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Futures Jump, Yields And Dollar Slide After Gundlach Says He’s A “Buyer” Of Treasuries

Futures Jump, Yields And Dollar Slide After Gundlach Says He’s A "Buyer" Of Treasuries

US equity futures and European stocks staged a solid…



Futures Jump, Yields And Dollar Slide After Gundlach Says He's A "Buyer" Of Treasuries

US equity futures and European stocks staged a solid rebound after the recent rout which saw the S&P close at a fresh 2022 low on Monday, as the dollar finally weakened against all of G-10 peers, snapping a five-day gain of new record highs as Treasury yields fell and the pound rebounded from a record low, even as (or perhaps because) Goldman Sachs and BlackRock soured on equities for the short term and Citigroup said bearish positioning continues to rise. As of 715am, S&P Futures traded 43 points, or 1.2% higher, at 3,714 while Nasdaq futures were 1.3% higher. 10Y yields dropped to 3.80% after rising above 3.90% late on Monday.

The dollar gauge dipped but held near the record high set Monday, when a barrage of Fed officials repeated hawkish comments on policy. Meanwhile, European authorities are probing “unprecedented” damage to the Nord Stream pipeline system that transports Russian gas to the region. Benchmark European gas prices climbed as much as 12% on Tuesday, after four days of losses. Oil and gold also rose.

One potential catalyst for the bounce in risk sentiment, and drop in TSY yields, was a tweet from bond king Jeff Gundlach just after midnight EDT, in which we said that "the U.S. Treasury Bond market is rallying tonight.  Been a long time.  I have been a buyer recently."

Which is good- it means that there’s at least one major investor who thinks the worst global bond rout in decades is creating a buying opportunity. Now if only all the others shared his sentiment. In any case, his contrarian position was enough to avoid 10Y yields surging above 4% tonight... it remains to be seen if this persists tomorrow and subsequently.

In premarket trading, tech giants such as Apple, and Alphabet advanced more than 1% in premarket trading as US index futures rebounded with Europe’s Stoxx 600. Here are some other notable premarket movers:

  • Cryptocurrency-exposed shares rise in premarket trading, as Bitcoin jumped to breach the closely watched $20,000 level. MicroStrategy (MSTR US) +4.9%, Marathon Digital (MARA US) +5.8%, Hut 8 Mining (HUT US) +6.4%, Coinbase (COIN US) +5%, Riot Blockchain (RIOT US) +4.8%.
  • Shares in 9 Meters Biopharma (NMTR US) jump as much as 40% in premarket trading, with Oppenheimer raising its price target on the biotech to a Street-high after the company reported data from a Phase 2 study of vurolenatide.
  • US-listed Macau casino and China travel stocks are on track to rise for a second day, after those listed in Hong Kong extended gains on growing optimism in a tourism revival. Wynn Resorts (WYNN US) +1.8% and Melco Resorts (MLCO US) +2% in premarket trading.
  • Grab (GRAB US) stock climbed 1.1% in premarket trading after the Southeast Asian internet giant said it pursues profitability in 2024, though expects revenue to slow significantly.
  • Keep an eye on Keurig Dr Pepper (KDP US) as Goldman Sachs downgraded the stock to neutral, saying that the company is still executing well in a tough environment, but the risk-reward seems more balanced from here.
  • Keep an eye on Arcos Dorados (ARCO US) as the stock was initiated with an overweight rating at Barclays, with broker saying that the McDonald’s franchisee is solidly positioned amid headwinds.

Even as dip buyers emerged on Tuesday, global markets remained on edge as investors braced for a heightened risk of global recession.  Volatility across markets was also reflected by the risk of future price swings, which reached the highest since the beginning of the pandemic, as shown by a Bank of America index.

Despite today's bounce, the turmoil in markets shows little sign of turning Fed officials away from hawkish rhetoric. Boston Fed President Susan Collins and her Cleveland counterpart Loretta Mester said additional tightening is needed to rein in stubbornly high inflation and Atlanta Fed President Raphael Bostic also said the central bank still has a ways to go to control inflation.

“The market is pricing in some Fed increases, but we’re a bit worried that it might not be pricing in everything,” Laila Pence, president of Pence Wealth Management, said on Bloomberg Television. “Everyone is nervous.”

In Europe, the Stoxx 50 rose 0.6%, also bouncing after a rout, but traded off session highs as risk sentiment took a small hit after Nord Stream said the damage to the Russian gas pipeline is unprecedented, even as the pullback of the dollar gave some relief to assets. Travel, miners and tech are the strongest performing sectors. Italy’s FTSE MIB index fell 0.9% as of 11:16am, the worst performer among major European stock markets on Tuesday, with utilities and financials dragging the benchmark lower. The BTP-bund spread widens as much as 256bps, climbing above 250bps for the first time since May 2020. FTSE MIB had climbed as much as 1.4% in early trading. Worst performers on the index include: Terna -3.9%, Enel -3.4%, FinecoBank -3.3%, Saipem -2.8%, A2A -2.3%, Generali -2.2%, Intesa Sanpaolo -1.3%. UK markets clawed back some losses after a meltdown triggered by the government’s fiscal plan late last week. Here are some of the biggest European movers this morning:

  • Nexi shares jump as much as 8%, the largest intraday advance in two months, after announcing net revenue and Ebitda growth goals for 2021-2025, which analysts said are ahead of or meet their expectations. Payment peers Adyen, Worldline and Network International also rise
  • Biffa shares rise as much as 29% after investment firm ECP agrees to buy the UK waste-management company at 410p/share in cash
  • SSP rises as much as 6.8% after the company boosted its full-year forecast, which Goodbody says should provide some near-term relief
  • Quadient gains as much as 6.8% after the French postal- and document-services company reported 1H results that Portzamparc says show recovery
  • Vitrolife drops as much as 20%, its largest intra-day decline since February, as Bank of America-Merrill Lynch initiates coverage calling the share overvalued, while spotting risks on the horizon
  • Close Brothers shares decline as much as 8.1% after the financial services group reported adjusted operating profit for the full year that missed the average analyst estimate
  • Akzo Nobel shares slide as much as 3.3% after the company reported preliminary 3Q adjusted operating profit that was well below estimates. Analysts notied that raw material cost inflation is expected to peak in 3Q
  • Real estate was the worst performing European equity sector for a second day, dragged down by UK and Swedish property stocks. Segro -3.3%, Rightmove -5.1%, LXI REIT -3.3% and Samhallsbyggnadsbolaget i Norden -4.7%, Fabege -2.9%, Castellum -2.5%

