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No Rest for the Weary

Overview: Risk appetites are improving on the margin. Asia Pacific stocks still fell after the sharp losses on Wall Street on Monday. Still, China, Taiwan…



Overview: Risk appetites are improving on the margin. Asia Pacific stocks still fell after the sharp losses on Wall Street on Monday. Still, China, Taiwan and Indian equities traded higher. Europe's Stoxx 600 is snapping a four-day 6.5%+ slide and is up around 1.2% in late European morning turnover. US equity futures are up over 1%. The 10-year Treasury yield that pushed to 3.20% yesterday is a little above 3% now. European benchmark yields are 5-7 bp lower and the peripheral premium has narrowed slightly. The US dollar is trading is mixed. The Australian dollar, yen, and Canadian dollar are steady, while the Norwegian krone and the Swiss franc are laggards. Most emerging market currencies are firmer, including the Indian rupee, which fell to record lows yesterday. The central reportedly intervened in the spot, forward and NDF markets. Today, the South Korean won, and Turkish lira are underperforming. Gold is holding above $1850 support. June WTI initially extended yesterday's pullback from the $110 area to test $100 before steadying. US natgas tumbled 12.6% yesterday after the pre-weekend drop of 8.4%. Today, it is off another 1.3%, and is below $7 for the first time in nearly two weeks. Europe's benchmark is off nearly 4% today after falling about 15% in the past two sessions. It is near last month's low. Iron ore fell 2.2% in Singapore. It is the sixth drop in the past seven sessions and has returned to levels last seen in mid-January. The June copper futures fell to the year's low yesterday and has steadied today. July wheat fell for the first time in four sessions yesterday but has come back bid today.

Asia Pacific

As Covid restrictions were eased, pent-up demand helped boost household spending in Japan even though wages increases are not keeping pace with inflation. Spending surged 4.1% in March over February, which was more than expected. The quarter ended on a firm note but not enough to offset the earlier weakness and spending fell around 1.8% on the quarter. Japan reports Q1 GDP next week and economists (median, Bloomberg survey) anticipate a 0.5% contraction.

Japan's Foreign Minister Hayashi became the latest international official to visit the Solomon Islands after a secret pact was signed with China. Clearly, many countries in the region, are concerned about an extended China presence. Prime Minister Sogavare claims that the Solomon Islands are being treated like children. The government insisted that the treaty does not allow for a permanent Chinese presence. The US had downgraded its own presence in the islands in 1993 when it closed its embassy, which had been open for five years. The US said it would re-open the embassy earlier this year but also warned Sogavare that it would "respond accordingly" if China builds a base or secure capability. The apt comparison may not be the Cuban Missile Crisis, but Ukraine. Kyiv has the right to choose its allies even if it is disruptive to some of its neighbors. Solomon Islands could be punished if it chooses wrong. 

As US 10-year yields pulled back and briefly dipped below 3.0% after reaching 3.20% yesterday, the dollar slipped to a three-day low near JPY129.80. US yields stabilized and so did the greenback. It has settled in a JPY130.20-JPY130.60 range. Last week's low was seen aroundJPY128.65 and this needs to be taken out to signal a corrective rather than just the consolidative phase. The Australian dollar was sold to almost $0.6900, its lowest level since mid-2020, before rebounding to about $0.6985. Buying emerging in early Europe on a pullback toward $0.6940. A move above $0.7000 is needed to stabilize the technical tone. The greenback traded on both sides of yesterday's range against the Chinese yuan. It briefly traded above CNY6.74 for the first time since November 2020 before being sold off to almost CNY6.69 where it found a new bid. The PBOC set the dollar's reference rate lower than expected (CNY6.7134 vs. CNY6.7139). After three days of gains, the greenback is trading softer.


