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Dollar Surges into the Weekend

Overview: The dollar is surging into the weekend, amid tumbling stocks and rising rates.  The euro has been sold through $1.08 after reversing lower…



Overview: The dollar is surging into the weekend, amid tumbling stocks and rising rates.  The euro has been sold through $1.08 after reversing lower yesterday, despite the stronger than expected flash April PMI.  Poor UK consumer confidence and a sharp drop in retail sales has seen sterling sold to new lows for since November 2020, below $1.2900.  The beleaguered yen is consolidating its recent drop and remains inside the range seen Wednesday for the second consecutive session.  Most Asia Pacific equities fell though China's CSI 300 rose 0.45% to snap a five-day slide.  Europe's Stoxx 600 gapped lower and is now lower on week.  US futures are slipping lower.  European rates are a bit firmer after yesterday's surge that lifted the 10-year Gilt above 2% for the first time since 2015. The German. 2-year trade at almost 0.25%, the highest since 2014. The US 10-year yield is up around four basis points to 2.95% and the 2-year yield is up seven basis points to 2.76%.  It is up about 30 bp this week.  Most emerging market currencies are lower.  The dramatic sell-off of the Chinese yuan gained momentum.  It is about 0.6% lower to bring this week's drop to 1.8%.  It is the largest drop in several years.  Gold is off aorud $10 to almost $1940. It settled last week closer to $1978.  June WTI is consolidating in a $101-$104 range.  US natgas is slightly softer and is set to end a five-week surge.  Europe's natgas benchmark is off 2% after rallying 9% yesterday.  It is up about 3.7% this week after falling more than 14% in the previous two weeks.  Iron ore was firm today but off 3% for the week.  Copper is giving back yesterday's 1% gain and is about 1.5% lower on the week, the first weekly loss in three.  July wheat is falling for the fourth consecutive session and is around 3.5% lower this week after a 12% gain over the past couple of weeks.  

Asia Pacific

Some sensationalized reports played up the intervention angle on talks between Japan's Finance Minister Suzuki and US Treasury Secretary Yellen.   The call out from the meeting suggests the rapid yen moves were discussed, foreign exchange was not the main focus.  They reiterated the boilerplate G7/G20 stance that markets ought to determine exchange rates, but excess volatility is not desirable.  A senior IMF official acknowledged yesterday that the yen's weakness reflects economic fundamentals.  The Fed is tightening.  The BOJ is not. As we have noted central banks want exchange rates to follow monetary policy, otherwise is offsets or blunts official efforts.  

Japan's data showed an economy recovering and energy-led price pressures.  The preliminary April PMI shows slightly slower growth in manufacturing activity (53.4 vs. 54.1) and better services (50.5 vs. 49.4).  The composite rose to 50.9 from 50.3.  The headline March CPI rose to 1.2%, as expected, from 0.9%.  Excluding fresh food, its core rate, edged up to 0.8% from 0.6%.  However, excluding fresh food and energy, Japan is still in deflation (-0.7% vs. -1.0%).  The BOJ meets next week and is expected to lift its inflation forecast from the 1.1% projection in January.  

Australia’s flash April PMI shows the economy gaining momentum.  The manufacturing PMI edged up to 57.8 from 57.7.  The service PMI rose to 56.6 from 55.6.  This translated into a 56.3 composite reading after 55.1 in March.  It is the highest since last June.   After Australia's national elections next month, the central bank is expected to hike rates in June to begin the tightening cycle.  The market is pricing in a 40 bp more that would bring the cash target rate to 0.50%.  