Earlier in the session, Asian stocks rose from their lowest level in more than two years as equities in China and Japan advanced.    The MSCI Asia Pacific Index added as much as 0.5%, poised to snap four-days of losses. Consumer staples and materials led the measure higher as Meituan, BHP and Toyota gave the biggest boosts to the measure.  Equities in mainland China were notable winners, with the CSI 300 Index finishing 1.5% higher. Several big mutual funds and brokers were asked by Chinese regulators to refrain from large sales of stocks before the party congress in October, Bloomberg News reported. The Hang Seng Tech Index gained, erasing a loss of as much as 1.8%.  The region’s stocks suffered days of selling after the Federal Reserve last week signaled more interest-rate hikes are in store, further strengthening the dollar and tightening global finances. Asian currencies tumbled, raising capital outflow risks and driving key equity gauges lower. 

“Although we could see quant traders likely to swoop and trigger a rally, we emphasize that headwinds still remain in place,” including higher bond yields as well as the dollar, Saxo Capital Markets analysts including Redmond Wong wrote in a note.   Japan’s stocks were among Tuesday’s biggest gainers as the yen weakened, bolstering the profit outlook for exporters. The Philippine benchmark fell to a two-year low, approaching a bear market, as trading resumed after one-day closure due to a typhoon. Key stock gauges in Hong Kong, China, South Korea, Taiwan and Vietnam are all down more than 20% so far this year, along with MSCI’s broadest regional measure.  Tech-heavy markets have suffered as rising rates and a stronger dollar fan valuation concerns. Taiwan will evaluate stock-stabilizing measures cautiously as they are a double-edged sword that may help prices but hurt liquidity, the Financial Supervisory Commission chief said Tuesday. 

Japanese equities climbed, rebounding from a three day drop, as a weaker yen boosted shares of exporters.  The Topix rose 0.5% to close at 1,873.01, while the Nikkei advanced 0.5% to 26,571.87. The yen strengthened slightly after dropping 1% against the dollar Monday. Toyota Motor Corp. contributed the most to the Topix gain, increasing 1.2%. Out of 2,169 stocks in the index, 1,245 rose and 785 fell, while 139 were unchanged. “As long as US stocks don’t fall drastically, Japanese shares have shown an ability to be resilient,” said Hideyuki Suzuki, a general manager at SBI Securities. Japanese stocks have been supported by low valuations as well as Prime Minister Kishida’s moves to raise the limit for tax breaks on individual investment and relax border controls.

In Australia, the S&P/ASX 200 index rose 0.4% to close at 6,496.20, boosted by gains in mining and energy stocks.  In New Zealand, the S&P/NZX 50 index fell 1.9% to 11,214.49.

In FX, the Bloomberg Dollar Spot Index retreats as all G-10 peers advance and as treasuries gained led by the belly as Fed tightening wagers were pared.

  • The pound bounced, reclaiming 1.08 against the dollar and trading around where it closed Friday against both the euro and dollar, with measures of implied volatility remaining elevated as investors brace for more swings. Focus on possible action from policy makers and a speech by the Bank of England’s Huw Pill. Overnight volatility in cable traded earlier at 44.76%, its strongest level since March 2020. Gilts traded higher led by the front-end of the curve as traders trimmed BOE tightening bets amid UK currency gains
  • The euro pared some gains against the US dollar, after Nord Stream reported “unprecedented” damage to the Russian gas pipeline. The common currency still traded above $0.96. Italian bonds extended their underperformance against German peers to a third day, the longest streak since the beginning of the month, as investors continued to digest the right-wing coalition’s election win
  • Japan’s yield curve bear steepens as the BOJ’s unscheduled bond purchases are dwarfed by a deepening selloff in global debt. Japan’s 20-year bond yields rose to the highest level since 2015 as global debt markets come under increasing pressure due to expectations of further monetary-policy tightening. The yen rises for the first time in three days as the dollar weakens. Forget the risk of intervention by Japanese officials in the spot market. Yen traders are more concerned over a potential pivot by the Bank of Japan. The volatility term structures in the euro, the pound and the Swiss franc are fully inverted whereas the one in the yen peaks on the two-month tenor

In rates, treasuries rebounded in Asian trading after 10-year yields jumped the most since March 2020 on Monday.  Japan 10-year yields edge up to 0.25%, the top of BOJ’s tolerated range, prompting the BOJ to enact another unscheduled bond-buying operation. 10-Year Treasury yields were  down 11bps to 3.81%; the 10-year yield surged 24bps Monday, the most since March 2020, after poor demand for a two-year auction triggered renewed selling across the curve. One catalyst for the move was Doubleline’s Gundlach who tweeted that he has been a recent buyer. Still, the selloff is seeing few signs of ending, with UK notes losing a stunning 27% this year.  The “bond vigilantes” are back in the saddle, according to the veteran economist credited with coining the term in the 1980s. Gilt yields slid following the biggest-ever surge and the pound rose about 1% after falling to a record low. Traders remained wary of the risk that the currency could slump to parity with the dollar after the Bank of England indicated it may not act before November to stem the rout. Peripheral spreads widen to Germany with 10y BTP/bund widening 10.3bps to 254.1bps.

In commodities, WTI climbed 1.6% to below $78, within Monday’s range. Spot gold rises roughly $15 to trade near $1,638/oz.  There has been focus this morning on Nord Stream 1 & 2 damage with the cause currently unknown and fresh reporting around a potential EU gas price cap, to be discussed on Friday. The German network regulator later stated that it did not know the cause of the Nord Stream 1 pressure drop but didn't see any impact on the security of supply, according to Reuters. At least 12 countries have signed a letter which calls on the EU to propose a gas price cap at this week's Energy Ministers meeting via Politico citing a letter; proposals will be discussed on Friday, September 30th. A completely clueless President Biden said companies running gas stations need to bring down gasoline prices at the pump now,. BP (BP/ LN) halted production and evacuated staff at two offshore oil platforms in the US Gulf of Mexico ahead of Hurricane Ian.  Intercontinental Exchange is reportedly planning to accept allowances generated by the carbon market as collateral in its European futures market to ease the pressure on utilities and traders amid the energy crisis, according to FT.

