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Euro Bounces Back, but The Turkish Lira Remains Unloved

Overview:  The US dollar’s sharp upside momentum stalled yesterday near JPY115 and after the euro met (and surpassed) a key retracement level slightly below $1.1300.  Led by the Antipodean currencies today, the greenback is mostly trading with a heavier..

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Overview:  The US dollar's sharp upside momentum stalled yesterday near JPY115 and after the euro met (and surpassed) a key retracement level slightly below $1.1300.  Led by the Antipodean currencies today, the greenback is mostly trading with a heavier bias.  Among the majors, helped by a steadying of US yields, the yen is soft.  In the emerging market space, the Turkish lira continues its headlong plunge while the yuan softened and the Mexican peso is off.  Hungary's central bank surprised with a 70 bp hike in the one-week deposit rate.  The JP Morgan Emerging Market Currency Index is posting a small gain through the European morning.  Disappointing tech results in China (Baidu and Bilibili) weighed on Chinese shares, but most markets in the region fell but Australia and Taiwan.  Europe's Stoxx 600 is struggling to extend the six-day advance.  US futures are also a little firmer.  After yesterday's four basis point pullback, the US 10-year yield is little changed near 1.58%.  European yields are 1-2 bp lower.  Gold remains within Tuesday's range (~$1850-$1877), but the moment seen earlier last week has faded, and the yellow metal is trading choppily in a consolidative phase.  The prospect of a coordinated sale of oil after China's announced it would tap its reserves for the second time saw the January WTI contract fall to $76.45, its lowest level since early October. Still, the price has stabilized in the European morning around $77 a barrel.  The benchmark European natural gas contract (Netherlands) has extended yesterday's pullback.  It settled a little below 75 euros last week, and after two days of declines, it is above 92 euros.  Iron ore is also falling for a second session and is now lower on the week.  Note that it settled October a little above $104 and is now around $86.40. Copper is lower for the fourth consecutive session.  It is trading around $424, off $20.5 this week.  

Asia Pacific 

Japan is expected to unveil the much-awaited supplemental budget tomorrow.  Prime Minister Kishida will get one bite of the proverbial apple, and he is expected to go big.  Talk of the size of the overall package has risen in recent days.  The Nikkei seemed to suggest a JPY79 trillion (~$690 bln) effort, while others report something on the magnitude of JPY56 trillion.  Still, it is recognized that part of the budget will include funds that were earmarked under previous budgets, which have not been spent.  The clear water is seen around JPY32 trillion.  Japan is one of the few countries that will provide new fiscal support.  

New Zealand's central bank meets next week.  It is widely expected to hike rates for the second time in the cycle.   The swaps market has 200 bp of tightening priced in for the next 12 months.  The cash rate stands at 50 bp.  Earlier today, the central bank reported that the two-year inflation expectations (business survey)  rose to 2.96% in Q4 from 2.27% in Q3.  It is the highest in a decade.  The one-year expectation rose to 3.7% from 3.02%.  Still, with other countries slower to raise rates, a 50 bp move may not be necessary.  The Kiwi rose almost 4% last month and has given back nearly half so far in November.  Separately, the Philippines and Indonesia central banks met and left rates steady as expected.  

The dollar posted a key reversal against the yen yesterday.  It made a new high for the move, a few pips below JPY115.00, and proceeded to sell-off and close (slightly) below Tuesday's low.  However, follow-through selling has been limited, and the greenback is trading firmly but may be absorbing sales related to the $1.34 bln in options in the JPY114.20-JPY114.25 area that expire today.  The Australian dollar initially extended its losses to almost $0.7250, where a A$575 mln option expires today. However, since early in the Asian session, it has posted corrective upticks and looks set to challenge yesterday's high and five-day moving average a little above $0.7300.   The Chinese yuan appears to have begun consolidating.  It remains in the range set on Tuesday that saw the dollar trade roughly between CNY6.3670 and CNY6.3965.  The small gain is the third this week.  The PBOC fix was at CNY6.3803, a bit firmer compared with expectations (CNY6.3786 in the Bloomberg survey) than seen recently.  Note that there is a $1 bln option at CNY6.3830 that expires today.  

Europe

The auto industry in Europe remained under pressure last month, though the US reported its first increase in sales in six months.  New car registration in Europe, including the UK, is a proxy for sales.  They tumbled by slightly more than 30% year-over-year in October.  This is considerably weaker than expected and is the poorest since May 2020.  The shortage of semiconductors is the likely culprit, and there are some signs of improvement. 

