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The Dollar and Oil Steady After Yesterday’s Advance

Overview: Bonds and stocks are mostly heavier today
and the dollar has turned mixed. Oil prices are consolidating after soaring to
new highs since late…

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Overview: Bonds and stocks are mostly heavier today and the dollar has turned mixed. Oil prices are consolidating after soaring to new highs since late last year on the longer than expected extension of Saudi Arabia's extra cut of one million barrels a day. Since July, it has been extending it by one month at a time. Yesterday, it extended it through Q4. Russia, who had previously indicated intentions on reducing its exports by 500k barrels, announced it was extended a 300k barrel a day cut also through the end of the year. October WTI's eight-day rally is under threat today. It is consolidating largely in a $86-$87 range today. Note that the average price of US retail gasoline is slightly lower than where it was a month ago but is still relatively high for this time of year (~$3.80 a gallon). 

Stepped-up warnings by Japanese officials have may have helped steady the yen. The dollar is narrowly mixed against the G10 currencies and is =/+ about 0.15%. Most emerging market currencies are lower. Of note, the Mexican peso remains under pressure as stale longs get squeezed out. The peso is off about 0.7% today, making it the weakest of the majors. Over the last five sessions, it is off nearly 4.7%. Equities in the Asia Pacific region were mixed. Japan, Hong Kong, and India are higher. China's Shanghai and Shenzhen composites eked out a small gain, but the CSI 300 slipped by around 0.2%. The Stoxx 600 in Europe is off by about 0.65%, which would make it the sixth consecutive losing session if sustained. US index futures are heavier. European benchmark yields are slightly higher, while the US 10-year yield is flat slightly above 4.25%. After testing $1950 at the end of 4last week, gold is eased to almost $1922.60 today, a six-day low. The 200-day moving average is near $1917.

Asia Pacific

Australia report Q2 GDP expanded by 0.4%, in line with expectation, and Q1 growth was revised to 0.4% from 0.2%. The year-over-year rate stands at 2.1%, a little less than the 2.4% pace in Q1. 1.6% from 2.3%. It is the slowest growth since the contraction was reported in the last three quarters of 2020. The median forecast in Bloomberg's survey sees the year-over-year growth to slow to below 1% in Q4. The Reserve Bank of Australia forecasts 1.3% growth this year and the IMF puts it at 1.6%. Tomorrow, RBA Governor Lowe is expected to give a final speech as before stepping down toward the end of next week. July trade figures are also due on Thursday. 

Since the pre-US jobs low near JPY144.45, the dollar has shot up to JPY147.80, a new high for the year. It made a marginal new 10-month high in Asia today before steadying. Japan's Finance Ministry stepped up its intervention rhetoric, using key word signals, including "watching the market with a high sense of urgency" and threatening to counter "speculative moves" with appropriate action. We have suggested initial potential toward the secondary highs set last November in the JPY148.40-85 area, ahead of the multiyear high set last October 21 near JPY152, ostensibly with the help of BOJ intervention. One notable difference between then and now is that one-month implied volatility is hovering around 9.2%, well below the 50-day moving average, near 10%. On October 21, 2022, it reached nearly 17%. The 10-year JGB yield was around 0.25%. Since then, the BOJ has doubled the cap twice to 1.0% and the yield is now near 0.66%. The 30-year yield, which is not capped settled at 1.61% last October 21, and is now near 1.67%. There is some speculation that BOJ intervention could focus on the 10-year JGB if it threatens the 0.70% level. The yen is threatening its recent lows against the other major currencies. The Australian dollar is consolidating after falling to new lows for the year yesterday (slightly below $0.6360). According to Bloomberg, it made a new low by 1/100 of a cent today, before bouncing on the GDP figures and briefly traded above $0.6400. Nearby resistance is seen in the $0.6400-20 area. The measuring objective of the double top at $0.6900 projects to $0.6300. One metric that captures the divergence between the US and Australia is that the US two-year premium over Australia has nearly doubled since the mid-July 60 bp. The premium has not been more than 120 bp since the bank stress erupted in March. The dollar settled above CNY7.30 for the first time this year and remains above it today. It reached slightly above CNY7.3215. This is the highest the dollar has been since it peaked last November near CNY7.3275. There are two key drivers of the yuan's weakness and observers seem to disagree on which is more significant. First, the disappointment with the Chinese efforts to reanimate the economy. The second is the dollar's broad strength. The PBOC set the dollar's reference rate at CNY7.1969. The average projection in Bloomberg's survey as for CNY7.3108. The gap between the two is the largest yet. The top of today's band is about CNY7.3408. The high in the offshore market so far today has been CNH7.3278. Last year's high was CNH7.3749. 

