15, and follow-through selling today took it to almost JPY146.65. The greenback recovered to session highs near JPY147.80 in European turnover despite the soft US rates. It stalled and may consolidatein North America. The  Australian dollar's surge extended into a fifth session today, reaching $0.6675 before the softer-than-expected CPI, which helped fuel some profit-taking. It was sold to around $0.6620. The Aussie has risen in nine of the past 12 sessions and met the (61.8%) retracement from the $0.6900-high in July found near $0.6665. A break, and especially a close below, yesterday's low slightly below $0.6600 would be a cautionary development, warning that this month's rally, from almost $0.6300 may be over. The dollar gapped lower against the Chinese yuan, reaching nearly CNY7.1175, a five-month low, before recovering to around CNY7.1280. Yesterday's low was close to CNY7.1345. The PBOC set the dollar's reference rate at CNY7.1031 (CNY7.1132 yesterday). The average projection in Bloomberg's survey was CNY7.1334.

Europe

Germany and Spain reported their figures today. German states reported softer inflation and the national estimate it due shortly. The EU harmonized measure is expected to fall for the second consecutive month and bring the year-over-year rate to 2.5% from 3.0%. That would be the lowest since June 2021. Spain's harmonized measure eased by 0.6%, which pushed the year-over-year rate to 3.2% from 3.5%. The eurozone aggregate measure is due tomorrow and is expected to fall by 0.2%, which would see the year-over-year rate ease to 2.7% from 2.9%. The median forecast in Bloomberg's survey has the core rate falling to 3.9% from 4.2%. It peaked at 5.7% in March.

While some American economists talk about the immaculate decline in inflation (without lifting unemployment), it may not be such a miracle. Europe is experiencing the same thing. It reports October unemployment tomorrow Despite the tightening of monetary policy and economic stagnation, unemployment in the eurozone has been 6.4%-6.5% since March. Before Covid struck, the eurozone’s unemployment rate was 7.5%. Germany reports November employment tomorrow and the unemployment rate has risen to 5.8% this year from 5.5% at the end of last year. Before the pandemic, Germany's unemployment rate was steady at 5.0%. Separately, Spain reported October retail sales today (4.5% year-over-year vs. 6.1% in September) while German figures are due tomorrow. Many economists are looking for the first increase in five months.

The euro rallied into the European close yesterday and follow-through buying lifted the single currency to almost $1.1010. Marginal new highs were seen today (slightly above $1.1015) before reversing lower. It is trading near $1.0970 in European turnover. Below there, nearby support is in the $1.0940-60 area. Yesterday's low was near $1.0935. Consistent with the euro's rise, the US two-year premium has fallen by 25 bp this month to mid-September levels. It has steadied today. Sterling pushed slightly above $1.2730 today and met the (61.8%) retracement of its decline from the mid-July high before profit-taking hit. Sterling was sold back to about $1.2675. Support is seen in the $1.2640-60 area. The upper Bollinger Band is around $1.2735 today. The intraday momentum indicators were oversold as European activity began and sterling found new bids. 

America

The sharp drop in US rates likely contributed to the weak reception at yesterday's $39 bln sale of seven-year note sales. Although several Fed officials spoke, it was Governor Waller's comments that seemed to spark the dramatic move lower in US interest rates, but they pushed on a door that was already open. Waller did not appear to say anything the market did not already know but he did provide a timeframe of lower inflation for 4-5 months that could get the Fed to cut, which dovetailed with what the futures market was discounted. The odds of a hike next month were near zero before and are a smidgeon closer to it now. The first cut is now fully discounted for May from almost 58% chance at the close Monday. The implied yield of the December 2024 Fed funds futures contract is about 4.34% implying bp almost 100 bp of cuts next year. Based on the current information set, this seem to be aggressive. Nearly all the Fed officials have commented on the uncertainty of policy is sufficiently restrictive, and forecasts are for solid jobs report on December 8 (~175k increase in nonfarm payroll and a 0.3% increase in average hourly pay). Fed Chair Powell speaks twice on Friday.

The US Treasury is done with new coupon issuance until December 11 when it returns with three- and 10-year offerings. The data on tap today are not typically market movers:  October inventories and preliminary estimate of US merchandise trade, and revisions to Q3 GDP. Still, retail inventories are rising at a faster rate. The median's forecast (Bloomberg) for a 0.6% rise would raise the three-month moving average to a little more than 0.8% compared with slightly more than 0.5% in the previous three months. In the year ago period, the average was around 0.2%. Wholesale inventories were drawn down from March through August and rose by 0.2% in September and are seen rising by the same in October. Recall that inventories bolstered Q3 GDP by about 1.3 percentage points. Net exports contributed almost 2.8 percentage points to Q3 GDP. The nominal goods balance is expected to be little changed in October from September $85.8 bln shortfall. The revisions to Q3 GDP are expected to be minor. The median forecast in Bloomberg's survey sees it being lifted to 5.0% from 4.9%. That brings us to the Fed's Beige Book that is prepared for next month's FOMC meeting. Look for anecdotal evidence that the economy is moderating and some easing of the labor market. It may be seen as lending credence to the prior conviction that the Fed's tightening cycle is over.

Canada's Q3 current account balance is expected to have posted a small surplus (~CAD1 bln) after four quarters of deficits. In Q3, it recorded a merchandise trade surplus of nearly CAD2.5 bln. In Q2, the merchandise trade deficit was about CAD7.1 bln. More market sensitive data is out over the next two days. Tomorrow sees September and Q3 GDP estimate. A flat September report would be the third consecutive month it has stagnated. Still, with a little bit of luck, the economy may have eked out growth of 0.1% in Q3 after a 0.2% contraction in Q2. On Friday, Canada updates the employment situation for November. Canada created 17.5k jobs in October but lost full-time positions (3.3k) for the first time since May. Its unemployment rate has trended higher from 5.0% from December 2022 through April 2023 to 5.7% in October. The participation rate, 65.6% is unchanged since April. 

The greenback's weakness is now proving sufficient to buoy the Canadian dollar. The Loonie saw its best level since early October. The US dollar fell to about CAD1.3540 today before recovering to around CAD1.3595 area. A sustained break of CAD1.3600 is potentially significant from a technical perspective. The greenback settled below its lower Bollinger Band yesterday (~CAD1.3580). The intraday momentum indicators are stretched by the greenback's recover. Banxico issues its inflation report today and it is possible the Deputy Governor Heath let the proverbial cat of out of the bag by recently suggesting that a rate cut could be delivered in Q1 24. On Monday, the US dollar made a low near MXN17.0350, but outside of this exception, it remains within the range set on November 21: ~MXN17.0660-MXN17.2690. The peso is the best performing Latam currency this month (~5.2%), but among emerging markets, excluding Russa, Poland leads (~6.40%), followed by Czech and Hungary (~5.0%).


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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…

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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),

The…

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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…

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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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