Looking at the day ahead, data releases from the US include the Conference Board’s consumer confidence for September, the preliminary reading for durable goods orders and core capital goods orders for August, the FHFA house price index for July, and new home sales for August. Meanwhile in the Euro Area, we’ll get the M3 money supply for August. Central bank speakers include Fed Chair Powell, as well as the Fed’s Evans, Bullard and Kashkari, ECB Vice President de Guindos, the ECB’s Centeno, Villeroy and Panetta, as well as BoE chief economist Pill.

Market Snapshot

  • S&P 500 futures up 1.2% to 3,715.75
  • STOXX Europe 600 up 0.8% to 391.77
  • MXAP up 0.5% to 142.53
  • MXAPJ up 0.4% to 464.38
  • Nikkei up 0.5% to 26,571.87
  • Topix up 0.5% to 1,873.01
  • Hang Seng Index little changed at 17,860.31
  • Shanghai Composite up 1.4% to 3,093.86
  • Sensex up 0.4% to 57,399.07
  • Australia S&P/ASX 200 up 0.4% to 6,496.16
  • Kospi up 0.1% to 2,223.86
  • German 10Y yield little changed at 2.11%
  • Euro up 0.3% to $0.9637
  • Brent Futures up 1.8% to $85.61/bbl
  • Gold spot up 0.9% to $1,637.52
  • U.S. Dollar Index down 0.43% to 113.62

Top Overnight News from Bloomberg

  • Options traders haven’t been this busy since the pandemic mayhem in March 2020, according to data from the Depository Trust & Clearing Corporation
  • Speculators are betting the UK’s pound will slide to a level that was virtually unthinkable in recent decades: $1 or less. After the pound tumbled as low as $1.0350 Monday, the weakest on record, options markets show traders expect it to keep falling
  • The worst bond selloff in decades is seeing few signs of ending, with UK notes losing a stunning 27% this year, as central banks battle to stamp out the strongest inflationary pressures in decades
  • “Bond vigilantes” are back in the saddle and riding high again having mostly been on hiatus since the early 1990s, according to the veteran economist credited with coining the term in the 1980s
  • Traders are bracing for more pushback from China’s central bank as the yuan approaches the lowest level in 14 years. The onshore yuan has lost about 4% over the past month, trading within 1% of 7.2 per dollar, a level it hasn’t reached since 2008
  • China’s shaky recovery continued in September, with a pickup in car and homes sales in the biggest cities compensating for weaker global demand and falling business confidence
  • Japan looks to have spent more supporting the yen on Thursday alone than it did during the entire period of boosting its currency during the Asian financial crisis in 1998

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks were mostly higher in which the majority of indices shrugged off the negative lead from Wall St as the overhang from the recent FX turmoil dissipated but with the recovery somewhat contained by the higher yield environment. ASX 200 eked slight gains led by the commodity-related sectors as they atoned for yesterday’s underperformance. Nikkei 225 gained after recent comments from BoJ Governor Kuroda who reaffirmed his commitment to maintaining easy monetary policy, while the central bank also announced unscheduled purchase operations. Hang Seng and Shanghai Comp were mixed with the mainland underpinned amid reports that China is to ramp up financial support for new types of infrastructure, while the PBoC conducted its largest cash injection in seven months ahead of next week’s National Day holiday. However, growth concerns lingered with the World Bank forecasting China’s economic growth to lag behind the rest of Asia for the first time since 1990. India will likely be included in the JP Morgan Emerging Market Index early 2023, according to Reuters sources.

Top Asian News

  • India Unwilling to Relent on Tax Stance for Debt Index Inclusion
  • Australia’s Pinnacle Looks for Deals in Stressed UK and Europe
  • Macau Casino, China Travel Stocks in US Extend Gains
  • India Mulls $2.5 Billion Aid to Manufacture Grid-Scale Batteries
  • Geely’s EV Truck Farizon Said to Seek $300 Million Funding Round
  • Jinke Smart Services Jumps 33% After Boyu’s Share Purchase Offer
  • TikTok Steers Its Charm Offensive Around Loudest Critics in D.C.

European bourses are mixed, Euro Stoxx 50 +0.2%, as the complex wanes from best levels ahead of a packed Central Bank agenda. Catalysts behind the pullback have been sparse with newsflow focused on geopols/energy; though, GS and BlackRock are turning more bearings on equities in the short-term. Stateside, futures remain in positive territory though have similarly drifted from initial peaks, ES +0.8%.

Top European News

  • Euro Pares Gain Versus Dollar After Nord Stream Comments
  • Odey Says Pound Still ‘Vulnerable’ as His Hedge Fund Soars 140%
  • Kwarteng Heads for a Difficult Meeting With London’s Top Bankers
  • Deutsche Bank’s Chief Economist Sees ‘Painful’ UK Recession
  • UK Labour Surges to Record 17-point Poll Lead Amid Pound Selloff
  • UniCredit Gains as JPMorgan Upgrades on Attractive Risk Reward
  • Akzo Nobel Reverses Drop as Analysts See Long-Term Opportunity

Central Banks

  • Fed's Mester (2022, 2024 voter) said further rate hikes will be needed and will need a restrictive stance for some time, while she added it can be better to act more aggressively in an uncertain environment and that pre-emptive action can prevent the worst-case outcome. Mester said this is the time to be decisive and the Fed policy rate may be right below the restrictive level, as well as noted that they are not at neutral yet and need to get above that. Furthermore, Mester said rates are not coming down next year and that at some point they would have done enough and it will be a case of balancing risk at some point, but this is not that moment, according to Reuters.
  • Fed's Evans (non-voter, departing) says US inflation is high, getting it under control is the number one job, via CNBC; Real rate could be around 1.5% by next spring, in Evans' judgement. By this period, can perhaps sit and wait on rates; end-2022 consensus view on rates is 4.25-4.50%. Tougher rate environment is here for a while.