It may not be particularly clear in the PMI data, which has been holding up fairly well for the euro area. The April Composite PMI rose to 55.8 from 54.9 in March and 555.5 in February before the Russian invasion of Ukraine. But the economy is weakening. Last week, we learned that retail sales fell 0.4% in March, which was more than expected. At the end of this week, we will learn that industrial output slumped. Consider that last week German reported March industrial output plummeted by 3.5% (the median in Bloomberg's survey expected a 0.4% decline). French industrial production fell by 0.5%, more than twice what had been expected. It followed a revised 1.2% decline in February (from -0.9%). It was the fourth decline in five months. Spain's industrial output contracted by 1.8% in March. The median forecast in Bloomberg's survey called for a 0.5% decline. Earlier today, Italy offered a pleasant surprise:  Its industrial output was flat in March. Economists had forecast a 1.5% decline on the month. The aggregate figure for the eurozone is due at the end of the week. A 2% fall is expected, which would be the most since the pandemic first struck.

Sentiment is also falling. Last week, the EC confidence indicators for April were all weaker than expected. Yesterday, the May Sentix investor confidence measure fell to -22.6, worse than expected and the lowest since June 2020. Today was the ZEW survey. The eurozone expectations component approached the March 2020 low (-43.6) but recovered to -29.5 in May. In Germany, the assessment of the current situation deteriorated (-36.5 vs. -30.8), but expectations stopped a two-month dramatic slide. It had fallen from 54.3 before the Russian invasion of Ukraine to -41.0 in April. The "rebound” lifted it to -34.3 in May. The latest survey on Bloomberg put the risk of a recession in the eurozone at 35% of the next 12 month. The odds of a recession in the UK and Japan are put at 30%. The US is at 25% and Canada is 17.5%.

The euro has been bouncing along its trough around $1.0480 for the better part of two weeks. The upside blocked last week in the $1.0630-$1.0640 area. So far, today, it is holding above $1.0550, which, if sustained, would be the highest low since April 26. The intraday momentum indicators suggest there is scope for range-extension today to the upside and a close above $1.06 could lift the tone. However, the $1.0650 area needs to be overcome to signal a correction rather than consolidation. Sterling traded on both sides the of the pre-weekend range yesterday but the close was a little lower. This is consistent with some sideways movement. Previous support at $1.2400 offers resistance. It is also the (38.2%) retracement of last week's BOE-induced slide. The intraday momentum indicators suggest a test on it is likely in North America today. Initial support is now seen near $1.2320.


The Financial Times citing the work of one bank suggests that we are in "reverse currency wars."  Is that a helpful or accurate framing of the issue or is "war" an inflammatory image that is the material equivalent of click-bait?  First, we would counter by saying that it is possible that the foreign exchange market becomes an arena of competition and beggar-thy-neighbor strategies. However, there is an arms control agreement, and even if the edges fray a little, it is holding. Second, most central banks from high-income countries view the exchange rate in terms of financial conditions. When the monetary officials are reducing accommodation, they prefer to see currency appreciation. Depreciation, on the other hand, would blunt or offset the tightening of financial conditions that is sought. What seemed like a race-to-the-bottom was that there was a common shock and central banks were easing policy.

Central banks from high-income countries are mostly tightening financial conditions. There are three notable exceptions. The Swiss National Bank and the Bank of Japan are clearly feeling no sense of urgency. For the European Central Bank, it appears a rate hike is a question of time. The debate seems to be between July and September. The signals from policy makers suggest an "expeditious" campaign to above zero before the end of the year. Depending on several other variables, including openness of an economy, exchange rates can influence inflation. Given elevated prices in most many high-income countries, yes, it is given that exchange rates are being monitored. Yet, given the increase in volatility and the trend moves, foreign exchange rates do not seem to be particularly urgent. And what is the policy implication that the "reverse currency war" is supposed to do?  The FT says that the bank estimates it to be worth 10 bp extra of tightening that will be required. This is a rounding error and speaks the exaggerated precision economists often use, not the kind of damage fitting of war imagery.

There are three key developments since last week's FOMC meeting. First, US rates are mixed. Since the night before the May 4th decision, the US 10-year yield has risen by about five basis points but was up closer to 23 bp at its peak yesterday. The two-year note yield has fallen 18 bp, and at yesterday's low point, had fallen 21 bp from the day before the FOMC hiked. Second, follows from the first point and is that the US 2-10 yield curve steepened. Both of those are consistent with the Fed not being as aggressive as the market expected. However, what challenges this narrative is that the 10-year breakeven (the difference between the conventional yield and the 10-year inflation protected security) has fallen. And it settled yesterday at its lowest level in two months (slightly below 2.75%). 