The EC will propose modest tweaks in rules about how funds outside of its borders (UK) can be managed while avoiding more dramatic changes.   Draft proposals call for at least two full-time senior managers in the EU and for regulators to be notified when most of their assets are managed outside the EU.  These seem quite minor and unlikely to disrupt the UK fund business.  Earlier this month, the EU Commissioner for Financial Services indicated that temporary waivers would be granted to allow EU banks and money managers to clear trades in the UK. Meanwhile, the dispute over fishing appears to be worsening (Denmark complaining, not just France), and the UK continues to threaten to invoke Article 16.  Former Prime Minister Blair says he will propose a solution to the dispute over the Northern Ireland Protocol in the coming days. 

Hungary delivered a 30 bp hike in the base rate earlier this week, which now stands at 2.10%.  It warned that it could make a separate decision on its one-week deposit rate.  It did so today, hiking it 70 bp to 2.50%.  It is a hawkish move that sent the forint higher.  Separately, as widely expected, the Central Bank of the Republic of Turkey cut the one-week repo rate 100 bps to 15%. As a result, the lira is weaker for the eighth consecutive session.  The lira's weakness not only fuels inflation but also will challenge companies and banks with foreign exchange exposure.  The dollar finished last month near TRY9.60 and after the rate hike, pushed above TRY10.97 before stabilizing.  

The euro overshot the (61.8%) retracement target of the rally that took it from near $1.0640 in March 2020 to high on January 6, around $1.2350.  That retracement target was about $1.1290, and the euro fell to around $1.1265 yesterday. It recovered to new session highs early in North America yesterday (~$1.1330), leaving bullish hammer candlestick, and follow-through buying lifted it to $1.1345 today.  The combination of higher inflation and stronger retail sales this week have helped sterling to recover.  It had traded near $1.3350 at the end of last week and has barely traded below $1.34 this week.  Indeed, sterling is rising today for the fifth consecutive session, the longest advance in nearly seven months.  It poked above $1.35, where an option for about GBP345 mln will expire today.  A convincing move above $1.3515 could signal another cent advance.  The euro slipped to below GBP0.8385 today before recovering.  It is testing the GBP0.8400, which holds options for 1.1 bln euros that also expires today.  

America

Leave aside the gaffes by President Biden over Taiwan.  Bloomberg counts four such verbal blunders that have required official walk back or explanation or clarification.  Reports indicate that Biden probed Xi about oil sales.  China has intervened in the commodities (industrial metals) and crude oil market recently.  Today it indicated it will provide more oil from its strategic reserves.  The September is action 7.1 mln barrels, according to reports, and privately sold more.  It is unclear whether today's sales were planned or grew out of the "virtual summit."  Still, it puts the ball back into the US court.  If the US does not sell or lend oil from its strategic reserves, it will look bad after China's move.  On the other hand, its own agency (EIA) projects that it may not be needed as oil will be in oversupply shortly.  Moreover, the pain for consumers is coming from gasoline prices, not oil per se.  Drawing down strategic reserves may not help the gasoline market.  Apparently, Japan has been approached by the US about coordinating the release of oil, though Europe was not. 

The US reports weekly initial jobless claims today.  They have fallen for six consecutive weeks, and at 267k, it is the lowest since the pandemic struck.   That said, at the end of 2019, there were below 220k.  The Philadelphia and Kansas City Feds publish their November survey results.  Both surprised last month, with the former on the downside and the latter on the upside.  This time it may be the other way around, with the Philly survey showing strength and the KC survey softer.  Canada reports its monthly portfolio flow data ahead of tomorrow's retail sales report.  Mexico and Brazil have light economic calendars.  

Canada's Prime Minister Trudeau and Mexico's President AMLO visit Washington today for the North America's Leaders Summit.  There is tension among the "three amigos."  The Build Back Better US initiative contains several elements that favor American producers. A key one is that substantial tax break for Americans buying electric vehicles if they are made in the US.  This would seem to put Canada and Mexico at a disadvantage, given the integration of the auto sector on a continental basis. Mexico and Canada are also concerned that the Biden Administration's interpretation of the domestic content requirement in the USMCA treaty is also narrow and puts them at a disadvantage.   Canada is also concerned about the pipelines after Biden nixed the Keystone Pipeline in one of his first acts in office, and the Line 5 pipeline is being challenged by Michigan.  The US, and to a less extent, Canada, is worried about the efforts by AMLO to increase the power of the state sector energy companies (oil and electricity), deterring private sector efforts.  The US may try pressing against this on environmental grounds.  Climate and immigration are reportedly on the top of today's agenda. 

