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Geopolitical Tensions Lift Oil and Gold, but little Sign of Haven Buying in FX

Overview: US economic data surprised to the upside yesterday,
and although interest rates rose as one would expect, the dollar’s initial
gains were pared,…



Overview: US economic data surprised to the upside yesterday, and although interest rates rose as one would expect, the dollar's initial gains were pared, and the Dollar Index finished slightly lower on the day. This seemed, in some respects, to echo how the greenback reacted to the recent jobs report. However, then, interest rates softened, but the inability to rally on seemingly good news is notable. The heightened tensions in the Middle East have spurred a dramatic rally in oil prices. December WTI is nearly 3.5% higher near $88.50 after gapping higher. Gold has also jumped after two relatively subdued sessions and is near $1945, up more than 1%.

The safe haven buying in foreign exchange market is limited. The dollar is heavier against most of the G10 currencies but the euro and Swedish krona. The yen is little changed after the BOJ bought bonds in an unscheduled operation, and the Swiss franc is up by less than 0.2%. Most emerging market currencies are also firmer against the US dollar. The biggest decline is in the Polish zloty, which seems to be subject to profit-taking after its recent run-up. Equity markets are mostly lower. In the Asia Pacific region, Japan, South Korea, and Australia saw minor gains. Europe's Stoxx 600 is slightly lower and US index futures show a heavier bias. Fixed income is also not showing safe haven demand. Yields in Europe are mostly 1-2 bp higher. UK Gilts and Italy's BTPs are under more pressure and yields are up nearly six basis points. The 10-year Treasury yield is flattish near 4.84%.

Asia Pacific

China reported stronger than expected Q3 GDP. The 1.3% quarter-over-quarter growth compares with a 0.9% median forecast in Bloomberg's survey. This put year-over-year growth at 4.9%, better than the 4.5% pace anticipated. Beijing has promised more measures to bolster growth, and this looks to entail more fiscal and monetary support. The September details were mixed. Industrial output was steady on a year-over-year basis at 4.5%, but retail sales picked up (5.5% vs. 4.6%). Fixed asset investment was slipped to 3.1% (from 3.2%), while property investment contracted by 9.1% (vs. -8.8% in August). The surveyed jobless rate eased to 5.0% from 5.2%.

The Bank of Japan announced another unscheduled bond buying operations today after the 10-year yield reached 0.815%, a new high. Separately, but perhaps not totally unrelated, some press reports suggested the BOJ was considering raising its inflation forecasts at the meeting later this month. Japan will report September trade figures tomorrow. Japan's trade balance improves in September, or it has in 19 of the past 20 years. August's JPY938 bln trade deficit may have been halved in September as exports may have risen on a year-over-year basis for the first time in three months. Imports have been falling since April but the 17.7% year-over-year decline in August may mark the bottom, with the pace slowing in September. Australia reports September's employment situation. It has created an average of almost 38k jobs a month this year through August, slower than the nearly 51k average in the first eight months of 2022. Of those jobs, about 23k on average have been full-time jobs this year compared with 51k in the year ago period. 

The dollar rose to a marginal new high of JPY149.85 yesterday, which is its best level since the JPY150 level was breached on October 3. It has held below there today. The nearly 24 bp rise in the 10-year US yield in the past two sessions proved too much. But as we noted the BOJ intervened in the bond market not the foreign exchange market. Still, the yen and the JGB yield are little changed. The Australian dollar set the session high shortly after Europe went home yesterday near $0.6380. It stopped slightly short of the 20-day moving average and the (61.8%) retracement of sell-off from last week's high near $0.6445. Central bank Governor Bullock's first formal speech played up the risks to inflation and may have helped the Aussie extend its gains to almost $0.6395. A move above $0.6400 targets last week's high. The greenback's uptrend against the Chinese yuan remains intact. It initially fell to a four-day low slightly below CNY7.2990 before recovering and setting new session highs near CNY7.3130. China's discount to the on 10-year rates fell to a new extreme around 215 bp. The PBOC set the dollar's reference rate at CNY7.1795 compared with the average forecast in Bloomberg's survey for CNY7.3085.


The UK's CPI rose by 0.5% last month as expected, which left the year-over-year rate unchanged at 6.7%. The core rate eased to 6.1% from 6.2%, which is the slowest since January. Services inflation ticked up to 6.9% from 6.8%. Producer prices are still falling on a year-over-year basis. Note that September's inflation is used to set cost-of-living increases in some transfer payments. The UK reports September retail sales before the weekend. In the swap market, the odds of a hike on November 2 slipped slightly but rose to a bit above 50% for the last meeting of the year on December 14. 

The eurozone has a relatively quiet economy schedule until next week's ECB meeting, where there is practically no chance of a hike in key rates. Earlier today was the release of August construction output, which tumbled 1.1% after a 0.8% increase in July. It is not a market-mover even in the best of times. Next week, ahead of the ECB meeting, the markets and officials will see the preliminary October PMI (which has been below the 50 boom/bust level for the past four months) and September M3 money supply (it contracted on a year-over-year basis in July and August for the first time since 2010).