Mexico's inflation accelerated last month, and the market expects the central bank to lift the overnight target rate by 50 bp on Thursday to 7.0%. The headline rate rose to 7.68% from 7.45%, which was slightly less than expected. However, the core rate rose slightly more than expected (7.22%, vs. 7.18%, the median forecast in Bloomberg's survey and 6.78% in March). The swaps market is pricing in about 115 bp of tightening over the next three months. This suggests two 50 bp moves with the risk of a 75 bp move.

The dollar traded above CAD1.30 yesterday for the first time since November 2020 as US equities cratered. Its gains were initially extended in the Asian turnover today (a little above CAD1.3035), but as equities stabilized, the greenback has pushed back below CAD1.30. Note that the CAD1.3025 corresponds to the (38.2%) retracement of the US dollar's decline from the pandemic high (~CAD1.4670). Hedging the large ($3.35 bln) option that expires today at CAD1.2935 may have contributed to the upward pressure on the exchange rate. Tomorrow, there is a $1.2 bln option at CAD1.30 that expires and $1.9 bln in options at CAD1.2950. We continue to see the key drag on the Canadian dollar coming the dramatic slide in equities rather than Canada's fundamentals. The greenback initially extended its gains against the Mexican peso. It rose to a five-day high near MXN20.44 to test the 200-day moving average before pulling back to around MXN20.3160 in the European morning. Nearby support is the MXN20.25-MXN20.30 band.



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How They Convinced Trump To Lock Down

How They Convinced Trump To Lock Down

Authored by Jeffrey A. Tucker via Brownstone Institute,

An enduring mystery for three years is how…



How They Convinced Trump To Lock Down

Authored by Jeffrey A. Tucker via Brownstone Institute,

An enduring mystery for three years is how Donald Trump came to be the president who shut down American society for what turned out to be a manageable respiratory virus, setting off an unspeakable crisis with waves of destructive fallout that continue to this day. 

Let’s review the timeline and offer some well-founded speculations about what happened. 

On March 9, 2020, Trump was still of the opinion that the virus could be handled by normal means. 

Two days later, he changed his tune. He was ready to use the full power of the federal government in a war on the virus. 

What changed? Deborah Birx reports in her book that Trump had a friend die in a New York hospital and this is what shifted his opinion. Jared Kushner reports that he simply listened to reason. Mike Pence says he was persuaded that his staff would respect him more. No question (and based on all existing reports) that he found himself surrounded by “trusted advisors” amounting to about 5 or so people (including Mike Pence and Pfizer board member Scott Gottlieb)

It was only a week later when Trump issued the edict to close all “indoor and outdoor venues where people congregate,” initiating the biggest regime change in US history that flew in the face of all rights and liberties Americans had previously taken for granted. It was the ultimate in political triangulation: as John F. Kennedy cut taxes, Nixon opened China, and Clinton reformed welfare, Trump shut down the economy he promised to revive. This action confounded critics on all sides. 

A month later, Trump said his decision to have “turned off” the economy saved millions of lives, later even claiming to have saved billions. He has yet to admit error. 

Even as late as June 23rd of that year, Trump was demanding credit for having followed all of Fauci’s recommendations. Why do they love him and hate me, he wanted to know. 

Something about this story has never really added up. How could one person have been so persuaded by a handful of others such as Fauci, Birx, Pence, and Kushner and his friends? He surely had other sources of information – some other scenario or intelligence – that fed into his disastrous decision. 

In one version of events, his advisors simply pointed to the supposed success of Xi Jinping in enacting lockdowns in Wuhan, which the World Health Organization claimed had stopped infections and brought the virus under control. Perhaps his advisors flattered Trump with the observation that he is at least as great as the president of China so he should be bold and enact the same policies here. 

