Connect with us

Government

Position Squaring Weighs on the Dollar Ahead of the Jobs Report

Overview:  While equities continue to march higher, the dollar is softer amid position squaring ahead of the US jobs data.  Gold has stabilized after yesterday’s shellacking.  Estimates for US nonfarm payrolls appear to have been creeping higher, encourag

Published

on

Overview:  While equities continue to march higher, the dollar is softer amid position squaring ahead of the US jobs data.  Gold has stabilized after yesterday's shellacking.  Estimates for US nonfarm payrolls appear to have been creeping higher, encouraged by the ADP, PMI, and weekly initial jobless claims.  A robust report today could bolster the dollar, as the short-term trading community still seems short. After the S&P 500 and NASDAQ made new record highs yesterday, Asia Pacific bourses, except for China, advanced.  Japan, Australia, and South Korea's main benchmarks rose by more than 1%.  Europe's Dow Jones Stoxx 600 is higher for the fifth consecutive session.  The roughly 3.8% gain on the week would be the biggest since last November if sustained. US shares are firm.  The bond market is quiet, with the US 10-year benchmark near 1.14%. The prospects of a Draghi-led Italian government have seen the Italian premium over German narrow, and it is now below 100 bp for the first time in five years.   The greenback is lower against nearly all the currencies, major and emerging.  The JP Morgan Emerging Market Currency Index is poised to snap a six-week decline.  Gold fell to around $1785 yesterday, tumbling around 2.2%.  It was squeezed back to about $1811 before stalling.  Oil has moved in the opposite direction.  It is up for a fifth consecutive session, leaving the March WTI contract around $57 a barrel.  It is up nearly 9% this week and is above year-ago levels.  

Asia Pacific

Japan's December household spending figures held in better than expected, falling 0.6%, a third of the decline that economists expected.  Japan does not report Q4 20 GDP until February 15. An expansion of 2.0%-2.5% is expected after 5.3% quarter-over-quarter growth was reported in Q3.   The household spending figures are consistent with a slowing in consumption from 5.1% in Q3. 

Australia's final look at December retail sales was in line with expectations, falling 4.1% (initially -4.2%).  The new information is that excluding inflation, retail sales rose 2.5% in Q2 after a 6.5% increase in Q3.  Separately, the RBA's quarterly update warned that the rapid part of the recovery has passed and that going forward, growth is likely to be "uneven."  Of note, while many scenarios are holding out the promise of a stronger second half, the RBA expects the Australian economy to expand by 8% in the year through June before easing to a 3.5% pace.  The central bank sees inflation accelerating to around 3% by mid-year--as some measures like free child care drop out---before being halved by the end of the year.  

India had unveiled a bold initial earlier this week.  However, with inflation near 4.6% in December, the central bank has little room to maneuver.  It left the repo rate at 4.0% and the reverse repo at 3.35%, as widely expected.  The 10-year Indian bond yield is up more than 20 bp this week to 6.10%.  The rupee is flat against the dollar this week (~+0.0.4%), making it one of the few in the region that did not succumb to the rebounding greenback.  

The dollar traded above its 200-day moving average (~JPY105.60) against the yen since last June, culminating a seven-day rally, encouraged by the five-day rise in the US Treasury yields. A pullback in late Asia saw the greenback ease to about JPY105.35, where Europe bought it again.  The next target is the JPY106.00-JPY106.10 area.  The Australian dollar is straddling the $0.7600-area as it has done all week.  It fell to about $0.7565 on February 2 and has been in the range set on the day (~$0.7565-$0.7660).  The downside momentum has faded, and of the major currencies we track, it could be the first to signal a coming bounce after trending lower for a month. The dollar's reference rate was set at CNY6.4710 by the PBOC, a little firmer than the models suggested.  The money market has stabilized, and the PBOC was a net provider of funds this week.  The dollar is up about 0.65% against the yuan this week, the most since the end of September.  It remains within the range set on the first two trading sessions of the year (~CNY6.43-CNY6.5150).  

 Europe

Conte's failure to form a new government in Italy has not been the political crisis that many feared.   As the country did during the sovereign crisis s a decade ago, it turned to a non-political leader to have navigated the country through the multidimensional crisis now. Eurosystem buying undoubtedly helped the Italian 10-year yield fall around nine basis points this week to a new record low just above 50 bp, and premium over Germany has fallen below 100 bp for the first time five years.  Other peripheral yields in Europe have edged higher this week.  A vote of confidence could be held as early as next week, according to reports.  A key issue is whether Draghi tried to form a government with technocrats or politicians.  The Five Star Movement is opposed, even though early elections would likely see it lose seats. Its support has waned, but this principled stance and arguments about the "undemocratic" nature of Draghi-led government may bolster its ranks.

