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USD/CAD calm on light data calendar

USD/CAD calm on light data calendar

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USD/CAD is drifting for a second successive day. In the North American session, the pair is trading at 1.3131, up 0.11% on the day.

US jobless claims sparkle

The weekly US Initial Jobless Claims report had an excellent week, with a gain of 787 thousand. This crushed the estimate of 860 thousand and was the lowest figure since mid-March, prior to the spread of Covid-19, which led to skyrocketing unemployment numbers. However, the positive news was tempered by the Conference Board Leading Economic Index, which slowed to 0.7% in September. The reading missed the consensus of 0.8%. The weakening pace of improvement is a sign that US recovery could be losing steam in the fourth quarter. The index posted a 1.4% increase in August and a 2.o percent gain in July. The Canadian dollar has shown a muted response to the mixed data on Thursday.

 

Deadlock over US stimulus deal

The financial markets continue to react to the on-again-off-again fiscal stimulus talks between the Republicans and Democrats. Nancy Pelosi and Treasury Secretary Steven Mnuchin have been holding talks, but the prospect of a deal between the Democrats and Republicans are dimming. Even if a deal was reached tomorrow, the stimulus package would not be implemented until after the election. A stimulus agreement would be good news for President Trump, but Republicans senators have their own election campaigns to worry about, and a massive spending package will not win many votes among conservative voters. It appears that barring a change in stance by Republican senators, the fiscal package is unlikely to materialize. A no-deal scenario is bullish for the US dollar, as risk sentiment would likely drop if there is no agreement.

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USD/CAD Technical

  • We find support at 1.3089. This is followed by support at 1.3047
  • 1.3188 is the next resistance line. Above, there is resistance at 1.3245
  • USD/CAD broke below the 10-day MA on Tuesday, which is a sign of a downward trend

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Government

Pentagon Boss ‘Clarifies’ Russia & China Pose Biggest Threats After Biden Says It’s Climate Change

Pentagon Boss ‘Clarifies’ Russia & China Pose Biggest Threats After Biden Says It’s Climate Change

On Wednesday, President Biden told US troops stationed in the UK that the Joint Chiefs told him "the greatest threat facing America" is…

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Pentagon Boss 'Clarifies' Russia & China Pose Biggest Threats After Biden Says It's Climate Change

On Wednesday, President Biden told US troops stationed in the UK that the Joint Chiefs told him "the greatest threat facing America" is "global warming" - a curious pivot from "white supremacy."

On day later, the Chairman of the Joint Chiefs 'corrected' Biden, asserting instead that the biggest threats facing the US are China and Russia, according to US News, (and who allegedly had a big role in scamming half of pandemic unemployment funds to the tune of hundreds of billions of dollars).

"Climate change does impact, but the president is looking at a much broader angle than I am," Army Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, told a congressional panel Thursday morning in response to a question by Sen. Kevin Cramer (R-ND) "I'm looking at it from a strictly military standpoint. And from a strictly military standpoint, I'm putting China, Russia up there."

Milley then backpedaled a bit, saying "Climate change is a threat. Climate change has a significant impact on military operations, and we have to take that into consideration."

"Climate change is going to impact natural resources, for example," he told the Senate Armed Services Committee,adding, "It's going to impact increased instability in various parts of the world, it's going to impact migrations and so on."

When asked how his assessment that Russia and China pose the biggest threats, Milley said "This is not, however, in conflict with the acknowledgement that climate change or infrastructure or education systems– national security has a broad angle to it. I'm looking at it from a strictly military standpoint."

On Wednesday, Biden spoke to US forces at Royal Air Force Base Mildenhall, where he recounted an alleged discussion which took place while he was Vice President with the Joint Chiefs in their cloistered "tank" meeting room at the Pentagon.

"This is not a joke. You know what the Joint Chiefs told us the greatest threat facing America was? Global warming," he claimed.

In response to Biden's Wednesday comments, former President Trump issued a statement.

"Biden just said that he was told by the Joint Chiefs of Staff that Climate Change is our greatest threat. If that is the case, and they actually said this, he ought to immediately fire the Joint Chiefs of Staff for being incompetent," said Trump.

Tyler Durden Fri, 06/11/2021 - 19:20

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International

Firework Shortage Could Ruin Fourth Of July 

Firework Shortage Could Ruin Fourth Of July 

Microchips, lumber, gas, steel, base metals, chicken, ketchup, and chlorine have been some of the latest shortages due to tangled supply chains because of the virus pandemic.

