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Yen Tries to Snap a Six-Day Drop , while the Euro Tests $1.10

Overview: China reported stronger than expected data, but it did not prevent a further slide in mainland and Hong Kong shares today.  The Hang Seng got…

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Overview: China reported stronger than expected data, but it did not prevent a further slide in mainland and Hong Kong shares today.  The Hang Seng got tagged for nearly 6% and the China's CSI 300 slumped a little more than 4.5%.  Note that the Golden Dragon Index of Chinese companies that trade in the US has fallen by more than a third since Russia invaded Ukraine.  Nearly all the regional markets but Japan fell.  Europe's Stoxx 600 is giving back yesterday's 1.2% gain plus more, and US futures are slightly softer.  Falling equities appears to be helping the bond market stabilize after yesterday's sharp sell-off. US and European benchmark yields are 1-3 bp lower, while Asian yield played catch-up to yesterday's move in the US.  The 10-year US Treasury yield is near 2.10%. The dollar is snapping a six-day advance against the Japanese that had lifted it from about JPY114.80 to JPY118.20.  The greenback is softer against major currencies, but the Canadian dollar.  The euro is pacing the move.  After testing $1.09 yesterday, the single currencies are struggling to sustain a foothold above $1.10.  Central European currencies are leading the emerging market complex higher.  Gold and oil are extending their pullback.  Gold held the $1925 area, which is about the midpoint of the rally from below $1800 that began in late January.  A break could signal a move toward $1890.  April WTI has been sold below $100 and appears headed toward support near $90.  It fell about 5.8% yesterday and is off about another 6% today.  OPEC's monthly production report is expected later today.  US natgas is around 2.3% lower, while Europe's benchmark is up 8.6% after falling 17.3% yesterday. Iron ore fell for the sixth consecutive session, during which time it has fallen about 16.5%.  Copper is firm after falling 2.25% yesterday.  May wheat is up 2.5%.  It had fallen almost 1% yesterday.  

Asia Pacific

There is much pessimism surrounding the Chinese economic outlook, but today's data for last month were mostly better than expected.  Industrial output rose 7.5% year-to-date compared with a year ago.  The median forecast (Bloomberg survey) was for a 4% increase.  Retail sales rose 6.7%, more the twice the median forecast.  Fixed asset investment jumped 12.2%.  The market expected 5.0%.  Property investment was to have contracted by 7% but instead, increased by 3.7%.  One disappointment stands out.  Surveyed unemployment rose to 5.5% from 5.1%.  Separately, China's one-year Medium-Term Lending Facility was left unchanged at 2.85%. There had been speculation that it would be reduced.  

Japan reports February trade figures tomorrow.  Without fail for more than 25 years, Japan's February trade balance improves over January.  The January deficit was nearly JPY2.2 trillion.  The February shortfall is expected to be around JPY150 bln.  Still, higher food and energy prices poses a negative terms-of-trade shock on Japan.  This coupled with some administrative prices looks likely to boost Japan's inflation reading starting next month. 

The dollar approached resistance we identified near JPY118.60 but has backed off.  Initially, the greenback looked poised to extend its advance for the seventh consecutive session against the yen, but after reaching JPY118.45, it reversed to test JPY117.70.  The dollar was extremely over-extended as it moved more than three standard deviations above its 20-day moving average (Bollinger Band is set at two standard deviations).  We see support in the JPY117.35-JPY117.40 area.  The Australian dollar extended its losses to about $0.7165.  It finished last week near $0.7280.  The $0.7150 area corresponds to a (61.8%) retracement of that rally that began in late January around $0.6970 and peaked earlier this month by $0.7440.  A close above $0.7200 may help stabilize the technical tone.  The dollar gapped higher for the second day in a row against the Chinese yuan.  The greenback reached CNY6.3860, its highest level of the year.  The reference rate was set at CNY6.3760, well above projections for CNY6.3630.  