Germany's December factory orders disappointed, falling nearly twice the 1% decline that economists expected.  The upward revision to the November series (2.7% from 2.3%) offered little consolation as it merely makes the drop more dramatic.  There is not always a tight fit between orders and output, but the market was already anticipating a soft industrial production report at the start of next week.  After rising by 0.9% in November, Bloomberg's survey median forecast sees a 0.1% gain.  

The Bank of England revised down its 2021 GDP forecast and warned of a rapid pick-up from the rapid deployment of the vaccine.  One report suggested that it took about 45 days for the UK to vaccinate 10% of its population and less than two more weeks to reach 20%.  Despite urging banks to prepare for possible negative rates, the Bank of England Governor seemed to persuade the market that the UK may be at its peak monetary efforts.  The short-sterling futures strip no longer implies negative rates. Moreover, the negative rates are being pushed out of the coupon curve, beginning with the three and five-year Gilts. The one and two-year bonds still have slightly negative yields.  

The euro's drop continued to almost $1.1950 today, roughly four cents from the high seen a month ago. It has steadied but unable to resurface above $1.20, where an option for 1.1 bln euro will expire later today.  Another one for 1 bln struck at the same place expires on Monday.  On the downside, the next important retracement objective is near $1.1875. The shifting rate expectations appear to be helping sterling maintain its recent resilience.  It rebounded smartly from the drop to around $1.3565 yesterday, a nearly three-week low.  The upper end of the range is in the $1.3760 area.  Sterling is also deriving support from the cross against the euro.  The euro posted a big outside down day yesterday as it broke below GBP0.8800 for the first time since last May.  The next area of support is seen around GBP0.8670-GBP0.8700.  

America

Canada and the US report January jobs figures today.  Canada lost 3 mln jobs as the pandemic struck and has recouped about 2.34 mln or nearly 78%.  The US lost roughly 22 mln jobs and has recouped around 12.3 mln or approximately 56%.  Canada lost almost 53k jobs in December and is expected to have shed another 40k. However, the underlying detail is important: the jobs lost in December were all part-time positions (95k).  Canada actually grew about 43k full-time positions in December.  The US lost an unexpected 140k jobs in December, but several reports, including ADP and the PMI, have spurred economists to revise up their estimates for today's report.  Some are talking about as much as a 200k gain in non-farm payrolls. 

The US also reports December trade figures, which could impact economists' expectations for Q4 GDP revisions. In the first 11 months of 2020, the US recorded a trade deficit of nearly $605 bln.  In the same period in 2018 and 2019, the US trade deficits of $531.2 bln and $523.5 bln, respectively, were reported.  We argue that all else being equal, the growth differentials that favor the US and are fueled to a large degree by fiscal stimulus will generate a larger trade shortfall.  Although we have anticipated this dollar bounce and suspect it may not be over, the twin-deficit issue is critical to our underlying bearishness.   

Separately, the US December consumer credit figures will be released today.  They are not typically market movers.  However, it may offer insight into the economy's recovery.  March through May last year saw consumer credit growth reverse.  It fell by $95 bln.  Subsequently, it has risen by $58 bln.  Consumer credit is expected to have increased by $12 bln in December. Such an increase would mean that for the year as a whole, consumer credit grew slightly.  

The US dollar has been confined to the range set last Friday against the Canadian dollar (~CAD1.2735-CAD1.2875) all week.  Within that range, the greenback has found support in the CAD1.2760-CAD1.2780 and struggles in the CAD1.2840-CAD1.2860 area.  Rising equities (risk-on) and rising oil (a proxy for commodities) have underpinned the Canadian dollar, which is the be performing major currency against the dollar this week, losing less than 0.2% (around CAD1.28).  The greenback has moved into a higher range against the Mexican peso.  It had been mostly MXN19.50-MXN20.00.  For the better part of the past two weeks, a new range has emerged:  MXN20.00-MXN20.50.  That said, like its performance against the Canadian dollar, the greenback has mostly been confined to last Friday's range (~MXN20.0850-MXN20.60).  Note that Banixco meets next week and is expected to deliver a 25 bp rate cut.  


Disclaimer



Read More

Continue Reading

Government

Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

Published

on

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

Read More

Continue Reading

Government

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

Published

on

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

Read More

Continue Reading

Government

Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

Published

on

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

Read More

Continue Reading

Trending