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Greenback Remains Soft Ahead of Employment Report, but Reversal Possible

Greenback Remains Soft Ahead of Employment Report, but Reversal Possible

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Overview: The modest loss in the S&P 500 and NASDAQ yesterday did not signal the end of the bull run.  All the markets in the Asia Pacific region rallied, with the Hang Seng among the strongest with a 1.6% advance that brought the week's gain to around 7.8%.  South Korea's Kospi was not far behind with a weekly gain of 7.5%.  In the past two weeks, the MSCI Asia Pacific Index is up nearly 10%.  European shares are higher by more than 1% in the morning turnover.  The Dow Jones Stoxx 600 has gained almost 9% in the past two weeks, which the S&P 500 matches coming into today, where it is poised for additional gains. While stocks are rallying, benchmark 10-year yields have backed up. Interest rates are a bit firmer today. The US 10-year is up 17 bp this week to 85 bp, ahead of the employment report. Germany's 10-year Bund yields are a little higher today and up nine basis points on the week at minus 31 bp. Peripheral yields are little changed today, but Italy's 10-year yield is off six basis points this week, and Greece's benchmark yield is down 14 bp. The Antipodeans remain the standouts among the major currencies, and with today's gains (~0.5%) are up about 4.7% on the week. The yen is little changed but is the only major currency to have lost ground to the dollar this week (~1.3%). Emerging market currencies continue to recover. The JP Morgan Emerging Market Currency Index is extending its advance to the seventh consecutive session today. In fact, since May 15, it has been down only twice. Note that Moody's reviews Turkey and Russia's credit rating today. Gold's shine has dulled a bit, and its loss today (~-0.2%) brings week's loss to more than 1%, and it is the third consecutive weekly loss. A deal among OPEC+  is helping underpin oil prices, and July WTI is higher for the fourth straight session and is extending its recovery for the sixth consecutive week.   

Asia Pacific

The Hong Kong Monetary Authority intervened to prevent the Hong Kong dollar from breaking higher out of its band against the dollar. The HKMA appears to have bought about $125 mln. The three-month forward points have slipped back below 100 and into the previous range. The 12-month forward points have eased eight of the past 10 sessions, and around 370 are still elevated compared with the 200 points on May 15. Separately, the PBOC set the dollar's reference rate at CNY7.0965, which was a bit firmer than the models suggested. Still, the dollar fell to its lowest level against the yuan (~CNY7.0825) since May 12. The greenback's four-week climb against the yuan is ending this week with about a 0.6% decline. 

China has ordered American soy and crude oil (2 mln barrels on the way). Given the price decline of oil, to meet the dollar targets, China will have to import much more than it may have thought in January. The US seems to be in a win-win situation in terms of the trade agreement. China fulfills the terms, and US exports rise. China does not, and the US can lord it over China, and it fits well into the US political cycle. The latest polls show Trump has begun to trail in two key swing states, Ohio and Wisconsin. To the extent the Democrats offer a substantive criticism of Trump's China policy, it is that it is not tough enough.  

Japan reported April household spending fell 11.1% year-over-year, almost twice the 6% decline in March.  It cannot all be attributed to the virus.  In fact, the April decline was the seventh consecutive monthly fall that began with the sales tax increase last October.  Separately, the BOJ boosted its purchases of 5-10 year JGBs to JPY400 bln from JPY370 bln.  

The dollar is higher against the yen for the fourth consecutive session today, and near JPY109.40, it is at its best level since March 27.  The JPY109.50 area corresponds to the (61.8%) retracement objective of the drop that began a few days earlier (March 24) from around JPY111.70.  There is much talk of a test on JPY110.00.  The Australian dollar poked above $0.7000 for the first time today since January 2.  It is stretching its advance into the seventh consecutive session.  It has fallen in only one week since April 3.  Note that its upper Bollinger Band is found near $0.6980 today.  

Europe

The ECB did not disappoint.  It opted to boost the Pandemic Emergency Purchase by 600 bln euros and extended the program until at least the end of June next year from the end of this year.  Most had expected a 500 bln euro expansion. It also indicated that it would reinvest the maturing principle from PEPP assets until at least the end of 2022. This is probably best understood within the context of forward guidance the commitment to keep rates low for the foreseeable future. The average maturity of bunds is considerably shorter than the average maturity of Italian bonds. Still, by pre-announcing the recycling, it assures investors that discrepancy will not be translated to a premature unwind.  It was quickly calculated that at the current pace, the PEPP facility would be exhausted around the middle of Q1 21. Depending on conditions, it suggests the issue of PEPP resources will be addressed again at the end of the year.


