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Riksbank Hikes 100 bp but the Krone gets No Love

Overview: Yesterday’s late rally in US shares carried into the Asia Pacific session where all of the large markets advanced. However, the bears are not…

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Overview: Yesterday’s late rally in US shares carried into the Asia Pacific session where all of the large markets advanced. However, the bears are not abdicating and Europe’s Stoxx 600 is off for the sixth consecutive session and US futures are trading lower. The sell-off in the bond market continues. European benchmark yields are mostly 8-10 bp higher and the US 10-year Treasury yield is up nearly five basis points to approach 3.54%. The two-year continues to knock on 4%. The US dollar is firmer against all the major currencies. Despite Sweden’s 100 bp rate, the krona is among the weakest of the G10 currencies, losing ground against all but the Norwegian krone and New Zealand dollar. The central bank of South Korea has requested hourly reports from the foreign exchange traders. This seems to have deflected some selling pressure away from the won, while most other emerging market currencies are lower. Gold stalled near $1680 and near $1666 in Europe. December WTI is firm near $85. US natgas is trying to snap a three-day tumble, while Europe’s benchmark is doing the same but with greater conviction. It is up about 4.25% after falling more than 20% over the past three sessions. Iron ore fell for the fifth consecutive session and has fallen nearly 7% over this run. December copper is about 0.5% softer today after slipping marginally yesterday. December wheat has stabilized. It fell 3.4% yesterday.

Asia Pacific

Japan reported slightly higher than expected August inflation. The headline CPI rose to 3.0% from 2.6%, while the core rate, which excludes fresh food, increased to 2.8% from 2.4%. Both were 0.1% above the median forecast in Bloomberg's survey. Excluding fresh food and energy, Japan's inflation rose to 1.6% from 1.2%, also 0.1% above the median forecast. The Bank of Japan meets later this week. Today's data is unlikely to sway the BOJ to change its monetary policy. However, its challenge will intensify. It had forecast core inflation at 2.3% this year. This will have to be revised higher. Yet, the key to policy might not be this year's core but the next year and 2024. The BOJ projects a 1.4% core rate next year and 1.3% in 2024. The median forecast in Bloomberg's survey puts it at 1.6% and 0.5%, respectively.

As widely expected, China left its loan prime rate unchanged at 3.65% and 4.30% for the one-year and five-year, respectively. The President of the World Bank said that China's unwillingness more stimulus puts more pressure on the US. Malpass noted that in the past, China offered more counter-cyclical support, but acknowledged that while this may be good for the PRC, and in the long-term, it puts pressure on the US. While this sounds intuitive clear, it is anything but. The more the "pressure" is looked at the more elusive it becomes. The US is aggressively tightening monetary and fiscal policy. How do decisions in Beijing impact the thrust of US policy?  It does not. US policy, of course is set independently. If Malpass is referring to world growth, which the World Bank estimates at 0.5% next year (-0.4% on a per capita basis), then it is simply mathematical. The weaker growth in China means the US may account for a greater share of world growth. Ironically, the World Bank forecast that the US grows 2.5% this year and 2.4% next is wildly out of date. The IMF is at 2.3% and 1.0%, respectively. The Federal Reserve's median forecast will be revised later this week. In June, it was at 1.7% this year and next.

The dollar is trading at the upper end of the three-day range against the Japanese yen of roughly JPY142.65-JPY143.80. Session highs are being recorded in the European morning and the intraday momentum indicators are stretched. Yet the market may feel emboldened by the divergence of monetary policy that is on full display this week. A move above JPY143.80 would target the JPY145 area that has capped it on at least a couple attempts this month. The minutes from the Reserve Bank of Australia's meeting early this month underscored the message that rates are getting to levels that may encourage a slower pace of increase. It has boosted its cash target rate by 50 bp in each of the last four meetings. It meets again on October 4. The futures market is nearly evenly split between a quarter point and half-point move. The Aussie extended its two-day advance to almost $0.6750 and has been turned back. It found support a little below $0.6700. A break of $0.6690 could signal a retest on the base near $0.6670, but suspect a consolidative North American session is likely. The Chinese yuan consolidated its recent losses. The US dollar trading in a narrow range within yesterday's range, which was within the pre-weekend range (CNY6.9870-CNY7.0255). The PBOC set the dollar's reference rate at CNY6.9468. The medina in Bloomberg's survey was CNY6.9984.

