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Pound steady as PMIs perform well

The British pound has stabilized on Tuesday, after sustaining losses over the past two days. GBP/USD is currently trading at 1.3381, down 0.11% on the day. PMIs point to inflation UK PMIs for October were positive, as manufacturing and business activity..

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The British pound has stabilized on Tuesday, after sustaining losses over the past two days. GBP/USD is currently trading at 1.3381, down 0.11% on the day.

PMIs point to inflation

UK PMIs for October were positive, as manufacturing and business activity continue to show expansion. Manufacturing PMI rose to 58.2 in November, up from 57.8 in October. The Services Business Activity PMI dropped to 58.6, down from 59.1 and a 2-momth low. Businesses are reporting increasing cost inflation, a result of higher wages and increased costs for fuel and raw materials. As well, manufacturers continue to be hampered by global supply chain disruptions, which has hurt manufacturing sales. The increase in costs will evenutually make their way to consumers, which means that consumer inflation will likely move even higher.

Listening to BoE officials, it’s still unclear whether the BoE will raise rates at next month’s policy meeting. On Friday, the BoE’s chief economist, Huw Phill, said that the ‘burden of proof’ was on policymakers to explain why not to raise rates. On the weekend, however, Governor Bailey spoke about the inflation picture being “two-sided”, saying that inflation could remain “elevated for longer”, but it was also possible that inflation would ease.

Another factor to keep in mind is the labor market, as last week’s numbers were strong, which would support a rate hike. The next employment report comes out just two days before the rate decision, and another positive release could sway those MPC members who are on the fence with regard to rates and result in a majority voting for a rate hike.

The financial markets are relieved with the renomination of Jerome Powell, which provides stability and consistency at the Fed at a delicate time for the central bank. Powell is under pressure to accelerate its timeline of raising interest rates, and there is growing expectation that the Fed will raise rates in June 2022, after the central bank winds up the bond purchase program. The Fed will have to proceed carefully with regard to tightening policy, balancing the need to contain inflation without choking the economy, which still has not emerged from the Covid pandemic.

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GBP/USD Technical Analysis

  • GBP/USD tested support at 1.3390 in the European session. Below, there is support at 1.3336
  • There is resistance at 1.3506 and 1.3568

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Economics

DB: Is The World Learning To Live With The Virus?

DB: Is The World Learning To Live With The Virus?

After a day of zigzags on the virus front, we end with some encouraging observations from Deutsche Bank’s Jim Reid who shows in his "chart of the day" that according to global mobility data,..

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DB: Is The World Learning To Live With The Virus?

After a day of zigzags on the virus front, we end with some encouraging observations from Deutsche Bank's Jim Reid who shows in his "chart of the day" that according to global mobility data, most of the world is back close to pre-pandemic levels of mobility (at least on a population-weighted basis) even if the GDP-weighted figure still lags, partly due to some of the larger DM economies still being down vs. February 2019.

Regardless, as Reid observes, the graph shows that "on both measures mobility is notably above last year’s levels. This helps show why reasonably strong YoY growth shouldn’t be too difficult to attain in H1 2022. In H1 2021, the world wasn’t that mobile."

This is good news because it means that - at least so far- as the winter covid wave and Omicron hit us, aggregate mobility hasn’t yet dipped. This, according to Reid, shows that either people are learning to live with the virus more or that it’s too early to tell as travel and domestic restrictions, only very recently imposed, have yet to fully take their toll, with more possibly to come.

To be sure, Austrian mobility has declined significantly with Germany also drifting lower. So where restrictions have been imposed there has been a consequence.

A more detailed heatmap of global mobility is shown below.

To be sure, the swing factor to winter mobility will be Omicron. For those readers looking for good news, the second chart from Reid shows that in South Africa covid fatalities from the Omicron wave have not responded to the rise in cases in the same manner as prior ones (with a 12-day lag).

While it is still very early days with the data subject to revisions, Reid notes that "we are getting more and more (albeit patchy) evidence that the new variant is less severe. So much now depends on how more transmissible it is, especially in heavily-vaccinated populations." Reid says that he leans on the optimistic side here "but it seems the number of Omicron cases are building fast enough that we should get some decent data very soon on how its impacting well-vaccinated countries."

