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The Greenback Remains Heavy Ahead of the Employment Report

Overview: The US dollar is weaker against all the
G10 currencies today but the Swiss franc. The backdrop seems fragile even
though a few regional bank…



Overview: The US dollar is weaker against all the G10 currencies today but the Swiss franc. The backdrop seems fragile even though a few regional bank shares have done better in after-hours trading and Apple's earnings were received well by the markets. Due to seasonal factors and other considerations, many are warning about a US jobs report, even though ADP's estimate surprised to the upside earlier this week. Equities were mixed in the Asia Pacific region, while Europe's Stoxx 600 is edging higher to pare this week's losses. Its bank index is snapping a three-day drop and is up about 1.5%. US equity futures are firmer, will see the jobs report before the opening. Despite a simply dreadful German factory orders report (-10.7%), European bonds are selling off. Yields are 6-8 bp higher and the 10-year Gilt yield is up nearly 10 bp.

The 10-year US Treasury yield is up 1-2 bp near 3.40%. The two-year yield has steadied (up 2 bp to 3.81%) after falling 35 bp over the past three sessions. Although emergency borrowing from the Fed fell last week, it seemed mostly a question of reallocating in light of the First Republic's takeover by JP Morgan. The Fed's balance sheet continued to shrink (QT), falling by nearly $59 bln in the week through Wednesday. The greenback has fallen against all the G10 currencies this week going into the jobs report. The Antipodeans are the strongest (1.75%-1.90%), while the euro is the weakest (~0.10%). The JP Morgan Emerging Market Currency Index is up about 0.4% in what could be the first back-to-back weekly gain since the end of March. After reaching nearly $2063 yesterday, gold is seeing profit-taking that is pushing it below to around $2037. Yesterday's low was near $2030.50. June WTI is snapping a four-day decline after reversing yesterday from a plunging to $63.65. It is up about 2% today and is knocking on $70.

Asia Pacific

Yesterday the Caixin manufacturing PMI confirmed the slippage back into contraction territory telegraphed by the "official" PMI. Today, Caixin reported growth in services slowed to 56.4 from 57.8. The "official" reading had also moderated to 56.4 from 58.2. The Caixin composite stands at 53.6, down from 55.0. China is restricting access to economic data, which makes it difficult to triangulate the high-frequency economic data for support or not. After China reported stronger than expected Q1 GDP, many economists revised up this year's growth prospects, but the disappointing PMI fanned speculation of a rate cut. The first opportunity may be on May 15, when the one-year medium term lending facility rate is set. It has been at 2.75% since it was shaved by 10 bp last August. We are a bit more skeptical of the urgency for a rate cut. Reports suggest spending over the May Day holiday was strong and the drop sharp drop in oil prices is a net positive for the world's largest importer. 

In its monetary policy statement earlier today, the Reserve Bank of Australia lowered its inflation and growth forecasts. It seems to be signaling that the recent hike may be the last as the new forecasts ae based on a 3.75% cash target rate, which now stands at 3.85%. The trimmed mean inflation is now seen at 6.0% in the 12-months through June, down from 6.25% seen in the previous forecast three months ago. It anticipates inflation falling to 4.0% by year-end (vs 4.25% previously). The new forecasts put GDP growth at 1.25% this year, down from 2.7% last year, with consumption slowing to 1.3% by the end of this year from 5.4% in 2022. 

Tokyo markets remained closed for the spring holidays and the yen is in a narrow range, consolidating this week's gains (~1.65%). The greenback peaked Tuesday slightly above JPY137.75, and pressured by sharply lower US rates, and fallen to JPY133.50 yesterday before settling near JPY134.50. Today, the dollar is in less than half a yen range (~JPY133.90-JPY134.30). There are options for nearly $1.4 bln at JPY133.50 that expire today. The Australian dollar showed no reaction to the new central bank forecasts that had been hinted at when the RBA hiked rates earlier this week. It approached a two-week high today near $0.6745 and took out the 200-day moving average (~$0.6730). It settled last week near $0.6615 and has risen every day this week, which it last did in the final week of 2022. The upper end of the two-month range is around $0.6800 and the daily momentum indicators are constructive. Initial support is seen in the $0.6700-20 area. The Chinese yuan is little changed today. The greenback is in a narrow range between roughly CNY6.9055 and CNY6.9155, inside yesterday's range. It settled near CNY6.9125 at the end of last week. Mainland markets were closed Monday-Wednesday. The reference rate was set at CNY6.9114 today compared with expectations (median in Bloomberg's survey) or CNY6.9121.


The ECB delivered the quarter-point hike that was widely expected, and by characterizing inflation "too high for too long", it was understood to confirm market expectations for another hike at the mid-June meeting. Lagarde was clear that the ECB was not pausing. The swaps market leans toward another hike in Q3. The managed reinvestment of the Asset Purchase Program (APP) is helping reduce the ECB's balance sheet by 15 bln euro a month, but starting in July it will stop the reinvestment of maturing proceeds entirely. This means a 25 bln euro reduction in bond buying a month. The maturing issues from the Pandemic Emergency Purchase Program (PEPP) will continue to be reinvested through the end of next year.

