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Futures Grind Higher Ahead Of Fed Hike Amid Continued Regional Bank Jitters, Oil Exten

Futures Grind Higher Ahead Of Fed Hike Amid Continued Regional Bank Jitters, Oil Exten

S&P 500 futures are marginally higher on the day…

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Futures Grind Higher Ahead Of Fed Hike Amid Continued Regional Bank Jitters, Oil Exten

S&P 500 futures are marginally higher on the day despite renewed pre-market weakness from US regional banks and a continued plunge in crude, which sent WTI futures lower by more than 3% on the day and below $70 per barrel on demand worries as the global economy slows. Contracts on the S&P 500 edged 0.1% higher while those on the Nasdaq 100 gained 0.2% by 7:30 a.m. ET, bouncing from yesterday’s losses ahead of the Fed decision. Treasury yields are lower, as traders seek out havens, while the Bloomberg dollar index weakened as traders eye recession risks alongside a potential pause in interest rate hikes. Meanwhile, most metals, including gold, decline slightly.

In premarket trading, regional banking stocks including PacWest Bancorp and Western Alliance Bancorp tumbled in early trading, dropping as much as 12% while Western Alliance Bancorp (WAL US) fell 7.8%. before recovering most losses ahead of a Fed rate hike that will only make the deposit outflow from small banks worse. Meanwhile, AMD shares fell as much as 6.3% in premarket trading, after the chipmaker gave a tepid forecast for the current quarter as it wades through a severe PC slowdown. Analysts highlighted mixed results for the quarter, but noted that its server and PC businesses should rebound in the second half of the year. Here are some other notable premarket movers:

  • Starbucks shares slid as much as 5% in US premarket trading after the coffee chain operator left guidance for the fiscal year 2023 unchanged. The move disappointed analysts, who called it a conservative stance given the strong second quarter and sales beat, and said it suggests growth will weaken in the second half of the year.
  • Ford declined in postmarket trading after the company reiterated its full-year forecast despite strong first-quarter results, and flagged headwinds including economic uncertainty around the globe and higher industrywide customer incentives.
  • Amcor shares dropped as much as 8.3% in US premarket trading, set to hit their lowest level since June 2020, after the packaging company cuts its adjusted EPS forecast for the full year, with analysts flagging weakness in volumes. Amcor’s shares also declined 9.5% in Sydney trading.
  • Chegg (rose as much as 9.5% in premarket trading, as the online educational services company attempts to recoup some losses after posting its biggest intra-day drop on Tuesday.
  • Match Group gained in extended trading, after the online dating company reported its first-quarter results and gave an outlook. While the revenue forecast is below expectations, analysts note strength in the company’s Tinder business.
  • Unisys shares jumped 12% in extended trading on Tuesday, after the IT services company reported first-quarter results that were stronger than expected.
  • Paycom Software shares gained in extended trading after the human-capital-management software company reported first-quarter results that beat expectations and raised its full-year forecast. It also introduced a dividend.

As we previewed previously, the Fed is expected to deliver a 25 basis-point interest-rate increase and signal a pause in its aggressive tightening campaign. Watchers anticipate the central bank will stop raising rates as tighter lending conditions and signs of a slowing economy suggest inflation will cool more meaningfully in the months ahead. Fed-dated OIS currently prices in around 23bp of rate hike premium for the meeting, little change vs Tuesday close. Investors will assess impact of current banking sector jitters on future monetary policy, though with inflation stubbornly elevated, Powell is expected to stop short of assuring markets that a pause is a done deal — or that rate cuts are imminent

The US stock rally, supported by better-than-feared earnings and hopes for a less hawkish Fed, lost steam this week amid weak economic data and concerns about the banking sector. The selloff pushed the VIX Index toward 18 after the volatility gauge spent most of April near a 16 handle, while the VIX1D doubled yesterday from 10 to 20. 

“When it comes to thinking about the potential for further hikes from here, I do think the Fed really wants to keep the door open specifically given the fact that the economy has been quite resilient,” said Madison Faller, global strategist at JPMorgan Private Bank. But “whether the last hike is today or even in June, we’re nearing the end of the Fed tightening cycle.”