Tyler Durden Tue, 12/07/2021 - 18:25

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The Great Realignment: Countless More Americans Will Be Moving From Blue States To Red States In 2022

The Great Realignment: Countless More Americans Will Be Moving From Blue States To Red States In 2022

Authored by Michael Snyder via The Economic Collapse blog,

We are rapidly becoming two very different nations with two very different cultu

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The Great Realignment: Countless More Americans Will Be Moving From Blue States To Red States In 2022

Authored by Michael Snyder via The Economic Collapse blog,

We are rapidly becoming two very different nations with two very different cultures.  At one time we truly were the “United” States of America, but now we have been split into two opposing camps that deeply hate one another.  As a result, in recent years we have watched millions of Americans relocate for ideological reasons.  This has caused “red states” to become even redder and “blue states” to become even bluer.  At this point, there are just a handful of “purple states”, and it is in those states where our presidential elections are determined.  It is really not healthy for just a few states like Pennsylvania and Michigan to have such power, but that is a topic for another article.  In this article, I want to discuss why the mass exodus from blue states to red states is actually going to accelerate in 2022.

Right now, there is no issue in the United States that is more divisive than the COVID vaccine.

Most conservatives want to be able to have the freedom to choose whether to take the injections or not, while many on the left want to use the power of government to compel people to get injected.

It has truly been frightening to watch many on the left embrace authoritarianism so eagerly, and many leftist politicians just continue to tighten down the screws.

For example, New York City Mayor Bill de Blasio just decided to impose a very strict vaccine mandate on all private employers in his entire city

Mayor Bill de Blasio announced what he called a first-in-the-nation vaccine mandate for private companies Monday.

He said the combination of the Omicron variant and holiday gatherings forced him to take “bold” steps. He’s giving businesses just three weeks to make sure their workers are vaccinated.

If you don’t get the jab, you won’t be allowed to keep your job.

There will not be a “testing option” under this new mandate, and so anyone that refuses to comply will be kicked to the curb two days after Christmas

De Blasio said the city will release specific rules on Dec. 15, before the mandate takes effect Dec. 27. He said it will apply to in-person employees, but would not provide any details about enforcement. He also said there will not be a weekly testing option.

This is complete and utter lunacy, but of course we are witnessing lots of that in blue states these days.

We are being told that this new mandate will apply to approximately 184,000 businesses, and that means that vast numbers of New Yorkers will soon be forced to search for greener pastures.

One of them is a woman named Cynthia.  She told a reporter that this mandate gave her yet another reason “to get the hell out of New York”

Cynthia, an employee at a Midtown marketing firm who refused to share her last name due to fear of blowback, told the Post that the new requirement is ‘another reason’ to leave the city.

‘Just terrific. Bill de Blasio just gave me another reason I need to get the hell out of New York, or at least find a job that lets me work remotely,’ she said.

Where will thousands upon thousands of displaced New Yorkers like Cynthia go?

One conservative member of Congress that represents New York fears that many of them will head to “the free state of Florida”

‘Mayor de Blasio can’t leave fast enough. He has crushed small business, the economy and quality of life. How many more New Yorkers does he want to see move to the free state of Florida?’ said US Rep. Nicole Malliotakis, who represents Staten Island and Brooklyn.

So New York is going to get even bluer in 2022, and Florida will be getting even redder.

Down in Massachusetts, hundreds of hospital workers were just ruthlessly canned because they refused to comply with a vaccine mandate…

About 200 UMass Memorial Health employees are out of a job because they missed the health care system’s COVID vaccination deadline.

UMass Memorial announced the mandate over the summer with a deadline to get vaccinated or receive an exemption by November 1.

Employees were let go on December 1 if they did not get the vaccine.

Many of those displaced health workers aren’t going to be able to find similar work in Massachusetts, and so they will head to red states.

As for UMass Memorial Health, I am not sure exactly what they plan to do.  You can’t just pull people off the streets to be medical professionals.  They will probably be short-handed for a long time to come, and that is just going to hurt the people that they are supposed to be serving.

In Oregon, a different sort of mandate has people thinking that it may be time to relocate.

If you can believe it, officials in Oregon are actually thinking of making their indoor mask mandate permanent

The Oregon Health Authority (OHA) assembled a Rules Advisory Committee (RAC) earlier this week to address a permanent indoor mask mandate in the state. Oregon is one of a few states that still retain one nearly two years into the pandemic.

