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The Euro is Knocked Back Further

The Euro is Knocked Back Further

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Overview:  The late sell-off in US stocks yesterday has not prevented gains in Asia and Europe.   Most of the equity markets, including the re-opening of China, gain more than 1%.  Australia was a notable exception, falling about 0.4%, and Taiwan was virtually flat.  European bourses opened higher but made little headway before some profit-taking set in, while US shares are trading higher.  Benchmark 10-year yields are firmer, and the US Treasury yield is near 67 bp and is approaching the upper end of its recent range.  The yield has not closed above here since April 14.  Despite the German court ruling yesterday, peripheral European bonds are not under pressure, and in fact, the Italian premium has narrowed a little. The dollar remains firm against most of the major currencies.  The yen is resilient and Japanese markets re-open tomorrow.  The dollar bloc is little changed, but the euro and sterling are under heavy.  The euro slipped below $1.08 in the European morning, and sterling was sold below $1.24.  Among emerging markets, the South Korean won is the strongest, though foreigners were net sellers of its equities today.  The South African rand was resisting the dollar's tug but has since turned weaker.  On the other hand, South African bonds continued yesterday's recovery.  Despite the recent downgrades and being dropped from the FTSE World Government Index, foreign investors have returned to South Africa's bond market, and its bond sales yesterday were oversubscribed.  Gold is hovering a little above $1700.  June WTI, which traded near $10 a barrel early last week, briefly poked above $26 today before setting back to $24 and is now near the middle of the session's range.   

Asia Pacific

China's mainland markets re-opened from the May Day holiday.  When the local markets were shut on April 30, the dollar was at about CNY7.0635.  The offshore yuan had weakened in the meantime.  The US dollar rose from around CNH7.0815 on April 30 to close yesterday near CNH7.1225.  The PBOC set the dollar's reference rate against the yuan at CNY7.0690, which was a bit weaker than the CNY7.0720 that the models projected.  The dollar fell to CNH7.10, as three-day low before recovering.   There is little evidence that Chinese officials are seeking to express their frustration with the escalation of US rhetoric over the virus or Taiwan through the exchange rate.  On the other hand, the dramatic decline in energy prices is another hurdle to China fulfilling the trade agreement with the US, which seemed to have been a stretch under normal circumstances.  

Australia appears to have reported an 8.5% surge in March retail sales, as households stockpiled.  However, prices jumped in Q1, and when retail sales are adjusted for price changes, the Q1 performance is not impressive.  In real terms, retail sales rose by 0.7% in Q1 after a 0.5% increase in Q4 19.  The median forecast in the Bloomberg survey expected a 1.8% increase.  Separately, New Zealand reported the jobless rate rose to 4.2% in Q1 from 4.0% in Q4 19. Employment rose 0.7% in the quarter while economists had expected a 0.2% decline.  Private wage growth slows.  

The dollar is trading heavily against the yen for the fourth consecutive session and has gained only once in 11 sessions.  It slipped to almost JPY106.20 today, its weakest level since March 17. It is fraying the band of support that appeared to have been built in the JPY106.40-JPY106.60 area, which now becomes resistance.  Some are linking the yen's persistence to repatriation from US derivatives such as collateralized loan obligations. However, our understanding was that most of these purchases were funded with dollar borrowings or swaps.  The Australian dollar finished last week near $0.6420.  It firmed slightly over the past two sessions but has stalled a cent below last week's highs (~$0.6570).   Watch the $0.6400 area, where the 20-day moving average is found.  It has not closed below this moving average since April 3.  

Europe

The flash PMI reports steal most of the thunder from the final estimates.  The new information today is the German factory orders for March, which were weaker than expected, falling 15.6%, half again as much as the median forecast in the Bloomberg survey anticipated (-10%).  The eurozone retail sales for March were also reported.  They fell 11.2% on the month, more than the 10.6% decline expected.  

The final PMI eurozone as a whole ticked up from the flash.  The service component stands at 12 rather than 11.7, but still off from 26.4 in March.  The composite edged up to 13.6 from 13.5, but it means virtually nothing given the 29.7 reading in March.  German services and composite PMI were revised higher from the flash while France's reports were revised slightly lower.  Italy came in a little better than expected, and by that, we mean that the drop was a smidgeon smaller than expected, while Spain's showed a larger decline than expected.  