In Europe, stocks are higher as they look to bounce back from their sharpest fall in five weeks on Tuesday. The Stoxx 600 is up 0.4% led by defensive sectors such as consumer products, miners and food and beverages the strongest-performing sectors while energy names have struggled as oil prices decline.  Italian lenders rose on Wednesday, outperforming banks in the rest of the region, after UniCredit raised its full-year profit target and said it will boost shareholder payouts.  UniCredit jumped as much as 6.9%, with Intesa Sanpaolo (+2.1%), FinecoBank (+2.1%) and Banco BPM (+1.8%) also among the top performers on the Stoxx 600 Banks Index, which was down 0.2% as of 12:33 p.m. in Milan.  Here are all the most notable European mover:

  • Colruyt shares rise as much as 18% with analysts saying the guidance raise from the Belgian retailer is encouragingly driven by cost savings and that this could drive a reassessment of its outlook
  • Straumann gains as much as 2.1% after the Swiss dental equipment group’s first-quarter earnings arrived in line with expectations. Analysts said strength in the EMEA market offset weakness in APAC
  • Auto1 rises as much as 7%, withCiti saying the used-car trading platform’s profitability metrics beat estimates in the first quarter, boosting confidence for adjusted Ebitda to break even before year end
  • Deutsche Post advances 2.9% to 2022 highs after the logistics firm reported 1Q Ebit which beat the average analyst estimate and confirmed the forecast published in its 2022 annual report
  • Orsted shares gain as much as 1.6% after Danish wind farm operator’s wind operations beat 1Q expectations, offsetting a miss in its gas marketing arm, which analysts said is a high-quality mix
  • Signify shares drop as much as 11%, the most intraday since July, after 1Q comparable sales missed estimates due to persistent weakness in its consumer and indoor professional businesses
  • Porsche falls as much as 2.8% in Frankfurt after the sports-car brand reported first-quarter operating profit that missed analyst estimates. Jefferies says first-quarter earnings are “a tad weak”
  • Stellantis falls 2.4% as the carmaker’s weakness in Europe and slightly lower volumes offset an overall revenue beat. Morgan Stanley noted that rising inventory levels could threaten further upside
  • Haleon shares fall as much as 4.3% after a Financial Times report that drugmaker Pfizer plans to start selling its stake within months overshadowed the consumer-health company’s 1Q results
  • Lufthansa falls as much as 6.5% after the airline reported 1Q earnings that analysts said were below estimates. Bernstein attributed the miss to a softer performance in the carrier’s cargo business

Earlier in the session, Asia’s stock benchmark headed for its first decline in five sessions, with Hong Kong-listed Chinese shares leading losses ahead of the Federal Reserve’s policy decision. The MSCI Asia Pacific Index dropped as much as 0.6% in broad-based declines, following the selloff on Wall Street as worries about the financial sector amplified risk aversion ahead of the Fed. Energy stocks were among the biggest losers in the region after oil prices collapsed on Tuesday following softening US employment data that added to recession concerns. Benchmarks in Hong Kong led the region lower, with doubts remaining over the pace of China’s economic recovery.

"So far, the guidance hasn’t shown much improvement” in the first-quarter earnings season, said Ken Peng, head of Asia Pacific investment strategy at Citi Global Wealth Investments. “The continued geopolitical concerns are likely to be with us for quite some time and the immediate sharp recovery from exiting the lockdowns is behind us already,” he added. As the results season in Asia continues, investors will closely watch the Federal Reserve’s commentary and interest-rate move to assess any further impact to corporate profits. Traders are pricing in a 25-basis-point hike this week, followed by a pause in its aggressive hiking campaign. The onshore China market will reopen Thursday, while Japan’s will resume trading on Monday.

Australian stocks extended their recent rout: the commodity-heavy S&P/ASX 200 index fell 1% to close at 7,197.40, extending losses for second session as banks and mining shares slumped. The drop comes ahead of a Federal Reserve decision where policymakers are expected to add to their rate-hike cycle.

Stocks in India declined in line with most Asian peers ahead of the Federal Reserve’s policy decision.  Index-heavy Reliance Industries and software exporter Tata Consultancy were among key drags on the benchmark gauge, which snapped its eight-day long run of advances.    The S&P BSE Sensex fell 0.3% to 61,193.30 in Mumbai, while the NSE Nifty 50 Index declined by a similar measure. Out of 30 shares in the Sensex index, 11 rose, while 19 fell. Stocks of government-controlled firms were outperformers as those companies benefit from government’s spending on infrastructure. Nifty PSE Index, a gauge of state-run enterprises, surged to its all-time high since Jan. 1995 debut.

In FX, the Bloomberg Dollar spot Index is down 0.3% while the Japanese yen and Swiss franc sit atop the G-10 intraday rankings; the USDJPY falls as much as 0.8% to 135.53 after hitting a multi-month high (Tokyo markets are closed for a public holiday). EUR/USD rose 0.4% to 1.1045; GBP/USD up 0.5% at 1.2524, while AUD/USD was little changed at 0.6664; NZD/USD up 0.4%, after advancing as much as 0.7% to 0.6250, the highest since Apr. 14 on bets the central bank will tighten policy following better-than-expected employment data.

