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Key Events This Week: “The Most Closely Watched Data Release So Far This Year”

Key Events This Week: "The Most Closely Watched Data Release So Far This Year"

After last week’s disappointing yet "goldilocks" payrolls report, the big event this week is Thursday’s US CPI release. As DB’s Jim Reid writes, consensus estimate

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Key Events This Week: "The Most Closely Watched Data Release So Far This Year"

After last week's disappointing yet "goldilocks" payrolls report, the big event this week is Thursday’s US CPI release. As DB's Jim Reid writes, consensus estimates for May currently expect both the headline and core rate to rise +0.4% month-on-month which would lift the YoY rate to 4.7% and 3.4% respectively which will be the highest since late 2008 and 1993 which would be a pretty impressive feat especially on the core. "This will undoubtedly be the most watched data release this year so far", according to Deutsche Bank.

BofA's economists are even more aggressive, and expects an even stronger CPI report in May with core jumping 0.5% mom and headline up 0.4% mom. Coupled with positive base effects, % yoy core will jump to 3.5% from 3% and headline to 4.7% from 4.2%.

We will also pay close attention to the inflation expectations data in Friday's University of Michigan consumer sentiment survey (89.0 vs 82.9). DB's rates strategists feel that expectations are heading back to their 1998-2014 regime after 7 years of rock bottom levels likely due to the slump in the oil price around that time.

In turn this should be worth 3% on 10 year Treasuries. Their 2.25% YE forecast reflects a probability, rather than certainty, of this happening. Last month the 5-10 year expectation rose to a revised 3.0% with the 1yr at 4.6%.

This follows May’s employment report missing expectations. The 559k gain headline payrolls (496k private) was characterized by Cleveland Fed President Mester as "solid" but still short of "substantial further progress". She also noted that the data are "not anywhere near a wage-price spiral". While there was some evidence in the report that labour shortages are resulting in upward pressure on wages – high demand in the leisure & hospitality sector being the most obvious - we are clearly along way from normality in the US labour market. However things might change very quickly as the economy fully opens up this year.

Outside of US CPI the other main event of the week will be Thursday’s ECB meeting, where much attention will be on what sort of pace the Governing Council decides on for the bank’s PEPP purchases. Given the dovish tilt in the Council’s latest commentary, our economists expect the ECB to maintain the faster pace of PEPP purchases for the time being. However, they expect that after June the market focus will be on PEPP exit, as it is a pandemic policy and we expect exit to be confirmed in September or December. See here for their full note. Otherwise, the other G20 central bank policy decisions will come from Canada on Wednesday and Russia on Friday. There are no Fed governors set to speak this week as Saturday marked the start of their blackout period ahead of next week’s FOMC meeting. The rest of the data week is in the day by day calendar at the end.

Also worth noting is that ahead of this weekend’s G-7 meeting we saw an agreement in principle from the same seven countries for a minimum global corporation tax of “at least 15%” on overseas earnings. The focus will now shift to a meeting of G20 finance minister in July to see if we can get wider agreement and on long-running talks between about 140 countries at the OECD. Overall it’s been clear for the last couple of years, even before the pandemic, that a 40-year race to the bottom for corporate tax rates was coming to an end and was likely to reverse. The pandemic has accelerated this.

Turning to Germany’s state election now where Angela Merkel’s Christian Democrats are most likely to win in Saxony-Anhalt and fend off the AfD. According to projections from public broadcaster ARD, the CDU is on course to win 37%, an improvement over the 30% it received in 2016 in the state, while the far-right AfD, which was pushing for the lead in recent polls, is likely to be well back in second with 22% (24% five years ago). This was the final electoral contest before the national vote in September and will be a boost to the CDU’s Armin Laschet as he bids to succeed Merkel in the Chancellorship.