  • Nord Stream says it has detected damage at three lines of the Nord Stream gas pipeline system; damages are unprecedented and is impossible to estimate when gas transportation infrastructure will be restored. Subsequently, Russia's Kremlin said pipeline damage is a very concerning development; cannot rule out sabotage.
  • Russian Head of Security Council says Russia has the right to use nuclear weapons if necessary, says it is not a bluff, via Reuters.
  • US State Department Spokesman Price said the US does not see an Iran deal coming together soon.


  • DXY has eased from newly formed peaks as yields ease from highs and broader sentiment stages a modest recovery.
  • A pullback that is benefitting GBP in particular, with Cable outperforming after recent pressure as the Pound manages to gain some composure ahead of BoE's Pill.
  • Similarly, NZD is among the best performers following RBNZ Governor Orr stating that further tightening is likely required.
  • More broadly, G10 peers are taking advantage of the USD's pullback though the magnitude of this does differ somewhat; on the flip side, Yuan remains under pressure following a weaker fix, soft data and World Bank updates.

Fixed Income

  • Core benchmarks are mixed and feature 'outperformance' in Gilts after yesterday's heft losses with the morning's I/L relatively robust.
  • More broadly, Bunds initially waned a touch from a 138.75 best, though have reverted back towards the top-end of parameters as broader sentiment slips.
  • Stateside, USTs are holding firm and similarly at the top-end of ranges ahead of numerous Fed officials and 5yr issuance.
  • UK DMO intends to hold 19 Gilt auctions in October through December, now plans three syndications for remainder of year.


  • Crude benchmarks have been meandering higher throughout the session, after yesterday's lower settlement.
  • Focus on Nord Stream 1 & 2 damage with the cause currently unknown and fresh reporting around a potential EU gas price cap, to be discussed on Friday.
  • At least 12 countries have signed a letter which calls on the EU to propose a gas price cap at this week's Energy Ministers meeting via Politico citing a letter; proposals will be discussed on Friday, September 30th
  • US President Biden said companies running gas stations need to bring down gasoline prices at the pump now, according to Reuters.
  • German network regulator later stated that it did not know the cause of the Nord Stream 1 pressure drop but didn't see any impact on the security of supply, according to Reuters.
  • BP (BP/ LN) halted production and evacuated staff at two offshore oil platforms in the US Gulf of Mexico ahead of Hurricane Ian.
  • Intercontinental Exchange is reportedly planning to accept allowances generated by the carbon market as collateral in its European futures market to ease the pressure on utilities and traders amid the energy crisis, according to FT.
  • Hurricane Ian has strengthened to a Category 3 storm (major hurricane), via NHC; expected to strengthen further today, has made landfall.
  • UBS says that only a production cut by OPEC+ can break the negative momentum within oil in the short-term, adding that to provide a stronger floor in oil prices, Saudi would need to make extra voluntary cuts.
  • Metals are deriving support from the USDs relative pullback, though spot gold for instance remains within yesterday's parameters.

US Event Calendar

  • 08:30: Aug. Durable Goods Orders, est. -0.3%, prior -0.1%;
    • Aug. -Less Transportation, est. 0.2%, prior 0.2%
  • 08:30: Aug. Cap Goods Orders Nondef Ex Air, est. 0.2%, prior 0.3%
    • Aug. Cap Goods Ship Nondef Ex Air, est. 0.3%, prior 0.5%
  • 09:00: July S&P CS Composite-20 YoY, est. 17.10%, prior 18.65%
    • July S&P/CS 20 City MoM SA, est. 0.20%, prior 0.44%
    • July S&P/Case-Shiller US HPI YoY, prior 17.96%
  • 10:00: Sept. Conf. Board Consumer Confidence, est. 104.5, prior 103.2
    • Sept. Conf. Board Expectations, prior 75.1
    • Sept. Conf. Board Present Situation, prior 145.4
  • 10:00: Aug. New Home Sales, est. 500,000, prior 511,000
    • Aug. New Home Sales MoM, est. -2.1%, prior -12.6%
  • 10:00: Sept. Richmond Fed Index, est. -10, prior -8

DB's Jim Reid concludes the overnight wrap

Yesterday I published my annual long-term study. It contains over 200 years of nominal and real returns across global bonds, equities, commodities and other assets. We also look at structural themes and this year we put 2022’s terrible year for financial markets into some historical context and try to understand “How we got here and where we’re going”. This year we have also launched it as a presentation pack simultaneously for those who want to flick through the broad themes. You can see the link to this in the executive summary of the full report which you can find here.

One of the key themes I pick up in the report is that we’re in the first global bear market for government bonds in over 70 years, using the yardstick of a -20% decline from their recent peak. This has also been a disaster for split bond-equity portfolios given the equity selloff as well this year.

When it comes to the last 24 hours, UK assets have remained at the eye of the storm as the negative reaction to the government’s mini-budget on Friday continued. The country’s government bonds were completely routed for a second day, with yields on 5yr gilts up by +47.8bps to a post-2008 high of 4.52%. Bear in mind that follows on from the +51.0bps move on Friday, which itself was the largest daily rise since January 1985 when there was a 200bps rate hike, so these are not the sort of moves we’re used to seeing every day. Indeed as I showed in an extra CoTD last night (link here) this is now the largest 5 day rolling move for 5yr gilts since our daily data starts in 1979 and the largest 5 day rolling move in 10yr gilts since 1976 (around the IMF loan) and the 5th largest such move since our daily data starts in 1934 (other 4 all around this mid-1970s period). So the global fixed income VAR shocks of the last 12 months keep on coming.

Furthermore, the gap between UK 10yr gilt yields and German 10yr bunds widened to more than 212bps by the close yesterday, which is the biggest spread in available Bloomberg data going back to the early 1990s. We'll have a look at longer data later.