Investors will scrutinise the Fed’s policy statement and comments to see if Powell suggests that more rate rises may be possible even as the US banking sector has come under pressure from dramatic tightening over the past year. “Overall, we lean toward USD lower today, but suspect price action will continue to be choppy,” said Erik Nelson, FX strategist at Wells Fargo. “Powell will be walking a fine line, and probably wants to err on the side of caution given fragility of banking sector sentiment and cracks appearing in the labor market.” While markets are pricing in the possibility that the Fed will start cutting rates later in the year, Powell is unlikely to validate those expectations yet, Nelson said, adding that the dollar would likely avoid a deep selloff later in the day as a result.

In rates, treasuries advanced during London session and broadly held gains into early US, following gains in bunds while US regional bank stocks fall pre-market.  US yields richer by 1bp to 2bp across the curve with 10-year around 3.40%, slightly lagging early bund gains over London session. Today's 830am refunding announcement of next week’s auction sizes and projected sizes for other sales during the May-July period is expected to include no changes from last quarter as debt ceiling limits flexibility. Focal points of US session, following Treasury refunding announcement, include PMI and ISM services indexes during US morning and Fed rate decision at 2pm New York time. 

In commodities, oil plunged for a second day, as Brent crude futures dropped 2% near $73.80 a barrel having dropped 5% on Tuesday while WTI slid below $70 a barrel in New York, falling to the lowest since March amid renewed anxiety over the financial stability of regional US lenders as well as signs of a cooling labor market. Spot gold is little changed around $2,016

Looking to the day ahead now, and the main highlight will be the Federal Reserve’s policy decision and Chair Powell’s press conference. Otherwise, US data releases include the ISM services index for April and the ADP’s report of private payrolls in April. And in Europe, we’ll get the Euro Area unemployment rate for March.

Market Snapshot

  • S&P 500 futures little changed at 4,140.50
  • STOXX Europe 600 up 0.3% to 462.64
  • MXAP down 0.3% to 160.32
  • MXAPJ down 0.7% to 511.25
  • Nikkei up 0.1% to 29,157.95
  • Topix down 0.1% to 2,075.53
  • Hang Seng Index down 1.2% to 19,699.16
  • Shanghai Composite up 1.1% to 3,323.28
  • Sensex down 0.4% to 61,136.04
  • Australia S&P/ASX 200 down 1.0% to 7,197.40
  • Kospi down 0.9% to 2,501.40
  • Brent Futures down 2.2% to $73.68/bbl
  • Gold spot down 0.1% to $2,015.20
  • U.S. Dollar Index down 0.35% to 101.60
  • German 10Y yield little changed at 2.23%
  • Euro up 0.3% to $1.1036

Top Overnight News

  • Malaysia becomes the second country in as many days (after Australia yesterday) to surprise markets with a rate hike (the central bank increased the policy rate by 25bp to 3% while investors were looking for it to stay on hold. BBG
  • The end of pandemic-era restrictions has unleashed a luxury spending rebound in China. Luxury spending in China is bouncing back even faster than the country’s overall economy. Retail sales of jewelry, gold and silver soared 37.4 percent in March from a year earlier, more than three times as fast as the rebound in overall retail sales, according to China’s National Bureau of Statistics. NYT
  • Iran seized another oil tanker in Middle East waters in a move that risks flaming US tensions. The Navy said a Panama-flagged ship was taken by Tehran in the Strait of Hormuz, the second incident in a week. The US has demanded the release of a Chevron-chartered ship that was intercepted at the end of April. BBG
  • A Russian spy network has acquired sensitive technology from EU companies to fuel Vladimir Putin’s war in Ukraine even after a US-led crackdown on the covert smuggling ring. The network — set up to procure goods ranging from microchips to ammunition — has managed to obtain machine tools from Germany and Finland despite US sanctions imposed in March 2022. FT
  • The Treasury will outline its issuance plans for longer-term debt and they're likely to contain no change to the slate of coupon-bearing auctions that kicks off each three-month cycle. Most analysts see the combined size of the three securities held at $96 billion. The department on Monday ramped up its borrowing estimate for April-June to $726 billion from the $278 billion predicted in late January. BBG
  • The FOMC is likely to deliver a widely expected 25bp rate hike to 5-5.25% at its May meeting, but the focus will be on revisions to the forward guidance in its statement. We expect the Committee to signal that it anticipates pausing in June but retains a hawkish bias, stopping earlier than it initially envisioned because bank stress is likely to cause a tightening of credit. GIR
  • Former Dallas Fed President Kaplan says he would be in favor of a “hawkish pause” whereby the Fed doesn’t hike rates today (but warns of potential further tightening down the road) as he thinks the regional bank situation is even worse than many imagine. BBG
  • The White House may try and challenge the legality of the debt ceiling itself rather than negotiate a deal, a strategy that is certain to spook markets by injecting a whole new layer of uncertainty into the process. NYT
  • House Democrats are pursuing a “discharge petition” option that could allow a debt ceiling bill to get to the floor without McCarthy’s consent. WSJ
  • Washington’s ability to avert a catastrophic US debt default risks coming down to as few as seven days in May, underscoring the enormous threat of the partisan impasse. Between now and June 1 — the date by which the Treasury Department could run out of sufficient cash — President Joe Biden and members of the House and Senate are scheduled to be in town at the same time for the sum total of one week.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly negative following the losses on Wall St where the major indices declined ahead of the FOMC rate announcement amid regional bank jitters and with sentiment overnight also hampered by the key market closures in Japan and mainland China. ASX 200 was led lower by underperformance in energy after oil prices dropped more than 5% yesterday and with the mood not helped by mixed data releases including weak AIG Manufacturing and Construction figures. KOSPI declined as the broad risk aversion overshadowed the jump in sales by South Korea’s top automakers. Hang Seng was pressured by weakness in the energy and tech sectors, with participants bracing for the expected rate hike stateside and a similar move by the HKMA in lockstep with the Fed.