Day-by-day calendar of events, courtesy of Deutsche Bank:

Monday June 7

  • Data: China May trade balance, imports, and exports, Japan preliminary June leading index, Germany April factory orders
  • Central Banks: ECB Holzmann speaks

Tuesday June 8

  • Data: Japan final Q1 GDP, final Q1 GDP deflator, April labor cash earnings, April BoP current account balance, Germany April industrial production and June ZEW survey expectations, France April trade balance, Italy April retail sales, Euro area final Q1 GDP and June ZEW survey expectations, US May NFIB small business optimism, April trade balance, and April JOLTS job openings

Wednesday June 9

  • Data: Japan May M2 money stock and preliminary May machine tool orders, Germany April trade balance and current account balance, US weekly MBA mortgage applications, and final April wholesale inventories
  • Central Banks: Bank of Canada monetary policy decision

Thursday June 10

  • Data: Japan May PPI, France and Italy April industrial production, US May CPI, weekly initial claims, continuing claims and May monthly budget statement
  • Central Banks: ECB monetary policy decision and ECB President Lagarde press conference, Bank of Canada Deputy Governor Lane speaks

Friday June 11

  • Data: UK April industrial production, manufacturing production and trade balance, US preliminary June University of Michigan sentiment survey
  • Central Banks: Russian Central Bank monetary policy decision
  • Other: G-7 summit begins in Cornwall, England

Finally, focusing on just the US, Goldman writes that the key economic data releases this week are the CPI report and the jobless claims report on Thursday. There are no speaking engagements from Fed officials this week.

Monday, June 7

  • There are no major economic data releases scheduled.

Tuesday, June 8

  • 06:00 AM NFIB small business optimism, May (consensus 100.9, last 99.8)
  • 08:30 AM Trade balance, April (GS -$68.0bn, consensus -$69.0bn, last -$74.4bn): We estimate that the trade deficit declined by $6.4bn to $68.0bn in April, reflecting the partial normalization of goods imports following their surge in March. Goods imports are now well above their pre-pandemic level, and goods exports are slightly above their pre-pandemic level. Both imports and exports of services have recovered only slightly from their 2020Q2 troughs, despite the pickup in March.
  • 10:00 AM JOLTS Job Openings, April (consensus n.a., last 8,123k)

Wednesday, June 9

  • 10:00 AM Wholesale inventories, April final (consensus +0.8%, last +0.8%)

Thursday, June 10

  • 08:30 AM CPI (mom), May (GS +0.46%, consensus +0.4%, last +0.8%); Core CPI (mom), May (GS +0.50%, consensus +0.4%, last +0.9%); CPI (yoy), May (GS +4.74%, consensus +4.7%, last +4.2%); Core CPI (yoy), May (GS +3.55%, consensus +3.4%, last +3.0%): We estimate a 0.50% increase in May core CPI (mom sa), which would boost the year-on-year rate by six tenths to 3.55%. Our monthly core inflation forecast reflects reopening-driven strength in airfares, hotel prices, and recreation prices. Additionally, we expect strong monthly readings in used cars (+6%) and new cars (+0.5%), reflecting supply chain disruptions and microchip shortages. Given the pickup in our shelter tracker, the reversal of rent forgiveness effects, and continued strength in the housing market, we expect firming in housing rent categories (we estimate rent +0.25% and OER +0.30%). On the negative side, ARP Act aid for day care and college tuition could weigh on education CPI, and we are assuming a normalizing of alcohol prices with bars generally open. We estimate a 0.46% increase in headline CPI (mom sa), reflecting higher food prices and little change in energy prices.
  • 08:30 AM Initial jobless claims, week ended June 5 (GS 355k, consensus 370k, last 385k); Continuing jobless claims, week ended May 29 (consensus 3,700k, last 3,771k): We estimate initial jobless claims decreased to 355k in the week ended June 5.

Friday, June 11

  • 10:00 AM University of Michigan consumer sentiment, June preliminary (GS 86.0, consensus 84.2, last 82.9): We expect the University of Michigan consumer sentiment index increased by 3.1pt to 86.0 in the preliminary June reading.

Source: DB, Goldman, BofA

Tyler Durden Mon, 06/07/2021 - 09:13

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Spread & Containment

AstraZeneca antibody cocktail fails to prevent Covid-19 symptoms in large trial

AstraZeneca said a late-stage trial failed to provide evidence that the company’s Covid-19 antibody therapy protected people who had contact with an infected person from the disease, a small setback in its efforts to find alternatives to vaccines.

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Astra antibody cocktail fails to prevent COVID-19 symptoms in large trial

(Reuters; )

June 15 (Reuters) – AstraZeneca (AZN.L) said on Tuesday a late-stage trial failed to provide evidence that its COVID-19 antibody therapy protected people who had contact with an infected person from the disease, a small setback in its efforts to find alternatives to vaccines.