The BOJ will continue its fixed-rate purchases of 10-year government bonds next Monday and Tuesday.  At today's operation it bought about JPY427 bln after not receiving any offers yesterday.  The dollar is consolidating against the yen and remains within the range set Wednesday (~JPY127.45-JPY129.40).  The five-day moving average is slightly above JPY128, and the greenback has not closed below it since April1.  After reversing lower yesterday, the Australian dollar has taken another leg lower today.  It is being sold through $0.7315, the (50%) retracement of the gains since the late January low near $0.6970.  The 200-day moving average is slightly below $0.7300 and the next retracement (61.8%) is closer to $0.7235.  The market may debate about the existence of a Fed put in the stock market, but China seems to have an Xi put.  After the recent slide in Chinese shares, China's Securities Regulatory Commission encouraged large financial firms to boost their allocation to stocks.  The CSI rose today for the first time in six sessions.  However, it offered no reprieve to the slumping yuan.  The sharp sell-off continued for the fourth consecutive session to bring this week's loss to 1.8%. The greenback approached CNY6.50, its highest level since last August.  The PBOC set the dollar's reference rate at CNY6.4596.  The median forecast in Bloomberg's survey was for CNY6.4645.  The sudden breakdown of the yuan has seen turnover in the offshore and options market increase dramatically.  


There has been a sharp rise in the implied yield of the December Euribor futures.  On Wednesday, the implied yield reached about 0.32% and now it is about 0.56%.  ECB President Lagarde warned of downside risks to growth but did not dissuade the market from looking for rate hikes later this year. Some reports played up the push from some hawks for a 50 bp move.  The swaps market is pricing in the first move in July and a total now of 80 bp before the end of the year.  

The eurozone's preliminary PMI defied expectations that the war in Ukraine was undermining activity. Both the manufacturing and service PMI were stronger than expected.  The manufacturing PMI softened a little (55.3 vs. 56.5) but economists had looked for a bigger pullback.  The service PMI rose to 57.7 from 55.6.  Economists had looked for a decline.  The composite rose to 55.8 (from 54.9) and is highest since last September.  German figures showed the manufacturing a little slower than expected (54.1 vs. 56.9 in March and expectations for 54.5).  The service PMI rose to 57.9 from 56.1.  Economists (Bloomberg survey) expected 55.3.  The composite eased to 54.5 from 55.1, a bit better than the 54.1 median forecast.  France more soundly beat expectations.  The manufacturing PMI rose to 55.4 from 54.7 and the service PMI rose to 58.8 from 57.4.  Both were expected to have declined.  The composite rose to 57.5 from 56.3.  It is the highest since before the pandemic.  

The UK is not as fortunate.  Today's data were disappointing beginning with the slump in the GfK consumer confidence (-38 vs. -31) but the real shocker was March retail sales.  Instead of falling 0.3% as the median forecast (Bloomberg's survey) had it, they tumbled 1.4% and the February series was revised to -0.5% from 0.3%.  Excluding gasoline, retail sales fell 1.1% after a revised 0.9% drop in February.  The flash PMI also disappointed.  The manufacturing PMI held up better than expected (edging up to 55.3 from 55.2), but the service PMI dropped to 58.3 from 62.6 (median forecast was for 60).  The composite PMI fell to 57.6 from 60.9. This does not offer a good economic backdrop for the local elections early next month.  Still, after BOE (Bailey and Mann) comments yesterday, the swaps market is pricing a little more than a 1-in-3 chance of a 50 bp hike on May 5. At the end of last week, it was about a 1-in-4 chance. 

The euro reversed lower yesterday after rising to about $1.0925 on the back of some hawkish ECB comments.  It lost a cent from the high, and follow-through selling today saw the single currency slip below $1.08.  The recent lows were around $1.0760.  The low from March 2020 was near $1.06 and a retest may be the most likely scenario.  Sterling has approached the $1.2830 target we have highlighted.  It is the halfway point of the rally since the March 2020 low near $1.14 to last year's high around $1.4250.  A break of that area, signal a test on $1.27, but the important retracement (61.8%) is closer to $1.25.  


