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Key Events This Week: Every Eye On Peak CPI

Key Events This Week: Every Eye On Peak CPI

After last week’s relentless barrage of news including the Fed’s biggest rate hike since May 2000,…



Key Events This Week: Every Eye On Peak CPI

After last week's relentless barrage of news including the Fed's biggest rate hike since May 2000, the bizarre shocker from the BOE, the Friday payrolls kicker and the record surge in US credit card usage, not to mention countless reports from the peak of earnings season, DB's Jim Reid reminds us that we won't have to wait too long for the next blockbuster event to help shape the debate as US CPI on Wednesday takes center stage this week with PPI the following day. There are lots of Fed speakers too to put some nuance to last week's FOMC announcement.

Outside of this geopolitics will be key. Today marks the annual "Victory Day" in Russia where there will be a parade and a speech from Putin. It's anyone's guess what tone the President will take in this landmark speech but it could shape the next phase of the war. Staying with geopolitics, Finland may decide whether to apply for NATO membership this week and Sweden is due to publish its security policy assessment before Friday.

We will also get a pulse check on economic sentiment in May from the ZEW survey for the Eurozone and Germany (tomorrow) and, for the US, the University of Michigan survey on Friday. China inflation data on Wednesday will be interesting. In an otherwise quiet week for economic data, the UK will be an exception with a data-packed Thursday.

It will be a slow week for corporate earnings too now as the bulk of US/European companies have reported and we will instead focus on Japan's corporate giants.  As well as Fed speakers there are a number of ECB equivalents, with all comments pertaining to a possible July hike watched out for.

In terms of US CPI midweek, DB’s US economists are expecting a +7.9% reading, down from the four-decade-high 8.5% print in March, not least due to base effects. From here it should all be about the pace of the declines as things like the extreme YoY prices in used cars roll out of the data. However on the other side it is important to see how prolonged the rise in rents are. Remember that rents make up a third of the CPI basket and 40% of core. Used cars only make up a few percentage points. A reminder that the day by day calendar of events is at the end as usual.

A few words on earnings with around 90% and 75% having reported in the US and Europe. According to DB's equity strategist Binky Chadha, the season has been pretty strong, especially in Europe which benefits from a better sector mix (eg Energy and Materials concentration and limited Tech which held the US back). One consistent theme in both regions is that margins remained strong suggesting that firms are for now still able to pass on inflationary pressures. On the macro front this makes it harder for the rate of inflation to fall sharply as price rises are being embedded into the economies for now. It won't last forever as excess savings/liquidity will be run down but seems to be holding for now.

As noted above, with earnings season in its tail end, here are the few remaining companies on deck to report this week.

Source: Earnings Whispers

Courtesy of Deutsche Bank, here is a day-by-day calendar of events

Monday May 9

  • Data: US March wholesale trade sales, China April trade balance, Japan March labour cash earnings, France March trade balance, Canada March building permits
  • Central banks: BoJ minutes of March meeting
  • Earnings: Simon property group, BioNTech, Infineon, Palantir, AMC

Tuesday May 10

  • Data: US April NFIB small business optimism, Japan March household spending, Italy March industrial production, Germany and the Eurozone May ZEW economic expectations
  • Central banks: Fed's Williams, Barkin, Waller, Kashkari and Mester speak, ECB's Nagel speaks
  • Earnings: Sony, Nintendo, Suncor, Bayer, Occidental Petroleum, Roblox, Peloton

Wednesday May 11

  • Data: US April CPI, real average hourly earnings, monthly budget statement, China April CPI and PPI, Japan March leading and coincident indices, UK 4Q unit labour costs
  • Central banks: Fed's Bostic speaks, ECB's Lagarde, Vasle, Centeno, Buch, Muller, Schnabel, Knot and Nagel speak
  • Earnings: Toyota, Disney, Rivian

Thursday May 12

  • Data: US April PPI, initial jobless claims, Japan March trade balance, April bank lending, UK March monthly GDP, Q1 GDP, private consumption, government spending, March construction output, industrial and manufacturing production, index of services, trade balance
  • Central banks: BoJ summary of opinions, ECB's De Cos speaks, Fed's Daly speaks
  • Earnings: SoftBank, Siemens, Allianz, RWE, Telefonica, Affirm, Commerzbank
  • Other: US-ASEAN Summit begins

Friday May 13

  • Data: US May University of Michigan index, April import and export price indices, Japan April M2, M3, France Q1 wages, Eurozone March industrial production
  • Central banks: ECB's Centeno speaks, Fed's Kashkari and Mester speak
  • Earnings: Toshiba, Deutsche Telekom

* * *

Focusing on just the US, Goldman notes that the key economic data release this week is CPI inflation on Wednesday. There are several scheduled speaking engagements by Fed officials this week.