One problem with this scenario is timing. The Oval Office meetings that preceded his March 16, 2020, edict took place the weekend of the 14th and 15th, Friday and Saturday. It was already clear by the 11th that Trump was ready for lockdowns. This was the same day as Fauci’s deliberately misleading testimony to the House Oversight Committee in which he rattled the room with predictions of Hollywood-style carnage. 

On the 12th, Trump shut all travel from Europe, the UK, and Australia, causing huge human pile-ups at international airports. On the 13th, the Department of Health and Human Services issued a classified document that transferred control of pandemic policy from the CDC to the National Security Council and eventually the Department of Homeland Security. By the time that Trump met with Fauci and Birx in that legendary weekend, the country was already under quasi-martial law. 

Isolating the date in the trajectory here, it is apparent that whatever happened to change Trump occurred on March 10, 2020, the day after his Tweet saying there should be no shutdowns and one day before Fauci’s testimony. 

That something very likely revolves around the most substantial discovery we’ve made in three years of investigations. It was Debbie Lerman who first cracked the code: Covid policy was forged not by the public-health bureaucracies but by the national-security sector of the administrative state. She has further explained that this occurred because of two critical features of the response: 1) the belief that this virus came from a lab leak, and 2) the vaccine was the biosecurity countermeasure pushed by the same people as the fix. 

Knowing this, we gain greater insight into 1) why Trump changed his mind, 2) why he has never explained this momentous decision and otherwise completely avoids the topic, and 3) why it has been so unbearably difficult to find out any information about these mysterious few days other than the pablum served up in books designed to earn royalties for authors like Birx, Pence, and Kushner. 

Based on a number of second-hand reports, all available clues we have assembled, and the context of the times, the following scenario seems most likely. On March 10, and in response to Trump’s dismissive tweet the day before, some trusted sources within and around the National Security Council (Matthew Pottinger and Michael Callahan, for example), and probably involving some from military command and others, came to Trump to let him know a highly classified secret. 

Imagine a scene from Get Smart with the Cone of Silence, for example. These are the events in the life of statecraft that infuse powerful people with a sense of their personal awesomeness. The fate of all of society rests on their shoulders and the decisions they make at this point. Of course they are sworn to intense secrecy following the great reveal. 

The revelation was that the virus was not a textbook virus but something far more threatening and terrible. It came from a research lab in Wuhan. It might in fact be a bioweapon. This is why Xi had to do extreme things to protect his people. The US should do the same, they said, and there is a fix available too and it is being carefully guarded by the military. 

It seems that the virus had already been mapped in order to make a vaccine to protect the population. Thanks to 20 years of research on mRNA platforms, they told him,  this vaccine can be rolled out in months, not years. That means that Trump can lock down and distribute vaccines to save everyone from the China virus, all in time for the election. Doing this would not only assure his reelection but guarantee that he would go down in history as one of the greatest US presidents of all time. 

This meeting might only have lasted an hour or two – and might have included a parade of people with the highest-level security clearances – but it was enough to convince Trump. After all, he had battled China for two previous years, imposing tariffs and making all sorts of threats. It was easy to believe at that point that China might have initiated biological warfare as retaliation. That’s why he made the decision to use all the power of the presidency to push a lockdown under emergency rule. 

To be sure, the Constitution does not allow him to override the discretion of the states but with the weight of the office complete with enough funding and persuasion, he could make it happen. And thus did he make the fateful decision that not only wrecked his presidency but the country too, imposing harms that will last a generation. 

It only took a few weeks for Trump to become suspicious about what happened. For weeks and months, he toggled between believing that he was tricked and believing that he did the right thing. He had already approved another 30 days of lockdowns and even inveighed against Georgia and later Florida for opening. He went so far as to claim that no state could open without his approval. 

He did not fully change his mind until August, when Scott Atlas revealed the whole con to him. 

There is another fascinating feature to this entirely plausible scenario. Even as Trump’s advisors were telling him that this could be a bioweapon leaked from the lab in China, we had Anthony Fauci and his cronies going to great lengths to deny it was a lab leak (even if they believed that it was). This created an interesting situation. The NIH and those surrounding Fauci were publicly insisting that the virus was of zoonotic origin, even as Trump’s circle was telling the president that it should be regarded as a bioweapon. 

