Month: August 2024

With the Middle East on the brink of a possible major war between Iran and Israel, also involving Lebanese Hezbollah, the White House and its regional partners are desperately trying to salvage ceasefire talks.

The United States, Qatar, and Egypt are calling on Israel and Hamas to step back to the negotiating table. They say it is urgent “to resume urgent discussion” on August 15 in Doha or Cairo “to close all remaining gaps and commence implementation of the deal without further delay.” Gaps?

While the statement speaks of “remaining gaps” – a fresh Axios report cites a diplomatic source strongly suggests the situation is a far cry from mere closing gaps…

A source familiar with the negotiations said the planned summit is a “Hail Mary” attempt by the Biden administration to get a deal and prevent a regional war.

The White House also needs to present to the American public that it has helped secure a ceasefire, which would be a boost to Democratic nominee Kamala Harris and her supposed foreign policy credentials going into the November election.

The statement from the US, Qatar, and Egypt continued: “It is the time to conclude a ceasefire agreement and release hostages and prisoners,” they said.

“We have worked for months to reach framework agreement and it is now on the table, with only details of implementation missing.”

But this is the same language that negotiators have presented to the public for several months at this point. They are always and ever “near the goal line,” we are told. Yet Israeli and Hamas officials themselves constantly suggest the opposite. There also doesn’t seem to be much US pressure on Israel, or serious efforts to reign in its adventurism in places like Iran.

Additionally, Washington policy itself is schizophrenic: President Biden has criticized Israel at times, lamenting the mass civilian casualties in the Gaza Strip, while at the same time he continues to arm Israel’s military to the teeth.

Consider too the rosy picture of negotiations painted by Secretary of State Antony Blinken last month at the Aspen Security Forum: “I believe we’re inside the 10-yard line and driving toward the goal line in getting an agreement that would produce a cease-fire, get the hostages home and put us on a better track to trying to build lasting peace and stability,” Blinken said July 19.

Perhaps it’s past time for Blinken and US officials to retire the football metaphors when it comes to Hamas negotiations? 

Authored by Jeff Louderbeck via The Epoch Times,

Almost a month after a gunman shot and injured former President Donald Trump at an outside rally in Pennsylvania, independent presidential candidate Robert F. Kennedy Jr. canceled a planned appearance at the Iowa State Fair, citing “increased security concerns.”

Kennedy announced his candidacy in April 2023 and was denied Secret Service protection five times by the Department of Homeland Security before it was swiftly authorized after the July 13 assassination attempt on Trump.

Kennedy’s uncle, President John F. Kennedy, was shot and killed during a campaign stop in Dallas in 1963, and his father, New York Sen. Robert F. Kennedy, was assassinated by a gunman after a campaign speech in Los Angeles while running for president in 1968.

In separate incidents last year, two armed men were arrested while attempting to confront Kennedy.

Kennedy was one of 10 candidates slated to speak at the Political Soapbox on Thursday, an event that has become an Iowa political tradition. He appeared at the forum last year.

A Kennedy campaign spokesperson said, “We were unable to secure a venue stage indoors that satisfies our security requirements for Mr. Kennedy’s safety.”

Kennedy has not held his own campaign rallies since receiving Secret Service protection. He did speak at the Bitcoin 2024 in Nashville last month. Trump also delivered an address at the conference.

Kennedy’s campaign told The Epoch Times that more events will be scheduled in the upcoming weeks. He has frequently appeared on podcasts and has held press briefings via Zoom as he continues his quest to get on the ballot in all 50 states and the District of Columbia.

Kennedy previously alleged that it was a “political” decision to deny his repeated requests for Secret Service protection.

“I worry about the safety of my family and the safety of bystanders if there happens to be a more serious incident,” he told The Epoch Times after a campaign stop in Des Moines, Iowa, in April.

Federal law indicates that it’s the president and the Secretary of Homeland Security who have the “broad discretion” to authorize Secret Service protection of presidential candidates.

Major presidential and vice presidential candidates, however, typically receive DHS security protection within 120 days of the first Tuesday of November in an election year.