Europe

The UK's employment report was better than expected.  Unemployment for the three-months through January fell to 3.9% and is below the pre-pandemic level for the first time.  The number of employed jumped 275k in February, more than twice what the median forecast projected in Bloomberg's survey, even though the January gain was revised to 61k from 108k.  The claimant count fell by 48k in February and by a revised 67.3k in January (from -32k).  Average weekly earnings were also a bit firmer than expected. The BOE meeting concludes on Thursday and the swaps market is pricing in about a 1-in-4 chance of a 50 bp move.  

Germany’s March ZEW survey collapsed.  The assessment of the current situation dropped to -21.4 from -8.1.  It is the lowest since last May. The expectations component plummeted to -39.3 from 54.3.  The median forecast in the Bloomberg survey anticipated a 5.0 reading.  This may warn of a marked deterioration in the preliminary March PMI due next week. 

While Ukraine's capital is under fire, it is seeking missile defense systems.  Israel has turned own its request for the Iron Dome intercept system.  Each missile costs around $50 mln and Israel says it does not have sufficient supply.  There is some speculation that the US may offer its two Iron Dome systems.   Estimates suggest Ukraine has received more than 17k anti-tank missiles and thousands of anti-aircraft missiles.  The US has warned China against materially aiding Russia following claims that Russia sought Beijing's assistance in the early days of the invasion.  

The euro recovered from yesterday's brief foray below $1.09 to reach $1.1020 today.  A move above $1.1040 is needed to signal anything of importance technically.  The intraday momentum indicators suggest this is unlikely.  Indeed, the risk is that North America brings the single currency back to the $1.0940 area. Sterling held support at $1.30, but the bounce is less than impressive.  It stalled near $1.3050.  Yesterday's high was near $1.3080, and the five-day moving average is about $1.3065.  The (50%) retracement of sterling's rally from the March 2020 low is about $1.2830 and it is the next big target below $1.30.  

America

The US reports February producer prices today.  The headline is expected to have accelerated to 10%, while the core may approach 8.7% (from 8.3%).  The market looks for a gain in the March Empire State manufacturing survey (6.1 vs. 3.1), but would anyone really be surprised with a softer report?  The focus is squarely on the FOMC meeting that begins tomorrow.  A rate hike, an estimate of the pace of unwinding of the balance sheet, and new forecasts are anticipated. 

West Virginia Senator Manchin has rejected Biden's nominee for the Fed's Vice Chair of Supervision and all but scuttling Raskin's nomination.  Manchiin has emerged as a key vote for the administration's agenda.  Recall that in 2020, Trump beat Biden by 39 percentage points in West Virginia. 

Canada reports February housing starts, existing home sales, and January manufacturing sales.  There are not market-moving data points even in the best of times.  Tomorrow, Canada reports February CPI figures and an acceleration in the headline and underlying core measures will reinforce the expectations for at least another 25 bp rate hike next month (OIS has about a 62% chance of a 50 bp move) and for its balance sheet to begin shrinking in either April or May. 

Note that El Salvador's Bitcoin bond is expected to be brought to market later this week, though some suspect it could be delayed.  A 10-year bond issued by a thermal energy company is planned, and the government hopes it can raise $1 bln, which seem awfully optimistic.  Many seem skeptical and a report suggested than about 2% of the work remittances in January used digital wallets, despite the ostensibly lower costs.  Bitcoin has lost about 20% of its value since the day before it became legal tender in El Salvador. 

After testing support near CAD1.27 at the end of last week after Canada reported a much stronger than expected February jobs data, the greenback jumped above CAD1.28 yesterday and is approaching CAD1.29 today.  Last year's high was recorded in late December near CAD1.2965. The intraday momentum indicators are stretched, but the risk-off and falling oil prices weigh on sentiment.  Support is seen in the CAD1.2825 area.  The greenback is consolidating in a narrow range against the Mexican peso.  Support is seen in the MXN20.83 area.  It has not traded below there since March 4. Initial resistance is seen near MXN21.00, though last week it reached nearly MXN21.47.  


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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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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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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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