Europe

The idea that the BOJ could simply raise rates and that would stop the yen from falling seems naive. Ask Sweden. The Riksbank delivered a 100 bp hike today to 1.75%. Most economists had expected a 75 bp move, while the swaps markets saw the risk of a larger move. The Riksbank sees the deposit rate at 2.5% a year from now. The krona initially rose but is weaker now against the dollar and euro. Swedish inflation reached 9% last month. The Riksbank cut next year's growth forecast to -0.7% from previously expecting growth to be of that magnitude.

The eurozone reported a nearly 20 bln euro current account deficit in July. It swamped the 15.6 bln euro surplus reported in the first half. Consider that in the first seven months of 2021, the EMU reported an average monthly current account surplus of about 30.6 bln euros. While goods trade balance has eroded, the service surplus has grown. The primary income account, which includes profits, dividends, coupon payments, royalties, licensing fees, and the like has swung into deficit, but also its deficit on its secondary income account (transfer payments) widened. We suggest that the deterioration of the eurozone's external balance is important, it is worth considering the secondary effects, such as beneficiaries of its export of surplus savings.

The euro rose to a five-day high near $1.0050 but was quickly sold back off to $1.0000 in early European turnover. There are large options struck there that expire tomorrow and Thursday (2.3 bln euros and 3.9 bln, respectively). Given that the euro has been straddling that level for several weeks, it is difficult to know or have a sense of what has been hedged or neutralized. Broad consolidation still seems to be the most likely near-term scenario. Sterling extended yesterday's recovery to $1.1460 today, stopping short of the pre-weekend high closer to $1.1480. So far, today is shaping up to be the third consecutive session that sterling has not traded above $1.15. Note that strike activity is set to resume with dock workers in Liverpool for two weeks, and next week Felixstowe dock workers also strike. More rail strikes are planned too.

America

The US reports some housing data before the conclusion of the FOMC meeting tomorrow. On tap today are August housing starts. They are getting a bad rap. Since the end of last year, US housing starts have alternated between gains and declines on a monthly basis. July was down, so August should be higher. The median in Bloomberg does in fact look for a small increase. In the first seven months of the year, they have averaged 1.65 mln (seasonally adjusted annual rate). During the first seven months of 2021, when rates were lower and the economy more vibrant, housing starts averaged 1.58 mln. In the Jan-July period in 2019, housing starts averaged 1.2 mln a month.

Canada report August CPI today. The broad pattern is expected to echo what we saw in the US. While the headline pace is slowly moderating the core rates ae proving sticky, that speaks to the breadth of the price pressures. Headline CPI is expected to have slowed for the second month, after peaking at 8.1% in June. The 7.3% projected by the median forecast in the Bloomberg survey would be the lowest since April. The Bank of Canada has three core measures (common, median, and trim). They are likely to have firmed to an average of 5.4% from 5.3%. The average was 3.4% at the end of last year. It stood at almost 3.8% in Q1 and 5.2% at the end of Q2. After lifting rates by 100 bp in July and 75 bp earlier this month, the Bank of Canada is expected to hike by 50 bp next month and 25 bp at the last meeting of the year. That would put the target rate at 4%. The swaps market has the terminal about 4.25%.

