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Global Recovery Rally Continues Unevenly In Asia

Global Recovery Rally Continues Unevenly In Asia



The peak virus global recovery rally continued unchallenged on US equities overnight, with the S&P 500 now officially fully recovered from its March dose of COVID-19 infection. The rotation out of US dollars and into the wider world continued uninterrupted, with the Australasian currencies’ notable beneficiaries. Oil’s rally stalled overnight, but the price moves look corrective, not structural. That is hardly surprising given the volume of speculative long positioning added to the futures market in the past month. US long-dated Treasury yields unwound Friday’s sell-off, with yields falling again ahead of the FOMC starting today.

The FOMC itself should contain no surprises. Overnight the Federal Reserve announced an expansion to its Main Street Lending Program, allowing more small and medium businesses to access support. That should be screaming to one and all that the Fed will have no surprises when it announces its latest rate decision tomorrow night. The Fed Funds rate will be unchanged at 0.25%, and we can expect the Fed to remain in uber-dove mode. It will also reiterate that policy will stay that way until its unemployment objectives, around 4.0%, is achieved.

That should mean that there will be no surprises to derail the buy everything post-COVID-19 rally that is still in full swing. The rally in equities has not been built on a v-shaped recovery by the world economy. Those of us living in the real world know this is not so. Instead, it is built on the almost limitless amounts of unconventional easing by the world’s central banks in its myriad forms. And, it appears in the Fed’s case especially, a determination to backstop any losses by investors, no matter how stupid or greedy they are.

Across the developed world, we will soon know if our national leaders were geniuses, lucky, naive, greedy, short-sighted or just plain dumb. Economies all over the globe are reopening before COVID-19 has been controlled. Only large secondary outbreaks of COVID-19 though, or an escalation of primary ones that result in more national shutdowns, can, at this stage, seemingly derail rail the peak-virus juggernaut. Which side of that equation, those national leaders and their nation’s economies are, shall be apparent soon enough.

That said, the level of disbelief and lack of engagement in the global asset rally many investors, the author included, suggests that there is still plenty of capital on the side-lines with itchy trigger fingers. Given that circumstance, and assuming the world dodges a second COVID-19 bullet, the peak-virus trade may have plenty of legs left in it yet. At this stage you are either long or square, but certainly not short unless you have impressively deep pockets.

Asian equities are mostly in the green, with some notable exceptions.

Wall Street was firing on all cylinders of its big-block V-8 engine overnight; emissions be damned. A clearly supportive Fed, and no headline surprises, meant it was peak-virus business as usual, as the S&P 500 notably, erased all it’s March losses. The S&P 500 rose 1,21%, the NASDAQ rose 1.13%, and the Dow Jones pushed 1.71% higher.

Today in Asia, the picture is mostly a positive one. Australian stock markets are on fire, led by the large banks and resource stocks. The rally was also partially supported by investors returning after a partial holiday yesterday. The ASX 200 is 2.60% higher, and the All Ordinaries are 2.40% higher. No wonder it’s called the lucky country.

The Nikkei 225 and Kospi are both in the red today, as North Korea announces it is cutting off all communications with the South, and the aftermarket S&P 500 futures ease on profit-taking. The Nikkei 225 is down 0.70%, and the Kospi has fallen 0.30%.

Elsewhere though the picture is all positive. Hong Kong has leapt by 1.50% ahead of some prominent IPO’s this week, a calmer security situation, and Cathay Pacific, Swire and Air China shares suspended pending an announcement. The obvious outcomes being a new capital raising or a buyout/merger.

Mainland China’s Shanghai Composite and CSI 300 are 0.50% higher. Singapore’s Straits Times is 1.10% higher, with Jakarta up 1.10% and Kuala Lumpur climbing 1.65%.

The US Dollar sell-off is seeing that capital deployed across the globe, including regional Asia. With no surprises expected from the Federal Reserve tomorrow night, the equity rally should continue peacefully on into European markets this afternoon.

Profit-taking is seen in Asia after the US Dollar sell-off continued overnight.

