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Treasuries: The Dog that Did not Bark

Overview: Like the dog that did not bark, the long-term US yields tumbled despite data that confirms the acceleration of the US economy and labor market.  The  10- and 30-year bond yields fell by the most since the end of February (~8.5 bp) and are…



Overview: Like the dog that did not bark, the long-term US yields tumbled despite data that confirms the acceleration of the US economy and labor market.  The  10- and 30-year bond yields fell by the most since the end of February (~8.5 bp) and are little changed today.  European benchmark yields are 2-3 bp higher.  The greenback finished mostly softer, even though the euro and Canadian dollar nursed small losses.  It is mixed today against the majors, and the euro and Canadian dollar are among the firmer currencies, while the Antipodeans and sterling are softer.  The Russian ruble is recouping yesterday's sanction-inspired drop. The other large, liquid, and accessible emerging market currencies, like South Africa, Turkey, and Mexico, are seeing their currencies trade heavier. However, the JP Morgan Emerging Market Currency Index is higher for a fourth consecutive session.  Similarly, both the MSCI Asia Pacific Index and Europe's Dow Jones Stoxx 600 are also higher for the fourth consecutive session.  US futures have drifted a little lower.   Gold is firm near $1772 its best level since late February.  Crude oil is trading higher for the fifth consecutive session.  June WTI climbed to nearly $64 a barrel, having begun the week below $60.  

Asia Pacific

The optics may be breath-taking.  The world's second-largest economy grew by 18.3% year-over-year in Q1, but of course, this is due to the favorable comparison.  On the quarter, the economy disappointed, with a 0.6% expansion.  Bloomberg's survey showed a median expectation of 1.4%.   Even with the upward revision in Q4 20 to 3.2% from 2.6%, China's economy did not perform as well as expected.  Still, some of the details were promising, and better growth is expected here in Q2 (the median forecast is for the economy to expand by about 1.4%  quarter-over-quarter). March retail sales were stronger than expected (34.2% year-over-year), while industrial output missed with a 14.1% increase (median forecast was for 18.0%). Fixed asset investment was also slower than in February and less than expected at 25.6%.  Steel and aluminum production was at record levels in March, and pork production rose by 32% in Q1.   The surveyed unemployment rate slipped to 5.3% from 5.5%.  It was at 5.1%-5.2% at the end of 2019.

Japan's Prime Minister Suga will visit US President Biden today.  Suga is the first foreign leader to visit Biden in the White House, and the symbolism is not lost on political observers.  Japan is the only G7 country not to have sanctions China over its human rights violations in Xinjiang, but the media suggests that Biden Administration wants from Suga is a joint statement about Taiwan.  It appears that the last time the US and Japan made a joint statement about Taiwan may have been backing 1969, with Japan's Prime Minister Sato and US President Nixon.  At the same time, Suga's popularity has waned as the contagion spreads and the government continues to press for Olympics, which the overwhelming majority are opposed, according to polls.  Japan will hold national elections by late October. 

The dollar is stuck in yesterday's range against the Japanese yen.  It found support near JPY108.60 and has not been able to resurface above JPY109.  The greenback fell for the first four sessions this week and is threatening to end the streak today after settling near JPY108.75 yesterday.  There is a $715 mln option struck at JPY109 that expires today.  The Australian dollar reached $0.7760 yesterday, its best level since March 19, but is consolidating today and has pulled back before finding new bids near $0.7725.  Its 1.5% gain this week (~$0.7740) is the biggest weekly advance since early last November.  The greenback is little changed against the Chinese yuan (~CNY6.5225) but has pushed lower every day this week.  The dollar's 0.45% decline over the five sessions is the most since the end of January.  The PBOC set the dollar's reference rate at CNY6.5288, a little softer than the bank models surveyed by Bloomberg anticipated.  