During yesterday’s session there was much speculation as to whether there might be an intervention or perhaps even an emergency intermeeting hike from the BoE. But it wasn’t until just before European markets closed that we finally heard from the UK Treasury, who put out a statement with a number of lines that looked designed to ease investors’ fears. In particular, there was confirmation that Chancellor Kwarteng would be setting out a “Medium-Term Fiscal Plan” on November 23, which would include details of the government’s fiscal rules and ensure that the debt-to-GDP ratio falls in the medium term. Furthermore, there would be a full forecast from the Office for Budget Responsibility (the government’s independent fiscal watchdog) alongside that fiscal plan in November 23. That contrasts with Friday’s mini-budget, where there wasn’t an independent forecast alongside the announcements.

Shortly after the Treasury statement, BoE Governor Bailey released his own statement, in which he said that the Monetary Policy Committee would “make a full assessment at its next scheduled meeting of the impact on demand and inflation from the Government’s announcements, and the fall in sterling, and act accordingly.” It further said that they would “not hesitate to change interest rates as necessary to return inflation to the 2% target sustainable in the medium term”. But in spite of those two statements, sterling actually lost ground afterwards since investors slashed the odds of an emergency inter-meeting hike. After hitting an all time low in Asia at $1.0392 it rallied to just above $1.09 by early afternoon and slightly higher on a hugely volatile day. After Bailey’s statement, it fell from just over $1.08 to just beneath $1.07, where it ended the day (up at $1.078 in Asia). In the meantime, the selloff in gilts resumed and they hit their lows for the session around the close. Looking forward, markets are still expecting an incredibly fast pace rate hikes ahead, with around 150bps priced in by the time of the next policy meeting on November 3, albeit that was down from 200bps at one point in the day.

The UK may have been the epicentre for yesterday’s moves, but the global bond selloff showed no sign of abating elsewhere, with yields rising to fresh multi-year highs on both sides of the Atlantic. In the US, 10yr Treasury yields were up +24.0bps on the day to 3.92%, their highest since 2010, which came as investors continued to ratchet up their expectations for how hawkish the Fed would be over the coming year.This morning in Asia, yields have pulled back with 10yr USTs (-5.28 bps) at 3.87% and 2yrs (-4.12 bps) at 4.30%, as we go to press. Indeed, markets are getting the message that the Fed will have to be restrictive for longer, and instead of pricing insurance cuts through next year, the spread between December 2023 and December 2022 policy rates reached their steepest point yet at 22.3bps. The focus on tighter Fed policy also meant that yesterday’s rise in 10yr yields was driven by real rates, which saw an outsize +30.6bps move up to 1.55% (remarkably, only their largest move since June, a sign of how volatile markets have been this year), thus leaving them at levels not seen since 2010. Over in Europe, mounting expectations that the ECB would hike by 75bps in October helped to send yields on 10yr bunds (+9.1bps) and OATs (+11.5bps) higher on the day. In particular, Italian BTPs were a key underperformer following their election, and the spread of 10yr yields over bunds widened by +9.9bps on the day to 242bps, taking them to their widest level since May 2020. That widening in peripheral spreads was also echoed on the credit side, with iTraxx Crossover widening +18.0bps on the day to 655bps, marking its highest closing level since March 2020 during the initial phase of the Covid crisis.

This global risk-off move was evident across asset classes, as the S&P 500 (-1.03%) fell for a 5th consecutive session to close at its lowest level so far this year. That takes it beneath the June lows to levels not seen since late 2020, and leaves the index down by over -23% on a YTD basis, where energy remains the only sector in the green for the year. European equities followed a similar pattern, and the STOXX 600 (-0.42%) fell for the 9th time in the last 10 sessions to also hit levels unseen since late 2020. This widespread selloff was seen amongst commodities, with Brent crude oil prices (-2.43%) closing beneath $85/bbl for the first time since January, and even the classic safe haven of gold (-1.31%) slumped to a 2-year low.

Asian equity markets are mixed this morning with the Nikkei (+0.83%), Shanghai Composite (+0.26%) and the CSI (+0.18%) on the positive side. Meanwhile, the Hang Seng (-1.05%) is trading lower, pulling back from some brief opening gains while the Kospi (-0.74%) is also weak. Across DMs, equity futures are pointing to a positive start with contracts on the S&P 500 (+0.68%), NASDAQ 100 (+0.76%) and DAX (+0.55%) all edging higher.

Elsewhere, yields on 20-yr Japanese government bonds jumped to its highest level since 2015, moving above 1% level and trading at 1.029% (+3.8bps) as the upward surge in global yields is adding pressure on super-long JGBs.

Back to yesterday and the limited data did nothing to help sentiment, with the Ifo’s business climate indicator from Germany falling more than expected to 84.3 in September (vs. 87.0 expected). With the exception of April and May 2020 during the Covid lockdowns, that means the index is at its lowest level since 2009 as the economy was recovering from the GFC. Otherwise in the US, the Dallas Fed’s manufacturing index fell to -17.2 in September (vs. -9.0 expected).

To the day ahead now, and data releases from the US include the Conference Board’s consumer confidence for September, the preliminary reading for durable goods orders and core capital goods orders for August, the FHFA house price index for July, and new home sales for August. Meanwhile in the Euro Area, we’ll get the M3 money supply for August. Central bank speakers include Fed Chair Powell, as well as the Fed’s Evans, Bullard and Kashkari, ECB Vice President de Guindos, the ECB’s Centeno, Villeroy and Panetta, as well as BoE chief economist Pill.

Tyler Durden Tue, 09/27/2022 - 07:58

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Biden Signs Bill To Declassify COVID Origins Intel

Biden Signs Bill To Declassify COVID Origins Intel

Having earlier issued his first veto since taking office, rejecting a bill that would have…



Biden Signs Bill To Declassify COVID Origins Intel

Having earlier issued his first veto since taking office, rejecting a bill that would have reversed a Labor Department rule on ESG investing, President Biden signed a bipartisan bill late on Monday that directs the federal government to declassify as much intelligence as possible about the origins of COVID-19.

His signature follows both the House and Senate unanimously approving of the measure, a rare moment of overwhelming bipartisan consensus.

The vote tallies meant that the measure would likely have survived a presidential veto had Biden opted to withhold his signature.

