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New analysis finds pandemic didn’t dampen deforestation

Despite the massive upheavals in the first year of the COVID-19 pandemic, deforestation globally proceeded more or less as expected from the trends established…



Despite the massive upheavals in the first year of the COVID-19 pandemic, deforestation globally proceeded more or less as expected from the trends established over the last 15 years, according to a recent study from researchers at the Alliance of Bioversity International and CIAT.

Credit: Alliance of Bioversity and CIAT / N.Palmer

Despite the massive upheavals in the first year of the COVID-19 pandemic, deforestation globally proceeded more or less as expected from the trends established over the last 15 years, according to a recent study from researchers at the Alliance of Bioversity International and CIAT.

In the paper “Has global deforestation accelerated due to the COVID-19 pandemic?” published in mid-November 2022, the researchers used historical deforestation data (2004–2019) from the Terra-i pantropical land cover change monitoring system to project expected deforestation trends for 2020.

Analysis of tree cover loss over time was used to determine whether deforestation observed in 2020 deviated from expected trajectories after the first COVID-19 cases were reported; both at the regional level for the Americas, Africa and Asia and at the country level for Brazil, Colombia, Peru, the Democratic Republic of the Congo and Indonesia.

“It was not particularly surprising to see little change,”

says Janelle Sylvester,  who is the corresponding author of the study and a Research Fellow at the Alliance.

She said that deforestation rates likely did not drastically change for many reasons. For one, it is probable that the complex dynamics driving deforestation before the pandemic persisted unimpacted by the lockdowns.

“For example, illegal deforestation in areas where there was minimal state (governmental) presence before the pandemic would likely continue during lockdowns,” she said. 

Moreover, she explained that “global-level macroeconomic forces related to changes in demand and supply paired with national economic stimulus packages could have balanced out economic pressures that were being placed on forests.”

Louis Reymondin, who co-leads the Digital transformation of the agri-food systems research theme for the Alliance of Bioversity International and CIAT also said that the finding wasn’t surprising, given that deforestation is heavily driven by livestock grazing and that demand for those products continued during the lockdowns in 2020.

“There were changes in food consumption habits, but usually it was towards processed foods and a reliance on industrialized agriculture,” he said, “The disruption needed to stop deforestation is about changing consumer behavior, changing the food system… and that’s something that countries and governments and scientists are trying to push forward.”

Jonathan Céspedes, the lead author of the study, an Alliance of Bioversity and CIAT research assistant during the study and now a 2nd year Phd Student at Institut Polytechnique de Paris says that his task was to evaluate deforestation and COVID-19 data in order to determine possible relationships between both variables.

“It is key to take into account that the spatial scale of this study is global; therefore, the next stage is to evaluate sub-national and local scales, where probably the results may be different,” Céspedes said.

Sylvester said that to get a genuine snapshot of the impact, more research would be required, as national economic recovery efforts in response to the pandemic may have longer-term effects on deforestation that are not captured in this study limited to 2020.

“All in all we see that deforestation trends in most countries followed their expected trajectories; however, to really understand the effects of the pandemic on deforestation we will have to look at a longer time period, say three years or more, in order to understand how national economic recovery efforts impact forest cover,” Sylvester said.

The Alliance’s Role

Sylvester explained that the previous expertise of the Alliance was key in reaching these conclusions.

“The Alliance of Bioversity and CIAT has a great team working with the Terra-i deforestation monitoring system, their expertise working with these deforestation alerts contributed immensely to this study,” Sylvester said.

Augusto Castro-Nunez, the lead supervisor and a senior scientist for low emissions food systems at the Alliance Bioversity and CIAT said that the Alliance is well-known for its many years of experience monitoring forest cover changes.

“More recently the Alliance has developed the capacities to not only monitor the changes but to understand the underlying drivers behind them,” he said, “We have been publishing on this topic for many years focusing on conflict-affected settings like Colombia and more recently, we have been studying the food system drivers of deforestation with the FAO as a partner.”


  • Learn more by reading the paper.

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Apple Shares Slide After Research Shows iPhone Launch In China Disappoints 

Apple Shares Slide After Research Shows iPhone Launch In China Disappoints 

Apple shares fell in premarketing trading in New York following…



Apple Shares Slide After Research Shows iPhone Launch In China Disappoints 

Apple shares fell in premarketing trading in New York following research indicating that iPhone 15 sales in China lagged behind its 2022 predecessor. 

Bloomberg cited a new report from market tracker Counterpoint Research that showed iPhone 15 sales were down 3.5% compared with iPhone 14 over the first 17 days after launch.

Counterpoint said the new iPhone's sales slump in China was due to a weakening economy. It noted that in the US, iPhone 15 sales were likely to see double-digit growth over the first nine days of sales in 2022 for the iPhone 14. 

