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Fade the Dollar Gains

Fade the Dollar Gains

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Overview: The S&P 500 rallied 1.6% yesterday to extend the streak to a fifth consecutive session, and the longest of the year and completed the negation of a bearish technical pattern.  However, the main feature today is a wave of profit-taking on risk assets.  Most equity markets moved lower in the Asia Pacific region. Chinese markets were a notable exception. The Shanghai edged about 0.35% higher, while the Shenzhen tacked on 1.7%.  European shares are struggling, and the Dow Jones Stoxx 600 is giving back a bit more than half of yesterday's 1.6% gain. US shares are trading heavily, setting up for around a 1.0% early loss in the S&P 500.  While Asia Pacific yields mostly eased, European 10-year benchmark yields are a little firmer.  The US 10-year yield is practically flat at 67 bp.   The dollar itself is firmer against all the major currencies, led by the Antipodeans and Norwegian krone. Emerging market currencies are also mostly weaker, with the JP Morgan Emerging Market Currency Index off around 0.4% late in the European morning.  Gold is consolidating at lower levels.  Initial support is seen ahead of $1770.  Similarly, oil has slipped lower and WTI for August delivery is testing support near $40 a barrel level after briefly poking above $41 yesterday.  

Asia Pacific

The dollar fell sharply (~0.70-0.75%) against onshore and offshore yuan yesterday but stabilized today but only after dipping below CNH7.0.  It remained below the 200-day moving average of both for the first time in three months. The inclusion of Chinese financial assets into global benchmarks has drawn almost $600 bln as of the end of Q1 20. These are still modest sums given the size of Chinese assets.  Nevertheless, many fund managers appeared underweight China, and the recent surge has caught many wrongfooted.  At the same time, investors, Chinese bonds have underperformed, as there seems to be a portfolio shift among domestic investors from bonds to stocks.    Separately, China reported that the value of its reserve holding rose by about $10.6 bln to $3.112 trillion in June.  It was the third consecutive monthly increase that puts the reserve holdings about $4.5 bln above the December 2019 levels.  

China's 10-year bond yield surged 12 bp yesterday to pop above the 3.0% level for the first time since January and edged a little higher today. The lack of new liquidity measures over the weekend and a deluge of anticipated supply offered fresh fodder for a move underway since the end of April.  Since then, the yield has risen by a little more than 50 bp.  For comparison, the US 10-year yield has edged up by about 5 bp.  The rising yield is not desirable, and a policy response may be likely if elevated yields persist, such a cut in required reserves. 

The Reserve Bank of Australia kept its cash rate target unchanged at 0.25%.  That also remains its target for three-year money.  Even as Melbourne, Australia's second-largest city re-entered lockdown mode (six weeks), the RBA sees a less severe hit to the economy that it feared earlier.  It continued to emphasize the uncertain economic outlook.  If more support is needed, it will extend its bond-buying efforts. 

In Japan, labor cash earnings were weaker than expected, falling 2.1% year-over-year in May, and it is the same decline when adjusted for inflation.  Economists had been looking for a decline half as large.  It is not surprising then that household spending was also weaker in May, falling a sharp 16.2% after an 11.1% decline in April.  Economists had forecast a little less than a 12% drop.  While there can be no doubt that the pandemic played a role, household spending in Japan has not risen since the sales tax hike was introduced at the beginning of Q3 19.  

The dollar found support near JPY107.25 and returned to yesterday's highs near JPY107.75 in Europe.  The intraday technicals readings are getting stretched. Last week's peak was near JPY108.15, but this looks a bit too far today.  We suspect early North American operators will be inclined to sell into these upticks.  The Australian dollar has traded on both sides of yesterday's range.  The close will be important from a technical perspective. A close below $0.6925 could signal near-term losses toward $0.6850.  

Europe

Germany followed its smaller than expected recovery in factory orders reported yesterday with a disappointing industrial output report.  Industrial production rose by 7.8% in May.  Economists had projected an 11.1% gain after a revised 17.5% decline in April, according to the median forecast in the Bloomberg survey.  The takeaway is that the largest economy in Europe is recovering, though a little slower than the survey day would suggest.  

France's May trade deficit yawned wider to 7.05 bln euros from 5.07 bln euros in April (initially 5.02 bln).  It is the second-largest shortfall since 2012.  However, the silver lining is that both exports and imports rose (16.8% and 20.7%, respectively) in the month.  This lends credence to the French recovery story, which appears to be running ahead of many of its trading partners.  Separately, note that in the cabinet reshuffle, Finance Minister Le Maire and Foreign Minister Le Drian retained their posts.  