As the US announced new sanctions on Russia, news of its decision not to deploy two destroyers in the Black Sea as it had previously intended.  The reason for this reversal, according to two (unnamed) officials in a Politico report, was "concerns about escalating tensions between Russia and Ukraine,"  which ironically was the apparent reason for the "routine transit" in the first place.  Informing Turkey of its intentions (under the 1936 Montreux Convention) was done after the Russians had begun amassing troops on the border.  One official said that there was a "myriad" of reasons the decision was made not to send the destroyers into the Black Sea, including a desire not to antagonize Putin.  At the same time, a summit between Putin and Biden, perhaps in Finland, appears to have begun being discussed.  Meanwhile, the ruble snapped a three-day advance yesterday, but the losses were pared after the sanctions were announced, and the ruble is stronger today. The ruble is up a little more than 2% for the week and is snapping a four-week slide.  

The US sanctioned six Russian companies that support Russia's cyberwarfare and will expel 10 Russian intelligence officers working in the US under diplomatic cover. The escalation was in barring US financial institutions from buying Russian (ruble and non-ruble bonds from the government (central bank, finance ministry, sovereign wealth fund) starting in the middle of June.  Previously, Americans financial institutions were barred from buying non-ruble debt from the government.  It is hardly an inconvenience as the bonds can be bought from Russian banks.  Russia's 10-year benchmark yield fell 11 bp today to bring the week's decline to 27 bp.   The US sanction is a small piece of sand in the wheels for US-based global bonds funds, for example, even if the prohibitions can be extended in the future.  Moreover, while the EU supported the US actions, it did not join even the mild sanctions on Russian debt.  

An ARD poll found that Bavarian leader Soeder is the overwhelming favorite of the CDU/CSU to lead the coalition into the coming national elections.  The poll showed him with 72% support compared sith the CDU leader Laschet with 17%.  No formal decision has been made yet, but it is expected in the coming weeks.  Some see the results as a sign that Merkel is losing her sway of the CDU, but the German Chancellor has also been critical of Laschet and other state leaders for not taking a stronger line on social restrictions.  Separately, a Bloomberg poll found that most expect the ECB to slow its bond-buying from the accelerated pace of Q2 and expect the program to end as currently scheduled at the end of Q1 next year.  The ECB meets next week.  

The euro remains firm, but the momentum seen earlier this week faded.  For the third session, the euro has approached the $1.20-level but turned back.  It has spent most of these three sessions between $1.1955 and $1.1985.  It appears to have held 1/100 of a cent below $1.1990, where a 400 mln euro option expires today.  The euro is posting its first back-to-back weekly gain since the first two weeks of the year. Sterling's momentum is also flagging.  After beginning the week with a four-session decline in tow, sterling advanced in the first four sessions this week before slipped marginally today.  However, yesterday, it stalled near $1.3810, where it had stopped at mid-week too.  Last week's high was near $1.3920.  Still, after slipping to almost $1.3715 in late Asian turnover, sterling found a good bid in the European morning, bringing it back to the $1.3780-area.  


Today's March housing starts should cap this week's series of stronger than expected data, beginning with the CPI figures earlier in the week and continuing yesterday with retail sales and the dramatic drop in weekly jobless claims.  Industrial production was the one notable exception.  We had been concerned that the chip shortage may have adversely impacted auto production in March, but this was the key story.  Auto and part production rose by 2.8% in March after falling 10% in February.  The unusually cold February saw a 9.2% jump in utility output, while the seasonally-adjust weather was warmer in March, and utility output fell by nearly 11.5%.  

The April data were strong as well. These included the Philadelphia and Empire State Fed surveys were stronger than expected (and at new multi-year highs) though the former had a quirky revision.  As the Beige Book suggested, producers are seeing costs rise due to supply bottlenecks and shortages.  The sharp (193k) drop in weekly initial jobless claims was sufficient to drag the four-week moving average below 700k since before the pandemic struck. To be sure, there is still a long way to go.  Recall weekly jobless claims were hovering a little more than 200k at the start of last year.  Encouraged by rising prices, cheap money, and better weather, housing starts are expected to have jumped by 13.4% last month, according to Bloomberg's survey's median forecast.  It would put the seasonally adjusted annual rate above 1.6 mln for only the third time since the Great Financial Crisis.  