Federal Reserve Chair Powell's comments yesterday reaffirmed what the market has already come to know.  The Fed chief endorse the quicker pace of tightening.  He qualified quicker with "a little", implying a 50 bp move and not the 75 bp move that St. Louis Fed Bullard suggested may be needed, though it was not his base case.  The market has fully taken on board Powell's "front-end loading" which is understood to mean now three 50 bp rate hike (May, June, and July).  The market now sees the terminal rate for Fed funds near 3.50% next year.  It is still a dynamic situation.  The implied yield of the December Fed funds futures is rising today for the sixth consecutive session.  It has risen by slightly more than 35 bp this week.  The flash PMI headlines may draw attention but barring a significant downside shock, it may not have much impact.  

Bank of Canada Governor Macklem also appeared to endorse a faster adjustment of monetary policy.  The swaps market has a 50 bp hike at the next four meetings (June, July, September, and October) discounted.  The Governor of Mexico's central bank suggested it may have to move quicker as well.  Today's Mexico reports the bi-weekly CPI through mid-April.  Headline and core readings above 7% will reinforce ideas that it will hike by at least 50 bp at next month's meeting (May 12).  The swaps market has about 200 bp of tightening over the next six months.  

The US dollar initially traded lower to CAD1.2460 yesterday, but as equities reversed lower, the greenback caught a bid.  It reversed higher to around CAD1.2590 and today has reached a new high for the months around CAD1.2680.  The CAD1.2700 is the (61.8%) retracement target of the decline since the March 15 high (~CAD1.2870).  A move above CAD1.2700 could target CAD1.2780 initially. The peso's sell-off is extending too.  The greenback began the week near MXN19.90 and is trading now around MXN20.35 in the European morning. It is at its best level since March 22.  The dollar is approaching the MXN20.39 area, which holds the (38.2%) retracement objective of the slide that began last month.  The potential double bottom pattern and the next retracement target (50%) are near MXN20.60.  


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Repeated COVID-19 Vaccination Weakens Immune System: Study

Repeated COVID-19 Vaccination Weakens Immune System: Study

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

Repeated COVID-19…



Repeated COVID-19 Vaccination Weakens Immune System: Study

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

Repeated COVID-19 vaccination weakens the immune system, potentially making people susceptible to life-threatening conditions such as cancer, according to a new study.

A man is given a COVID-19 vaccine in Chelsea, Mass., on Feb. 16, 2021. (Joseph Prezioso/AFP via Getty Images)

Multiple doses of the Pfizer or Moderna COVID-19 vaccines lead to higher levels of antibodies called IgG4, which can provide a protective effect. But a growing body of evidence indicates that the “abnormally high levels” of the immunoglobulin subclass actually make the immune system more susceptible to the COVID-19 spike protein in the vaccines, researchers said in the paper.

They pointed to experiments performed on mice that found multiple boosters on top of the initial COVID-19 vaccination “significantly decreased” protection against both the Delta and Omicron virus variants and testing that found a spike in IgG4 levels after repeat Pfizer vaccination, suggesting immune exhaustion.

Studies have detected higher levels of IgG4 in people who died with COVID-19 when compared to those who recovered and linked the levels with another known determinant of COVID-19-related mortality, the researchers also noted.

A review of the literature also showed that vaccines against HIV, malaria, and pertussis also induce the production of IgG4.

“In sum, COVID-19 epidemiological studies cited in our work plus the failure of HIV, Malaria, and Pertussis vaccines constitute irrefutable evidence demonstrating that an increase in IgG4 levels impairs immune responses,” Alberto Rubio Casillas, a researcher with the biology laboratory at the University of Guadalajara in Mexico and one of the authors of the new paper, told The Epoch Times via email.

The paper was published by the journal Vaccines in May.

Pfizer and Moderna officials didn’t respond to requests for comment.

Both companies utilize messenger RNA (mRNA) technology in their vaccines.

Dr. Robert Malone, who helped invent the technology, said the paper illustrates why he’s been warning about the negative effects of repeated vaccination.