Biden, in a statement, said he was pleased to sign the legislation.

“My Administration will continue to review all classified information relating to COVID–19’s origins, including potential links to the Wuhan Institute of Virology,” he said.

"In implementing this legislation, my administration will declassify and share as much of that information as possible, consistent with my constitutional authority to protect against the disclosure of information that would harm national security."

Of particular interest to freedom-loving Americans who were tyrannized, censored, banned, and deplatformed for even daring to mention it, is the small matter of whether the virus leaked from the Level 4 Virus Lab at the Wuhan Institute of Virology (or instead, as The Atlantic proclaimed recently, a sick pangolin fucked a raccoon dog and coughed in someone's bat soup in a wet market.

The Department of Energy and other federal agents such as the FBI have increasingly backed a lab leak as the likely origin of the virus, while some lawmakers have even suggested Beijing may have deliberately allowed it to spread.

Tyler Durden Mon, 03/20/2023 - 20:41

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Asia’s trade at a turning point

Policymakers in Asia are rightly focused on the potential reconfiguration of global supply chains, given the implications these shifts may have for the…



By Sebastian Eckardt, Jun Ge, Hassan Zaman

Policymakers in Asia are rightly focused on the potential reconfiguration of global supply chains, given the implications these shifts may have for the development of their export-oriented and highly open economies. While the focus on potential shifts on the supply side of the global and regional trading system is well-justified, equally dramatic shifts on the demand side deserve as much attention. This blog provides evidence of the growing role of final demand originating from within emerging Asia and draws policy implications for the further evolution of trade integration in the region.

Trade has been a major driver of development in East Asia with Korea and Japan reaching high-income status through export-driven development strategies. Emerging economies in East Asia, today account for 17 percent of global trade in goods and services. With an average trade-to-GDP ratio of 105 percent, these emerging economies in East Asia trade a higher share of the goods and services they produce across borders than emerging economies in Latin America (73.2 percent), South Asia (61.4 percent), and Africa (73.0 percent). Only EU member states (138.0 percent), which are known to be the most deeply integrated regional trade bloc in the world, trade more. Alongside emerging East Asia’s rise in global trade, intra-regional trade—trade among economies in emerging East Asia—has expanded dramatically over the past two decades. In fact, the rise of intra-regional trade accounted for a bit more than half of total export growth in emerging East Asia in the last decade, while exports to the EU, Japan, and the United States accounted for about 30 percent, a pattern that was briefly disrupted by the COVID-19 crisis. In 2021, intra-regional trade made up about 40 percent of the region’s total trade, the highest share since 1990.

Drivers of intra-regional trade in East Asia are shifting 

Initially, much of East Asia’s intra-regional trade integration was driven by rapidly growing intra-industry trade, which in turn reflected the spread of cross-border global value chains with greater vertical specialization and geographical dispersion of production processes across the region. This led to a sharp rise in trade in intermediate goods among economies among emerging economies in Asia, while the EU, Japan, and the United States remained the main export markets for final goods. Think semiconductors and other computer parts being traded from high-wage economies, like Japan, Korea, and Taiwan, China for final assembly to lower-wage economies, initially Malaysia and China and more recently Vietnam, with final products like TV sets, computers, and cell phones being shipped to consumers in the U.S., Europe, and Japan.

The sources of global demand have been shifting. Intra-regional trade no longer primarily reflects shifts in production patterns but is increasingly underpinned by changes in the sources of demand for exports of final goods. With rapid income and population growth, domestic demand growth in emerging East Asia has been strong in recent years, expanding by an average of 6.4 percent, annually over the past ten years, exceeding both the average GDP and trade growth during that period. China is now not only the largest trading partner of most countries in the region but also the largest source of final demand for the region, recently surpassing the U.S. and the EU. Export value-added absorbed by final demand in China climbed up from 1.6 percent of the region’s GDP in 2000 to 5.4 of GDP in 2021. At the same time, final demand from the other emerging economies in East Asia has also been on the rise, expanding from around 3 percent of GDP in 2000 to above 3.5 percent of GDP in 2021. While only about 12 cents of every $1 of export value generated by emerging economies in Asia in 2000 ultimately met consumer or investment demand within the region, today more than 30 cents meet final demand originating within emerging East Asia.

Figure 1. Destined for Asia

Source: OECD Inter-Country Input-Output (ICIO) Tables, staff estimates. Note: East Asia: EM (excl. China) refers to Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, and Vietnam.

These shifting trade patterns reflect dramatic shifts in the geography and makeup of the global consumer market. Emerging East Asia’s middle class has been rising fast from 834.2 million people in 2016 to roughly 1.1 billion in 2022. Today more than half of the population—54.5 percent to be precise—has joined the ranks of the global consumer class, with daily consumer spending of $12 per day or more. According to this definition, East Asia accounted for 29.0 percent of the global consumer-class population by 2022, and by 2030 one in three members of the world’s middle class is expected to be East Asian. Meanwhile, the share of the U.S. and the EU in the global consumer class is expected to decline from 19.2 percent to 15.8 percent. If we look at consumer-class spending, emerging East Asia is expected to become home to the largest consumer market sometime in this decade, according to projections, made by Homi Kharas of the Brookings Institution and others, shown in the figure below.

Figure 2. Reshaping the geography of the global consumer market

Figure 2

Source: World Bank staff estimates using World Data Pro!, based on various household surveys. Note: Middle-class is defined as spending more than $12 (PPP adjusted) per day. Emerging East Asia countries included in the calculation refer to Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, Vietnam, and China.

Intraregional economic integration could act as a buffer against global uncertainties  

Emerging economies in Asia are known to be the factories of the world. They play an equally important role as rapidly expanding consumer markets which are already starting to shape the next wave of intra-regional and global trade flows. Policymakers in the region should heed this trend. Domestically, policies to support jobs and household income could help bolster the role of private consumption in the steady state in some countries, mainly China, and during shocks in all countries. Externally, policies to lower barriers to regional trade could foster deeper regional integration. While average tariffs have declined and are low for most goods, various non-tariff barriers remain significant and cross-border trade in services, including in digital services remains particularly cumbersome. Multilateral trade agreements, such as ASEAN, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP) offer opportunities to address these remaining constraints. Stronger intraregional trade and economic integration can help diversify not just supply chains but also sources of demand, acting as a buffer against uncertainties in global trade and growth.