UK Chancellor of the Exchequer Sunak will present to Parliament tomorrow an economic update and new measures to support the economy and jobs.   The government's furlough program, under which it pays 80% of the wages, is now supporting 12.1 mln jobs (cost ~GBP35 bln).  It is to begin winding down next month.  Separately, the government's three lending programs have lent about GBP45 bln to more than one million companies.  Among his new proposals, Sunak will reportedly launch a GBP3 bln initiative to fund a conversion to more energy-efficient public buildings.  

The euro peaked near $1.1345 yesterday and has been sold to about $1.1260 in the European morning.  It is stretched, and a bounce is likely in the North American morning.  There are 1.5 bln euros in options ($1.1265-$1.1275) that expire today.  On the upside, another 1.7 bn euros in expiring options ($1.1335-$1.1345).  Over the last couple of weeks, sterling has been capped in the $1.2530-$1.2550 area. Yesterday it peaked near $1.2520 and today has retreated to about $1.2465.  Here too, we suspect support has been found in the European morning, and some recovery is likely in North America.  

America

Another fairly subdued economic calendar is on tap for the Americas today.   The US reports the JOLTS jobs-opening survey, and four Fed officials, including the Vice-Chair Quarles, speak today.  Canada reports the IVEY survey, and a rise from May's 39.1 reading is anticipated.  Ottawa is expected to provide a budget update tomorrow.  Note that the US Supreme Court allowed a lower court ruling that is blocking the Keystone XL pipeline to remain in place over the Trump Administration's objections.  Mexico reports vehicle production and exports.  In Brazil, the results from President Bolsonaro's Covid-19 tests are awaited await after apparently showing some symptoms. 

With the foreclosure and eviction moratorium and the $600 a week extra unemployment insurance programs set to end later this month, pressure is building on Congress to take more action.  The 7.5 mln employees returning to their jobs in May and June seemed to sap some enthusiasm for another large stimulus package. Still, new closures and the slowing of re-opening efforts in the face of the increase in the number of cases, with hospitalizations, also beginning to rise,  Senate leader McConnell acknowledged that one more stimulus package will be put together in the coming weeks.  

The US dollar found support near CAD1.3520 and has recovered to about CAD1.3590 today, which nearly fulfills a (38.2%) retracement objective of the recent losses from the push above CAD1.3700 on June 26.  The next retracement is near CAD1.3620.  However, we suspect the greenback's bounce will run out of steam before getting there, and it could pullback toward the middle of the range.  With a few exceptions, the US dollar has been confined to an MXN22.00-MXN23.00 range of over the last three weeks.  We look for this range to be maintained near-term, and that suggests new peso buying will likely emerge shortly as the upper third of the range is entered.  




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Ancient technology turns plant-based cheese into ‘something we want to eat’

Credit: Photo: Department of Food Science To produce plant-based cheeses that feel and taste like dairy cheese, scientists have their sights set on fermentation….

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Credit: Photo: Department of Food Science

To produce plant-based cheeses that feel and taste like dairy cheese, scientists have their sights set on fermentation. In a new research result, University of Copenhagen scientists demonstrate the potential of fermentation for producing climate-friendly cheeses that people want to eat. 

Nearly thirty kilos of cheese are eaten by the average dairy-loving Dane every year. But increasing pressure on Earth’s resources and climate change call for our food system to turn in a more plant-based direction. As a result, scientists are looking into how to transform protein-rich plants like peas and beans into a new generation of non-dairy cheeses that possess the similar sensory properties as the dairy-based ones that humans have enjoyed for thousands of years.

Several plant-based cheeses are already on the market. The challenge is that plant proteins behave differently than milk proteins when trying to make cheese from them. To meet this challenge, producers add starch or coconut oil to harden plant cheeses, as well as an array of flavourants to make them taste like cheese.

But it turns out that this can be done with the help of nature’s smallest creatures. In a new research result from the University of Copenhagen’s Department of Food Science, researcher Carmen Masiá has succeeded in developing plant-based cheeses made from yellow pea protein with a firm texture and improved aroma profile. She was able to do so by using the same natural fermentation process with bacteria that we have used with cheeses made from milk for thousands of years.

“Fermentation is an incredibly powerful tool to develop flavour and texture in plant-based cheeses. In this study, we show that bacteria can serve to develop firmness in non-dairy cheese in a very short period of time while reducing the bean-like aroma of yellow pea protein, which is used as the main and only protein source,” explains Carmen Masiá. 

Fresh cheese after eight hours

The result builds upon a research result from last year by the same researcher, who found that yellow pea protein constituted a good “protein base” for making fermented plant-based cheese. In the new result, the researcher examined twenty four bacterial combinations made from bacterial cultures supplied by the biotech company Chr. Hansen, where Carmen Masiá is completing her Industrial PhD.