The US dollar reversed higher against the Canadian dollar on Tuesday, posting an outside up day.  Follow-through buying yesterday lifted the greenback a little above CAD1.2620.  It ticked ever so slightly higher today but has come back offered.  Support is seen in the CAD1.2555-CAD1.2575 area.  The $1.04 bln option at CAD1.25 that expires today is too far away to be impactful. Meanwhile, the US dollar remains within Tuesday's range against the Mexican peso (~MXN20.56-MXN20.85).  This range looks set to hold today.  


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CDC Now Recommends COVID Testing For All Domestic Air Travel, Including The Vaccinated

CDC Now Recommends COVID Testing For All Domestic Air Travel, Including The Vaccinated

Authored by Jack Phillips via The Epoch Times,

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CDC Now Recommends COVID Testing For All Domestic Air Travel, Including The Vaccinated

Authored by Jack Phillips via The Epoch Times,

The Centers for Disease Control and Prevention (CDC) is recommending that all domestic travelers undergo COVID-19 testing before and after they travel - regardless of vaccination status.

In an update on the agency’s website, anyone traveling within the United States may want to consider “getting tested as close to the time of departure as possible,” and no more than three days before a flight. It previously only recommended testing for people who have not received COVID-19 vaccines or up-to-date booster shots.

The CDC update is also recommending that people take a test before or after a trip if they went to crowded spaces “while not wearing a well-fitting mask or respirator.”

In April, a Florida federal judge struck down the CDC mandate that required people to wear masks inside airports or on airplanes. Justice Department officials have signaled they will challenge the rule, implemented after President Joe Biden took office in early 2021, in court.

A spokesperson for the agency told AFAR Magazine on May 19 that “COVID-19 vaccines are effective at preventing severe disease and death,” but added, “since vaccines are not 100 percent effective at preventing infection, some people who are up to date can still get COVID-19.”

“People who are up to date with their COVID-19 vaccines may feel well and not have symptoms but still can be infected and spread the virus to others,” the spokesperson said.

In January of this year, the CDC also implemented a change to its international travel rule, requiring plane passengers aged 2 and older to show a negative COVID-19 test from no more than a day before boarding a flight or proof of recovery from COVID-19 within the previous 90 days. Foreign nationals have to show proof of COVID-19 vaccination as well.

Neither the CDC nor the White House has given any public indication of when the mandatory testing rule for international travelers will be relaxed. Travel groups have pushed for that rule to be removed for months now.

In a letter to the White House, a group representing more than 250 organizations called for an end to the rule, saying it’s only caused “slow economic recovery of the business and international travel sectors.”

After the federal judge’s order was handed down last month, the CDC issued a new recommendation that people inside airports and airplanes wear masks, despite nearly all major airliners having scrapped enforcement.

And during a news briefing last week, CDC Director Rochelle Walensky, who has been criticized for her agency’s messaging during the COVID-19 pandemic, said that people living in counties that the agency deems to have high COVID-19 transmission should wear masks in indoor settings.

Tyler Durden Mon, 05/23/2022 - 17:40

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Spread & Containment

How many bots are on Twitter? The question is difficult to answer and misses the point

Elon Musk’s focus on the number of bots on Twitter, whether genuine or a distraction, does little to address the problems of misinformation and spam….

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Yes, worry about Twitter, but don't worry whether there are hordes of spambots running rampant there. gremlin/E+ via Getty Images

Twitter reports that fewer than 5% of accounts are fakes or spammers, commonly referred to as “bots.” Since his offer to buy Twitter was accepted, Elon Musk has repeatedly questioned these estimates, even dismissing Chief Executive Officer Parag Agrawal’s public response.

Later, Musk put the deal on hold and demanded more proof.

So why are people arguing about the percentage of bot accounts on Twitter?

As the creators of Botometer, a widely used bot detection tool, our group at the Indiana University Observatory on Social Media has been studying inauthentic accounts and manipulation on social media for over a decade. We brought the concept of the “social bot” to the foreground and first estimated their prevalence on Twitter in 2017.

Based on our knowledge and experience, we believe that estimating the percentage of bots on Twitter has become a very difficult task, and debating the accuracy of the estimate might be missing the point. Here is why.

What, exactly, is a bot?

To measure the prevalence of problematic accounts on Twitter, a clear definition of the targets is necessary. Common terms such as “fake accounts,” “spam accounts” and “bots” are used interchangeably, but they have different meanings. Fake or false accounts are those that impersonate people. Accounts that mass-produce unsolicited promotional content are defined as spammers. Bots, on the other hand, are accounts controlled in part by software; they may post content or carry out simple interactions, like retweeting, automatically.