Fauci belonged to both camps, which suggests that Trump very likely knew of Fauci’s deception all along: the “noble lie” to protect the public from knowing the truth. Trump had to be fine with that. 

Gradually following the lockdown edicts and the takeover by the Department of Homeland Security, in cooperation with a very hostile CDC, Trump lost power and influence over his own government, which is why his later Tweets urging a reopening fell on deaf ears. To top it off, the vaccine failed to arrive in time for the election. This is because Fauci himself delayed the rollout until after the election, claiming that the trials were not racially diverse enough. Thus Trump’s gambit completely failed, despite all the promises of those around him that it was a guaranteed way to win reelection.

To be sure, this scenario cannot be proven because the entire event – certainly the most dramatic political move in at least a generation and one with unspeakable costs for the country – remains cloaked in secrecy. Not even Senator Rand Paul can get the information he needs because it remains classified. If anyone thinks the Biden approval of releasing documents will show what we need, that person is naive. Still, the above scenario fits all available facts and it is confirmed by second-hand reports from inside the White House. 

It’s enough for a great movie or a play of Shakespearean levels of tragedy. And to this day, none of the main players are speaking openly about it. 

Jeffrey A. Tucker is Founder and President of the Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

Tyler Durden Fri, 03/24/2023 - 17:40

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Could the common cold give children immunity against COVID? Our research offers clues

Certain immune cells acquired from a coronavirus that causes the common cold appear to react to COVID – but more so in children that adults.

Why children are less likely to become severely ill with COVID compared with adults is not clear. Some have suggested that it might be because children are less likely to have diseases, such as type 2 diabetes and high blood pressure, that are known to be linked to more severe COVID. Others have suggested that it could be because of a difference in ACE2 receptors in children – ACE2 receptors being the route through which the virus enters our cells.

Some scientists have also suggested that children may have a higher level of existing immunity to COVID compared with adults. In particular, this immunity is thought to come from memory T cells (immune cells that help your body remember invading germs and destroy them) generated by common colds – some of which are caused by coronaviruses.

We put this theory to the test in a recent study. We found that T cells previously activated by a coronavirus that causes the common cold recognise SARS-CoV-2 (the virus that causes COVID) in children. And these responses declined with age.

Read more: Does COVID really damage your immune system and make you more vulnerable to infections? The evidence is lacking

Early in the pandemic, scientists observed the presence of memory T cells able to recognise SARS-CoV-2 in people who had never been exposed to the virus. Such cells are often called cross-reactive T cells, as they stem from past infections due to pathogens other than SARS-CoV-2. Research has suggested these cells may provide some protection against COVID, and even enhance responses to COVID vaccines.

What we did

We used blood samples from children, sampled at age two and then again at age six, before the pandemic. We also included adults, none of whom had previously been infected with SARS-CoV-2.

In these blood samples, we looked for T cells specific to one of the coronaviruses that causes the common cold (called OC43) and for T cells that reacted against SARS-CoV-2.

We used an advanced technique called high-dimensional flow cytometry, which enabled us to identify T cells and characterise their state in significant detail. In particular, we looked at T cells’ reactivity against OC43 and SARS-CoV-2.

We found SARS-CoV-2 cross-reactive T cells were closely linked to the frequency of OC43-specific memory T cells, which was higher in children than in adults. The cross-reactive T cell response was evident in two-year-olds, strongest at age six, and then subsequently became weaker with advancing age.

We don’t know for sure if the presence of these T cells translates to protection against COVID, or how much. But this existing immunity, which appears to be especially potent in early life, could go some way to explaining why children tend to fare better than adults with a COVID infection.

A little boy sleeps with a teddy bear.
Children are less likely to get very sick from COVID than adults. Dragana Gordic/Shutterstock

Some limitations

Our study is based on samples from adults (26-83 years old) and children at age two and six. We didn’t analyse samples from children of other ages, which will be important to further understand age differences, especially considering that the mortality rate from COVID in children is lowest from ages five to nine, and higher in younger children. We also didn’t have samples from teenagers or adults younger than 26.