The ECB's staff forecasts saw a cut in both growth and inflation projections.  The eurozone economy is expected to contract by 8.7% this year and grow by 5.2% in 2021 and 3.3% in 2022.  The IMF's April forecasts anticipated a 7.5% contraction this year and a 4.7% expansion next.  The ECB's CPI forecast was slashed to 0.3% this year and 0.8% next year.  In March, the staff projected 1.1% inflation this year, followed by 1.4% next.   Next week, the Federal Reserve will update its forecasts, and the median forecast will likely be for a shallower contraction this year and a stronger recovery in 2021.  The economic estimates assumed a $36 barrel of oil this year and $37.20 next year, and $40.7 in 2022. The euro was assumed to be $1.09 this year and $1.08 in 2021 and 2022. These are not forecasts and appear consistent with the forward curve a couple weeks ago.

German factory orders for April collapsed by almost 26% in April.  Spanish industrial output tanked by nearly 22%.  Both reports were weaker than expected.  Italy's 10.5% drop in April retail sales was roughly half the decline the median forecast in the Bloomberg survey anticipated.  It follows a 21.3% decline in March.  Still, the news was regarded as old, and the euro extended its gains to almost $1.1385, the highest since March 10.  It is consolidating ahead of the US jobs data and found support in the European morning near $1.1320.  There is an option for 600 mln euros at $1.13 that could come into play later, though the intraday technical indicators do not favor that.  Sterling surpassed the April highs (~$1.2640-$1.2650) and rose to almost $1.2700 before the buying enthusiasm eased.  It traded above its 200-day moving average (~$1.2680) for the first time since March 12. Support is seen near $1.2580.  Sterling is trying to snap a three-week slide against the euro.  The euro finished last week near GBP0.8995 and is near GBP0.8975 now.

America

The US employment data remains dismal but is unlikely to have much impact on the market provided that the pace of layoffs slows.  Indeed, the US forecast to have lost only 7.5 mln jobs after a loss of 20.5 mln in May.  Methodological differences, such as the treatment of furloughed worker means that the government's estimate is not likely to show the same improvement as the ADP report.  Employment measures of the surveys ticked up, but not by much.  The weekly jobless claims have gotten less bad but remain horrific. Even in the best of times, the monthly jobs report is among the hardest high-frequency data point to forecast. The unemployment rate is expected to rise to 19%-20% from 14.7% in April. The underemployment rate that was 6.7% at the end of last year and 22.8% in April, may rise to 30%. The emergency payment of an extra $600 a week unemployment insurance is set to expire at the end of next month. This is just one of the fiscal cliffs that need to be extended.

Canada is expected to report that it lost 400k jobs last month, after shedding nearly 2 mln jobs in April, according to an MNI poll.   The unemployment rate was 5.5% in January and rose to 13% in April. It is expected to increase to 15% in May.  Bank of Canada Deputy Governor Gravelle delivered a rather upbeat economic update, that cited an uptick in house and auto sales.  Gravelle reiterated that the intention to respect the zero-bound and that the current overnight target of 25 bp was the lowest it could go without risking problems in the financial system. 

The US dollar made a marginal new low against the Canadian dollar today near CAD1.3460, just below the 200-day moving average and above the bottom of an old gap from March that extends to CAD1.3440. The momentum is stalling, and a close above CAD1.3520 today could signal a correction next week. The greenback recorded the low for the week against the Mexican peso on Wednesday, just below MXN21.51. It tested the MXN22.00-level yesterday, and a move above there would be important technically. Still, this the third weekly decline for the greenback and the fifth in the past six weeks, leaving the technical indicators stretched. Lastly, the Dollar Index recorded a big outside down day yesterday by rising above the previous session's high and then closing below the previous session's low. There was some follow-through selling, and DXY fell to its lowest level since March 12 (~96.45). However, caution is advised, and a reversal pattern is possible today, such as a hammer candlestick.




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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…

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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),

The…

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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…

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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.

(Shutterstock)

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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