Europe

Retail sales in the eurozone fell by 0.2% in July, matching the June decline. Details for Q2 GDP will be reported with tomorrow's revisions, but EMU consumption looks lackluster, may have risen by 0.1% after a 0.8% increase in Q1. Consumption could contract this quarter. Separately, after reporting a heady 7% rise in June factory orders, which was revised to 7.6%, German orders collapsed by 11.7% (median forecast in Bloomberg's survey was for a 4.3% decline. Recall that Airbus had received 902 aircraft orders in June. Hamburg hosts a major plant while there are several smaller facilities in the rest of Germany. The drop, like the increase in July was due to major orders. Without these, factory orders would have risen by 0.3%. Germany will report July industrial output figures tomorrow. Industrial production is expected to have fallen for the third consecutive month and four of the past five. The UK's August construction PMI slipped to 50.8 after jumping to 51.7 in July (from 49.8 in June). Still, it was a better than expectations, which were for a drop back below the 50 boom/bust level.

The euro was beat down to nearly $1.0705 yesterday. There are large options expiring tomorrow (1.6 bln euros) and Thursday (1.3 bln euros) at $1.07. Early in the North American session, a brief attempt on the upside faltered near $1.0750, were 1.45 bln euros in options expire today. Today's high has been 2/100 of a cent below there. The euro settled below its lower Bollinger Band (~$1.0735) for the first time since mid-May. It comes in today near $1.0720. A break of $1.07 targets the $1.0600-35 area. Sterling was sold to almost $1.2525 yesterday, its lowest level since mid-June. It frayed its lower Bollinger Band (~$1.2555) but managed to settle slightly above it. There are options struck at $1.25 for nearly GBP1.4 bln that expire today. The euro posted an outside down day against sterling. It looks poised to last month's low near GBP0.8490, the lowest level since last August. Recall that last year's low for the euro was almost GBP0.8200, which was the low since the UK referendum in 2016. Note that Poland's central bank meets later today, and many look for the first rate cut, a quarter-point move to 6.50%.

America

Today is the busiest day of the week for North America. The US is expected to report a wider July trade deficit. Although the trade deficit widened in Q2 over Q3m it is smaller than H2 22. Indeed, the average monthly trade shortfall H1 23 (~68.2 bln) and is the smallest on a six-month rolling basis since July 2021. The combination of the dollar's strength and growth differentials are typically associated with a wider US trade deficit. The US also sees the final services and composite PMI, which will be overshadowed by the ISM services index, though they normally track each other closely, as one might expect. Late in the session, the Federal Reserve's Beige Book, the anecdotal survey ahead of the FOMC meeting will be released. The market sees practically no chance of a hike at the conclusion of the Sept 20-21 meeting and the chances of a November hike continue to be cut. It stands now a little below 45%. It was near 70% at the start of last week. 

Shortly after Canada's July merchandise trade deficit is reported, the Bank of Canada's meeting concludes. After hiking at the past two meetings, the chances of another hike were never very high, and after the unexpected contraction in Q2 GDP reported last week, the odds fell further. The swaps market shows practically no chance of a hike today, down from around a 1-in-4 chance seen at the start of last week. The market is looking at the first rate cut in early Q3 24. 

The US dollar set the session high against the Canadian dollar yesterday in Europe near CAD1.3670. It came off in North America but found support near CAD1.3600. There are options for nearly $1.5 bln set there that expire today. The dollar made a marginal new high and remains firm. Some still view the Canadian dollar as a petro-currency, but during oil's recent surge the correlation has lessened. The 30-day correlation of changes in the exchange rate and WTI is about 0.24, the lowest in six months. Around 0.40, the 60-day correlation is near its lowest in five months. Support is seen in the CAD1.3570-CAD1.3600 area. A move above CAD1.3670, which is also the late April high, could spur another leg up toward CAD1.3800. The greenback frayed the upper Bollinger Band (~CAD1.3650) but settled within it. The upper Bollinger Band is slightly above CAD1.3660 today. The shakeout of the Mexican peso continues. It began last week with the central bank's announcement of plans to reduce its currency hedge facility. The dollar was trading near MXN16.75-80 before the announcement and shot up to MXN17.10. Yesterday, it reached almost MXN17.46, and today jumped to MXN17.6740. Nearby chart resistance is seen in the MXN17.73-77 area. The dollar closed well above its upper Bollinger Band (~MXN17.3555) yesterday and remains above it (~MXN17.4410) now. Lastly, note that Chile's central bank cut the overnight target rate 75 bp to 9.50% as expected. It is the second cut in the cycle. It began the easing cycle in July with a 100 bp cut.

 

 

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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…

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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

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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…

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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

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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…

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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

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