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California Hospital Refuses Transplant Surgery For Unvaccinated Woman With End-Stage Kidney Disease

California Hospital Refuses Transplant Surgery For Unvaccinated Woman With End-Stage Kidney Disease

Authored by Allan Stein via The Epoch…



California Hospital Refuses Transplant Surgery For Unvaccinated Woman With End-Stage Kidney Disease

Authored by Allan Stein via The Epoch Times (emphasis ours),

Even on a good day, Linda Garinger of Ramona, California, thinks about dying.

Linda Garinger (L), who has end-stage kidney disease, and her daughter Emily Lewis read the letter from a hospital denying Garinger a kidney transplant operation because she won't get a COVID-19 vaccine. (Allan Stein/The Epoch Times)

Since she went on kidney dialysis two years ago, she’s had a heart attack and a cardiac episode associated with her thrice-weekly treatments.

Her energy is low as her other vital organs slowly fail. Her blood pressure is out of control—hovering at around 200 systolic over “100-something”diastolic whenever she undergoes dialysis.

Garinger feels it’s only a matter of time before her next heart attack, which could prove fatal unless she gets a new kidney.

Linda Garinger, 68, of Ramona, Calif., looks out her living room window on March 13, 2023. (Allan Stein/The Epoch Times)

The dialysis is very stressful on me. My vision is going. My hair is falling out. I’ve got skin cancer,” said Garinger, 68. “They said it’s from the dialysis not filtering out all the bad stuff.

“My biggest fear is I’ll have a heart attack during dialysis. I’m just going downhill right now.”

In 2022, Garinger was eagerly waiting for a kidney transplant at Sharp Memorial Hospital in San Diego, having found a good organ match in her daughter, the doctors told her.

But, “I needed [the transplant] like two years ago,” Garinger said.

Early last May, Garinger received an unexpected letter from the hospital saying she was no longer on the United Network for Organ Sharing (UNOS) waitlist for a kidney transplant.

“The reason for this status change is you have not had your COVID vaccines,” read the May 6, 2022, letter Garinger shared with The Epoch Times.

“Once this situation is remedied, you will be evaluated for re-activation on the transplant waitlist.”

Garinger did not appeal the hospital’s decision. She knew “in her gut” her unvaccinated status would always be a problem.

Still, she put her faith in Sharp Memorial, only to be put through tests, medical procedures, and consultations at a substantial cost to Medicare.

“The whole time, they knew I wasn’t vaccinated and that [my daughter] wasn’t vaccinated. They would always ask me, ‘Why don’t you want to get a vaccine?'”

“I was pretty adamant,” said Garinger. “I didn’t want to take anything that was still experimental.”

She remembered her good friend who died two weeks after receiving a COVID shot. “She lived right over here, on the other side [of the street],” Garinger said.

Garinger said she was fortunate to find another hospital nearby that would operate without her taking the vaccine.

Starting All Over

The challenge now is the time it will take to complete all the required paperwork and preliminary procedures, the time it will take to get on a waitlist for a kidney donor, and the time it will take to find a donor.

She fears her time will run out before then.

One sympathetic doctor said, ‘Linda, you could drop over dead. Your heart could stop.’ So, I have to watch what I eat, and on the days I don’t do dialysis, I take this powder that tastes like gritty sand” to remove the excess potassium from her body.

Garinger finds herself among many people who need an organ transplant but are up against a medical system still adhering to vaccine protocols in many facilities.

In a 2021 Healio transplantation survey, 60 percent of the 141 transplant centers that responded did not require a COVID-19 injection before surgery. The survey sample represented just over 56 percent of the transplant centers in the United States.

Jeffrey Childers, a commercial attorney based in Gainesville, Florida, served clients facing COVID-19 mandates at hospitals and medical clinics during the pandemic.

He said Garinger’s case reflects the “COVID mania” that permeated the medical establishment beginning in 2020.

“This was an ugly manifestation of the COVID management regime that popped up,” Childers said. “All the cases get a lot of attention because people are horrified. But the transplant people will say they have limited resources, only get so many organs each year, and we have to give them to people with the best survival chances. They’ll hide behind that forever.”

Life-and-Death Decisions

Childers said health care facilities still have tremendous discretionary power to make critical decisions concerning COVID-19 vaccines.

“To see these kinds of life-and-death bureaucratic powers wielded by people who are not motivated by the science but—something else—is horrifying,” Childers said.

“I’ve run into it a handful of times in Florida. The law that applies is state dependent. The folks who manage those donor lists and the assignments have a lot of discretion.

“It’s even more appalling it’s happening now so late in the pandemic when the mandates are gone. You can’t find a single person who says they regret not taking the vaccine. But you can find tons going the other way.”

Childers said pro-vaccine advocates argue that an unvaccinated recipient is much more likely to die from COVID-19 following transplant surgery than a vaccinated patient.

I don’t know the official line anymore,” he told The Epoch Times. “[The vaccine] doesn’t stop you from dying. It doesn’t stop you from getting sick.”

One study in the November 2022 MDPI, a Switzerland-based publisher of open-access scientific journals, claimed that over 60 days, the death rate among unvaccinated kidney transplant patients was 11.2 percent at the time of COVID-19 infection.

The study found the death rate among the vaccinated was 2.2 percent. More than two-thirds of the 144 patients in the study received a kidney transplant.

By contrast, a study published in the Journal of Clinical Medicine in September 2022 found that some cornea transplant patients rejected the grafts after receiving a COVID-19 vaccine.

In some cases, the rejection took place 20 years after the procedure.

Childers believes the science generally does not support the notion that unvaccinated transplant recipients are at an increased risk of dying from COVID-19.

The argument is always don’t give an organ to a person who is living some kind of lifestyle that is risky or increases the risk of dying from something else,” Childers told The Epoch Times.

“That’s the logic they’re applying to this. They’re essentially saying by not taking the vaccine, [transplant patients] are at higher risk of dying from COVID. So they don’t want to give an organ to somebody at high risk voluntarily.”