Canada reports March housing starts (expected to be strong) and its February international transactions.  These reports are not typically market movers.  Ahead of the Bank of Canada's meeting on April 21, the March CPI will be reported.  The Canadian dollar is the worst-performing major currency this week, rising less than 0.2% against the US dollar (~CAD1.2505), which is not unusual in a soft greenback period.  The US dollar settled near CAD1.2530 last week.  Mexico's calendar is light and remains so until the second half of next week when it reports its bi-weekly reading of CPI, March unemployment, and February retail sales.  The peso has gained about 1% against the greenback this week (~MXN19.95) and reached its best level since mid-February. It's four-day advance under threat now. The US dollar settled near MXN19.94 yesterday.  


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Spread & Containment

Middle-aged Americans in US are stressed and struggle with physical and mental health – other nations do better

Adults in Germany, South Korea and Mexico reported improvements in health, well-being and memory.

Middle age was often a time to enjoy life. Now, it brings stress and bad health to many Americans, especially those with lower education levels. Mike Harrington/Getty Images

Midlife was once considered a time to enjoy the fruits of one’s years of work and parenting. That is no longer true in the U.S.

Deaths of despair and chronic pain among middle-aged adults have been increasing for the past decade. Today’s middle-aged adults – ages 40 to 65 – report more daily stress and poorer physical health and psychological well-being, compared to middle-aged adults during the 1990s. These trends are most pronounced for people who attained fewer years of education.

Although these trends preclude the COVID-19 pandemic, COVID-19’s imprint promises to further exacerbate the suffering. Historical declines in the health and well-being of U.S. middle-aged adults raises two important questions: To what extent is this confined to the U.S., and will COVID-19 impact future trends?

My colleagues and I recently published a cross-national study, which is currently in press, that provides insights into how U.S. middle-aged adults are currently faring in relation to their counterparts in other nations, and what future generations can expect in the post-COVID-19 world. Our study examined cohort differences in the health, well-being and memory of U.S. middle-aged adults and whether they differed from middle-aged adults in Australia, Germany, South Korea and Mexico.

A middle-aged woman looking sad sitting in front of artwork.
Susan Stevens poses for a photograph in her daughter Toria’s room with artwork Toria left behind at their home in Lewisville, N.C. Toria died from an overdose. Eamon Queeney/For The Washington Post via Getty Images

US is an outlier among rich nations

We compared people who were born in the 1930s through the 1960s in terms of their health and well-being – such as depressive symptoms and life satisfaction – and memory in midlife.

Differences between nations were stark. For the U.S., we found a general pattern of decline. Americans born in the 1950s and 1960s experienced overall declines in well-being and memory in middle age compared to those born in the 1930s and 1940s. A similar pattern was found for Australian middle-aged adults.

In contrast, each successive cohort in Germany, South Korea and Mexico reported improvements in well-being and memory. Improvements were observed in health for each nation across cohorts, but were slowed for Americans born in the 1950s and 1960s, suggesting they improved less rapidly than their counterparts in the countries examined.

Our study finds that middle-aged Americans are experiencing overall declines in key outcomes, whereas other nations are showing general improvements. Our cross-national approach points to policies that could could help alleviate the long-term effects arising from the COVID-19 pandemic.

Will COVID-19 exacerbate troubling trends?

Initial research on the short-term effects of COVID-19 is telling.

The COVID-19 pandemic has laid bare the fragility of life. Seismic shifts have been experienced in every sphere of existence. In the U.S., job loss and instability rose, household financial fragility and lack of emergency savings have been spotlighted, and children fell behind in school.