Top Asian News

  • BoK Governor Rhee said it is premature to talk about a policy pivot, while he noted that it is time to wait and see as core inflation remains high and they are careful because of large FX volatility, according to a CNBC interview.
  • RBNZ Financial Stability Report said New Zealand's financial system is well placed to handle the higher interest rate environment and international financial disruptions, while it added that global inflation is persisting at levels well above central banks’ policy targets.

European equities trade on the front-foot, Euro Stoxx 50 +0.5%, in an attempt to claw back some of yesterday’s losses ahead of tomorrow's ECB but before that, the FOMC later today. Equity sectors in Europe have a positive tilt with Consumer Products & Services and Food, Beverage and Tobacco names top of the leaderboard, whilst Energy names are enduring another session of losses after yesterday’s marked underperformance. Stateside, futures are trading in modest positive territory after Tuesday's pressure where the focus was on the regional banking sector, ES +0.1%. FBN's Gasparino tweets "Sources say bank analysts and traders are digesting the JPMorgan and First Republic deal and valuing regional bank assets off of it at about 85 cents on the dollar. It’s why all the regionals have sold off today and why the regional bank crisis probably isn’t over."

Top European News

  • Le Maire Says French Retailers Agree to Extend Price Cuts
  • Turkey Gets More Reprieve From Inflation With Dive Below 50%
  • Forecasts Signal End of Profit Recession Is Near: Earnings Watch
  • Ukraine Latest: Russian Drones Target Cities Including Kyiv
  • Brent Oil Extends Drop Below $75 as Demand Concerns Escalate

FX

  • DXY extends decline from recent peaks as clock ticks down to FOMC, index touches 101.500 from 101.920 high.
  • Funding currencies relish low yield environment as Franc regains 0.8900+ status vs Dollar and Yen tests support into 135.50.
  • Kiwi flies after upbeat NZ jobs data, with NZD/USD firm on the 0.6200 handle and the AUD/NZD cross sub-1.0700.
  • Euro and Pound gain at the expense of the Buck as former eyes 1.1050 and latter tops 1.2530.
  • Loonie lags below 1.3600 vs Greenback as oil continues to tank.

Fixed Income

  • Debt futures extend recovery rallies before waning at 136.70, 102.46 and 115-30+ in Bunds, Gilts and T-notes respectively ahead of ADP, services ISM and Fed.
  • German and UK issuance snapped up as auctions both twice over-subscribed in the run up to US Quarterly Refunding remit and press conference.

Commodities

  • WTI and Brent front-month futures are softer despite a lack of fresh catalysts, with analysts citing investor jitters surrounding the growth outlook and the expected rate hike by the FOMC.
  • Spot gold prices remain above USD 2,000/oz due to a softer Dollar and ongoing fears surrounding the US banking sector, while base metals are indecisive due to growth fears, a softer Dollar, and recovering Chinese demand.
  • US Energy Inventory Data (bbls): Crude -3.9mln (exp. -1.1mln), Cushing +0.7mln, Gasoline +0.4mln (exp. -1.2mln), Distillate -1.0mln (exp. -1.1mln)
  • Morgan Stanley lowers Brent forecast to USD 75/bbl by year-end, expects the 2024 oil market to be 500k BPD oversupplied.
  • Turkey, Russian and Ukraine's Deputy Defence Ministers are to meet on May 5th, via AA; to discuss extending the Black Sea Grain deal; Russian Foreign Ministry says talks on Black Sea grain deal on May 5th have not yet been agreed, according to Ria.