A little less…

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Firework Shortage Could Ruin Fourth Of July 

Microchips, lumber, gas, steel, base metals, chicken, ketchup, and chlorine have been some of the latest shortages due to tangled supply chains because of the virus pandemic.

A little less than a month from now, Americans will be celebrating the Fourth of July with backyard barbecues, drinking Budweiser, and, of course, how could we forget, launching Chinese-made fireworks. 

Due to food inflation and shortages of some products, Americans will be paying an arm and a leg for items at supermarkets. But what may anger them the most is the shortage of fireworks, according to ABC 13, who spoke with multiple vendors. 

Firework stores across Texas are urging customers to shop now then wait till the very last week or even the last day because of delays in container freight from China to West Coast ports. 

Vendors are saying container shipments of artillery shells, such as mortars, from China are in short supply because of port congestion. They warned customers this would lead to higher prices. 

"There is going to be an increase in the process just because shipping has doubled since last year," said Cele Rasmussen, a fireworks vendor.

Peak shipping season has arrived at West Coast ports as congestion could result in firework shipments not arriving in time. This is terrible news for US consumers because 94% of US imported fireworks are derived from China. 

Google searches for "firework shortage" have already hit 17-year highs. 

Some Americans may not hear fireworks this hear but rather noisy cicadas. 

Tyler Durden Fri, 06/11/2021 - 22:40

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Spread & Containment

Perfect Storm: Congestion Plagues South China And US West Coast Ports 

Perfect Storm: Congestion Plagues South China And US West Coast Ports 

Peak shipping season is ahead — and the parking lot of container ships moored off the US West Coast continues to worsen, with the epicenter of congestion based around…

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Perfect Storm: Congestion Plagues South China And US West Coast Ports 

Peak shipping season is ahead — and the parking lot of container ships moored off the US West Coast continues to worsen, with the epicenter of congestion based around Los Angeles/Long Beach ports. On the other side of the Pacific, in southern China, a surge in COVID-19 has caused some of the biggest port congestion in more than one year. 

So now port congestion is seen on both sides of the Pacific as it's hardly a secret that the recent collapse of trans-pacific supply chains will remain strained through the summer and one reason why prices for goods are soaring (as recently discussed in "It's About To Get Much Worse": Supply Chains Implode As "Price Doesn't Even Matter Anymore" and "Port Of LA Volumes Are "Off The Charts."") 

But now, focusing at South China ports, exploding cases of coronavirus infections in Guangdong province, a top manufacturing and exporting hub, recently triggered local governments to increase prevention and control efforts that "curbed port processing capacity," said Reuters

Major shipping companies have warned clients of vessel delays, changes to port call schedules, and the possibility of avoiding some ports altogether.

Ocean Network Express (ONE), a container shipping company, warned customers in an advisory Wednesday: "The container logistics situation continues to deteriorate around all the ports in the area [South China port]." 

Most of the congestion has been building at the Yantian International Container Terminal (YICT), a deepwater port in Shenzhen, Guangdong, China handing some of the largest container ships in the world, has reduced capacity at the port due to a recent outbreak of the virus, according to Seatrade Maritime News, citing ONE. 

The world's leading container line Maersk told customers to expect delays up to two weeks because of the reduced capacity of staffing at the port. 

Refinitiv data shows 50 container vessels are moored in the Outer Pearl River Delta, waiting to dock at YICT. For comparison, this compares with 20 vessels for the same time last year. 

Reuters quoted one exporter who said loading delays and slow deliveries continue to tangle global supply chains. 

"Basically we had a similar experience last year so we have experience in responding, only the increase in transport costs are getting really astonishing. The freight fees are reflected in the increase in material costs which are up by around 15%-30% already," said a sales manager at an electronics cable manufacturer in Shenzhen, a large manufacturing city in Guangdong. 

The congestion and delays in South China came when container shipping supply chains were already at full stretch due to US West Coast port congestion. As a result, container freight rates have hit a record high and are expected to continue to rise further. 

"The recent rise in Covid-19 cases in China has resulted in a shutdown that may add to the already record cost of shipping goods out of China. The delays have already resulted in pressurizing soaring shipping prices within China due to a lack of containers and increased export demand," said Josh Brazil, the Vice President of Marketing at project44. 

Port congestion on either side of the Pacific continues to deteriorate. It suggests that the normalization of trans-pacific supply chains will not happen anytime soon and will continue to add cost pressures for exporters in China and importers in the US - adding to the cost of products and ultimately pushed along to US consumers. Delays will also continue to create additional shortages...  

Tyler Durden Fri, 06/11/2021 - 21:20

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