These types of accounts often overlap. For instance, you can create a bot that impersonates a human to post spam automatically. Such an account is simultaneously a bot, a spammer and a fake. But not every fake account is a bot or a spammer, and vice versa. Coming up with an estimate without a clear definition only yields misleading results.

Defining and distinguishing account types can also inform proper interventions. Fake and spam accounts degrade the online environment and violate platform policy. Malicious bots are used to spread misinformation, inflate popularity, exacerbate conflict through negative and inflammatory content, manipulate opinions, influence elections, conduct financial fraud and disrupt communication. However, some bots can be harmless or even useful, for example by helping disseminate news, delivering disaster alerts and conducting research.

Simply banning all bots is not in the best interest of social media users.

For simplicity, researchers use the term “inauthentic accounts” to refer to the collection of fake accounts, spammers and malicious bots. This is also the definition Twitter appears to be using. However, it is unclear what Musk has in mind.

Hard to count

Even when a consensus is reached on a definition, there are still technical challenges to estimating prevalence.

a network graph showing a circle composed of groups of colored dots with lines connecting some of the dots
Networks of coordinated accounts spreading COVID-19 information from low-credibility sources on Twitter in 2020. Pik-Mai Hui

External researchers do not have access to the same data as Twitter, such as IP addresses and phone numbers. This hinders the public’s ability to identify inauthentic accounts. But even Twitter acknowledges that the actual number of inauthentic accounts could be higher than it has estimated, because detection is challenging.

Inauthentic accounts evolve and develop new tactics to evade detection. For example, some fake accounts use AI-generated faces as their profiles. These faces can be indistinguishable from real ones, even to humans. Identifying such accounts is hard and requires new technologies.

Another difficulty is posed by coordinated accounts that appear to be normal individually but act so similarly to each other that they are almost certainly controlled by a single entity. Yet they are like needles in the haystack of hundreds of millions of daily tweets.

Finally, inauthentic accounts can evade detection by techniques like swapping handles or automatically posting and deleting large volumes of content.

The distinction between inauthentic and genuine accounts gets more and more blurry. Accounts can be hacked, bought or rented, and some users “donate” their credentials to organizations who post on their behalf. As a result, so-called “cyborg” accounts are controlled by both algorithms and humans. Similarly, spammers sometimes post legitimate content to obscure their activity.

We have observed a broad spectrum of behaviors mixing the characteristics of bots and people. Estimating the prevalence of inauthentic accounts requires applying a simplistic binary classification: authentic or inauthentic account. No matter where the line is drawn, mistakes are inevitable.

Missing the big picture

The focus of the recent debate on estimating the number of Twitter bots oversimplifies the issue and misses the point of quantifying the harm of online abuse and manipulation by inauthentic accounts.

screenshot of a web form
Screenshot of the BotAmp application comparing likely bot activity around two topics on Twitter. Kaicheng Yang

Through BotAmp, a new tool from the Botometer family that anyone with a Twitter account can use, we have found that the presence of automated activity is not evenly distributed. For instance, the discussion about cryptocurrencies tends to show more bot activity than the discussion about cats. Therefore, whether the overall prevalence is 5% or 20% makes little difference to individual users; their experiences with these accounts depend on whom they follow and the topics they care about.

Recent evidence suggests that inauthentic accounts might not be the only culprits responsible for the spread of misinformation, hate speech, polarization and radicalization. These issues typically involve many human users. For instance, our analysis shows that misinformation about COVID-19 was disseminated overtly on both Twitter and Facebook by verified, high-profile accounts.

Even if it were possible to precisely estimate the prevalence of inauthentic accounts, this would do little to solve these problems. A meaningful first step would be to acknowledge the complex nature of these issues. This will help social media platforms and policymakers develop meaningful responses.

Filippo Menczer receives funding from Knight Foundation, Craig Newmark Philanthropies, Open Technology Fund, and DoD. He owns a Tesla.

Kai-Cheng Yang does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Spread & Containment

Monkeypox Outbreak Primarily Spreading Via Sexual Contact: WHO Officials

Monkeypox Outbreak Primarily Spreading Via Sexual Contact: WHO Officials

Authored by Jack Phillips via The Epoch Times (emphasis ours),

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Monkeypox Outbreak Primarily Spreading Via Sexual Contact: WHO Officials

Authored by Jack Phillips via The Epoch Times (emphasis ours),

The recent outbreak of the monkeypox virus in North America and Europe is primarily spreading through sex, according to World Health Organization (WHO) officials on Monday, while confirming about 200 cases so far.