Geopolitics

  • Explosions were reported in Ukraine's capital Kyiv and surrounding regions, according to TASS.
  • Top US diplomat for East Asia Kritenbrink said the visit by Philippines President Marcos to the US highlights how enduring the alliance is and the importance of peace and stability in the Indo-Pacific. Kritenbrink said he remains deeply concerned about China's continued intimidation and harassment, while he added the US stands with the Philippines in the face of China Coast Guard's infringement and harassment of the Philippines' freedom of navigation in the South China Sea.
  • Turkish Foreign Minister says meeting with Russian and Syrian foreign ministers could take place in Moscow on May 10th, according to Haberturk.
  • US Fifth Fleet says a Panama-flagged oil tanker was seized by Iran's IRGC as it was transiting in the Strait of Hormuz on May 3rd.

US Event Calendar

  • 07:00: April MBA Mortgage Applications -1.2%, prior 3.7%
  • 08:15: April ADP Employment Change, est. 148,000, prior 145,000
  • 09:45: April S&P Global US Services PMI, est. 53.7, prior 53.7
  • 10:00: April ISM Services Index, est. 51.8, prior 51.2
  • 14:00: May FOMC Rate Decision

DB's Jim Reid concludes the overnight wrap

The renewed turmoil in the US regional banking sector yesterday has cast a big shadow over the conclusion of the FOMC today. The S&P 500 fell -1.16%, 2 and 10yr Treasury yields slumped -17.9bps and -14.4bps respectively, PacWest Bancorp fell -27.8% and Metropolitan Bank -20.5%, Fed pricing for a 25bps tonight fell from a 95% probability to 86% (though bottomed yesterday at 78%), and the December 2023 contract declined -19bps to 4.41%. As well as renewed regional banking fears, concerns over a sooner-than-expected debt ceiling deadline (June 8 T-bills soared by an astonishing +85bps at one point before settling +45bps higher), along with signs that the labour market is continuing to soften, helped reinforce the moves.

We’ll start with the banking turmoil, since yesterday saw the KBW Bank index (-4.47%) fall beneath its low on March 23, back at the height of the initial slump when SVB and then Credit Suisse came under pressure. Some of the regional bank stocks were the worst-affected, with PacWest Bancorp (-27.78%), Metropolitan Bank (-20.5%), and Western Alliance Bancorp (-15.12%) seeing major falls as investor concerns grew that the current turmoil wasn’t yet over. The larger banks weren’t immune from the selling pressure either, with declines for Citigroup (-2.62%), Bank of America (-3.06%) and Morgan Stanley (-1.87%). Those moves spurred a broader market selloff, with all the major indices including the NASDAQ (-1.08%) and the Dow Jones (-1.08%) seeing sizeable losses of their own. Consumer goods (+0.55%) and services (+0.44%) were the only sectors to gain on the day, with over 82% companies in the entire index moving lower.

With another round of banking concerns swirling, all eyes will now be on the Fed’s decision later today and what Chair Powell has to say about the current issues in markets. In terms of what to expect, it’s widely anticipated that we’re going to get another 25bp hike, although as discussed at the top the turmoil yesterday did see futures lower the chance to 86% from 95% on Monday. But assuming the hike happens as expected, the bigger question will be what Chair Powell and the FOMC might signal moving forward, not least since market pricing is currently suggesting today will be the last move in the current hiking cycle, with futures still looking for around 64bps of cuts by year-end despite the more hawkish signals from the Fed. The view from our US economists is that the FOMC will maintain a tightening bias and repeat the language from March. If our economists are correct it will mean that Chair Powell won’t commit to any decision at the June meeting, but will emphasise the continued need for a hawkish bias to tame inflation. Their base case is that this is the last hike of this cycle, but the risks are tilted towards another increase in June. We'll never know but will yesterday's price action force the Fed to be more dovish than they might have been on say Monday night?

Ahead of that decision, there was some good news from the Fed’s perspective in the latest JOLTS report. That showed the tightness in the labour market eased further in March, with the number of jobs openings down to 9.59m (vs. 9.74m expected), which is the lowest since April 2021. In turn, that meant there were 1.64 vacancies per unemployed individual, again the lowest since October 2021. And it wasn’t just openings that were showing signs of easing, since the private quits rate (which is strongly correlated with wage growth) also came down a tenth to 2.7%, the lowest since February 2021. And with the JOLTS report having some pretty dovish implications, Treasury yields took another leg lower after the release, building on their moves from earlier in the day. By the close, the JOLTS report and the banking turmoil meant that the 10yr Treasury yield was down -14.4bps at 3.424%, and the 2yr yield was also down -17.9bps at 3.961%.