The potential bearish shooting star candlestick in the dollar-CAD exchange rate seen yesterday has gone for nought. Initial follow-through USD selling was quickly exhausted near CAD1.3225 and the reversal of US equities helped lift the greenback toward CAD1.33. Yesterday's new two-year high was set by CAD1.3345, meeting the 38.2% retracement of the US dollar's decline from the March 2020 pandemic peak (~CAD1.4670). That said, the intraday momentum indicator is stretched, but watch stocks for the cue. The US dollar posted its lowest settlement against the Mexican peso in five sessions yesterday, but here too follow-through has been minimal. The US dollar is bouncing off the MXN19.90 area. In the broader picture, the greenback has been in mostly confined to a MXN19.80-MXN20.20 range since mid-August. 


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Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair…

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Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair Bolsonaro for falsifying his Covid-19 vaccine card in order to travel to the United States and elsewhere during the pandemic.

Federal prosecutors will review the indictment and decide whether to pursue the case - which would be the first time the former president has faced criminal charges.

According to the indictment, Bolsonaro ordered a top deputy to obtain falsified Covid-19 vaccine records of himself and his 13-year-old daughter in late 2022, right before he flew to Florida for a three-month stay following his election loss.

Brazilian police are also waiting to hear back from the US DOJ on whether Bolsonaro used said cards to enter the United States, which would open him up to further criminal charges, the NY Times reports.

Bolsonaro has repeatedly claimed not to have received the Covid-19 vaccine, but denies any involvement in a plan to falsify his vaccination records. A previous investigation by Brazil's comptroller general concluded that Bolsonaro's vaccination records were false.

The records show that Bolsonaro, a COVID-19 skeptic who publicly opposed the vaccine, received a dose of the immunizer in a public healthcare center in Sao Paulo in July 2021. [ZH: hilarious, Reuters calling the vaccine an 'immunizer.']

The investigation concluded, however, that the former president had left the city the previous day and didn't leave Brasilia until three days later, according to a statement.

The nurse listed in the records as having applied the vaccine on Bolsonaro denied doing so and was no longer working at the center. The listed vaccine lot was also not available on that date, the comptroller general's office said. -Reuters

"It's a selective investigation. I'm calm, I don't owe anything," Bolsonaro told Reuters. "The world knows that I didn't take the vaccine."

During the pandemic, Bolsonaro panned the vaccine - and instead insisted on alternative treatments such as Ivermectin, which has antiviral properties against Covid-19. For this, he was investigated by Brazil's congress, which recommended that the former president be charged with "crimes against humanity," among other things, for his actions during the pandemic.

In May, Brazilian police raided Bolsonaro's home, confiscating his cell phone and arresting one of his closest aides and two of his security cards in connection to the vaccine record investigation.

Brazil's electoral court ruled that Bolsonaro can't run for public office until 2030 after he suggested that the country's voting system was rigged. For that, he has to sit out the 2026 election.

Tyler Durden Tue, 03/19/2024 - 11:00

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This gambling tech stock is future-proofing the world’s casinos

Supported by the universal thrill of a quick payout and the need for leisure, gambling stocks make a compelling case for long-term returns.
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Supported by the universal human thrill of a quick payout, and the need for leisure and entertainment to bring enjoyment to adult life, casinos will remain essential spaces for people to dream and play for the foreseeable future, making gambling stocks a prospective space to look for long-term returns.

According to Research and Markets, the global casino industry was valued at US$157.5 billion in 2022, and it will grow to US$224.1 billion by 2030 at a compound annual growth rate of 4.5 per cent. This trend includes:

Approximately 100 million gamblers in the United States, who generated US$66.5 billion in revenue in 2023, a 10 per cent gain from 2022, which itself was a record year A little fewer than 20 million gamblers in Canada, who generated about C$15 billion in revenue in 2023 A global addressable market of thousands of casinos, and more than 4.2 billion people who gamble at least once every year, according to a 2016 study by Casino.org

The main challenge with attracting these billions through casino doors is they sway heavily toward middle age. The mean age of U.S. casino visitors has hovered around 50 for the past decade, with a similar trend across the world, forcing casinos to attract younger, tech-savvy customers, many with less gambling experience, to continue growing profits for their stakeholders over the long term.