However, the new iPhone's debut in China occurred weeks after Huawei Technologies launched the Mate 60 Pro, which uses a cutting-edge processor made in China and is seen as a victory for Chinese tech despite US sanctions on chips. Also, the Chinese government broadened a ban on iPhones at government agencies and state companies. 

"The US is hot right now with back-to-back stellar weekends for the new iPhone," said Counterpoint research director Jeff Fieldhack.

Fieldhack said, "It's a positive sign from the biggest iPhone market in the world. So definitely takes some of the sting off the China numbers." 

In a separate report, Jefferies analysts led by Edison Lee estimates iPhone 15 sales in China are down as much as double-digit percentage compared with iPhone 14. He explained this has to do with Huawei outselling Apple. 

"The trend suggests iPhone would lose to Huawei in 2024," Lee said, adding, "We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone."

Apple shares fell as much as 1.7% in premarket trading due to Counterpoint Research's new note.

Sliding iPhone sales in China can be attributed to a sluggish economic recovery and the preference of consumers in the world's second-largest economy to ditch Apple for domestic brands. 

Remember, China accounts for nearly 20% of Apple's revenue.

Tyler Durden Mon, 10/16/2023 - 07:20

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Capital Markets are Calm though Anxiety Continues to Run High

Overview: The risk that the war in Israel spreads
remains palatable, and several observers have warned of the greatest risks of a
world war in a generation….



Overview: The risk that the war in Israel spreads remains palatable, and several observers have warned of the greatest risks of a world war in a generation. Still, the capital markets remain relatively calm. The US dollar is softer after closing last week firmly. The only G10 currency unable to post corrective upticks today is the Swiss franc. Among emerging market currencies, the Polish zloty has been boosted by the pro-EU election results, and the Mexican peso lead the complex. Gold, which rallied 3.4% at the end of last week, is seeing its gains pared by nearly 0.9% today and the yellow metal is straddling the $1916 area. December WTI rallied 5.5% before the weekend to settle at $86.35. It saw a little follow-through buying today before slipping back $85.65 today. It is near $86.20 in the European morning.

Equities are trading heavily. Weak Japanese industrial production data took local indices down by 1.5%-2.0%. China's CSI 300 was off nearly 1%, and nearly all the bourses in the region fell. Last week, the MSCI Asia Pacific Index snapped a three-week slide of more than 4% and closed 1.5% higher. Europe's Stoxx 600 is marginally lower after losing nearly 1% before the weekend. It too snapped a three-week down draft last week (~-3.7%) and closed up almost 1%. US index futures are firm. The S&P 500 and NASDAQ closed lower last week, while the Dow Industrials eked out a small gain. Bond markets are under pressure. Benchmark 10-year yields in Europe are up 3-6 bp and the 10-year US Treasury yield is up seven basis points to 4.68%. The yield had fallen 19 bp net-net last week.

Asia Pacific

There are three developments in China to note. First, the PBOC kept the benchmark one-year Medium-Term Lending Facility rate unchanged at 2.50%. Banks will set the loan prime rates at the end of the week and have not fully passed through the last hike in the MLF. The PBOC stepped up its liquidity provision at the facility to CNY789 bln from CNY591 bln last month. Second, China's sovereign wealth fund bought bank shares last week. Third, mainland brokers were discouraged from opening new offshore accounts for domestic investors. Third, a key standing committee of the National People's Congress will meet October 2-24. Reportedly under consideration are a new equity stabilization fund (CNY1 trillion, or ~$137 bln) that has been discussed for some time, and a proposal to boost local government borrowing ahead of the new quotas typically issued in January-February.

Japan showed weaker August industrial output than preliminary estimate. Rather than flat month-over-month, Japanese industrial production fell by 0.7%, which dragged the year-over-year rate down to -4.4% (not -3.8%) after a -2.3% pace in July. The extraordinary Diet session begins on October 20 and two byelections will be held on October 22. The chief purpose is to agree to a new supplemental budget. There are strains in the governing coalition and the recent cabinet reshuffle did little to bolster public opinion in the government. The chances of a snap-election this year appear to be fading. Meanwhile, before the weekend, Finance Minister Suzuki told reporters what told to the G20, namely that "excessive moves are undesirable" and that there will be times that an "appropriate response" is required in the foreign exchange market. Still one-week implied volatility finished last week near 6.6%, the lowest since February 2022. Three-month implied volatility reached nearly 8.8% at the end of last week, the lowest since the year's low was set slightly lower in mid-June. In terms of a one-way market, which may also be objectionable, note that coming into today the yen has weakened in six of the past ten trading sessions.