Whilst yields moved lower across most of the curve, there were some seismic movements at the very front-end, with yields on near-term T-bills spiking after Treasury Secretary Yellen warned that the government could hit the debt ceiling as early as June 1. For instance, one bill that matures on June 8 spiked up by +85bps at one point before finishing up +45bps on the day, ending the day at 5.230%. For now at least, there hasn’t been much signs of progress on the political side either, which is further concerning investors. The next key point will be a meeting between Biden and congressional leaders on May 9, although as previous debt ceiling episodes have shown, we may well have to get much closer to the deadline before either side feels a need to adjust their position.

Even as the US was the centre of attention yesterday, there was plenty occurring in Europe too ahead of tomorrow’s ECB decision. First, we had the Euro Area flash inflation release for April, which showed that core inflation came off its record +5.7% in March to +5.6% in April. The move was in line with expectations, but it marks the first time that core inflation has fallen in 10 months, and helped markets to grow in confidence that the ECB would step down their hikes to a 25bp pace at tomorrow’s meeting. Otherwise, headline inflation was a tenth above expectations at +7.0%, which was actually an upward move from its +6.9% rate in March.

As the ECB decide on how much to hike, another important release yesterday came from the ECB’s Bank Lending Survey for April. That showed that the speed of net tightening in credit standards was the highest since the sovereign crisis in 2011. But on the other hand, there was hope in some of the forward-looking indicators, with expectations for Q2 seeing a notable rebound. So there was something for everyone in the release. Finally, we also found out that growth in the M3 monetary aggregate was just +2.5% (vs. 2.4% expected) in the year to March 2023, which is the slowest since October 2014. See Peter Sidorov's wrap up of the news here.

Although plenty was happening in Europe, the market moves mostly followed the US as the continent caught up after the previous day’s holiday. For instance, equities fell back, with the STOXX 600 (-1.24%) seeing its worst daily performance in over a month. At the same time, yields reversed their increase earlier in the day, and those on 10yr bunds (-5.5bps and down -15.9bps from the day's highs) OATs (-3.7bps) and BTPs (-0.4bps) all moved lower.

In Asia, markets are closed in Japan and mainland China for their respective public holidays. Over in Hong Kong, the Hang Seng is down -1.76% as I type, heading towards breaking a four-day consecutive streak of gains off the back of renewed turmoil in the US banking sector. The Korean Kospi is likewise retreating -0.89%. US S&P 500 futures are inching higher after yesterday’s sell-off, to be up +0.16%.

Looking at yesterday’s other data, US factory orders grew by +0.9% in March (vs. +1.2% expected), and the previous month was revised down four-tenths to show a larger -1.1% contraction. Over in Europe, German retail sales unexpectedly contracted in March with a -2.4% decline (vs. +0.4% expected). And the final Euro Area manufacturing PMI was revised up three-tenths from the flash reading to 45.8.

To the day ahead now, and the main highlight will be the Federal Reserve’s policy decision and Chair Powell’s press conference. Otherwise, US data releases include the ISM services index for April and the ADP’s report of private payrolls in April. And in Europe, we’ll get the Euro Area unemployment rate for March.

Tyler Durden Wed, 05/03/2023 - 08:11

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Government

Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation

Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation

Canadian Prime Minister Justin Trudeau and Ukrainian President Volodomyr…

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Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation

Canadian Prime Minister Justin Trudeau and Ukrainian President Volodomyr Zelenskyy - who commands a battalion of neo-Nazis - honored an actual WWII Nazi with a standing ovation on Friday.

Yaroslav Hunka, 98, fought in a Third Reich military formation accused of war crimes.

On Friday, he was honored during a session of Canadian parliament in which Zelenskyy addressed the lawmakers to thank them for their support since Russia invaded Ukraine, saying that Canada has always been on "the bright side of history."

Hunka stood for standing ovation and saluted, according to Canadian television.

According to the Associated Press, Hunka "fought with the First Ukrainian Division in World War II before later immigrating to Canada," another name for the 14th Waffen Grenadier Division of the SS, the Nazi party's military wing, also known as the SS Galichina.

Related:

Formed in 1943, SS Galichina was comprised of Ukrainians from the Galicia region in the western part of the country. It was armed and trained by Hitler's Nazis and commanded by German officers. The next year, the division received a visit from SS head Heinrich Himmler, who had high praise for the unit's effectiveness at slaughtering Poles.

The SS Galichina subunits were responsible for the Huta Pieniacka massacre, in which they burned 500 to 1,000 Polish villagers alive.