Ohio attorney Warner Mendenhall, representing clients in vaccine mandate cases, said he knows at least 60 organ transplant denial suits working through the medical freedom group Liberty Counsel.

Each case involves a client refusing to take the COVID-19 vaccine required for transplant surgery.

“We’re seeing [transplant denials] at many hospitals across the country,” Mendenhall said.

And while the medical establishment remains split on the safety and effectiveness of COVID-19 injections, some “medical people are concerned about clotting and other issues that occur with the vaccinated.”

“Especially if you’ve got liver and kidney problems and need that type of transfer, you don’t want to be vaccinated before the transplant. That’s my understanding,” Mendenhall said.

A ‘Fiduciary Responsibility’ to Patients

Often, the unvaccinated transplant patient has maintained a longstanding medical relationship with the hospital or clinic without issue before the COVID-19 vaccine rollouts.

For this reason, Mendenhall believes there is a “fiduciary relationship that the hospitals engage in with a transplant patient.” To break that obligation would be “a real breach of that fiduciary responsibility to them.”

According to the Chronic Disease Research Group, an estimated 37 million people in the United States have kidney disease in varying stages.

About 1 million Americans are in the end stages of the disease. At the same time, 550,000 undergo kidney dialysis to remove excess toxins from the blood because their kidneys cannot perform this function.

The average wait time for a kidney transplant in the United States is three to five years at most health facilities, but it’s longer in some parts of the country, according to

“It is best to explore transplant before you need to start dialysis. This way, you might be able to get a transplant ‘preemptively,’ before you need dialysis,” the organization’s website states.

“It takes time to find the right transplant center for you, to complete the transplant evaluation, to get on the transplant waitlist for a deceased donor, or to find a living kidney donor if you can.”

Garinger said she is in terminal Stage 5 of her kidney disease and needs dialysis almost every other day to stay alive.

“I’m pissed off,” said Garinger, who gets short of breath just walking to the kitchen.

I can’t walk to Costco or a grocery store now. My muscles—I get out of wind so easily. I can’t walk down to my chickens anymore.

Her daughter Emily Lewis, 35, is a recent medical assistant program graduate and is now her mother’s live-in caretaker as she waits for a kidney transplant.

“I put my life on hold because [of my mother],” Lewis said, although she has no regrets.

With her career in limbo, Lewis said she is angry at the injustice of the COVID-19 mandates while doubting the shots even work.

Linda Garinger, who has end-stage kidney disease, goes through her medicines on March 13, 2023. (Allan Stein/The Epoch Times)

“Everyone I know who’s COVID vaccinated has had it four or five times. I’ve had it zero,” Lewis told The Epoch Times.

Denied access to the kidney wait list at Sharp Memorial, Garinger found that the University of California San Diego Medical Center was willing to perform the kidney transplant surgery.

But the longer it takes to find a kidney donor, the more likely it is that she won’t make it back to a more normal life.

She characterized her relationship with her doctors at Sharp Memorial as adversarial since she opposed taking the COVID-19 vaccine under any circumstances.

She remembered one doctor in Ramona who kept “pressuring me” about the vaccine.

He said, “What will you do if you get COVID? What if you catch COVID and you have to go to the hospital?’

“Well,” she told him. “I have this protocol on my fridge—vitamins C and D. I have ivermectin. Number one: I won’t go to the hospital. It’s a death sentence there.”

“I guess you know more than me,'” the doctor said as he stood up and left the room.

“I didn’t know I had an adversary” or that “I was an evil person. I just had a gut feeling they would deny me [a kidney] because they kept pressuring me about the shot.”

“They did the same thing with me,” Emily said.

‘Why Aren’t You Vaccinated?’

At one point, Garinger demanded data showing the vaccine’s side effects.

“There was none,” she said. “It came down to the last final interview with the surgeon. All he could ask me was, ‘Why aren’t you vaccinated? Why don’t you want to get vaccinated?'”

“I don’t have COVID,” Garinger said. “[Emily] doesn’t have COVID. Another thing they told me was we were a [donor] match. And then I got to UCSD, and the bloodwork showed she was not a match.”

Sharp Memorial did not respond to a request for comment from The Epoch Times. UCSD Medical Center did not return an email seeking comment.

New Orleans attorney David Dalia said Garinger’s case seems to be medical “discrimination.”

They are discriminating against her based on her vaccination status,” he said.

During the pandemic, Dalia worked on vaccine mandate cases with Frontline doctors, filing amicus briefs on behalf of 1.5 million federal employees who refused to take a COVID-19 vaccine by order of President Joe Biden.

“The truth is [Garinger] has a lot better chance of living than a vaccinated person. We can back that up. They’re viewing it as sort of a disability.

“Well, that’s a violation of the Americans with Disabilities Act. And federal law specifically says all experimental use authorization drugs are strictly voluntary and subject to informed consent.”

Dalia said informed consent is “never coerced.”

As Garinger works through the intake process at UCSD Medical Center, she has good, bad, and “hell” days.

“I sit in a chair all day,” said Garinger, who ran a successful foreclosure business before she retired due to her illness. “[Emily] helps me do cooking. She does all the chopping and stuff. I have a chair in the kitchen. I walk to the kitchen and start cooking. I don’t do much. My gardening is on hold—everything is on hold. My muscles are gone. I use electric carts to go to Costco. I can’t do anything. I’m out of breath. It sucks.”

“Every part of my body is deteriorating. So, I’m on hold until I get a kidney.”

Just as painful are the times people call her “evil ” because she refuses to take an mRNA vaccine for COVID-19.

“You’re going to give [COVID] to everybody,” they tell her. “You’re evil for not getting vaccinated.”

“That’s how I felt,” Garinger told The Epoch Times.

She said another fear is receiving a kidney from a vaccinated donor, with unknown health effects, since there is no way to determine which donor is vaccinated and which one is not.

Feeling her time is growing short, Garinger said she is still determined to keep fighting in the time she has left.

“I’ve got to get this done. Every day there’s something else going wrong with me because my kidneys are gone,” Garinger said.

Tyler Durden Mon, 03/20/2023 - 18:20

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