As widely expected, the center-right won the New Zealand election and the National Party's leader Luxon will be the new prime minister, ending six years of Labour Party governance. The National Party garners 39% of the vote, meaning it will have to negotiate with the libertarian ACT (9% of the vote) and the New Zealand First (6.5%). The National Party and ACT may have enough to form a parliamentary majority, but it is vulnerable to special and overseas votes that will not be published until November 3. Labour's share of the vote was nearly halved to 27% from 50% in the last election three years ago. Its alliance partner, the Green Party, took key districts from Labour as it received almost 11% of the vote from a little less than 8% in 2020. Separately, Australian's rejected the government-backed bid to boost the representation of the Indigenous Australians, including the creation of an advisory committee to parliament. The be approved the referendum needed a "double majority"--a majority of states and voters. It secured neither.

The dollar was confined to a narrow range of less than 40 pips against the yen ahead of the weekend. It settled near the session low of about JPY149.45. It slipped to almost JPY149.30 today. Last week's low was slightly below JPY148.20. There are options for around $1.10 bln at JPY148.00 that expire tomorrow. There no longer appears to be much near-term optionality around JPY150. The Australian dollar posted its lowest settlement of the year at the end of last week (~$0.6295). It has recovered slightly through $0.6330 today to approach the pre-weekend higher $0.6335. Last week's high was closer to $0.6445. The New Zealand dollar is also trading firmer but is also holding below the high from the end of last week (~$0.5935). For the fourth consecutive session, the greenback has risen above the previous session high against the Chinese yuan. Today's high near CNY7.3130 is the best since late September, before the early October extended holiday. The PBOC set the dollar's reference rate at CNY7.1798, above the previous day's for the first time in weeks. The average in Bloomberg's survey was for CNY7.3095.


In Poland, the Law and Justice Party (PiS) received the most votes but was shy of a majority and this gives Tusk's Civic Coalition an opportunity to build a wider coalition. This will likely lead to the reforms that will free up billions of euros in Recovery Funds for Poland. The Polish zloty was trending higher against the euro over the last couple of weeks. The euro has fallen by about 2.3% since September 28 and is off another 1% in the European morning, have fallen by nearly 2% in the immediate reaction to the election news.

The eurozone's trade balance has not returned to levels seen prior to Russia's invasion of Ukraine or pre-Covid levels, but it is healing. The seasonally adjusted August trade surplus was 11.9 bln euros. That brings the average in the first eight months to a surplus 1.365 bln euros. The average in the Jan-Aug 2022 period was a deficit of 30 bln euros. In the first eight months of 2019, the eurozone's average monthly seasonally adjusted trade surplus was 16.23 bln euros.

The US and EU meet at the end of the week. Three topics seem to dominate: Russia/Ukraine, Middle East, and China. For discussion are the price caps on Russian oil and the use of the profits from Russia's frozen assets to be turned over to Ukraine, timing, and mechanisms still to be worked out. This is a compromise solution between those who want to use all the confiscated assets to rebuild Ukraine and those who are wary of setting a dangerous precedent. US Treasury Secretary Yellen appears to have endorsed "repurposing" the profits and expressed concern that the oil price cap is not effective. Second, there is a real danger that the war in Israel expands. The US has sent two carrier groups into the region to deter Iran, Syria, and Hezbollah. At the same time, the US has warned that Azerbaijan and Armenian hostilities are poised to escalate. Third, the US and EU may try to coordinate positions on China, and in particular the excess capacity (and carbon emissions) in steel and aluminum. This may help resolve the dispute since 2018 between the US and EU over tariffs. There may also be an attempt to strike a deal on rare earths ("critical minerals") to allow EU to qualify for some assistance under the so-called Inflation Reduction Act.

After posting an outside down day after the US CPI, the euro headed further south ahead of the weekend to slip a little through $1.05, though managed to close back above it. It has risen to almost $1.0545 today. Resistance is seen in the $1.0560-70 area. A break of $1.0490 signals a retest of the year's low set earlier this month slightly below $1.0450. Sterling was sold to new lows for the week last Friday a little below $1.2125. It enjoys a firmer bias today and reached almost $1.2180. Nearby resistance is seen in the $1.2200-15 area. There may be some support near $1.2100 but October 3 low was closer to $1.2035. 


On top of the firmer than expected US PPI and CPI last week, the University of Michigan reported a jump in inflation expectations at the end of last week. Its preliminary results for October showed the one-year inflation expectation jumped to 3.8%, a five-month high, from 3.2% in September. The 5–10-year inflation expectation rose to 3.0% from 2.8% in September. It stuck at 3% in the previous three months. Sentiment itself fell to 63.0 from 68.1. It is the third consecutive decline and the largest fall since June 2022. Still, expectations for the last two FOMC meetings of the year are at a low ebb: less than 8% for November, down from around 30% after the employment report on October 6. The odds of hike before the end of the year are near 33%. It was slightly below 50% on October 13. 