One of several photos on a blog by an SS Galichina veterans’ group that shows Yaroslav Hunka, the Ukrainian immigrant honored by the Canadian Parliament during a visit by Ukrainian President Volodymyr Zelenskyy. Hunka is in the front row, middle.

In fact, during the Nuremberg Trials, the Waffen-SS was declared to be a criminal organization responsible for mass atrocities.

Following the war, thousands of SS Galichina veterans were allowed to leave Germany and resettle in the West - with around 2,000 moving to Canada. By that time, they were known as the First Ukrainian Division.

A blog by an association of its veterans, called “Combatant News” in Ukrainian, includes an autobiographical entry by a Yaroslav Hunka that says he volunteered to join the division in 1943 and several photographs of him during the war. The captions say the pictures show Hunka during SS artillery training in Munich in December 1943 and in Neuhammer (now Świętoszów), Poland, the site of Himmler’s visit. 

In posts to the blog dated 2011 and 2010, Hunka describes 1941 to 1943 as the happiest years of his life and compares the veterans of his unit, who were scattered across the world, to Jews. -Forward

So, the same leftists who called Trump supporters Nazis for years are now honoring an actual Nazi - while Germany has notably locked up several concentration camp guards in their 90s for their involvement in Nazi activities.

University of Ottawa Political Scientist Ivan Katchanovski lays it out...

Meanwhile, here's Ukraine's Azov Battalion of neo-Nazis that everyone with a Ukraine flag in their bio is supporting...

Odd, they don't look like Trump supporters.

Maybe these Nazis can shed some light? Careful, "X" thinks this is sensitive material (that might redpill people?).

Meanwhile...

Tyler Durden Sun, 09/24/2023 - 14:25

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International

Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City

Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City

Authored by Nathan Worcester via The Epoch Times,

While…

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Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City

Authored by Nathan Worcester via The Epoch Times,

While addressing an Atlantic Council meeting on nuclear energy, U.S. Climate Envoy John Kerry made it clear he doesn't think wind and solar alone will be sufficient to meet global energy needs while achieving policy plans to rapidly scale back the use of hydrocarbons in the name of addressing climate change risks as outlined by the United Nations.

"You will have to have some component of nuclear—yet to be determined how big or where it'll go. That's going to be a market-based reaction," said Mr. Kerry, who served as a Democratic senator from Massachusetts before serving as Secretary of State under former President Barack Obama.

The 2004 Democratic candidate for president said that "most scientists will tell you" the goal of Net Zero 2050 cannot be achieved "unless we have a pot, a mixture of energy approaches."

"Clearly, we're going to need nuclear to be a part of that," he said on Monday.

Mr. Kerry's pro-nuclear remarks come as climate-related diplomacy and other climate-themed events overtake New York City.

Over the weekend, protesters demonstrated against fossil fuels in the streets of New York City, with Rep. Alexandria Ocasio Cortez (D-N.Y.) among the participants.

Mr. Kerry voiced support for those demonstrators in his speech to the Atlantic Council.

In addition, the U.N. will hold its inaugural Climate Ambition Summit on Sept. 20.

U.N. statement on the event states it "will showcase leaders who are 'first movers and doers' from government, business, finance, local authorities, and civil society who have credible actions, policies and plans to keep the 1.5°C degree goal of the Paris Agreement alive and deliver climate justice to those on the front lines of the climate crisis."

The Climate Ambition Summit comes ahead of the next annual United Nations Climate Change Conference, which will begin in late November. It's taking place in Dubai, United Arab Emirates.

Even as he praised climate protesters, Mr. Kerry noted that a previous generation of environmental activists had fought hard against nuclear power, now seen as a pragmatic solution by many climate hawks.

"In my state of Massachusetts, where there was a huge fight over Seabrook Nuclear Plant in New Hampshire, we now happily get about 20 percent of all our energy from Seabrook, and nobody's complaining—maybe about the prices a little bit, because that's normal in today's world," he said.

A view of the Seabrook Nuclear Power Plant in Seabrook, N.H., on March 21, 2011. (Emmanuel Dunand/AFP via Getty Images)

"The United States is now therefore committed, based on experience and based on reality, to trying to accelerate the deployment of nuclear energy, as part of the Biden program," he added.

The diplomat, who came under fire from Republicans earlier this summer for his unwillingness to share details of his staff at a Congressional hearing, commented positively on Bill Gates' TerraPower, which plans to build the next-generation Natrium nuclear reactor in Wyoming.

He also drew attention to his recent trip to Romania, where he visited a control room simulator for a small modular reactor developed by the American firm NuScale.

Mr. Kerry took issue with the continued construction of unabated coal-fired power plants and with the existence of subsidies for fossil fuels.