A man is taken into police custody outside an event where Democratic presidential candidate Robert F. Kennedy Jr. was scheduled to speak at Wilshire Ebell Theatre in Los Angeles on Sept. 15, 2023. (Provided to The Epoch Times)

Kennedy’s campaign has encountered security issues. In September 2023, security personnel arrested an armed man impersonating a U.S. Marshal outside a campaign event in Los Angeles.

One month later, another armed man was arrested after twice attempting to break into Kennedy’s Los Angeles home. When he was released after the first incident under a restraining order, he returned to the candidate’s home and again tried to break in before authorities arrested him a second time.

The Fed’s constant narrative shield of its ‘apolitical-ness’ took a battering this morning when Chicago Fed President Austan Goolsbee said the quiet part out loud during an interview on Fox News.

With the market implying a 50-50 chance of The Fed cutting 25bps or 50bps in September…

…the affable Fed head was asked the ubiquitous question of whether monetary policymakers weigh their ‘mandate-only-driven’ decision to cut rates against the ‘political’ benefits of cutting rates in an election year.

The correct answer to this question is simple – “No!” – The Fed does not consider the election cycle and is data-driven (or some such gaslighting).

Goolsbee’s answer, however, left some room for the ‘grey’ when he admitted that it makes him “a little” uncomfortable that the Fed may start cutting interest rates close to the US presidential election in November.

He did recover quickly, by adding that elections come regularly

“So whatever the Fed does, somebody’s going to say they didn’t like that. All we can do in the Fed is commit to the thing that would be driving our decisions – the dual mandate”

Of course, Goolsbee wouldn’t be the first Fed-related member to crack the door of politicization open…

In his post-Fed existence, Bill Dudley is of course best known for writing that infamous August 2019 Bloomberg op-ed, in which he called for the Fed to hike rates into the last months of Trump first administration to scuttle his odds of re-election…

Watch the full exchange with Goolsbee here:

Pretty wild thing for a voting member to say. He cleans up afterwards but this is not something you should be saying imo. https://t.co/RgznPDG8Re pic.twitter.com/3qxYEtDUBy

— Paul E Williams (@PEWilliams_) August 8, 2024

Authored by Tsvetana Paraskova via OilPrice.com,

• California residents face the second-highest average electricity bills in the U.S., driven by investments in wildfire mitigation, grid upgrades, and renewable energy integration.

• The surge in electricity costs has left nearly 1 in 5 California households behind on their energy bills.

• California is transitioning to a new net billing tariff for residential solar and a flat monthly fee structure for electricity in an effort to make electrification more affordable.

Consumers in California have seen their electricity bills surge in recent years and double over the past decade as utilities are investing more in wildfire prevention and transmission lines to accommodate growing renewable energy output.

As these utilities invest billions of U.S. dollars to make the grid more resilient, they pass the higher spending on to consumers. 

So California now has the second-highest average electricity bill in the United States, second only to Hawaii. 

“Untenable” Surge 

California is looking to rapidly shift away from fossil fuels and make its grid more resilient, but these efforts show the other side of the greening of the grid – power generation costs may be plunging, but transmission and distribution costs are rising, leading to higher spending from utilities. 

These increased expenditures are passed on to consumers by the investor-owned utilities Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. As a result, electricity bills in California have risen so much in recent years that in some places, the power bill exceeds the cost of rent, The Wall Street Journal reports in a featured article. 

The surge in bills has been “untenable,” according to the consumer advocate’s office at California’s utilities regulator. 

In its latest 2024 Q2 Electric Rates Report last month, the Public Advocates Office tracked residential electric rate changes across Pacific Gas and Electric (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Edison (SCE) service territories through July 1, 2024. 

The report found that over the last few years, California’s electric bills are generally rising due to higher electricity use from things such as air conditioning, and higher overall electricity prices. 

Since January 2014, residential average rates for the PG&E service area have jumped by 110%, those of SCE have surged by 90%, and SDG&E rates have soared by 82%.

The primary statewide drivers of soaring rates have been investments in wildfire mitigation, transmission and distribution investments, and rooftop solar incentives or the so-called net energy metering, the Public Advocates Office said.  