At the start of the pandemic the focus was rightly on the safety of older adults. Older adults were most vulnerable to the risks posed by COVID-19, which included mortality, social isolation and loneliness. Indeed, older adults were at higher risk, but an overlooked component has been how the mental health risks and long-haul effects will likely differ across age groups.

Yet, young adults and middle-aged adults are showing the most vulnerabilities in their well-being. Studies are documenting that they are currently reporting more psychological distress and stressors and poorer well-being, compared to older adults. COVID-19 has been exacerbating inequalities across race, gender and socioeconomic status. Women are more likely to leave the workforce, which could further strain their well-being.

A older women hugs her daughter.
Middle-aged people often have parents to take care of as well as children. Ron Levine/Getty Images

Changing views and experiences of midlife

The very nature and expectations surrounding midlife are shifting. U.S. middle-aged adults are confronting more parenting pressures than ever before, in the form of engagement in extracurricular activities and pressures for their children to succeed in school. Record numbers of young adults are moving back home with their middle-aged parents due to student loan debt and a historically challenging labor and housing market.

A direct effect of gains in life expectancy is that middle-aged adults are needing to take on more caregiving-related duties for their aging parents and other relatives, while continuing with full-time work and taking care of school-aged children. This is complicated by the fact that there is no federally mandated program for paid family leave that could cover instances of caregiving, or the birth or adoption of a child. A recent AARP report estimated that in 2020, there were 53 million caregivers whose unpaid labor was valued at US$470 billion.

The restructuring of corporate America has led to less investment in employee development and destabilization of unions. Employees now have less power and input than ever before. Although health care coverage has risen since the Affordable Care Act was enacted, notable gaps exist. High numbers of people are underinsured, which leads to more out-of-pocket expenses that eat up monthly budgets and financially strain households. President Biden’s executive order for providing a special enrollment period of the health care marketplace exchange until Aug. 15, 2021 promises to bring some relief to those in need.

Promoting a prosperous midlife

Our cross-national approach provides ample opportunities to explore ways to reverse the U.S. disadvantage and promote resilience for middle-aged adults.

The nations we studied vastly differ in their family and work policies. Paid parental leave and subsidized child care help relieve the stress and financial strain of parenting in countries such as Germany, Denmark and Sweden. Research documents how well-being is higher in both parents and nonparents in nations with more generous family leave policies.

Countries with ample paid sick and vacation days ensure that employees can take time off to care for an ailing family member. Stronger safety nets protect laid-off employees by ensuring that they have the resources available to stay on their feet.

In the U.S., health insurance is typically tied to one’s employment. Early on in the COVID-19 pandemic over 5 million people in the U.S. lost their health insurance when they lost their jobs.

During the pandemic, the U.S. government passed policy measures to aid people and businesses. The U.S. approved measures to stimulate the economy through stimulus checks, payroll protection for small businesses, expansion of unemployment benefits and health care enrollment, child tax credits, and individuals’ ability to claim forbearance for various forms of debt and housing payments. Some of these measures have been beneficial, with recent findings showing that material hardship declined and well-being improved during periods when the stimulus checks were distributed.

I believe these programs are a good start, but they need to be expanded if there is any hope of reversing these troubling trends and promoting resilience in middle-aged Americans. A recent report from the Robert Wood Johnson Foundation concluded that paid family leave has a wide range of benefits, including, but not limited to, addressing health, racial and gender inequities; helping women stay in the workforce; and assisting businesses in recruiting skilled workers. Research from Germany and the United Kingdom shows how expansions in family leave policies have lasting effects on well-being, particularly for women.

Middle-aged adults form the backbone of society. They constitute large segments of the workforce while having to simultaneously bridge younger and older generations through caregiving-related duties. Ensuring their success, productivity, health and well-being through these various programs promises to have cascading effects on their families and society as a whole.

[Get the best of The Conversation, every weekend. Sign up for our weekly newsletter.]