The US Dollar endured its 9th consecutive daily fall overnight. The dollar index of developed countries fell 0.30% to 96.65. The stars of the evening were the Australian and New Zealand Dollar, rising 0.80% to 0.7020 and 0.6560 respectively. The land’s Downunder continue to be boosted by COVID-19 successes, and their high beta to China and commodities, and therefore by default, to the global recovery. With no signs of central bank trash-talk, and the global equity rallies momentum undiminished, higher levels beckon for both.

Elsewhere amongst the majors, the USD/JPY fell by 1.10% to 108.40, as profit-taking on Yen cross positioning appeared to sweep the market. Today, North Korean tensions have seen further Yen-haven inflows, USD/JPY falling 0.30% to 108.10. Interestingly, a close at these levels will see USD/JPY close below its 100 and 200-day moving averages for the first time since April. That could presage a deeper correction to 107.00.

The US Dollar has gained modestly across most major and regional currencies in Asian trading. The price action, however, looks driven by the slight drop in the S&P 500 futures. The overall picture suggests currency markets are consolidating recent gains versus the Dollar before it’s sell-off resumes later today.

Oil sees profit-taking overnight, but price action remains constructive.

Oil markets retreated overnight, as Saudi Arabia officially announced that it, the UAE, and Kuwait’s excess production cuts would not continue as part of the new OPEC+ agreement. The extra cuts had been voluntary anyway and were not expected to have continued. But with such a large amount of speculative long position in the market, it sparked some profit-taking selling. Brent crude fell 3.50% to $40.80 a barrel, and WTI fell 3.40% to $38.25 a barrel.

Buyers have returned in Asia though, with Brent crude climbing around 0.80% to $41.20 a barrel, and WTI rising about 1.0% to $38.60 a barrel. The price action suggests that plenty of buyers in Asia are eager to snap up oil on any price dip, driven by physical demand. That further reinforces the constructive price action evident on both contracts.

Brent crude remains poised to fill in its March price gap to $45.00 a barrel, with WTI seemingly set to test $40.00 a barrel sooner rather than later. If the global recovery trade remains on track in other asset markets, it should also continue with oil as well.

US Dollar grants gold a stay of execution.

Gold continued to display its Teflon qualities overnight, as a falling US Dollar and US long-dated yields, granted gold longs another stay of execution. As the US Dollar fell, gold managed to rally impressively by 0.80% to 1698.00 an ounce.

Gold, though, could not attempt to breach resistance at 1705.00 an ounce. Indeed, it has tried and failed to do just that in Asian trading this morning. It has now retreated to $1694.00 in the morning session to lick its wounds.

Gold must break its descending trend-line resistance line at $1705.00 to give bullish traders hope, even though resistance at $1720.00 an ounce lies close behind. A failure to progress from its overnight gains, though, sets up further losses to $1670.00 and then $1645.00 an ounce, its 200-day moving average.

With the market having spent the last three months getting long gold at now unattractive higher prices, the risk remains strong, that gold will suffer a much deeper correction lower; especially as other asset markets continue to rally strongly.

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China Auto Sales Jump 55% Year Over Year As Price Cuts Continue To Move NEV Metal

China Auto Sales Jump 55% Year Over Year As Price Cuts Continue To Move NEV Metal

Retail sales of passenger vehicles scorched higher in May,…



China Auto Sales Jump 55% Year Over Year As Price Cuts Continue To Move NEV Metal

Retail sales of passenger vehicles scorched higher in May, with 1.76 million units sold, according to preliminary data from the China Passenger Car Association released this week. 

The sales figure represents 8% growth from the month prior. As has been the case over the last several years, new energy vehicles continue to grow disproportionately to the rest of the sector, driving sales higher.

Last month 557,000 NEVs were sold, growth of 55% year over year and 6% sequentially, according to a Bloomberg wrap up of the data. 

The sales boost comes as the country slashed prices to move metal throughout the first 5 months of the year. In late May we noted that China's auto industry association was urging automakers to "cool" the hype behind price cuts that were sweeping across the country. 

The price cuts were getting so egregious that the China Association of Automobile Manufacturers went so far as to put out a message on its official WeChat account, stating that "a price war is not a long-term solution". Instead "automakers should work harder on technology and branding," it said at the time.