Monday, May 9

  • 10:00 AM Wholesale inventories, March final (consensus +2.3%, last +2.3%)

Tuesday, May 10

  • 06:00 AM NFIB small business optimism, April (consensus 92.9, last 93.2)
  • 07:40 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will give a speech at a NABE/Bundesbank economic symposium in Eltville am Rhein. Text and moderator Q&A are expected.
  • 09:15 AM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Thomas Barkin will discuss inflation at an event hosted by the Cecil County Chamber of Commerce. Audience Q&A is expected.
  • 01:00 PM Fed Governor Waller (FOMC voter) and Minneapolis Fed President Kashkari (FOMC non-voter) speak: Fed Governor Christopher Waller will take part in a discussion moderated by Minneapolis Fed President Neel Kashkari before the Economic Club of Minnesota. Audience Q&A is expected.
  • 03:00 PM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will speak on a panel discussing "Monetary Policy and Financial Stability Challenges During Balance Sheet Normalization" at the Atlanta Fed’s annual financial markets conference in Florida. Text and audience Q&A are expected.
  • 07:00 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will discuss monetary policy and the economy during his bank’s annual financial market conference in Georgia. Audience Q&A is expected.

Wednesday, May 11

  • 08:30 AM CPI (mom), April (GS +0.15%, consensus +0.2%, last +1.2%); Core CPI (mom), April (GS +0.42%, consensus +0.4%, last +0.3%); CPI (yoy), April (GS +8.01%, consensus +8.1%, last +8.5%); Core CPI (yoy), April (GS +6.01%, consensus +6.0%, last +6.5%): We estimate a 0.42% increase in April core CPI (mom sa), which would lower the year-on-year rate by 0.5pp to 6.0%. Our forecast reflects upward pressure on core goods categories such as auto parts and home furnishings related to the Ukraine-Russia war and China covid lockdowns. We also estimate a smaller decline in used car prices, and we expect positive residual seasonality in new car inflation with the implementation of new source data. Within services, we believe the continued reopening of the economy likely boosted prices of hotels, airfares, and car insurance. We estimate rent increased by 0.45% and OER increased by 0.43%, with the latter reflecting a drag from imputed utilities. We estimate a 0.15% monthly increase in headline CPI, reflecting a decline in seasonally adjusted energy prices but higher grocery and restaurant prices.
  • 12:00 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will discuss monetary policy and the economy during an event hosted by the World Affairs Council of Jacksonville. Audience Q&A is expected.

Thursday, May 12

  • 08:30 AM PPI final demand, April (GS +0.6%, consensus +0.5%, last +1.4%); PPI ex-food and energy, April (GS +0.7%, consensus +0.6%, last +1.0%); PPI ex-food, energy, and trade, April (GS +0.7%, consensus +0.6%, last +0.9%): We estimate a 0.7% increase for PPI ex-food and energy and PPI ex-food and energy, and trade, reflecting a continued boost from supply chain bottlenecks, labor shortages, and commodity prices. We estimate that headline PPI increased by 1.0% in April.
  • 08:30 AM Initial jobless claims, week ended May 7 (GS 195k, consensus 190k, last 200k); Continuing jobless claims, week ended April 30 (consensus 1,360k, last 1,384k):  We estimate that initial jobless claims edged down to 195k in the week ended May 7.
  • 04:00 PM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will take part in a moderated fireside chat in Anchorage, Alaska.

Friday, May 13

  • 08:30 AM Import price index, April (consensus +0.6%, last +2.6%): Export price index, April (consensus +0.7%, last +4.5%)
  • 10:00 AM University of Michigan consumer sentiment, May preliminary (GS 63.0, consensus 64.0, last 65.2): We expect the University of Michigan consumer sentiment index declined by 2.2pt to 63.0 in the preliminary May reading, reflecting weaker signals from other consumer confidence measures and an expected drag from stock market volatility.
  • 11:00 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will take part in a discussion on energy prices and their impact on inflation at an event co-hosted with the Dallas Fed.
  • 12:00 PM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will discuss monetary policy during and after the pandemic during a virtual event jointly hosted by the Fed, ECB and Euro Area Business Cycle Network. Audience Q&A is expected.