In addition, our study investigated T cells circulating in the blood. But immune cells are also found in other parts of the body. It remains to be determined whether the age differences we observed in our study would be similar in samples from the lower respiratory tract or tonsil tissue, for example, in which T cells reactive against SARS-CoV-2 have also been detected in adults who haven’t been exposed to the virus.

Read more: Colds, flu and COVID: how diet and lifestyle can boost your immune system

Nonetheless, this study provides new insights into T cells in the context of COVID in children and adults. Advancing our understanding of memory T cell development and maturation could help guide future vaccines and therapies.

Marion Humbert received funding from KI Foundation for Virus Research (Karolinsk Institutet, Sweden) and Läkare mot AIDS (Sweden).

Annika Karlsson receives funding from the Swedish Research Council (Dnr 2020-02033), CIMED project grant, senior (Dnr: 20190495), and Karolinska Institutet (Dnr: 2019-00931 and 2020-01599).

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Spread & Containment

Where there’s smoke, there’s thiocyanate: McMaster researchers find tobacco users in Canada are exposed to higher levels of cyanide than other regions

HAMILTON, ON – Mar 24, 2024 – Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a…



HAMILTON, ON – Mar 24, 2024 Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a large-scale population health study from McMaster University.

Credit: McMaster University

HAMILTON, ON – Mar 24, 2024 Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a large-scale population health study from McMaster University.

Scientists made the discovery while investigating the molecule thiocyanate – a detoxified metabolite excreted by the body after cyanide inhalation. It was measured as a urinary biomarker of tobacco use in a study of self-reported smokers and non-smokers from 14 countries of varying socioeconomic status.

“We expected the urinary thiocyanate levels would be similar across regions and reflect primarily smoking intensity. However, we noticed significant elevation of thiocyanate in smokers from high-income countries even after adjusting for differences in the number of cigarettes smoked per day,” says Philip Britz-McKibbin, co-author of the study and a professor of chemistry and chemical biology at McMaster.

Tobacco-related illness remains the leading cause of preventable illness and premature death in Canada, contributing to approximately 48,000 deaths annually. According to researchers, the findings could be caused by the type of cigarettes smoked in high-income countries like Canada.

“The cigarettes commonly consumed in Canada are highly engineered products with lower tar and nicotine content to imply they’re less harmful. Heavy smokers with nicotine dependence compensate by smoking more aggressively with more frequent and deeper inhalations that may elicit more harm, such as greater exposure to the respiratory and cardiotoxin, cyanide.”

Smoking rates in Canada have declined from 26 per cent in 2001 to 13 per cent in 2020. But participation in smoking cessation programs has declined during the COVID-19 pandemic, leading to concern about a potential uptick in smoking rates, including cannabis use and a plethora of vaping of products popular among young adults.

Researchers say urinary thiocyanate can serve as a robust biomarker of the harms of tobacco smoke that will aid future research on the global tobacco picture, since most smokers now reside in developing countries. As smoking rates have decreased here in Canada, at-risk groups like youth and pregnant women have been prone to underreport their tobacco use when surveyed, making a reliable biomarker more valuable.

“Historically assessing tobacco behaviors have relied on questionnaires that are prone to bias, especially when comparing different countries and local cultures. The idea is to find robust methods that can quantify recent tobacco smoke exposure more reliably and objectively, which may better predict disease risk and prioritize interventions for smoking cessation.” says Britz-Mckibbin.

The study was published in the latest issue of Nicotine and Tobacco Research and received funding from the Natural Sciences and Engineering Research Council of Canada, Genome Canada, the Canada Foundation for Innovation, Hamilton Health Sciences New Investigator Fund, and an internal grant from the Population Health Research Institute.




For more information please contact:

Matt Innes-Leroux

Media Relations

McMaster University

647-921-5461 (c)


Photos of Philip Britz-McKibbin can be found here

Credit: McMaster University

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