Recall we wrote in May that most major automakers were slashing prices in China. The move is coming after lifting pandemic controls failed to spur significant demand in China, the Wall Street Journal reported last month. Ford and GM will be joined by BMW and Volkswagen in offering the discounts and promotions on EVs, the report says. 

At the time, Ford was offering $6,000 off its Mustang Mach-E, putting the standard version of its EV at just $31,000. In April, prior to the discounts, only 84 of the vehicles were sold, compared to 1,500 sales in December. There was some pulling forward of demand due to the phasing out of subsidies heading into the new year, and Ford had also cut prices by about 9% in December. 

A spokesperson for Ford called it a "stock clearance" at the time. 

Discounts at Volkswagen ranged from around $2,200 to $7,300 a car. Its electric ID series is seeing price cuts of almost $6,000. The company called the cuts "temporary promotions due to general reluctance among car buyers, the new emissions rule and discounts offered by competitors."

China followed suit, and thus, now we have the sales numbers to prove it...

Tyler Durden Wed, 06/07/2023 - 20:00

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World Bank: Global Economic Growth Expected To Slow To 2008 Levels

World Bank: Global Economic Growth Expected To Slow To 2008 Levels

Authored by Michael Maharrey via,

Most people in the mainstream…



World Bank: Global Economic Growth Expected To Slow To 2008 Levels

Authored by Michael Maharrey via,

Most people in the mainstream concede that the economy is heading for a recession, but the consensus seems to be that downturn will be short and shallow. Projections by the World Bank undercut that optimism.

According to the World Bank, global growth in 2023 will slow to the lowest level since the 2008 financial crisis.

In other words, the World Bank is predicting the beginning of Great Recession 2.0.

You might recall that the Great Recession was neither short nor shallow.

In fact, World Bank Group chief economist and senior vice president Indermit Gill said, “The world economy is in a precarious position.”

According to the World Bank’s new Global Economic Prospects report, global growth is projected to decelerate to 2.1% this year, falling from 3.1% in 2022. The bank forecasts a significant slowdown during the last half of this year.

That would match the global growth rate during the 2008 financial crisis.

According to the World Bank, higher interest rates, inflation, and more restrictive credit conditions will drive the economic downturn.

The report forecasts that growth in advanced economies will slow from 2.6% in 2022 to 0.7% this year and remain weak in 2024.

Emerging market economies will feel significant pain from the economic slowdown. Yahoo Finance reported, “Higher interest rates are a problem for emerging markets, which already were reeling from the overlapping shocks of the pandemic and the Russian invasion of Ukraine. They make it harder for those economies to service debt loans denominated in US dollars.”

The World Bank report paints a bleak picture.

The world economy remains hobbled. Besieged by high inflation, tight global financial markets, and record debt levels, many countries are simply growing poorer.”

Absent from the World Bank analysis is any mention of how more than a decade of artificially low interest rates and trillions of dollars in quantitative easing by central banks created the wave of inflation that continues to sweep the globe, along with massive levels of debt and all kinds of economic bubbles.

If you listen to the mainstream narrative, you would think inflation just came out of nowhere, and central banks are innocent victims nobly struggling to save the day by raising interest rates. Pundits fret about rising rates but never mention that rates were only so low for so long because of the actions of central banks. And they seem oblivious to the consequences of those policies.

But being oblivious doesn’t shield you from the impact of those consequences.

In reality, central banks and governments implemented policies intended to incentivize the accumulation of debt. They created trillions of dollars out of thin air and showered the world with stimulus, unleashing the inflation monster. And now they’re trying to battle the dragon they set loose by raising interest rates. This will inevitably pop the bubble they intentionally blew up. That’s why the World Bank is forecasting Great Recession-era growth. All of this was entirely predictable.

After all, artificially low interest rates are the mother’s milk of a global economy built on easy money and debt. When you take away the milk, the baby gets hungry. That’s what’s happening today. With interest rates rising, the bubbles are starting to pop.

And it’s probably going to be much worse than most people realize. There are more malinvestments, more debt, and more bubbles in the global economy today than there were in 2008. There is every reason to believe the bust will be much worse today than it was then.