Source: DB, Goldman, BofA

Tyler Durden Mon, 05/09/2022 - 10:13

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Vaccinia virus MacGyvers a makeshift tool to repair its DNA, exposing a vulnerability that could be targeted

Instead of relying on the cell’s repair mechanisms, the vaccinia virus MacGyvers a tool for DNA repair from one that it already uses to copy DNA, reports…



Instead of relying on the cell’s repair mechanisms, the vaccinia virus MacGyvers a tool for DNA repair from one that it already uses to copy DNA, reports a team of researchers at the Medical University of South Carolina (MUSC) in the Journal of Virology. Blocking that tool – an enzyme known as polymerase – at once disrupts the virus’s ability to copy and to repair DNA, exposing an Achilles’ heel that could be targeted with a therapeutic. 

Credit: Medical University of South Carolina. Photo by Sarah Pack.

Instead of relying on the cell’s repair mechanisms, the vaccinia virus MacGyvers a tool for DNA repair from one that it already uses to copy DNA, reports a team of researchers at the Medical University of South Carolina (MUSC) in the Journal of Virology. Blocking that tool – an enzyme known as polymerase – at once disrupts the virus’s ability to copy and to repair DNA, exposing an Achilles’ heel that could be targeted with a therapeutic. 

“For vaccinia virus, polymerase is a Sawzall – a tool that you can use for everything” said Paula Traktman, Ph.D., senior author of the article and dean of the College of Graduate Studies at MUSC, who has studied the virus for decades. “Viruses have smaller chromosomes, and so they’ve evolved to be able to use their tools for different things.”

“It’s like the virus’s Swiss Army knife,” said Conor Templeton, Ph.D.  lead author of the article, who was a predoctoral candidate in the Traktman laboratory during the study and has since completed his doctorate. “It’s a protein that’s involved in replicating or copying DNA, but it also seems to be involved in repair.”

Such detailed basic science findings about the way viruses copy and repair their DNA have paved the way for breakthrough antiviral therapies in the past 20 years, said Traktman.

“HIV antiretroviral drugs were made by really painstaking analysis of which proteins in the virus are essential, leading to drugs that now have made it a chronic disease,” she said. “A curative treatment for hepatitis C was made possible by painstaking analysis of which proteins are essential for the virus. The more we know about the enemies, the better the weapons we can develop against them.”

Better therapies for pox viruses are certainly needed. The vaccinia virus is a close relative of the virus causing smallpox and was used in the vaccine that successfully eradicated it in the late 20th century. Although smallpox no longer naturally occurs, the threat that it might be used as a bioweapon remains, and currently, there is only one approved antiviral agent against it. Other pox viruses, most notably monkeypox, continue to afflict humans and can be lethal.

Vaccinia is a large DNA virus made up of about 200 genes, and its approach to survival differs markedly from that of smaller, nimbler RNA viruses, such as that which causes COVID-19. The RNA viruses mutate quickly to outrun the body’s immune system. However, they do so at the cost of corrupting their genome. Vaccinia virus prefers a slower, steadier approach and is less likely to make mistakes, helping to ensure genomic stability.

“Vaccinia has gone for ‘I may not be a Ferrari, but I’m a jeep, and I’m going to come out undamaged, and I’m going to be stable, and I’m going to stick around,’” said Traktman.

Unlike other DNA viruses, vaccinia virus does not set up shop in the cell’s nucleus but instead stays in the cytoplasm, where it begins reproducing itself using only the tools it brought with it.

“The nucleus is like the kitchen of the cell,” said Traktman. “If you came into somebody’s house to cook dinner, you would go to their kitchen because that’s where all the necessary equipment is. You wouldn’t decide to go downstairs to their basement because then you’d have to start from scratch. But that’s what vaccinia does. It says ‘I’m not going into the kitchen where you cook. I’m going to just set up shop in the basement, where there’s lots of space. I’ll build everything I need.’”

The MUSC team wanted to see how vaccinia virus would react to damage to its DNA caused by ultraviolet (UV) radiation. They chose UV radiation because it is already known to affect viral replication negatively. They also wanted to know whether exposing the cell to UV radiation one hour before infection with vaccinia would affect the virus’s ability to copy and repair DNA.

The MUSC team found that exposing cells to UV radiation either one hour before or four hours after infection with vaccinia virus reduced the number of mature viral units, or virions, vaccinia was able to produce.

The enzyme polymerase is known to be necessary for successful viral replication, and UV radiation can prevent it from doing its job.

“Polymerase is like a car running down the road,” said Templeton. “It runs smoothly when the road is nice and flat. But UV radiation acts like a speed bump, stopping it in its tracks.”

The UV radiation can cause damage that makes it impossible for DNA replication to continue.