Separately, after Germany reported that March retail sales plunged 2.4% (median forecast in Bloomberg's survey was for a 0.4% gain), it was clear that there were downside risks to today's aggregate retail sales data. Eurozone retail sales fell by 1.2%, and small compensation was that the February decline of 0.8% was revised to -0.23%. Recall that consumer spending slid by 1.3% in France (the median in Bloomberg's survey was for a 0.5% increase). As we have seen with other recent data, the periphery is doing better than the core. Spanish retail sales rose 0.5% in March. Italy's was reported today, and it fell by 0.5%. Also, Germany shocked today with a whopping 10.7% collapse of factory orders. This is five-times the decline expected. The auto sector was particularly hard. Auto and part orders slumped 12.2%, which reflects a 7.3% decline in domestic orders and a 14.5% drop in foreign orders. Sharp declines were also report for computers/electronics (-7.9%) and engineering (-5.9%). Germany reports industrial production figures on Monday, and after today's dismal news, there is downside risk to the 1.6% decline economists project. 

The UK economy continues to show resilience. As we noted yesterday, the final reading of the April PMI (54.9) was unexpectedly revised higher from the preliminary estimate (53.9) and is the highest since last April. Separately, mortgage approvals rose to a five-month high in March and consumer credit rose more than expected. Split roughly evenly between households and businesses, nearly GBP11 bln was withdrawn from banks in March amid US and Swiss banking woes. Still, in local elections, the Tory Party was not rewarded for the economic improvement. All the results have not been tabulated, but among the first 1600 results, the Tories lost 200 seats, which seems be on pace with worst-case scenarios. Labour won more than half of those seats, and the Liberal Democrats made inroads into Tory territory in the south. 

The poor eurozone data hardly impacted the euro, which is holding above $1.1000 and trading well within yesterday's range (~$1.0985-$1.1090). It settled near $1.1020 last week. The 20-day moving average is near $1.0990 today, and although it had been penetrated on an intraday basis earlier this week, it has not closed below it since March 16. There are options for 1.7 bln euros at $1.10 that expire today. Sterling is trading firmly and reached almost $1.2635, its highest level since early last June, when it peaked near $1.2665. It finished last week slightly above $1.2565. After falling for the first two days of the week, it is advancing today for the third consecutive session. The BOE meets next week, and the resilience of both the economy and inflation will likely see a hawkish hike.


The Federal Reserve's June decision looks to be a function of three variable: inflation, labor market, and the extent that credit tightens. Today's data speaks the labor market and next week inflation. Bloomberg's survey found a median expectation for nonfarm payrolls to rise 182k after a 236k increase in March. The ADP estimate of private sector employment does not do a good job tracking the BLS estimate on a monthly basis, and after the methodological change recent announced, its tracking ability on a medium-term basis is an open question. Still, the ADP estimate of 296k was nearly twice the expectation, and some observers will say the whisper number (which seems like intuitive guesses) will be higher than the Bloomberg median of 156k for the private sector job growth. The unemployment rate is seen rising to 3.6% from 3.5% while hourly earnings are seen steady at 4.2% year-over-year. The participation rate is also seen unchanged at 62.6%. Federal Reserve Chair Powell was clear that from the Fed's point of view the labor market remains strong, and citing various measures, labor costs are in excess of what is consistent with the Fed's inflation target. We note that nonfarm payrolls increased by more than one million in Q1. That compares with 852k in Q4 22.

Canada also reports April jobs data. The median forecast in Bloomberg's survey is for an increase of 20k jobs. In Q1, Canada filled 206k posts, or which a little more than 170k were full-time positions. This is compares with 165k jobs (~183k full-time) in Q4 22. This is pretty impressive given that Canada's population is about an eighth of the US population. That said, the bar to get the Bank of Canada to renew is tightening cycle after announcing a "conditional pause" in January seems high and too high to be met by today's jobs report, even though it will not see another jobs report before it meets on June 7. The next report with the heft to impact expectations is the April CPI due May 16.

Some observers are attributing the recovery of the Canadian dollar to comments from Bank of Canada Governor Macklem who warned that inflation too high. However, he also noted that price pressures were easing in line with the central bank's forecasts. He said that its focus was on employment growth, wages, corporate pricing behavior and short-term inflation expectations. There was no adjustment in rate expectations in response but the 0.55% gain in the Canadian dollar was the most since late March. Follow-through CAD buying today has pushed the US dollar through CAD1.3500 for the first time in two weeks. The CAD1.3485 area corresponds to the halfway point of the US dollar's rally from the mid-April low near CAD1.3300. Some of the USD selling may be related to expiring options. The next important chart area is around CAD1.3450 and is also where the 200-day moving average is found. For its part, the Mexican peso is trading quietly, a little above six-year high set earlier this week. The greenback has steadied after being sold to MXN17.8315 in the middle of the week. To be anything of note, the US dollar needs to resurface above MXN18.0350, and ideally MXN18.08.




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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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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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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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