Despite the weakness of the German economy, which last grew in Q3 22 and may expand in a single quarter this year, Berlin is undeterred in its political agenda. It wants the re-establishment of the Stability and Growth Pact that enforces fiscal discipline on members. The fact that Italy is thus far avoiding a recession means that it cannot take advantage of the same exception as Germany. Italy's 10-year premium over Germany that had recorded the year's low in mid-June below 160 bp is back above 200 bp. Germany is also having a row with France continues. The debate is over the extent that government funds should be used to extend the life of nuclear reactors. Spain, which holds the rotating EU presidency, is trying to work out a compromise that would allow France to keep its aging nuclear reactors functioning while minimizing the risk that it undercuts power prices in Europe. The EU summit later this month will likely take up the issue, but a resolution does not seem imminent.

The euro was surprisingly resilient in the face of the stronger than expected US data and the jump in US rates. The single currency fell by about a third of a cent after the US retail sales surprise but did not make a new low on the day. It proceeded to recover fully and make record new session highs after European markets closed near $1.0595. It met the (61.8%) retracement (~$1.0585) of the sell-off from the October 12 high before stalling. Still, it settled above Monday's high (~$1.0565). The euro is little changed within yesterday's range. There are nearly 1.0 bln euros in options struck at $1.06 that expire today. Sterling is uninspiring. It was confined to Monday's range (~$1.2125-$1.2220) and the close was near mid-range. Unlike the euro, it was unable to record session highs in North America, but it did manage to recover from about $1.2135 to almost $1.2210 before faltering. It is firm today and still within Monday's range. It needs to resurface above $1.2255 to be significant. 


Rather than lose momentum as Q3 wound down, as we expected, the US economy strengthened. Retail sales rose by 0.7%, more than twice the median in Bloomberg's survey. Even the core measure, which exclude autos, gasoline, building materials and food services rose by 0.6%. The median forecast was for a 0.1% rise. Moreover, retail sales for August were revised up to 0.8% (from 0.6%) on the headline and 0.2% on this core measure (from 0.15). Industrial output also surprised. It was expected to be flat and instead rose by 0.3%, led by a 0.4% rise in manufacturing production. Here, unlike retail sales, August revisions were downward. The 0.4% rise initially reported in August industrial output was revised to flat and the 0.1% rise in manufacturing was revised to -0.1%. Business inventories stronger than expected, rising by 0.3% in August and 0.1% in July (after an initial flat estimate). The Atlanta Fed's GDP tracker ticked up from 5.1% for Q3 to 5.4%. Still, the futures market, the odds of a Fed hike at the conclusion of the October 31-November 1 meeting, firmer to a still low 12% from about 8%. The odds of a hike at the last FOMC meeting of the year (December 12-13) rose to about 48% from about 37%. However, the market also made a large adjustment to converge toward the Fed's latest dot plot that implied only two cuts next year. The implied yield of the December 2024 Fed funds futures contract settled with an implied yield of 4.84%, an increase of 11.5 bp, the most since early September. The current effective Fed funds rate is 5.33%. 

On tap today, the US reports September housing starts and permits. They are expected to unwind some of August's changes, when permits rose by 6.8% and starts fell by 11.3%. Economists expected permits to soft and starts to recover about 2/3 of its decline. Late in the session, the Fed's Beige Book, prepared for the upcoming FOMC meeting will be released. Six Fed officials speak throughout the session, but the slightly different views are largely known already.

Softer than expected Canadian September CPI weighed on the Canadian dollar as it reduced the perceived chances of a central bank rate hike next week. Instead of increase, the headline rate slipped by 0.1% and this allowed the year-over-year rate to fall to 3.8% from 4.0%. The underlying core measures also fell by more than expected. The swaps market downgraded the chances of a hike next week to about 15% from around 43% before the report. The probability of a hike this year fell to about 43%, the lowest in a month, from nearly a 65%. Canada also report September housing starts today. They have fell in July and August and are expected to have fallen again. The median forecast in Bloomberg's survey is for a little more than a 5% decline that would take starts to about 240k, a six-month low.

In response to the combination of US strong retail sales and easier than expected prices pressures in Canada saw the greenback spike back to last week's high slightly above CAD1.3700. Over the next few hours, it trended back to almost CAD1.3620. It spent the North American afternoon in a 20-pip range around CAD1.3640. The US dollar is trading heavier and looks set to test CAD1.3600, where there are about $655 mln in options that expire today. There is another set of options there for $1.6 bln that expire Friday. A break likely spurs a test on the CAD1.3550-70 area. The greenback has been stuck in a range against the Mexican peso. It traded between roughly MXN17.8450 and MXN18.11 before the weekend and remained in the range the last two sessions. Like it did against the other currencies, the dollar initially rallied on the economic data, unwound the gains, and then consolidated. The US dollar made a marginal new session low in early North American afternoon dealings near MXN17.8720. It is straddling the MXN18.00 area today.



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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…



Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

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




Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

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

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…



Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.


A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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