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The Dollar Continues to Press Against JPY150; Risk Off Ahead of the Weekend

Overview: True to the market’s penchant, it heard a
dovish Fed Chair Powell yesterday. He seemed to suggest that the bar to another
hike was high. This…



Overview: True to the market's penchant, it heard a dovish Fed Chair Powell yesterday. He seemed to suggest that the bar to another hike was high. This helped cap the 10-year yield just in front of 5.00% and allowed foreign currencies to recover against the dollar. The US two-year yield reversed lower after rising above 5.25%. It is now around 5.15%. Still, Powell appeared to cover similar ground as several other officials, including Fed governors in recent days. The dollar is trading with a firmer bias in Europe, and it drew ever nearer JPY150. Most of the non-restricted emerging market currencies, including the South African rand, central European currencies, and Mexican peso are softer. Gold is extending it surge for the fourth consecutive session and is above $1980 having settled last week a little below $1933. It is up nearly $150 an ounce since the Hamas attack. December WTI is also rising for the fourth consecutive session. It settled near $86.35 last week and approached $90 today. It is up roughly 10% over the past two weeks. 

Equities are lower, and given the geopolitical developments, risk-off moves ahead of the weekend are not surprising. Asia Pacific equities are a sea of red today and this week. South Korea and Australia indices lead today's move with more than 1% drawdowns, but on the week China's CSI 300's 4.2% drop is the region's largest loss. The Stoxx 600's nearly 1% drop today brings this week's decline to above 3%, the most since March. US indices are softer and have fallen for the past three sessions. European 10-year benchmark yields are narrowly mixed with most peripheral yields slightly softer and core rates a little firmer. Gilts remain under pressure with the 10-year yield up nearly three basis points to a new high for the week near 4.70%. The 10-year US Treasury yield is off 4.5 bp to about 4.95%. Itis up about 24 bp this week. The implied yield of the December 2024 Fed funds futures has risen by almost 12 bp this week.   

Asia Pacific

It was a mixed week for China. Growth in Q3 was a little better than expected even though the property sector remains distressed, and Country Garden is on precipice of default, having missed the final deadline of a coupon payment on a dollar bond. China surprised the international community striking a debt agreement with Sri Lanka before the Paris Club. It celebrated the 10th anniversary of the Belt Road Initiative, Although the US has been critical, and Europe has become more disenchanted, developing countries in Asia, Latam, and Africa are more may still be attracted. The media jumped all over US Treasury data showing that China sold $21.2 bln of US bonds, including Agency debt, in August. The $5.1 bln in divestment of US equities appears to be a record. Still, before filing this under de-dollarization, note that China's sales were largely offset by a movement into bills and short-term securities, not out of the dollar. Note too that in addition to the BRI, Xi's other global initiative, the Asian Infrastructure Investment Bank also makes dollar loans. Meanwhile, the US defense of Israel did not bolster Washington's standing among large parts of the so-called Global South, which China's says it champions. Lastly, that Chinese banks did not reduce the loan prime rates was not surprising after the PBOC left the one-year Medium-Term Lending Facility rate unchanged earlier this week at 2.50%.

Japan's September CPI softened a little and was largely signaled by the Tokyo's report a couple of weeks ago. Headline CPI eased to 3.0% from 3.2%. This is the lowest reading so far this year and matches the low since July 2022. The core rate, which excludes fresh food, fell to 2.8% from 3.1%. This is the rate that the BOJ targets at 2%. It peaked in January at 4.2%. The measure that excludes fresh food and energy eased to 4.2% from 4.3%, which was the peak seen first in May and then July and August. The low for the year as set in January at 3.2%. Both of these core rates were slightly firmer than expected. Some press reports suggest that at the BOJ meeting at the end of the month, the inflation forecast could be raised to 3.0% this fiscal year from 2.5% and next year's projection raise to a little above 2% from 1.9%. The forecast for FY25 may stay below 2% (set at 1.6% in July). Note that here are two byelections on Sunday and Prime Minister Kishida is set to deliver an important policy speech on Monday, which is expected to address fiscal policy.

The dollar reached JPY149.96 in North America yesterday according to Bloomberg. In effect, it came within 2/10000 of a cent shy of the equivalent of JPY150 (~0.006666). There are options for a little more than $1 bln struck at JPY150 that expire today and Bloomberg has today's high at JPY149.99. In the Powell-induced pullback, the dollar fell to new session lows but found new bids slightly below JPY149.70, where it found support today, as well. The Australian dollar recovered in North America from the dip in Asia and Europe below $0.6300, and Powell's comments goosed it up to almost $0.6360, where it ran out of steam. It stalled near a retracement of the two-day decline and in front of the 20-day moving average (~$0.6375). It returned to the $0.6300 area today and has mostly held below $0.6330. The greenback rose against the Chinese yuan for the fourth time this week and made a marginal new high today near CNY7.3185. It is the strongest the US dollar has been since September 11. The PBOC injected a record amount of liquidity (CNY828 bln, or ~$115 bln) through its reverse repo operations today apparently to facilitate next tax period and new government bond issuance. The PBOC set the dollar's reference rate at CNY7.1793, a new low for the week. The average projection in the Bloomberg survey was for CNY7.3074.