Frank J. Infurna receives funding from the National Institute on Aging and previously from the John Templeton Foundation. The content is solely his responsibility and does not necessarily represent the official views of the funding agencies.

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Euro 2020 – a football tournament where the big players come from China and the US

Much of the money that pays for the competition is spent to build global brands.

Simon Lehmann / Alamy Stock Photo

With Euro 2020 now under way after a year of pandemic delay, football fans will be hoping for great performances from Europe’s finest players. Some of us will watch the tournament unfold on our Hisense televisions, and many will choose to order in some half time refreshments, maybe via the Just Eat delivery service, possibly sent using a Vivo mobile phone.

Sustained by cans of Heineken, as goals are scored, supporters will upload celebration clips on to TikTok. And after the final, what better way to recharge than by arranging a holiday on, perhaps flying on Qatar Airways.

For while fans will have their eyes firmly fixed on the efforts of players worth billions of pounds on the field, another big money game will be taking place off it. The Euros is one of the world’s biggest sport events, and a bonanza for corporate sponsors and partners (just a few of which are mentioned above).

In return for being exposed to the eyes of the world, Euros sponsors pay huge amounts of money. Just how much is difficult to say, as fees are commercially sensitive data. But in one case – that of Alipay (part of the Alibaba empire) – it is believed the Chinese company paid £176 million for an eight year deal.

UEFA has sold these deals in three ways: National Team Football Official Sponsors, Euro 2020 Official Sponsors, and Euro 2020 Official Licensees. And the origins of the companies and brands sponsoring this year’s event are a clear indication of how the beautiful game is valued by the corporate world.

Alongside UEFA partners such as FedEx and Konami, each of the national teams bring their own roster of sponsors, which makes for quite a cluttered selection of brands competing for attention. There’s England’s £50 million, five-year contract with BT, for example, while the Germans will bring Lufthansa to the tournament, Carlsberg will promote its association with Denmark and South Korea’s Hyundai will be represented by the Czech Republic.

The list goes on (and on). To capture the complex network of sponsors at Euro 2020 we created a network graphic of some of the most prominent and significant deals on show over the coming weeks. For reasons of clarity, we wern’t able to include every sponsor, but the range on display is revealing.

Graphic of Euro 2020 teams and sponsors.
Euro 2020 teams and associated sponsors. Paul Widdop and Simon Chadwick, Author provided

What becomes immediately clear is that although the UEFA European Championship is a continental tournament, its commercial reach is truly global. A significant number of sponsors are either not European or else have divisions that operate way beyond the borders of Europe.

At the same time, the sponsorship portfolio shows us that football is at the heart of the entertainment, lifestyle and digital economies. Gone are the days of motor-oil and office photocopier sponsorships. Instead we see a profusion of drinks brands, confectionery products and airlines.

In addition, the sponsorship of teams appears to go hand-in-hand with the promotion of national identity and national industry. “Brand Germany” for instance, is strongly represented by some of the country’s most important corporations, including Adidas and Volkswagen.

The appearance of Gazprom meanwhile, reflects the increasing use by nations of sponsorship as a geopolitical instrument. Indeed, the state owned Russian gas company has recently put its associations with UEFA and others to influential use.

Europe’s own goal

Equally, “Brand China” is now a major industrial and political power, and home to five of UEFA’s biggest tournament sponsors (Alipay, Antchain, Hisense, TikTok and Vivo).

Corporate America continues to endure too, represented by the likes of Coca Cola and IMG. The US has always been the home of contemporary sport sponsorship, and the country’s businesses continue to derive significant commercial value from it.

In fact, the underdogs in this big-money corporate competition appear to be the Europeans themselves. For an event being staged in countries including England, Italy, Spain and Romania, UEFA draws very few of its sponsors from the continent. Instead, it is clear that organisations from China and the US have both the financial muscle and the tactical brains to successfully dominate the tournament.