The committee included several community stakeholders, including representatives from the hospitality industry, the business sector, and faith communities, according to local ABC affiliate KATU.

I cannot understand why any rational decision maker would want to do such a thing, but apparently they are quite serious.

There are a whole lot of very conservative people that live in eastern Oregon, and I think that even more of them are going to be moving over the border into Idaho in 2022.

Before I end this article, I want to mention what Canada has just done.

Beginning November 30th, all unvaccinated individuals are now banned from using any form of public transportation

In Canada, any travelers older than 12 years old must show proof of full vaccination to take any form of public transportation including domestic and international flights as well as trains.

“Starting November 30 at 3:01 am EST, vaccination will be required for travel within and to depart Canada,” the Candian travel website states. “A valid COVID-19 molecular test will no longer be accepted as an alternative to vaccination unless you’re eligible for one of the limited exemptions.”

Trudeau and his minions have completely gone off the deep end, and I feel so sorry for freedom-loving Canadians that are deeply suffering under his regime.

Of course the Biden administration is considering something similar for domestic travel inside the United States.

Let us hope that they never pull the trigger on such a move.

All over the globe we are seeing governments become more authoritarian, and that certainly sets the stage for some of the things that I warned about in my latest book.

Here in the U.S., countless numbers of freedom-loving Americans are fleeing to red states as they seek to escape the oppression that they have been experiencing in blue states.

Unfortunately, blue state tyrants have no intention of backing down, and this is going to create a tremendous amount of tension in our nation as we head into 2022 and beyond.

*  *  *

It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

Tyler Durden Tue, 12/07/2021 - 18:05

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China Says US Trying To “Disrupt” Beijing Winter Olympics, Vows Retaliation

China Says US Trying To "Disrupt" Beijing Winter Olympics, Vows Retaliation

China has followed Monday’s White House confirmation that US government officials will boycott the 2022 Winter Olympic games with a vow to retaliate with "resolute…

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China Says US Trying To "Disrupt" Beijing Winter Olympics, Vows Retaliation

China has followed Monday's White House confirmation that US government officials will boycott the 2022 Winter Olympic games with a vow to retaliate with "resolute countermeasures"

Describing that it's lodged a formal diplomatic protest, China's Foreign Ministry said at a Tuesday press conference that the United States is seeking to "disrupt" Beijing's hosting of the games. "Out of ideological bias and based on lies and rumors, the US is trying to disrupt the Beijing Winter Olympics. This will only expose its sinister intention and further erode its moral authority and credibility," ministry spokesperson Zhao Lijian said.

China News Service/Getty Imagest

"The wrong move of the US has undermined the foundation and atmosphere for China-US sports exchanges and Olympic cooperation. It has shot itself in the foot. The US should understand the grave consequences of its move," Zhao added.

While US athletes will be allowed to compete in the games, the Biden administration's largely symbolic slap in the face is geared toward sending a strong message against China's "ongoing genocide and crimes against humanity in Xinjiang," according to a Monday statement. 

Beijing officials have meanwhile suggested that the US government boycott is likely to negatively impact bilateral dialogue and cooperation in key areas.

It's as yet unclear whether other Western-allied governments of the US will follow suit, but it was separately reported early this week that New Zealand officials will also not attend the Beijing games. However, in this case New Zealand Deputy PM Robertson cited the Covid-19 pandemic as the reason, and confirmed his country's diplomats would not attend.

Interestingly, some notable Chinese officials and pundits expressed that if US officials don't come, nobody in China actually cares. For example, Liu Pengyu, spokesperson of the Chinese Embassy in the US, had this to say on Twitter:

"Politicians calling for boycott #2022BeijingOlympics are doing so for their own political interests and posturing. In fact, no one would care about whether these people come or not, and it has no impact whatsoever on the #Beijing2022 to be successfully held."

And Hu Xijin, editor-in-chief of state-run English language Global Times, questioned: "Why the fuss?" He answered, "If US officials don't come, let it be. China didn't invite them anyway."

"Only super narcissistic people will regard their absence as a powerful boycott. Most of those US govt officials are close contacts of the Covid-19 patients according to China's standard, moreover picky and pretentious. You are the people that Beijing residents least want to see," the GT editor quipped sarcastically.

Tyler Durden Tue, 12/07/2021 - 19:45

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