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Week Ahead – Deal or no deal

Two down, two to go The month of compromise has delivered two so far. OPEC+ agreed on output targets for next year while the EU27 gave their backing to the 2021-27 budget and recovery fund. That just leaves Brexit and US fiscal stimulus outstanding, with.

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Two down, two to go

The month of compromise has delivered two so far. OPEC+ agreed on output targets for next year while the EU27 gave their backing to the 2021-27 budget and recovery fund. That just leaves Brexit and US fiscal stimulus outstanding, with a positive outcome in both cases making this a rather remarkable end to an extraordinary year.

Can Congress secure stimulus deal next week?

Time almost up as no-deal Brexit odds jump

China recovery running out of steam


Country

US

It is all about stimulus this week.  Risk appetite will take its cues from the Fed and possibly from Congress.  The Fed could deliver fresh measures following softer economic data and no fiscal aid from Congress.  Expectations are growing for the Fed to extend the average maturity of their Treasury purchases.  The risk of Congress going home for the holidays without delivering a rescue bill is growing by the day.  The key sticking points remain liability protections and aid to state and local governments.  

On the data front, the flash PMI readings could show modest weakness in both the manufacturing and service sectors.  Both retail sales and industrial production in November are expected to decline, while housing data appears poised to steady, 

US Politics

The electoral college will gather on Monday and is expected to formalize Joe Biden’s presidential victory.  The focus will heavily remain on the Georgia Senate runoff-races.  Democrats need to win both seats to have a split Senate, with VP Harris having the tie-breaking vote.  Most political experts expect the Republicans to win at least one of the races and keep control of the Senate.  

EU

It’s been a very good week for the EU. The ECB announced provided fresh stimulus for the bloc as lockdowns wreak havoc on the economy once more. The 27 members signed off on the EU budget and recovery fund after Hungary and Poland dropped their opposition to it. It would have been a perfect week but for the fact that Brexit negotiations haven’t really progressed, despite face to face talks between Boris Johnson and Ursula von der Leyen. 

Brexit

Neither side is willing to call it quits on talks but there’s no doubting that no-deal Brexit odds have significantly increased this week and traders are starting to feel the heat. Volatility in the pound has been on the rise and it has fallen more than 2% against the dollar this week. Leaders have pledged to make a firm decision on the negotiations by Sunday but since when do deadlines matter when it comes to Brexit? There’s only one deadline that’s set in stone (ish) and that’s 31 December. Still, this claim means this weekend carries heightened market risk.

UK

The economy grew at its slowest monthly pace since May in October and November is expected to be far worse as a result of the lockdown. Growth of 0.4% left the economy 7.9% smaller than it was before the pandemic and that’s before the lockdown kicked in. The Bank of England last month increased its bond buying program in an attempt to support the economy through the second wave but should no-deal Brexit become a reality, more will have to be done on the fiscal and monetary side. This is the worst time to be facing no-deal Brexit which is partly why I still believe a deal will be reached. It’s just not yet a minute to midnight.

Turkey

The lira has stabilized somewhat over the last month or so but did slide at one stage today, going above 8 to the dollar, before paring losses. The move came as the US prepared to sanction Turkey over its purchase of Russian S-400 air defence systems last year. The sanction may turn out to be only minor though and, ultimately, it will soon be Joe Biden’s problem, who may choose to push back harder, regardless.

China

China stocks finished the week under pressure as the PBOC leaves liquidity tight and it is swept by a wave of corporate defaults. New sanctions on China officials and telcos by the US continues to muddy the waters, with China detaining a Bloomberg reporter in Beijing this week. That will continue to weigh on China stocks, which will underperform versus Asia next week.

China’s Industrial Production and Retail Sales on Wednesday are expected to be unchanged from October’s numbers. That may escalate concerns that China’s 2020 recovery story is running out of steam, further dampening equities, although the Yuan should remain strong on liquidity and interest rate carry.

India

India releases WPI Inflation on Monday, which is expected to print at 7.20%, just above the RBI’s target of 5-7%. That will raise a glimmer of hope that the RBI will cut rates at its next meeting to support growth, despite the stagflation environment. That should be supportive of Indian equities.

PM Modi still faces massive protests over the new farmers bill, which may see the Rupee’s recent rally slow. Otherwise, events internationally will drive moves in most developing markets.

New Zealand 

The New Zealand Dollar has rallied strongly as a pro-cyclical recovery play for 2021. Having broken 0.7000, it now targets 0.7300 in the coming weeks. Expect more noise about the currency and the spectre of negative rates from the RBNZ if the rally continues to accelerate.

Q3 GDP on Wednesday will be old news, with markets focused on the November Balance of Trade on Thursday. New Zealand’s recovery could see exports surprising to the upside, boosting the currency. On the import side, severe port congestion could lower the headline import number.

Australia 

The global commodity rally and vaccine-led 2021 cyclical recovery play have been a huge boost to the Australian Dollar as a proxy for world trade. AUD/USD has risen rapidly through 0.7500 and now targets 0.7800 this week. The deteriorating relations between China and Australia continue to have no effect on the AUD or Australian equities, with Australian domestic data continuing to impressively outperform.