“I warned that more jabs can result in what’s called high zone tolerance, of which the switch to IgG4 is one of the mechanisms. And now we have data that clearly demonstrate that’s occurring in the case of this as well as some other vaccines,” Malone, who wasn’t involved with the study, told The Epoch Times.

So it’s basically validating that this rush to administer and re-administer without having solid data to back those decisions was highly counterproductive and appears to have resulted in a cohort of people that are actually more susceptible to the disease.”

Possible Problems

The weakened immune systems brought about by repeated vaccination could lead to serious problems, including cancer, the researchers said.

Read more here...

Tyler Durden Sat, 06/03/2023 - 22:30

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Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Authored by Jessie Zhang via Thje Epoch…



Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Authored by Jessie Zhang via Thje Epoch Times (emphasis ours),

An Australian and Swedish investigation has found that among the hundreds of COVID-19 research papers that have been withdrawn, a retracted study linking the drug hydroxychloroquine to increased mortality was the most cited paper.

Hydroxychloroquine sulphate tablets. (Memories Over Mocha/Shutterstock)

With 1,360 citations at the time of data extraction, researchers in the field were still referring to the paper “Hydroxychloroquine or chloroquine with or without a macrolide for treatment of COVID-19: a multinational registry analysis” long after it was retracted.

Authors of the analysis involving the University of Wollongong, Linköping University, and Western Sydney Local Health District wrote (pdf) that “most researchers who cite retracted research do not identify that the paper is retracted, even when submitting long after the paper has been withdrawn.”

“This has serious implications for the reliability of published research and the academic literature, which need to be addressed,” they said.

Retraction is the final safeguard against academic error and misconduct, and thus a cornerstone of the entire process of knowledge generation.”

Scientists Question Findings

Over 100 medical professionals wrote an open letter, raising ten major issues with the paper.

These included the fact that there was “no ethics review” and “unusually small reported variances in baseline variables, interventions and outcomes,” as well as “no mention of the countries or hospitals that contributed to the data source and no acknowledgments to their contributions.”

A bottle of Hydroxychloroquine at the Medicine Shoppe in Wilkes-Barre, Pa on March 31, 2020. Some politicians and doctors were sparring over whether to use hydroxychloroquine against the new coronavirus, with many scientists saying the evidence is too thin to recommend it yet. (Mark Moran/The Citizens’ Voice via AP)

Other concerns were that the average daily doses of hydroxychloroquine were higher than the FDA-recommended amounts, which would present skewed results.

They also found that the data that was reportedly from Australian patients did not seem to match data from the Australian government.

Eventually, the study led the World Health Organization to temporarily suspend the trial of hydroxychloroquine on COVID-19 patients and to the UK regulatory body, MHRA, requesting the temporary pause of recruitment into all hydroxychloroquine trials in the UK.

France also changed its national recommendation of the drug in COVID-19 treatments and halted all trials.

Currently, a total of 337 research papers on COVID-19 have been retracted, according to Retraction Watch.

Further retractions are expected as the investigation of proceeds.

Tyler Durden Sat, 06/03/2023 - 17:30

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Complying, Not Defying: Twitter And The EU Censorship Code

Complying, Not Defying: Twitter And The EU Censorship Code

Authored by ‘Robert Kogon’ via The Brownstone Institute,

So, word has it that…



Complying, Not Defying: Twitter And The EU Censorship Code

Authored by 'Robert Kogon' via The Brownstone Institute,

So, word has it that Twitter has withdrawn from the EU’s Code of Practice on Disinformation, a fact that appears only to be known thanks to a couple of pissy tweets from EU officials. I cannot help but wonder if this is not finally Elon Musk’s response to the question I asked in my article here several weeks ago: namely, how can a self-styled “free-speech absolutist” be part of a “Permanent Task-Force on Disinformation” that is precisely a creation of the EU’s Code?

But does it matter? The answer is no. The withdrawal of Twitter’s signature from the Code is a highly theatrical, but essentially empty gesture, which will undoubtedly serve to shore up Musk’s free speech bad-boy bona fides, but has virtually no practical consequences. 