Investors seeking exposure to a leadership position in building the bridge between casinos and the next generation of gamblers should evaluate Jackpot Digital (TSXV:JJ). The Vancouver-based company is a manufacturer of dealerless electronic table games that deliver immersive experiences tailored to the digital age, while earning casinos attractive returns on investment.

The gambling technology stock benefits from no direct competition in the dealerless poker space, with orders spanning North America, Europe, Asia, Africa and the Caribbean, a long-established presence with major cruise ship brands, such as Carnival, Princess Cruises and Holland America, and a growing land-based presence with orders or ongoing installations across 12 U.S. states. Its highlight partnership to date is a master services agreement with Penn Entertainment, the country’s largest regional gaming operator with 43 properties across 20 states.

Jackpot Digital’s differentiated technology and well-rounded management team are at the heart of its success in landing several blue-chip casino gaming companies as customers.

Jackpot Blitz

The gambling technology stock’s flagship product, Jackpot Blitz, is a dealerless poker table featuring three of the world’s most popular variations – Texas Hold’ em, Omaha, and Five-Card-Omaha – brought to life through slick 4k graphics on a 75-inch touchscreen, and offered in three formats – pot-limit, no-limit and fixed-limit – designed to attract a diversity of revenue from casual to experienced players.

Spokesperson and NFL championship-winning coach Jimmy Johnson explains the benefits of the Jackpot Blitz. Source: Jackpot Digital.

The table also comes equipped with house-banked mini-games, including blackjack, baccarat and video poker, as well as side bets on the main poker game, such as Bet the Flop, all of which keep players engaged and entertained between, and even during, poker hands. The stunning Jackpot Blitz machine also offers multi-venue “Bad Beat” jackpot functionality, allowing casinos to offer a “Poker Powerball” with massive Jackpots, further enhancing the attractiveness of Jackpot Blitz to new players.

It’s by striking a balance between the needs of the modern gambler, and efficiency and profitability that in-person operators couldn’t hope to match – unless they ordered the machine for themselves – that Jackpot Digital has earned itself the top spot in dealerless poker.

Player benefits

When a veteran or novice gambler takes a seat at the Jackpot Blitz, his or her experience begins with an easy-to-use interface, laid out in a modern and stylish design, programmed to respond to hand gestures that bring real casino play into the digital age, including card bending and chip jingling.

Source: Jackpot Digital.

The table’s intuitive controls, combined with instant payouts and its dealerless nature, translate into faster game play, which maximizes playing time and player excitement, while minimizing human error and the intimidation new gamblers might feel about approaching an analog poker table. The gambling technology stock’s in-house development team is also constantly working on new games to keep content fresh, with a special focus on bringing international games and regional versions of poker to casino audiences in Asia, South America and the Indian subcontinent.

As hands are laid down and pots pile up, players can also track game stats in real time, which inform future strategy and enhance the thrill of the moment with an added element of competition.

Operator benefits

From an operator’s perspective, a floor of automated gaming tables can meaningfully and instantly reduce casino staff expenditures and management pain points, while avoiding wage inflation, labour shortages and supply costs.

The Blitz is no slouch on revenue either, dealing more hands per hour, resulting in higher revenue and higher profitability, which is further enhanced by onboard side bets and mini-games that can be played while players are engaged in a poker hand.

The Jackpot Blitz’s economics are attractive to operators thanks to its ability to accommodate non-stop play, while monetizing downtime through side games and bets. While a human dealer must spend time shuffling, interacting with players, and consulting with colleagues, the Jackpot Blitz can accept wagers 100 per cent of the time, making sure gamblers get the action they came for and operators see a return on their investment.

Source: Jackpot Digital.