On today's economic agenda, the US sees the NY State manufacturing survey, where the diffusion index is expected to retreat into negative territory, and the September budget statement. If the September deficit is about $150 bln, that would bring the 12-month shortfall to around $1.68 trillion. In the 12-months through September 2022, the deficit was closer to $1.38 trillion. It puts the shortfall near 5.9% of GDP. It was 4.7% in 2019. US continues to sell bills and will sell $143 bln today of 3- and 6-month bills followed by $75 mln cash management bill tomorrow and 4- and 8-week bills on Thursday. Coupon offerings are limited this week to $13 bln of the 20-year bond that is re-opened, and $22 bln in five-year TIPS. However, it is another busy week for Fed speakers. No fewer than 13 different officials speak with Chair Powell speech at the Economic Club of New York on Thursday being the highlight.

Canada has a busy data week as well. Today's wholesale and manufacturing sales are more for economists that the market. But the market will likely take notice of the Bank of Canada's survey of the business outlook. The quarterly reading has declined for the past six consecutive quarters and fell below zero in Q1 23. Still, tomorrow's CPI report is more important for policy expectations. The market sees a better chance that the Bank of Canada hikes when it meets on October 25 than the Fed hikes on November 1. The swaps market is discounting about a 38% chance of a hike this month and slightly more than a 60% chance of a move before the end of the year.

After jumping up to CAD1.3700 after the US CPI report, the greenback stalled and pulled back to almost CAD1.3635 at the end of last week before settling at CAD1.3660. The US dollar did trade slightly below the pre-weekend low and is trading quietly in the European morning below CAD1.3650. Initial support may be near CAD1.3620. There are options for about $695 mln at CAD1.37 that expire today and $640 mln at CAD1.36 that expire on Wednesday. The greenback posted an outside up day against the Mexican peso last Thursday and follow-through buying lifted it to almost MXN18.11 before the weekend, a three-day high. The US dollar is better offered today, falling to about MXN17.93. A break of MXN17.75-77 may be needed to confirm a nearby top is in place. 


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US Stocks Still Lead Global Assets In 2023

The Israeli-Palestinian conflict is a new risk factor for financial markets, but for now there’s no contest between US shares and other asset classes…



The Israeli-Palestinian conflict is a new risk factor for financial markets, but for now there’s no contest between US shares and other asset classes as the year moves into its final stretch, based on a set of ETFs through Friday’s close (Oct. 13).

Vanguard Total US Stock Market Index Fund (VTI) is up 13.0% year to date. Although that’s well below the 20% peak for the ETF reached in the summer, this year’s performance premium for American shares remains hefty vs. the rest of the major asset classes. The second-best performer in 2023: developed-markets stocks ex-US (VEA) with a relatively modest 5.2% year to date return.

Roughly half of markets are posting losses so far in 2023. Property shares in the US and in foreign markets are currently suffering the steepest declines: -5.6% and -7.5%, respectively.

The Global Market Index (GMI) is outperforming most asset classes this year, with the exception of US stocks. GMI is an unmanaged benchmark holds all the major asset classes (except cash) in market-value weights via ETFs and represents a competitive measure for multi-asset-class-portfolio strategies. 

Note, too, that GMI’s current drawdown is relatively light vs. its underlying component markets. Only US stocks (VTI) and US junk bonds (JNK) are posting softer peak-to-trough declines than GMI’s -12.3% drawdown.

The question of how risk assets fare in the near term is expected to be closely linked to the path ahead for the Israeli-Palestinian conflict.

“We’re looking at the potential economic implications of the hostilities,” says US Treasury Secretary Janet Yellen. “It’s too early to speculate on whether or not there will be significant consequences. I think importantly it depends on whether the hostilities extend beyond Israel and Gaza, and that’s certainly an outcome we would like to avoid.”

Economists are upbeat about the prospects for the US economy in the near term, according to a new survey by The Wall Street Journal. A small minority (54%) think the country will avoid a downturn, up from 48% in July.

The key question is whether Israel’s military operation, which appears set to invade Gaza, will trigger a wider conflict in the Middle East?

“I have no clue whether markets will remain relatively well behaved,” says Erik Nielsen, group chief economics adviser at UniCredit. “It almost certainly depends on whether this latest conflict remains localized or whether it escalates into a broader Middle Eastern war.”

Nomura European economist George Moran adds: “If the Ukraine war taught us anything, it’s not to underestimate the effect of geopolitics.”

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