The study assessed whether the therapy, a cocktail of two types of antibodies, could prevent adults who had been exposed to the virus in the past eight days from developing COVID-19 symptoms.

The therapy, AZD7442, was 33% effective in reducing the risk of people developing symptoms compared with a placebo, but that result was not statistically significant — meaning it might have been due to chance and not the therapy.

The Phase III study, which has not been peer reviewed, included 1,121 participants in the United Kingdom and the United States. The vast majority, though not all, were free of the virus at the start of the trial.

Results for a subset of participants who were not infected to begin with was more encouraging but the primary analysis rested on results from all participants.

FILE PHOTO: A computer image created by Nexu Science Communication together with Trinity College in Dublin, shows a model structurally representative of a betacoronavirus which is the type of virus linked to COVID-19, better known as the coronavirus linked to the Wuhan outbreak, shared with Reuters on February 18, 2020. NEXU Science Communication/via REUTERS

“While this trial did not meet the primary endpoint against symptomatic illness, we are encouraged by the protection seen in the PCR negative participants following treatment with AZD7442,” AstraZeneca Executive Vice President Mene Pangalos said in a statement.

The company is banking on further studies to revive the product’s fortunes. Five more trials are ongoing, testing the antibody cocktail as treatment or in prevention.

The next one will likely be from a larger trial testing the product in people with a weakened immune system due to cancer or an organ transplant, who may not benefit from a vaccine.

TARGETED ALTERNATIVES

AZD7442 belongs to a class of drugs called monoclonal antibodies which mimic natural antibodies produced by the body to fight off infections.

Similar therapies developed by rivals Regeneron (REGN.O) and Eli Lilly (LLY.N) have been approved by U.S. regulators for treating unhospitalised COVID patients.

European regulators have also authorised Regeneron’s therapy and are reviewing those developed by partners GlaxoSmithKline (GSK.L) and Vir Biotechnology (VIR.O) as well as by Lilly and Celltrion (068270.KS).

Regeneron is also seeking U.S. authorisation for its therapy as a preventative treatment.

But the AstraZeneca results are a small blow for the drug industry as it tries to find more targeted alternatives to COVID-19 inoculations, particularly for people who may not be able to get vaccinated or those who may have an inadequate response to inoculations.

The Anglo-Swedish drugmaker, which has faced a rollercoaster of challenges with the rollout of its COVID-19 vaccine, is also developing new treatments and repurposing existing drugs to fight the virus.

AstraZeneca also said on Tuesday it was in talks with the U.S. government on “next steps” regarding a $205 million deal to supply up to 500,000 doses of AZD7442. Swiss manufacturer Lonza (LONN.S) was contracted to produce AZD7442.

Shares in the company were largely unchanged on the London Stock Exchange.

The full results will be submitted for publication in a peer-reviewed medical journal, the company said.

Reporting by Vishwadha Chander in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

 

Reuters source:

https://www.reuters.com/business/healthcare-pharmaceuticals/astrazeneca-says-its-antibody-treatment-failed-in-preventing-covid-19-exposed-2021-06-15

 

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Government

Former FDA Head Takes on Exec Role at Flagship’s Preemptive Health Initiative

Stephen Hahn, the Commissioner of the U.S. Food and Drug Administration under former President Donald Trump, took on a new role as chief medical officer of a new health security initiative launched by Flagship Pioneering, a life sciences venture firm…

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Former FDA Head Takes on Exec Role at Flagship’s Preemptive Health Initiative

 

Stephen Hahn, the Commissioner of the U.S. Food and Drug Administration (FDA) under former President Donald Trump, has taken on a new role as chief medical officer of a new health security initiative launched by Flagship Pioneering, a life sciences venture firm that incubates and curates biopharma companies.

First announced Monday, Flagship’s Preemptive Medicine and Health Security initiative aimed at developing products that can help people before they get sick. This division will focus on infectious disease threats and pursue bold treatments for existing diseases, including cancer, obesity, and neurodegeneration. 

In a brief statement, Hahn, who served as commissioner from December 2019 until January 2021, said the importance of investing in innovation and preemptive medications has never been more apparent. 