It was not a particularly good week for the UK. It announced that jobs were lost in September for the third consecutive month, though wage pressures eased slightly more than anticipated in the three months through August. Still, September CPI rose 0.5% and the year-over-year rate, and especially service prices were firmer than expected. Earlier today, a 0.9% decline in retail sales were announced, and a 1% drop when gasoline is excluded. The drop was more than twice the median forecasts in Bloomberg's survey. Many economists think the UK economy stagnated in Q3 and look for the same in Q4. The 10-year Gilt yield jumped 30 bp this week, the most in nearly four months and rose every day this week. Separately, the Labour took both previously held Conservative seats in yesterday's byelection. 

Germany lifted its objections to (France) using state subsidies to fund its nuclear power plants, which provide 70% of its electricity. However, in the grand horse-trading exercise, it may mean that Berlin will not compromise on its backing of re-imposing the Stability and Growth Pact, which will force many countries to tighten fiscal policy. Germany has an "escape clause” if it is in a recession. Meanwhile, US and European officials meet in Washington today. The US wants Europe to impose a 25% tariff on steel and 10% on aluminum from non-market economies (i.e., China). In exchange, Europe wants the so-called Trump-era tariffs to be permanently lifted. The US is trying to preserve the right to reimpose the duties on Europe in the future. Lastly, there is still hope that a US-EU agreement can be struck on critical minerals. 

With Powell's help, the euro rose to a five-day high near $1.0615 yesterday. Some of the buying may have been related to the nearly 900 mln euro options at $1.0550 and nearly 2 bln euros in options struck at $1.06 that expire today. There are almost nearly $2.5 bln in options at $1.0625 expiring today. Still, the euro failed to settle above $1.0600, which tarnished the otherwise firm performance. Last week's high was near $1.0640. A move above there would lift the technical tone, but so far today, the euro has held below $1.06. Support is seen in the $1.0555-60 area. Sterling's recovery from $1.2090 was impressive but new sellers emerged as it approached $1.2200. Yesterday was the first session since the US employment data on October 6 that sterling was unable to trade above $1.22. It retested yesterday's lows today after the disappointing retail sales report. It recovered by looks capped around $1.2140. Separately, note that S&P reviews Greece's debt later today and its BB+ rating. An upgrade to investment grade is possible. DBRS already did so last month. S&P is also due to review Italy's BBB rating today. We suspect the risk is of an outlook downgrade to negative from stable.


It was a mixed week for the US. The key economic data were stronger than expected. This included retail sales, industrial production, and business inventories. The Atlanta Fed's GDP tracker for Q3 GDP was lifted to 5.4% (from 5.1% in the previous week) and several money center banks revised up their forecasts as well. The median forecast in Bloomberg's survey sees 4% growth, when it is reported next week. The 10-year bond yield reached 4.99% yesterday. It settled at 4.61% last week. Almost half the increase seems to come from the change in expectations for overnight rates next year. The implied yield of the December 2024 Fed funds contract rose 16 bp this week before pulling back in response to Fed Chair Powell's comments. The other half of the increase in the 10-year note yield appears to reflect the term premium, which is "compensation" for risk that the yield rises over the life of the bond. It is the part that can be argued is tightening financial conditions beyond what the Fed has done. Yet, the rising rates did not prevent bank shares from advancing, even b Coming into today the index of large bank shares, perhaps helped by the earnings reports is up about 0.20% this week, which if sustained would be the first back-to-back weekly gains since July. An index of regional bank shares is up about 2.4% this week, the largest advance in seven weeks. On the other hand, the House of Representatives still has been unable to pick a speaker and the Beige Book picked up growing concerns about the economic outlook. 

Canada and Mexico report August retail sales today. The median forecast in Bloomberg's survey calls for a 0.1% decline, which would be the first since March. If true, it probably overstates the weakness of the Canadian economy. Still, the economy is nearly stagnant. The Q2 contraction of 0.2% at an annualized rate is expected to be followed by a 0.3%-0.4% expansion in Q3. The Bank of Canada meets next week, and the odds of a hike have been downgraded in the swaps market to less than 13% from more than 38% at the end of last week. Retail sales are expected to edge up by 0.1% in Mexico. They had risen by 0.2% in July. Mexico's retail sales rose at an annualized rate about 14% in Q2 after falling at a 4.0% annualized rate in Q1 23. On a quarterly basis, the Mexican economy expanded by 0.8% in Q1 and Q2 23. It is expected to slow to around 0.5% in Q3 and further in Q4.

The US dollar was consolidating its gains that took it to CAD1.3740 in Europe yesterday before Powell spoke. The greenback slumped to CAD1.3680 but quickly bounced before stalling near CAD1.3710. It is consolidating quietly inside yesterday's range. A close below CAD1.3680 would be constructive for the Canadian dollar. Still, the US dollar needs to fall back below CAD1.3600 to be anything of technical importance and, ideally, below last week's lows in the CAD1.3570-80 area. The US dollar reached almost MXN18.40 yesterday in Europe and fell to a session low near MXN18.16 after Powell's comments before stabilizing. The dollar is consolidating firmly near yesterday's highs. A break of the MXN18.4860 high seen earlier this month, could signal a move toward MXN18.80. Recall that in Q2, the peso fell in four weeks. Assuming it does not recover much today, the peso would have weakened for the sixth week in the past eight. At the risk of oversimplifying, it appears the risk-off has met the overweight positioning. Moreover, as the volatility is rising, and this also impacts the attractiveness of carry strategies. Three-month implied volatility has risen from below 9% in July to above 16% this month and is now around 15.25%. Lastly, Argentina holds presidential elections on Sunday, but a second round will likely be necessary (November 19). 




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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),




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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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…



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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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…



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.


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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