The euro was unable to recover much after falling from around $1.09 to about $1.0825 in response to the German Constitutional Court ruling yesterday, and it has been sold further today.  A trap was laid by the court.  It is not as simple as complying with a German court's demand, as many observers seem to think.  If the ECB provides the justifications that its Public Sector Purchase Program is indeed a proportionate response, it concedes that the German court can overrule the European Court of Justice.  This would set a dangerous precedent, most immediately for the likes of Hungary and Poland. They are already at odds with the ECJ over the independence of the judiciary, for example.


On the other hand, if the ECB were not to provide the justification, then it would leave the Bundesbank in an awkward position.  Could it ignore the German Constitutional Court and continue to buy bonds under the PSPP program?  The Germany court claimed that the ECJ had overstepped its authority (ultra vires).   The PSPP program accounts for less than a quarter of the ECB's current purchases, success here will likely encourage challenges of the Pandemic Emergency Purchase Program, which is not bound by the capital key.  Also, troubling was the German Court's urging of the German government and parliament to challenge the ECB.  Even Bundesbank President Wiedmann, who wanted to ECB to adhere to the German Court's demand for formal justification of its purchases, tried to defend the ECB's independence.  It begs the question, not of monetary or fiscal union, but the need for a legal union, and perhaps, a reaffirmation of the primacy of EU law over national law.

The euro has been sold below $1.08 in the European morning. It is at its lowest level since April 24 when it reached almost $1.0725.  The low from late March was set near $1.0635, and the risk of a retest is growing.   Resistance is now seen near $1.0850.  Sterling also traded at its lowest level since April 24 when it briefly took out the $1.2360 area.  It is slightly heavier than the euro.  There is an option for about GBP325 mln at $1.2400 that expires today.  Initial resistance is in the $1.2400-$1.2420 area.  

America

Three US reports attract attention today.  First is the ADP private-sector jobs estimate.   Millions of jobs were lost in April, and the ADP will give some clue as to the magnitude ahead of the national figures on Friday.  Something on the magnitude of 21 mln job loss is expected.  Second, the US Treasury will announce the details of its quarterly refunding that is expected to boost the size and also re-introduce a 20-year bond.  Third, the EIA oil inventory figures will be watched, following the API estimate of an 8.4 mln barrel build, the smallest since late March.  


Oil prices are extending their recovery.  The five-day rally coming into today is the longest in over a year.  Most of the talk is about reductions in supply, and many expect that US inventory growth slowed for the third consecutive week.  The EIA estimated that oil stocks rose almost 9 mln barrels in the week to April 24.  Near $28.35, the June WTI contract would meet a (38.2%) retracement objective of this year's decline.  Reports suggest some shale producers they could start up again if crude were above $30. 


Brazil's currency and equity markets are among the worst performers so far this year.  The currency is off 27%, and the stock market has fallen 30%.  The central bank meets later today and is expected to cut the Selic rate again as the economy has deteriorated sharply. Inflation expectations had dropped since the last meeting when the officials had thought they provided enough stimulus.  Although most economists expect a 50 bp rate cut, the market appears to in between a 50 and 75 bp cut.  Yesterday, Brazil reported March industrial output.  The median forecast in the Bloomberg survey was a sharp 3.7% decline.  Instead, it plummeted by 9.1%.  The IBGE measure of CPI will be released later in the week.  It is expected to fall to around 2.5% from 3.3% in March.  Fitch cut its outlook for Brazil's BB- rating to negative late yesterday.  It cited the economic weakness, fiscal efforts, and tensions between President Bolsonaro and Congress.  The virus contagion is spreading, and the economic situation is likely to get worse. 

The US dollar is trading within yesterday's range against the Canadian dollar after finding support in front of CAD1.40.  Yesterday's high was just shy of CAD1.4100.  Firm equities warn of the risk that the greenback is sold through CAD1.40 today.  A low near CAD1.3930 was seen at the end of last week.  Meanwhile, the US dollar is also pushing near yesterday's high against the Mexican peso near MXN24.17 in the European morning.   The intraday technicals suggest it may hold, but if it doesn't, the risk is for MXN24.40.  Support is seen in the MXN23.60-MXN23.80 area.  




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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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