“In my career I have been a doctor and a researcher foremost and it is an honor to join Flagship Pioneering in its efforts to prioritize innovation, particularly in its Preemptive Medicine and Health Security Initiative. The more we can embrace a “what if …” approach the better we can support and protect the health and well-being of people here in the U.S. and around the world,” Hahn said in a statement. 

During his time at the FDA, Hahn was at the forefront of the government’s effort to battle the COVID-19 pandemic. His office oversaw the regulatory authorization of antivirals, antibody therapeutics and vaccines, as well as diagnostics and other tools to battle the novel coronavirus. 

Kevin Dietsch-Pool/Getty Images

Hahn bore the brunt of verbal barbs aimed at the FDA by the former president for not rushing to authorize a vaccine for COVID-19 ahead of the November 2020 election. The second vaccine authorized by the FDA for COVID-19 was developed by Moderna, a Flagship company. 

Prior to his confirmation as FDA Commissioner, Hahn, a well-respected oncologist, served as chief medical executive of the vaunted The University of Texas MD Anderson Cancer Center. Hahn was named deputy president and chief operating officer in 2017. In that role, he was responsible for the day-to-day operations of the cancer center, which includes managing more than 21,000 employees and a $5.2 billion operating budget. He was promoted to that position two years after joining MD Anderson as division head, department chair and professor of Radiation Oncology. Prior to MD Anderson, Hahn served as head of the radiation oncology department at the University of Pennsylvania’s Perelman School of Medicine.

Flagship Founder and Chief Executive Officer Noubar Afeyan said the COVID-19 pandemic that shut down economies and caused the deaths of more than 3.8 million people across the world was an important reminder that health security is a top global priority. In addition, the ongoing pandemic brings into “stark focus” the importance of preemptive medications. 

Hahn, who helmed the FDA for three years and before that served as chief medical executive at The University of Texas MD Anderson Cancer Center, has extensive experience overseeing clinical and administrative programs. Afeyan said the new division would benefit from Hahn’s experience as FDA Commissioner and help steer the Preemptive Medicine and Health Security initiative as it explores Flagship’s “growing number of explorations and companies in this emerging field.”

It is not unusual for former FDA heads to take prominent roles with companies. For example, former FDA Commissioner Scott Gottlieb, Trump’s first FDA Commissioner, took a position on the Pfizer Board of Directors weeks after departing his government role. He has also taken positions on other boards since then, including Aetion, FasterCures and Illumina.

 

BioSpace source:

https://www.biospace.com/article/former-fda-head-stephen-hahn-takes-cmo-role-at-flagship-pioneering-preemptive-health-initiative-

 

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Government

Five U.S. states had coronavirus infections even before first reported cases – study

At least seven people in five U.S. states were infected with the novel coronavirus weeks before those states reported their first cases, a new government study showed.

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Five U.S. states had coronavirus infections even before first reported cases – study

(Reuters) – At least seven people in five U.S. states were infected with the novel coronavirus weeks before those states reported their first cases, a new government study showed.

Participants who reported antibodies against SARS-CoV-2 were likely exposed to the virus at least several weeks before their sample was taken, as the antibodies do not appear until about two weeks after a person has been infected, the researchers said.

The latest results build on findings from a Centers for Disease Control and Prevention study that suggested the novel coronavirus may have been circulating in the United States last December, well before the first COVID-19 case was diagnosed on Jan. 19, 2020.

A protective face mask lays, as the global outbreak of the coronavirus disease (COVID-19) continues, beside leaves at the lakefront in Chicago, Illinois, U.S., December 6, 2020. REUTERS/Shannon/File Photo

The positive samples came from Illinois, Massachusetts, Mississippi, Pennsylvania and Wisconsin, and were part of a study of more than 24,000 blood samples taken for a National Institutes of Health research program between Jan. 2 and March 18, 2020.

Samples from participants in Illinois were collected on Jan. 7 and Massachusetts on Jan. 8, suggesting that the virus was present in those states as early as late December.

“This study allows us to uncover more information about the beginning of the U.S. epidemic,” said Josh Denny, one of the study authors.

The findings were published in the journal Clinical Infectious Diseases.

Reporting by Mrinalika Roy in Bengaluru; Editing by Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

 

Reuters source:

https://www.reuters.com/business/healthcare-pharmaceuticals/five-us-states-had-coronavirus-infections-even-before-first-reported-cases-study-2021-06-15

 

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