“The whole point of this study has been to combine the commercially-available bacterial cultures that are suitable for the fermentation of a plant-based raw material, and test them in a pea protein matrix to develop both taste and texture that would be suitable for a cheese-like product. And, even if some bacterial combinations performed better than others, all of them actually provided firm gels and reduced beaniness in the samples” says the researcher.

To study the behavior of the bacterial combinations, the scientist inoculated them in a protein base made of yellow pea protein. After only eight hours of incubation, the result was a firm “cheese-like gel” reminiscent of a fresh soft white cheese.

“All bacterial blends produced firm gels, which means that one can get a fermentation-induced gel without necessarily adding starch or coconut oil to the base. From an aroma perspective, we had two goals: To reduce the compounds that characterize the beaniness of yellow peas, and to produce compounds that are normally found in dairy cheese. Here we saw that some bacteria were better at producing certain volatile compounds than others, but that they all worked great to reduce beaniness – which is a very positive outcome. Furthermore, all blends acquired dairy aroma notes to different degrees” explains Carmen Masiá.

Taste and feeling is everything

The researcher points out there is still a way to go to before achieving this plant-based cheese, but that research is on the right track. According to her, tailored bacterial compositions and cultures must be developed in order to achieve the optimal cheese-like characteristics. Furthermore, the plant-based cheese might need to mature over time so that it develops flavor and character, just as dairy-based cheeses do.

Finally, the new generation of fermented plant-based cheeses must be judged by consumers, so that the flavour is perfected. All in all, this is to make plant-based cheeses so delicious that people seek them out and purchase them.

“The most challenging thing for now is that, while there are a lot of people who would like to eat plant-based cheese, they aren’t satisfied with how it tastes and feels in the mouth. In the end, this means that no matter how sustainable, nutritious, etc. a food product is, people aren’t interested in buying it if it doesn’t provide a good experience when consumed,” says Carmen Masiá, who adds:

“One needs to remember that dairy cheese production has been studied over many years, so it’s not something that we can just mimic overnight with totally different raw materials. Nevertheless, there are many scientists and companies out there doing great progress in the field; I hope that we will get closer to making non-dairy cheeses that taste good over the next few years. We are getting there.”

The study was conducted in collaboration between the Department of Food Science and microbial ingredients supplier Chr. Hansen, a bioscience company that produces ingredients for the food and pharmaceutical industries, among other things. 

What is fermentation:

Fermentation is an ancient technique which originated in China. Today, it is used to make beer, wine, cheese, pharmaceuticals and much more. Fermented foods are preserved by initiating a fermentation process in which natural lactic acid bacteria and enzymes are formed. This is done as microorganisms convert sugars in the selected food into lactic acid, acetic acid and carbon dioxide. This makes food acidic and prevents the growth of putrefactive and pathogenic bacteria.

The first textual evidence of cabbage fermentation is found in China’s oldest collection of poems, Shi Jing (Book of the Odes), which dates back to approximately 600 BC.

About the study:

  • The researchers tested twenty four different bacterial compositions on a protein base made from yellow pea protein.
  • The study shows that all of the bacterial compositions produce a firm cheese-like gel, reduced the beaniness, and produced dairy-related volatile compounds.
  • The study was conducted in collaboration between the Department of Food Science and microbial ingredients supplier Chr. Hansen, a bioscience company that manufactures microbial ingredients for the food and pharmaceutical industries.
  • The study has been published in the scientific journal Future Foods
  • The research is funded by Innovation Fund Denmark (grant 0153-00058B)

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BGI Genomics breaks new ground in Saudi Arabian precision medicine

The Saudi Society of Medical Genetics Annual Conference 2023 was held in Riyadh, Saudi Arabia, on September 29-30, 2023. As the most authoritative academic…

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The Saudi Society of Medical Genetics Annual Conference 2023 was held in Riyadh, Saudi Arabia, on September 29-30, 2023. As the most authoritative academic conference on precision medicine in the Kingdom, this conference attracted global experts worldwide.

Credit: BGI Genomics

The Saudi Society of Medical Genetics Annual Conference 2023 was held in Riyadh, Saudi Arabia, on September 29-30, 2023. As the most authoritative academic conference on precision medicine in the Kingdom, this conference attracted global experts worldwide.

One of the highlights of the conference was the presentation entitled “Spatial-temporal sequencing and some large-scale application of precision medicine technologies,” delivered by Dr. Louis (Renyuan) Luo, VP of BGI Genomics West Asia, at the invitation of the Saudi Society of Medical Genetics.

Dr. Luo’s presentation discussed the importance of spatiotemporal sequencing technology in the field of precision medicine and its potential large-scale applications, introduced the company’s case studies, such as the world’s first multi-center project of newborn genetic screening, large-scale regional noninvasive prenatal testing (NIPT) coverage and extensive early screening project of colorectal cancer at Wuhan, Hubei province, China.