Beyond gaming revenue, casinos are further incentivized to onboard the Jackpot Blitz because of its fully customizable advertising functions, including logos, card backs, chips and felt colors, all of which bolster casino culture and enable the pursuit of revenue from third-party advertising partners.

The Blitz ties its value proposition together by generating automatic reports – including demographics and consumer behaviour through a rewards card system – and plugging directly into most back-end management systems, saving casinos the hassle of manual tracking, while also minimizing tampering, money-laundering and theft through the use of isolated servers.

Whether it’s streamlining the player experience or putting automation at the service of operators’ bottom lines, Jackpot Digital’s flagship product is positioned to create value, and plenty of it.

Jackpot Digital’s path to profitability

After existing as an exclusively cruise-ship-based operation since 2015, Jackpot Digital suffered a steep decline in revenue during the COVID pandemic, falling from C$2.18 million in 2019 to C$0.42 million in 2021.

Management quickly pivoted in the face of uncertainty, redesigning the Blitz to execute on a land-based expansion strategy – backed by Gaming Labs International certification in fall 2023 – which is bringing about a successful turnaround after the re-emergence of the casino business. Revenue more than tripled to C$1.43 million in 2022, and reached C$1.57 million through three quarters of 2023, with the company expecting to ramp up significant recurring revenue after it installs several dozen machines currently in its backlog.

The Jackpot Blitz electronic gaming table in action. Source: Jackpot Digital.

The first installation of land-ready Jackpot Blitz machines is now completed at the Jackson Rancheria Casino in California, as the company announced today. The three-machine installation marks a new era of growth for the company, having announced 25 Blitz deals since November 2021 (slide 12), with many more across Canada and the United States in the works, in addition to a strong pipeline in Asia and Europe.

“Jackpot Digital could be a profitable company right now if it only focused on care and maintenance of the revenues it currently generates. But that’s not why we’re here,” Mathieu McDonald, Vice President of Corporate Development at Jackpot Digital, said in a recent interview with Stockhouse. “We intend to scale up to many multiples of the tables we have out right now, with the potential for up to 2,000 tables over the next three to five years.”

According to McDonald, the company is fielding three to five inquiries per week about the Blitz from casinos around the world that recognize the machines’ first-mover advantage in dealerless poker and potential expansion into other games in need of automation.

Jackpot Digital’s ambitious plan of action is supported by a management team of proven gambling, finance, advertising and legal professionals, many of which have been serving Jackpot stakeholders for more than two decades.

A long-tenured management team

The management team behind Jackpot Digital is led by Jake Kalpakian, who has served as president and chief executive officer since 1999, including under the gambling technology stock’s former incarnation as Las Vegas From Home.com Entertainment Inc. Kalpakian brings more than 30 years of experience managing small-cap publicly listed companies, granting him a steady hand when it comes to maneuvering through the volatility of the economic cycle.

Kalpakian’s efforts are supported by three directors whose well-rounded expertise positions Jackpot Digital for long-term sustainable growth:

Gregory T. McFarlane, a director at Jackpot Digital since 1999, previously ran an independent advertising firm and holds a degree in mathematics from the University of Toronto. McFarlane is also a co-founder of the popular Control Your Cash personal finance website. Chief financial officer Neil Spellman, a director at the company since 2002, boasts an almost two-decade track record as vice president at Wall Street firm Smith Barney, where he developed a multi-industry understanding of the journey to profitability. Finally, Alan Artunian, a director since 2017, currently serves as CEO of Nice Guy Holdings, a corporate and legal consulting company advising clients across a diversity of sectors.

Guided by a strategic management team, and benefiting from a macro-trend toward casino automation, Jackpot Digital is on course to ride a wave of millions of gamblers looking for an elegant, tech-informed alternative to traditional in-person play.