This reflects broader global trends which indicate the declining presence of European industry. European companies account for a falling percentage of global output. The market capitalisation of European firms is way behind that of American corporations and is fast being caught by Chinese firms. And the world’s technological hot spots are found in places such as Shenzhen and Silicon Valley, not in Europe.

Whether the footballing squad from France, Portugal or Switzerland lifts the trophy in July, there is no doubt that the UEFA tournament will be an on field triumph for Europe.

But the forces of globalisation, digitalisation and politico-economic change, reflected in the Euros’ portfolio of sponsors, will keep on playing long after the final whistle blows. And European industry could pay the penalty with a swift exit from the global industrial competition.

Simon Chadwick works with UEFA on its Certificate in Football Management programme.

Paul Widdop ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.

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EU adds another rare blood condition as side effect of AstraZeneca shot

Europe’s drug regulator on June 11 identified another rare blood condition as a potential side effect of AstraZeneca’s Covid-19 vaccine and said it was looking into cases of heart inflammation after inoculation with all coronavirus shots.



EU adds another rare blood condition as side effect of AstraZeneca shot

(Reuters; )

Europe’s drug regulator on Friday identified another rare blood condition as a potential side effect of AstraZeneca’s (AZN.L) COVID-19 vaccine and said it was looking into cases of heart inflammation after inoculation with all coronavirus shots.

The European Medicines Agency’s (EMA) safety committee said that capillary leak syndrome must be added as a new side effect to labelling on AstraZeneca’s vaccine, known as Vaxzevria.

People who had previously sustained the condition, where fluids leak from the smallest blood vessels causing swelling and a drop in blood pressure, should not receive the shot, the EMA added.

The regulator first began looking into these cases in April and the recommendation adds to AstraZeneca’s woes after its vaccine was associated with very rare and potentially lethal cases of blood clotting that come with a low platelet count.

Last month, the EMA had advised against using the second AstraZeneca shot for people with that clotting condition, known as thrombosis with thrombocytopenia syndrome (TTS).

The committee reviewed six validated cases of capillary leak syndrome in people, mostly women, who had received Vaxzevria, including one death. Three had had a history of the condition.

A vial of AstraZeneca coronavirus vaccine is seen at a vaccination centre in Westfield Stratford City shopping centre, amid the outbreak of coronavirus disease (COVID-19), in London, Britain, February 18, 2021. REUTERS/Henry Nicholls/File Photo

AstraZeneca declined to immediately comment.

More than 78 million Vaxzevria doses have been administered in the European Union, Liechtenstein, Iceland & Norway and Britain.

Britain’s regulator, the MHRA said on Thursday it had received 8 reports of capillary leak syndrome in the context of more than 40 million doses of the AstraZeneca vaccine given, and currently does not see a causal link.

Separately, the EMA said it was continuing its probe into cases of heart inflammation known as myocarditis and pericarditis, primarily following inoculation with the Pfizer/BioNTech (PFE.N), (22UAy.DE) and Moderna mRNA shots, but also after the J&J (JNJ.N) and AstraZeneca vaccines.

U.S. health officials said on Thursday they had registered a higher-than-expected number of heart inflammation cases in young men who received a second dose of the mRNA shots, though a causal relationship could not be established. read more

Israel’s Health Ministry said this month it had found a likely link to the condition in young men who received the Pfizer/BioNTech shot. read more

Both Pfizer and Moderna have acknowldged the observations but said a causal association with their vaccines has not been established.

BioNTech said adverse events, including myocarditis and pericarditis, are being regularly and thoroughly reviewed by the companies and regulatory authorities.

“More than 300 million doses of the Pfizer-BioNTech COVID-19 vaccine have been administered globally and the benefit risk profile of our vaccine remains positive.”

The United States and Israel have been months ahead of the EU in vaccinating men below 30, who are particularly prone to heart inflammation, giving them potentially more cases to analyse.

Our Standards: The Thomson Reuters Trust Principles.


Reuters source:


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