Besides sharing BGI Genomics research achievements and innovative applications in enhancing medical outcomes, Dr. Luo highlighted Genalive, BGI Genomics joint venture laboratory in the Kingdom of Saudi Arabia. This is the result of a localized strategic partnership aiming to provide cutting-edge precision medicine services, promote development and contribute to improving the country’s healthcare system.

The success of Dr. Luo’s presentation paves the way for deepening future localized collaboration and innovation in Saudi Arabia. BGI Genomics will continue to support the realization of Saudi Vision 2030 through active participation in global cooperation and exchanges in the field of precision medicine to enhance patients’ health outcomes.

About BGI Genomics:

BGI Genomics, headquartered in Shenzhen, China, is the world’s leading integrated solutions provider of precision medicine. Our services cover more than 100 countries and regions, involving more than 2,300 medical institutions. In July 2017, as a subsidiary of BGI Group, BGI Genomics (300676.SZ) was officially listed on the Shenzhen Stock Exchange.


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Swiss Writer Sentenced To 60 Days In Jail For Calling Journalist A “Fat Lesbian”

Swiss Writer Sentenced To 60 Days In Jail For Calling Journalist A "Fat Lesbian"

Submitted by BlueApples,

With Switzerland being the home…

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Swiss Writer Sentenced To 60 Days In Jail For Calling Journalist A "Fat Lesbian"

Submitted by BlueApples,

With Switzerland being the home of the technocratic vanguard tasked with ushering in new world order totalitarianism in the World Economic Forum, the recent sentencing of a Swiss-French writer for what could best be described as a thought crime should come as no surprise. Writer and social commentator Alain Soral was handed a 60-day jail sentence for chastising a critic of his after he took aim at their body image and sexual orientation. Soral lashed out at the journalist by calling them a "fat lesbian" among berating them with more vitriolic criticism. A Swiss court in Lausanne determined that Soral's scornful remarks constituted criminal acts of defamation, discrimination and incitement of hatred. The sentenced ultimately handed down to the Soral was a cruel irony even more surreal than any satirical polemic social commentary he could have written.

Soral's remarks occurred two years ago when he took aim at Catherine Macherel, a journalist who prided herself in using her platform to advance her advocacy for LGBT causes. The polemicist turned to Facebook to air his grievances in a video in which he described Macherel as "unhinged" for her activism. His remarks resulted in his arrest, conviction, and sentencing to 3 months in prison in April 2021. Soral's sentence was one of the first to follow sweeping legislation in 2020 which criminalized homophobic statements by broadening the scope of existing laws against discrimination to extend its protections to people on the basis of their sexual orientation. However, Soral was initially able to escape the prison time handed down to him following a successful appeal in December 2022, instead only receiving a fine as punishment.

While Soral was initially able to evade a conviction, prosecutors were relentless in their pursuit by instigating a further appeal which would ultimately lead to the maximum sentence the court could hand down. That six month prison sentence exceeded the original three month prison term he faced. The decision to penalize Soral under the full force of the law was applauded by LGBT groups across Switzerland as a testament to the success of the country's criminalization of free speech. “This court decision is an important moment for justice and rights of LGBTQI people in Switzerland,” said Murial Waeger, co-director of the lesbian activist group LOS. Waeger would go on to opine that “The conviction of Alain Soral is a strong signal that homophobic hatred cannot be tolerated in our society.”

While Soral's conviction serves as a blueprint for the weaponization of the Swiss justice system again critics of LGBT groups, the writer is somewhat of an easy target considering his controversial past and already checkered criminal record. Before moving to Switzerland, Soral was sentenced to one year in jail 2019 in his native France for an illustration he made in 2016, Soral was charged for a cartoon he published in the notoriously satirical newspaper Charlie Hebdo. His contribution to the polemic publication was featured on a page titled "Chutzpah Hebdo" which bore an illustration of Charlie Chaplin in front of the Star of David asking "Shoah, where are you?" in a play on words the court ruled was a criminal act of Holocaust denial. Although Soral was sentenced to a year in prison, he failed to show up to court for the sentencing, instead announcing his plans to appeal the conviction before seeking refuge in Switzerland.

The illustration which led to Alain Soral being convicted of Holocaust denial.

Ultimately, the controversies which led to Soral fleeing France would follow him to Switzerland. Amidst expanding legislation across the whole of Europe leading to thousands of arrests for remarks made on the internet deemed to be hate speech, it appears that there is nowhere on the continent that Soral or any dissident challenging  the narratives approved by the ruling elite can find safe haven in any longer.

Tyler Durden Wed, 10/04/2023 - 08:30

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