The team found UV-caused damage in the viral DNA of cells irradiated four hours after infection but not in those irradiated an hour before infection. The cells irradiated at four hours after infection also produced 30 times fewer new viruses. This UV-caused damage could account for the reduced infectivity of these cells. Although viral DNA levels were able to recover slightly by 10 to 18 hours, suggesting some viral DNA repair, blocking polymerase resulted in a further tenfold to twentyfold reduction.

“Polymerase is a well-known character in DNA replication,” said Traktman. “It’s a well-known character in actually synthesizing the genome, but this is its debut in repair.”

In essence, the virus’s polymerase “multitasks,” but in so doing makes the virus vulnerable. Because vaccinia relies on polymerase both for DNA copying and repair, blocking it could be a particularly devastating weapon against the virus. The current blocking agent, however, is too broad, and a much more tailored one would be needed for the clinic.

Next, the MUSC team wants to understand better why blocking polymerase makes the DNA more vulnerable to damage and less able to repair itself.

“We want to establish the ensemble of culprits in that process and then try to understand why it is that when you inhibit polymerase function, you see this sensitivity,” said Templeton.

About MUSC

Founded in 1824 in Charleston, MUSC is home to the oldest medical school in the South as well as the state’s only integrated academic health sciences center, with a unique charge to serve the state through education, research and patient care. Each year, MUSC educates and trains more than 3,000 students and nearly 800 residents in six colleges: Dental Medicine, Graduate Studies, Health Professions, Medicine, Nursing and Pharmacy. MUSC brought in more than $327.6 million in biomedical research funds in fiscal year 2021, continuing to lead the state in obtaining federal and National Institutes of Health funding, with more than $220 million. For information on academic programs, visit

As the clinical health system of the Medical University of South Carolina, MUSC Health is dedicated to delivering the highest-quality and safest patient care available while training generations of compassionate, competent health care providers to serve the people of South Carolina and beyond. Patient care is provided at 14 hospitals with approximately 2,500 beds and five additional hospital locations in development, more than 300 telehealth sites and nearly 750 care locations situated in the Lowcountry, Midlands, Pee Dee and Upstate regions of South Carolina. In 2021, for the seventh consecutive year, U.S. News & World Report named MUSC Health the No. 1 hospital in South Carolina. To learn more about clinical patient services, visit

MUSC and its affiliates have collective annual budgets of $4.4 billion. The more than 24,000 MUSC team members include world-class faculty, physicians, specialty providers, scientists and care team members who deliver groundbreaking education, research, technology and patient care.

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The New Rift Between WHO And China

The New Rift Between WHO And China

Authored by Jeffrey Tucker via The Brownstone Institute,

From the beginning of the pandemic, the World…



The New Rift Between WHO And China

Authored by Jeffrey Tucker via The Brownstone Institute,

From the beginning of the pandemic, the World Health Organization and China’s CCP have worked and spoken hand-in-glove, culminating in the Potemkin Village junket of mid-February 2020. The WHO-sponsored travel report—how wonderfully China had performed!—was written and signed by American public health officials who recommended Wuhan-style lockdowns, a disastrous policy that further inspired most governments in the world to do the same.

Twenty-six months later, it turns out that China in fact had not “eliminated the virus fully within its borders,” contrary to the over-the-top claims of TV pundit Devi Sridhar in her new book “Preventable.” They only pushed cases into the future, as the CCP discovered when positive tests appeared all over Shanghai, leading to 7 weeks of brutal lockdowns.

This move on China’s part has been a disaster for the country and the world economy, and presently endangers the financial and technological future of the entire country.

For Xi Jinping, lockdowns and zero-covid were his greatest achievement, one which was celebrated the world over, causing his political pride to swell beyond all bounds. Now, he cannot back off lest he face possible losses in upcoming party elections.

Just this past weekend, he made it clear to the entire government that there would be no backing off the zero-covid policy: the CCP will “unswervingly adhere to the general policy of ‘dynamic zero-Covid,’ and resolutely fight against any words and deeds that distort, doubt or deny our country’s epidemic prevention policies.”

The problem is acute: vast numbers in China likely need to acquire natural immunity via exposure. The lockdown policy likely puts a damper on the achievement of endemicity. That means long-term damage to China’s future.

Sensing this problem, the head of the WHO, Tedros Adhanom Ghebreyesus, offered a mild criticism:

“Considering the behavior of the virus, I think a shift will be very important,” adding that he had discussed this point with Chinese scientists.