This is because: (1) as I have discussed in various articles (for instance, here and here), the effect of the EU’s Digital Services Act (DSA) is to render the hitherto ostensibly voluntary commitments undertaken in the Code obligatory for all so-called Very Large Online Platforms (VLOPs) and (2) as discussed here, the European Commission just designated a whole series of entities as VLOPs that were never signatories of the Code.

Twitter is thus in no different a position than Amazon, Apple and Wikipedia, none of which were ever signatories of the Code, but all of which will be expected by the EU to comply with its censorship requirements on the pain of ruinous fines. 

As EU officials like to put it, the DSA transformed the “code of practice” into a code of conduct: i.e. you had better do it or else.

Compliance is thus not a matter of a signature. The proof of the pudding is in the eating. And the fact of the matter is that Musk and Twitter are complying with the EU’s censorship requirements. Much of the programming that has gone into the Twitter algorithm is obviously designed for this very purpose.

What, for instance, are the below lines of code?

They are “safety labels” that have been included in the algorithm to restrict the visibility of alleged “misinformation.” Furthermore – leaving aside the handy “generic misinfo” catch-all – the general categories of “misinformation” used exactly mirror the main areas of concern targeted by the EU in its efforts to “regulate” online speech: “medical misinfo” in the context of the COVID-19 pandemic, “civic misinfo” in the context of issues of electoral integrity, and “crisis misinfo” in the context of the war in Ukraine.

Indeed, as Elon Musk and his lawyers certainly know, the final version of the DSA includes a “crisis response mechanism,” (Art. 36) which is clearly modeled on the European Commission’s initially ad hoc response to the Ukraine crisis and which requires platforms to take special measures to mitigate crisis-related “misinformation.” 

In its January submission to the EU (see reports archive here), in the section devoted precisely to its efforts to combat Ukraine-war-related “misinformation,” Twitter writes (pp. 70-71): 

“We … use a combination of technology and human review to proactively identify misleading information. More than 65% of violative content is surfaced by our automated systems, and the majority of remaining content we enforce on is surfaced through regular monitoring by our internal teams and our work with trusted partners.”

How is this not compliance? Or at least a very vigorous effort to achieve it? And the methodology outlined is presumably used to “enforce on” other types of “mis-“ or “disinformation” as well.

Finally, what is the below notice, which many Twitter users recently received informing them that they are not eligible to participate in Twitter Ads because their account as such has been labeled “organic misinformation?”

Why in the world would Twitter turn away advertising business? The answer is simple and straightforward: because none other than the EU’s Code of Practice on Disinformation requires it to do so in connection with the so-called “demonetization of disinformation.” 

Thus, section II(d-f) of the Code reads:

(d) The Signatories recognise the need to combat the dissemination of harmful Disinformation via advertising messages and services.

(e) Relevant Signatories recognise the need to take granular and tailored action to address Disinformation risks linked to the distribution of online advertising. Actions will be applicable to all online advertising.

(f) Relevant Signatories recognise the importance of implementing policies and processes not to accept remuneration from Disinformation actors, or otherwise promote such accounts and websites.

So, in short, vis-à-vis the EU and its Code, Twitter is complying, not defying. Removing Twitter’s signature from the Code when its signature is no longer required on the Code anyway is not defiance. Among other things, not labeling content and/or users as “misinformation,” not restricting the visibility of content and/or users so labeled, and accepting advertising from whomever has the money to pay would be defiance.

But the EU’s response to such defiance would undoubtedly be something more than tweets. It would be the mobilization of the entire punitive arsenal contained in the DSA and, in particular, the threat or application of the DSA fines of 6 percent of the company’s global turnover.

It is not enough to (symbolically) withdraw from the Code of Practice to defy the EU. Defying the EU would require Twitter to withdraw from the EU altogether.

Tyler Durden Sat, 06/03/2023 - 10:30

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