A multi-bagger opportunity

The Jackpot Digital opportunity sets up savvy investors who recognize the soundness of the company’s value proposition. The tremendous risk/reward value of Jackpot Digital gives investors the opportunity to ride the macro-trend toward casino automation, as deals for the Blitz keep pouring in, the company adds games to its portfolio, and the global casino industry adds hundreds of billions in revenue through this decade.

Join the discussion: Find out what everybody’s saying about this gambling technology stock on the Jackpot Digital Bullboard.

This is sponsored content issued on behalf of Jackpot Digital, please see full disclaimer here.

The post This gambling tech stock is future-proofing the world’s casinos appeared first on The Market Online Canada.

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Gates-backed PhIII study tuberculosis vaccine study gets underway

A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.
The Bill & Melinda Gates…

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A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.

The Bill & Melinda Gates Medical Research Institute (MRI) will test a tuberculosis vaccine’s ability to prevent latent infections from causing potentially deadly lung disease. Last summer the nonprofit said it would foot $400 million of the estimated $550 million cost of running the 20,000-person Phase III trial.

It’s a pivotal moment for a vaccine whose origins date back 25 years when scientists identified two proteins that triggered strong immunity to the bacterium that causes tuberculosis. A fusion of those proteins, paired with the tree bark-derived adjuvant that helps power GSK’s shingles shot, comprise the so-called M72 vaccine.

Thomas Scriba

After decades of failures in the field, the vaccine impressed scientists in 2018 when GSK found that it was 54% efficacious at preventing lung disease in a 3,600-person Phase IIb study.

But the Big Pharma decided that a full-blown trial was too expensive to conduct on its own. Gates MRI stepped in to license the vaccine in early 2020, right before the Covid pandemic shifted global vaccine priorities towards the coronavirus, further stalling the tuberculosis shot.

“There’s been frustration that it’s taken so long to get this trial up and running,” Thomas Scriba, deputy director of immunology for the South African Tuberculosis Vaccine Initiative, told Endpoints News last summer.

At last, the vaccine is getting a chance to prove itself in a bigger study. If successful, it could lead to the first new shot for tuberculosis in over a century.

Emilio Emini, CEO of the Gates MRI, told Endpoints that the initial results may come in roughly four to six years. “Hopefully this will galvanize a refocus on TB,” he said. “It’s been ignored for many, many years. We can’t ignore it anymore.”

A substantial impact

Even though an existing vaccine helps protect babies and children against severe tuberculosis, the bacterium responsible for the disease still causes roughly 10 million new cases and 500,000 deaths each year.

Emilio Emini

By vaccinating adolescents and adults who test positive for infections but don’t have symptoms of lung disease, the Gates MRI hopes the shot will help prevent mild infections from becoming severe ones, curtail transmission of the bug, which is predominantly driven by people with lung disease, and reduce deaths.

“The impact would be substantial,” Emini said. But he cautioned that the biology behind mild and severe diseases is still mysterious. “The reality is that no one really knows what keeps it under control.”

The study, which will take place at 60 sites across seven countries, will include some people who are not infected with tuberculosis to ensure that the vaccine is safe in that broader population.

“Having to pre-test everybody is not going to make the vaccine easy to deliver,” Emini said. If the vaccine is ultimately approved, it will likely be used in targeted communities with high tuberculosis, rather than across a whole country, he added. “In practice, you would immunize everybody in those populations.”

Emini described the Gates MRI’s rights to the vaccine as “close to a worldwide license.” GSK retained rights to commercialize the vaccine in certain countries but declined to specify which ones.

A spokesperson for GSK said that the company “has around 30 assets under development specifically for global health … none of which are expected to generate significant return on investment.”

“It is not sustainable or practical in the longer term for GSK to deliver all of these alone. So we continue to work on M72, but in partnership with others,” the spokesperson added.

If the shot works, Emini said that the Gates MRI will sublicense it to a manufacturer that will be responsible for making and marketing the vaccine. The details are still being worked out, he noted.

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