What happened next is truly fascinating: Tedros’s comments were censored all over China and searches for the name Tedros were immediately blocked within the country.

Implausibly, merely by stating the incredibly obvious point, Tedros has made himself an enemy of the state.

Meanwhile, another WHO/China partisan, Bill Gates, has been sheepishly saying something very similar in interviews, namely that the virus cannot be eradicated.

It’s not just Tedros and Gates who are trying to flee their advocacy of lockdowns. Anthony Fauci himself denied that the United States ever had “complete lockdowns”—which is technically correct but not because he didn’t demand them.

On March 16, 2020, Fauci faced the national press and read from a CDC directive: “In states with evidence of community transmission, bars, restaurants, food courts, gyms and other indoor and outdoor venues where groups of people congregate should be closed.”

In fact, one gets the strong sense that governments around the world are pretending as if the whole pathetic and terrible affair never happened, even as they are attempting to reserve the power to do it all over again should the need arise.

On May 12, 2022, many governments around the world gathered for a video call and agreed to pour many billions more into covid work, and reaffirm their dedication to an “all-of-society” and “whole-of-government” approach to infectious disease. The U.S. government under the administration readily agreed to this idea.

Leaders reinforced the value of whole-of-government and whole-of-society approaches to bring the acute phase of COVID-19 to an end, and the importance of being prepared for future pandemic threats. The Summit was focused on preventing complacency, recognizing the pandemic is not over; protecting the most vulnerable, including the elderly, immunocompromised people, and frontline and health workers; and preventing future health crises, recognizing now is the time to secure political and financial commitment for pandemic preparedness.

The Summit catalyzed bold commitments. Financially, leaders committed to provide nearly $2 billion in new funding—additional to pledges made earlier in 2022. These funds will accelerate access to vaccinations, testing, and treatments, and they will contribute to a new pandemic preparedness and global health security fund housed at the World Bank.

Is it progress to see these people throwing around language from the much-criticized but now wholly vindicated Great Barrington Declaration? Doubtful. You can’t make a bad policy better by tossing around words. There is every indication from this statement that there will be no apologies, no regrets, and no changes in the default position that governments must always and everywhere have maximum power to control any pathogen of their choosing.

Despite Tedros’s censored words, it’s no wonder that Xi Jinping continues to feel vindicated and affirmed, and sees no real political danger in choosing his own power over the health and well-being of his people. Governments around the world still cannot muster the courage to make a full-throated and solid attack on zero-covid, for fear of the implications of such a concession. Nudges and hints, even from the WHO, will not do it.

Tyler Durden Mon, 05/16/2022 - 19:45

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Spread & Containment

100,000 More Recalls And Even More Shanghai Delays Sting Tesla To Start The Week

100,000 More Recalls And Even More Shanghai Delays Sting Tesla To Start The Week

Just as it started to look like everything had finally been…



100,000 More Recalls And Even More Shanghai Delays Sting Tesla To Start The Week

Just as it started to look like everything had finally been sorted out for Tesla in Shanghai, we reported last week that the company once again had to halt its production due to "issues with supplies". 

Starting off this week, it doesn't look like things are getting any better. First, Bloomberg reported that "no vehicles were sold in Shanghai last month" as a result of the lockdown, according to an auto-seller association in the city. 

Meanwhile, Tesla's plans to restart Shanghai to its pre-pandemic production levels have been pushed back another week, Reuters reported this weekend. Citing an internal memo, Reuters wrote that Tesla is still planning on just one shift for its plant this week and a daily output of about 1,200 units.

Tesla is aiming for 2,600 units per day by May 23. 

Additionally, it was reported Monday that Tesla would be recalling over 100,000 vehicles in China. 107,293 vehicles in China will be recalled "due to safety risks", according to the China People's Daily

The recall, which relates to a defect in the central touchscreen during fast charging, "involves Model 3 and Model Y vehicles produced in the country between Oct 19, 2021, and April 26, 2022," the report says. 

Recall, Tesla's most recent Shanghai shutdown came just three weeks after the plant resumed production. The plant was closed for a total of 22 days, Reuters noted. Shanghai is now in its seventh week of lockdowns, and we noted last week that it was "unclear when the supply issues can be resolved and when Tesla can resume production".

Wire harness maker Aptiv is one supplier who is currently facing issues due to "infections found among its employees", we reported last week. Meanwhile, Tesla had just started to eye resuming double shifts at its plant, we noted two weeks ago. The plant was making plans to "resume double shifts" at its Shanghai factory as soon as mid-May after starting back up in mid April. 

Tyler Durden Mon, 05/16/2022 - 19:25

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