An International Monetary Fund (IMF) study identified $1.3 trillion in "explicit" subsidies for fossil fuels in 2022, a stark increase from $500 billion in 2020. Such subsidies are ascribed to fossil fuel prices when they are lower than they would otherwise be if producers fully bore supply costs. The IMF authors attributed a substantial proportion of the increase to "temporary price support measures," in line with surging fossil fuel prices during that period.

Whitehouse Touts ADVANCE Act

Mr. Kerry wasn't the only high-level Democratic politician who addressed the Atlanticist forum on Monday.

In pre-recorded remarks, Sen. Sheldon Whitehouse (D-R.I.) touted the bipartisan, nuclear power-related ADVANCE Act, which passed the Senate as part of the National Defense Authorization Act (NDAA) in July. The bill has not moved ahead in the House.

"Our legislation would strengthen the Nuclear Regulatory Commission's ability to safely and efficiently review the expected influx of applications and prepare them to license HALEU [high-assay low-enriched uranium] fuels," the lawmaker said.

Russia currently dominates the production of HALEU fuels, which are key for most next-generation nuclear reactors. Uncertainty about Russian supplies of HALEU has been a worry for TerraPower and a central motivation for the Nuclear Fuel Security Act, another successful NDAA amendment.

"We spend nearly $1 billion each year on Russian uranium. Russia uses these revenues to fund its invasion of Ukraine," Sen. John Barrasso (R-Wyo.) said in the Senate as the measure was under consideration.

Sen. John Barrasso (R-Wyo.) in Washington on Dec. 1, 2020. (Bill O'Leary-Pool/Getty Images)

'Decarbonize Beyond Electricity'

Other speakers at the event expanded on how nuclear energy could be used to cut carbon emissions.

"We need to decarbonize beyond electricity," said John Wagner, director of the Idaho National Laboratory. He cited industrial heating and hydrogen production as examples of such applications for nuclear energy.

Sama Bilbao y León, director general of the World Nuclear Association, concurred.

"Yes, we need to electrify as much as we can of our economy, but it is not going to be possible to electrify everything," she said.

Ben Pickett of Nucor Corporation, which operates mills that recycle scrap steel using electric arc furnaces, explained that his company's operations require "billions and billions of kilowatt hours per year."

Earlier this year, Nucor signed a memorandum of understanding with NuScale Power. The latter could potentially develop small modular reactors for use in conjunction with Nucor's steel production facilities.

"We've got customers now that are demanding much cleaner steels," Mr. Pickett said.

He conceded that the idea of running steel production on advanced nuclear has met with a "mixed" reaction in his industry.

Tyler Durden Sun, 09/24/2023 - 15:00

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Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help ‘Rebuild Schools’

Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help ‘Rebuild Schools’

Authored by Chris Menahan via Information…

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Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help 'Rebuild Schools'

Authored by Chris Menahan via Information Liberation (emphasis ours),

Ukrainian president Volodymyr Zelensky is recruiting spirit cooker Marina Abramovic to serve as an ambassador for Ukraine and help "rebuild schools."

From The Telegraph, "Zelensky asks Marina Abramovic to be ambassador for Ukraine":

Volodymyr Zelensky has asked Marina Abramovic, the performance artist, to be an ambassador for Ukraine.

‌Ms Abramovic, a fierce critic of Vladimir Putin's illegal invasion, said the Ukrainian president had asked for her help in rebuilding schools.

[...] ‌"I have been invited by Zelensky to be an ambassador of Ukraine, to help the children affected by rebuilding schools and such."

‌She added: "I have also been invited to be a board member of the Babyn Yar organisation to continue to protect the memorial."

‌The Holocaust memorial centre to Jews murdered by Nazis in Ukraine was damaged by Russian missile attacks in March last year.

The "bombing" of the Babyn Yar memorial was confirmed to be a lie last year.

‌Ms Abramovic installed her work Crystal Wall of Crying at the memorial centre in Kyiv four months before Russia invaded Ukraine in February 2022.

‌The wall, 40 metres long and three metres high, is made of coal and has large quartz crystals sticking out of it. Visitors can touch the installation, which mirrors the western wall in Jerusalem.

Zelensky said last year his goal is to turn Ukraine into a "Greater Israel."

In Dec 2022, Zelensky made a deal with BlackRock's Larry Fink to help "rebuild" Ukraine after the war and just last week the Biden regime announced Penny Pritzker would become their Special Representative for "rebuilding" Ukraine.

Meanwhile, Abramovic's pals, the Clintons, are also salivating over helping to 'rebuild' Ukraine.

Tyler Durden Sun, 09/24/2023 - 16:10

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