The virus itself is not a sexually transmitted infection, but WHO officials said the recent surge in cases is linked to homosexual men. However, they said that anyone can contract monkeypox, which is generally confined to Central and West Africa.

“We’ve seen a few cases in Europe over the last five years, just in travelers, but this is the first time we’re seeing cases across many countries at the same time in people who have not traveled to the endemic regions in Africa,” Dr. Rosamund Lewis, who runs WHO’s smallpox research, said in a streaming event on social media.

So far, the United States has confirmed at least two cases and a third suspected case is being investigated by officials in Florida. The cases have been reported in New York City and Massachusetts.

Many diseases can be spread through sexual contact. You could get a cough or a cold through sexual contact, but it doesn’t mean that it’s a sexually transmitted disease,” Andy Seale, who advises WHO on HIV, hepatitis, and other sexually transmitted diseases, or STDs. Seale said monkeypox isn’t considered an STD.

Meanwhile, Dr. David Heymann, who chaired a meeting of the World Health Organization’s advisory group on infectious disease, told The Associated Press that the leading theory to explain the spread of the disease was sexual transmission at events held in Spain and Belgium. Monkeypox has not previously triggered widespread outbreaks beyond Africa, where it is endemic in animals.

We know monkeypox can spread when there is close contact with the lesions of someone who is infected, and it looks like sexual contact has now amplified that transmission,” said Heymann.

“It’s very possible there was somebody who got infected, developed lesions … and then spread it to others when there was sexual or close, physical contact,” Heymann said, adding that “these international events … seeded the outbreak around the world, into the U.S., and other European countries.

*  *  *

[ZH: as Michael Snyder notes, however]

Of course sexual activity is not the only way that monkeypox can be spread.

Officials at the WHO need to make that very clear.

But so far authorities have identified two “superspreader events” which seem to have been catalysts for this global outbreak. 

One was a pride festival in the Canary Islands

The Canaria Pride festival, held in the town of Maspalomas between May 5 and 15, has become a hotspot for the monkeypox outbreak, reports El País.

The massive party was attended by over 80,000 people, including three Italian men who later tested positive for the virus.

A health source told the newspaper: “Among the 30 or so diagnosed in Madrid, there are several who attended the event, although it is not yet possible to know if one of them is patient zero of this outbreak or if they all got infected there.”

And the other was a fetish festival in Antwerp, Belgium

Many of the patients who have come forward so far are gay men and Belgium’s three confirmed cases of monkeypox have been linked to a large-scale fetish festival in the port city of Antwerp. Kuipers said in his briefing that while a notable number of men who have sex with men are among the patients the virus is ‘not confined to them’. The virus can be spread via mucus membranes in the mouth, nose and eyes or via open wounds.

As we move into the summer months, the WHO is warning that similar events could cause the outbreak to accelerate even more

Now the World Health Organization is warning that summer festivals and mass gatherings could accelerate the spread of monkeypox.

“As we enter the summer season in the European region, with mass gatherings, festivals and parties, I am concerned that transmission could accelerate, as the cases currently being detected are among those engaging in sexual activity, and the symptoms are unfamiliar to many,” said Dr Hans Kluge, WHO regional director for Europe.

But even if health authorities do a great job of explaining the dangers, will people avoid engaging in high risk activities?

Of course not.

Another very interesting thing that has come to light is the fact that an international biosecurity conference that was held in Munich in March 2021 actually simulated the type of scenario that we are facing now

Elite media outlets around the world are on red alert over the world’s first-ever global outbreak of Monkeypox in mid-May 2022—just one year after an international biosecurity conference in Munich held a simulation of a “global pandemic involving an unusual strain of Monkeypox” beginning in mid-May 2022.

*  *  *

Last week, officials in Belgium said they would implement a mandatory, 21-day quarantine for individuals who contracted monkeypox. Germany has four confirmed cases linked to exposure at “party events … where sexual activity took place” in Spain’s Canary Islands and in Berlin, according to a government report to lawmakers obtained by the AP.

This is not COVID,” Heymann told AP. “We need to slow it down, but it does not spread in the air and we have vaccines to protect against it.

Heymann said studies should be conducted rapidly to determine if monkeypox could be spread by people without symptoms and that populations at risk of the disease should take precautions to protect themselves.

Symptoms include fever, body aches, and rashes. Though related to the smallpox virus, symptoms are typically less severe for monkeypox. The latter is notably distinguished from smallpox by the appearance of swollen lymph nodes during the symptomatic phase of the virus, immediately preceding a swollen rash that spreads to the inside of the mouth and the hands and feet.

Tyler Durden Mon, 05/23/2022 - 16:20

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