In other words, you can strike “short” and “shallow” from your recession vocabulary.

Even the World Bank is hinting at this.

Tyler Durden Wed, 06/07/2023 - 15:20

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DNAmFitAge: Biological age indicator incorporating physical fitness

“We expect DNAmFitAge will be a useful biomarker for quantifying fitness benefits at an epigenetic level and can be used to evaluate exercise-based interventions.”…



“We expect DNAmFitAge will be a useful biomarker for quantifying fitness benefits at an epigenetic level and can be used to evaluate exercise-based interventions.”

Credit: 2023 McGreevy et al.

“We expect DNAmFitAge will be a useful biomarker for quantifying fitness benefits at an epigenetic level and can be used to evaluate exercise-based interventions.”

BUFFALO, NY- June 7, 2023 – A new research paper was published in Aging (listed by MEDLINE/PubMed as “Aging (Albany NY)” and “Aging-US” by Web of Science) Volume 15, Issue 10, entitled, “DNAmFitAge: biological age indicator incorporating physical fitness.”

Physical fitness is a well-known correlate of health and the aging process and DNA methylation (DNAm) data can capture aging via epigenetic clocks. However, current epigenetic clocks did not yet use measures of mobility, strength, lung, or endurance fitness in their construction. 

In this new study, researchers Kristen M. McGreevy, Zsolt Radak, Ferenc Torma, Matyas Jokai, Ake T. Lu, Daniel W. Belsky, Alexandra Binder, Riccardo E. Marioni, Luigi Ferrucci, Ewelina Pośpiech, Wojciech Branicki, Andrzej Ossowski, Aneta Sitek, Magdalena Spólnicka, Laura M. Raffield, Alex P. Reiner, Simon Cox, Michael Kobor, David L. Corcoran, and Steve Horvath from the University of California Los Angeles, University of Physical Education, Altos Labs, Columbia University Mailman School of Public Health, University of Hawaii, University of Edinburgh, National Institute on Aging, Jagiellonian University, Pomeranian Medical University in Szczecin, University of Łódź, Central Forensic Laboratory of the Police in Warsaw, Poland, University of North Carolina at Chapel Hill, University of Washington, and University of British Columbia develop blood-based DNAm biomarkers for fitness parameters including gait speed (walking speed), maximum handgrip strength, forced expiratory volume in one second (FEV1), and maximal oxygen uptake (VO2max) which have modest correlation with fitness parameters in five large-scale validation datasets (average r between 0.16–0.48). 

“These parameters were chosen because handgrip strength and VO2max provide insight into the two main categories of fitness: strength and endurance [23], and gait speed and FEV1 provide insight into fitness-related organ function: mobility and lung function [8, 24].”

The researchers then used these DNAm fitness parameter biomarkers with DNAmGrimAge, a DNAm mortality risk estimate, to construct DNAmFitAge, a new biological age indicator that incorporates physical fitness. DNAmFitAge was associated with low-intermediate physical activity levels across validation datasets (p = 6.4E-13), and younger/fitter DNAmFitAge corresponds to stronger DNAm fitness parameters in both males and females. 

DNAmFitAge was lower (p = 0.046) and DNAmVO2max is higher (p = 0.023) in male body builders compared to controls. Physically fit people had a younger DNAmFitAge and experienced better age-related outcomes: lower mortality risk (p = 7.2E-51), coronary heart disease risk (p = 2.6E-8), and increased disease-free status (p = 1.1E-7). These new DNAm biomarkers provide researchers a new method to incorporate physical fitness into epigenetic clocks.

“Our newly constructed DNAm biomarkers and DNAmFitAge provide researchers and physicians a new method to incorporate physical fitness into epigenetic clocks and emphasizes the effect lifestyle has on the aging methylome.”

Read the full study: DOI: 

Corresponding Authors: Kristen M. McGreevy, Zsolt Radak, Steve Horvath

Corresponding Emails:,, 

Keywords: epigenetics, aging, physical fitness, biological age, DNA methylation

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About Aging-US:

Launched in 2009, Aging publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.

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