Talk is increasing of an Australia/New Zealand travel bubble which would boost equities on both sides of the Tasman Sea, as well as the currencies. Queensland is the latest state to announce yesterday that Kiwis can travel without quarantine. Unfortunately the travel bubbles are still asymmetric for now.

PMI’s on Wednesday should show confidence continuing to increase. Key data is Employment on Thursday after October’s blow-out 179,000 job increase. November will be lower but a still respectable 50,000 jobs. Risks are skewed to another upside surprise, boosting the AUD and local equities.

As long as the global recovery trade retains momentum in international markets, and iron ore and copper prices elevated, Australian equities and the currency will remain investor favourites.

Japan

A heavy data week beckons for Japan with the Tanken survey on Monday expected to remain negative, but improve over October’s number. Balance of Trade and PMI’s follow on Wednesday, with increasing Covid-19 restrictions and concerns set to see imports fall markedly, and forward sentiment sour. That may weigh on Japan equities mid-week ahead of the FOMC decision in the US.

The Bank of Japan meets on Friday with rates to remain unchanged, but the Bank expected to announce an increase in asset buying and lending facilities. That would dovetail in with last week’s supplementary budget and assuming no surprises from the Federal Reserve, see Japan equities rally into the end of the week.

The MoF and BoJ will be watching the recent rally on the Japanese Yen with concern. Friday may see some currency rhetoric from the BoJ if USD/JPY has fallen to 103.00 or lower, which could see a spike higher.


Key Economic Events

Sunday, December 13th

The latest deadline for post-Brexit trade talks with the EU.  Very large gaps remain and no-deal Brexit risks have returned 

Monday, December 14th

– U.S. Electoral College to vote for the next U.S. president likely ending President Donald Trump’s legal challenges

– Monthly OPEC Oil Market Report is released

Economic data

Japan Tankan manufacturing index, industrial production, tertiary industry index, capacity utilization

India wholesale prices, CPI

Turkey industrial production

South Africa consumer confidence

Hong Kong industrial production

Tuesday, December 15th

– Swiss government publishes economic forecasts.

– Bank of Canada Governor Tiff Macklem speaks

– Bank of Finland Governor Rehn presents the central bank’s forecasts for the Finnish economy.

– Apple launches its $549 over-ear headphones

Economic data and rate decisions

US Dec Empire manufacturing 7.5 estimate v 6.3 prior, industrial production, TIC flows

Canada housing starts, existing home sales, manufacturing sales

New Zealand Westpac consumer confidence

Australia ANZ consumer confidence, RBA meeting minutes

China Nov industrial production y/y: 7.0% estimate v 6.9% prior, retail sales y/y: 5.0% estimate v 4.3% prior, fixed assets, jobless rate

Poland CPI

UK unemployment

Hungary rate decision expected to see interest rate and overnight deposit rate kept unchanged.

India Trade data

Wednesday, December 16th

Fed Day. The Fed will address the recent weakness in the economy and could finally adopt yield curve control.  To promote growth and inflation the Fed should shift their purchases to the longer end of the curve

– The UK government to update the regional tiers for coronavirus restrictions

 Economic data

US Nov retail sales m/m: -0.2% estimate v 0.3% prior, Dec Prelim Markit manufacturing PMI: 55.8 estimate v 56.7 prior

Canada wholesale sales, CPI

New Zealand BoP, current account GDP ratio

Euro-area Markit PMIs

UK CPI, Markit PMIs

Australia Markit PMIs, Westpac leading index

Japan trade, Jibun Bank PMIs

EIA crude oil inventory report

Thursday, December 17th

Bank of England will keep policy unchanged and address the current pressures Brexit is having on the economy

The FDA panel will review Moderna’s Covid-19 vaccine. Many are expecting the vaccine to get the greenlight with immunizations starting later in the week

Economic data and rate decisions

US initial jobless claims, building permits, housing starts

New Zealand GDP

Singapore non-oil domestic exports, electronic exports

Australia unemployment

Swiss National Bank to keep interest rates steady and reiterate pledge to prevent franc from appreciating too much

Czech rate decision is expected to see the repurchase remain steady at 0.25%.

Norway central bank (Norges) expected to keep benchmark interest unchanged even as the growth outlook deteriorates.

Mexico central bank expected to keep overnight rate unchanged at 4.25%.

Hong Kong unemployment, composite interest rate

France manufacturing confidence

Friday, December 18th

Bank of Russia expected to keep Key Rate unchanged at 4.25%.   Governor Elvira Nabiullina could surprise markets with a rate cut to 4.00%

Bank of Japan to keep monetary policy unchanged

 Economic data

US leading index, current account balance, Baker Hughes rig count

Canada retail sales

New Zealand ANZ business confidence, trade

Japan CPI

Sovereign Rating Upgrades

– Cyprus (Moody’s)

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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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