Overall, residential electricity rates have increased substantially since 2014, surpassing inflation, it noted.  

It couldn’t be surprising then that nearly 1 in 5 households are behind on their energy bills, according to the office. A total of 18.4% of the customers of the three investor-owned utilities are in arrears in their energy bills. 

Changes in Charging for Electricity 

This year, California has changed the way utilities charge for electricity and is transitioning from net energy metering to net billing tariff for residential solar projects. These regulatory changes have hit residential solar installations and are set to change the way power bills are formed starting next year.

The move to the net billing tariff in California dragged down the total U.S. residential solar market, which saw in the second quarter of 2024 its lowest quarter since Q1 2022 at 1.3 GWdc, reflecting a 25% decline year-over-year and 18% quarter-over-quarter. 

“While slowdowns are occurring nationwide, these declines were heavily influenced by California, where quarterly installations have shrunk for the last two quarters as NEM 2.0 projects are built out and the state transitions to the net billing tariff,” the Solar Energy Industries Association (SEIA) said in its latest quarterly report.

In another significant change, California’s utilities will charge from next year or 2026 a flat monthly fee of up to $24.15 on all customers while reducing the charges imposed per kilowatt of electricity used.

The California Public Utilities Commission (CPUC) says that the new billing structure “lowers overall electricity bills on average for lower-income households and those living in regions most impacted by extreme weather events, while accelerating California’s clean energy transition by making electrification more affordable for all.”

The usage rate for electricity will be reduced by 5 to 7 cents per kilowatt-hour for all residential customers, which makes it more affordable for everyone to electrify homes and vehicles, regardless of income or location, because the price of charging an electric vehicle or running a heat pump is lower. 

However, critics of the new billing structure have said \ it will hurt customers who live in small homes and have relatively small electricity use as the lower per-kWh rate would not offset the new flat fee.  

It remains to be seen how the new billing structure will affect California customers and whether it will lead to the expected mass electrification of homes. 

A total of 78% of Americans are concerned about their rising energy bills, an exclusive CNET Money survey has shown. Around 80% of U.S. adults in all regions, including the Northwest, Midwest, South, and West, said that their finances have been impacted by growing home energy costs, according to the survey.

California leads in U.S. solar and battery installations, but the cost of bringing that power generation to consumers has soared with the need to expand, upgrade, and protect the power grid. 

With both Goldman and JPMorgan asking the question on everyone’s lips, namely whether the market has bottomed, so far the answer remains elusive with futures flat on the last trading session of the day, but erasing earlier gains as sentiment remains on edge thanks to a VIX around 24 and the yen, the currency at the basis of the carry trade, failing to drop. Perhaps the only good news is that the wild week is ending on a subdued note, with Friday trading seeing light equity volumes and small moves across stocks, bonds and currencies as even traders are exhausted from the week’s fireworks. Remarkably, US stocks are close to wiping out all the losses from the Monday’s market meltdown, with S&P 500 futures unchanged as of 7:45am, fading an earlier gain of 0.5%, after markets roared back on Thursday as data showed much fewer American filed for jobless benefits, alleviating fears of a looming recession. Nasdaq futures were modestly in the green led by Mag7 and semi stocks. European stocks are already positive on the week as investors hunted for bargains from the selloff. Treasury yields dipped and the dollar weakened. The VIX Index hovered around 23. Otherwise it will be a quiet data on the data front with no macro releases scheduled as investors now wait for next week’s data, which includes reports on the all important CPI and retail sales.

In premarket trading, Expedia surged after posting better-than-expected second-quarter results. Paramount Global rose 5% after the media company beat adjusted EPS estimates in the 2Q. The company also took on an impairment charge of $5.98 billion on its cable networks and announced a 15% cut to its US workforce. Here are some of the other most notable premarket movers:

• Adma Biologics a maker of plasma-derived drugs for immune-compromised patients, soars 19% after the company boosted its year revenue and net income forecast.
• Blend Labs climbs 10% after the mortgage lending software company reported 2Q results that beat expectations.
• DigitalOcean gains 5% after the software company reported 2Q results that beat expectations and raised its full-year adjusted Ebitda margin forecast.
• Doximity rallies 30% after the healthcare software company raised its full-year forecast for  revenue.
• Expedia jumps 9% after the online travel company reported 2Q results that beat expectations on key metrics.
• Five9 slumps 14% after the call-center software provider reduced full-year revenue guidance, saying bookings slowed in 2Q as corporate clients cut budgets.
• Honest Co. rises 13% after the consumer products company reported 2Q results that largely topped Wall Street expectations.
• Mitek Systems plunges 26% after the company cut its revenue guidance for the full year.
•  
• Pitney Bowes soars 24% after the shipping and mailing company reported revenue for the 2Q that beat.
• PubMatic plunges 27% after the company posted results and provided a forecast that disappointed.
• Rocket Lab USA gains 12% after the space systems company said it has successfully hot fired its new rocket engine Archimedes for the first time.
• Sweetgreen soars 25% after the salad restaurant chain boosted its full-year revenue forecast.
• Trade Desk gains 5% after the advertising technology company reported 2Q results that beat expectations.

Mixed signals from the Fed may prompt caution among investors, especially after Kansas City Fed President Jeffrey Schmid indicated he’s not ready to support a reduction in interest rates with inflation above the target, according to comments made on Thursday in the US.

“Market volatility could remain elevated for some time,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. But “investors shouldn’t overreact to swings in market sentiment,” he said. Since that flied in the face of sharply higher expectations for rate cuts by year-end, swaps traders trimmed bets on aggressive Fed easing in 2024. The global repricing has been so sharp that at one point interest-rate swaps implied a 60% chance of an emergency rate cut by the Fed in the coming week — well before its next scheduled meeting in September. Current pricing suggests about 40 basis points of cuts for September.

“Scope for higher bond yields is limited as central banks may have realized it’s time to move back to more neutral settings,” said Martin van Vliet, a macro strategist at Robeco. “This scare will will have reinforced the feeling among central banks that they need to take back the restrictiveness of monetary policy.”

The Stoxx Europe 600 index climbed 0.8%, led by energy, real estate and miners. Hargreaves Lansdown gained after a consortium including CVC and ADIA agreed to buy the investment manager in a £5.4 billion ($6.9 billion) deal. Trading volumes in European stocks were about 35% below average levels on Friday, according to data compiled by Bloomberg. Here are some of the biggest European movers on Friday:

• Lotus Bakeries shares rise as much as 8%, touching a record high, after the Belgian cake-and-cookie maker reported first-half earnings that beat estimates, and said the outlook for its Biscoff brand remains positive in the second half.
• LEG Immobilien shares rise as much as 5.3%, after the German property firm raised its Adjusted Funds From Operations (AFFO) forecast for the full year.
• Hargreaves Lansdown shares rise as much as 2.6% after the investment firm agreed to a premium-priced takeover offer. Analysts at Jefferies and Shore Capital believe there is scope for the stock to earn a higher valuation, but think the deal will go ahead.
• Lanxess shares rise as much as 4.8% after the German specialty chemicals firm posted second quarter results that analysts called strong, with the consumer protection division a positive surprise.
• Jenoptik shares rise 9%, the most in three months, as the German optical technology company beat profit and revenue estimates in its second quarter results.
• Just Eat shares rise as much as 6% in Amsterdam after Morgan Stanley raises the stock to overweight from equal-weight, saying New York City’s fee caps for food delivery platforms now look more likely to be raised.
• Entain shares rise as much as 4.5%, extending gains booked on Thursday, after the gambling company posted an earnings beat and raised its outlook.
• Galderma shares rise as much as 3.9% after J.P. Morgan initiated coverage of the firm with a recommendation of overweight, saying it sees the Swiss dermatology giant delivering a sustained double-digit top-line growth.
• Bellway shares rise as much as 2.9%, with the homebuilder’s trading statement suggesting annual operating profit will be comfortably ahead of consensus after it built more houses and sold them at higher prices than anticipated, according to Peel Hunt.
• Generali shares fall as much as 2.9% after the Italian insurance company posted a sharp drop in second-quarter earnings, weighed down by claims from storms and flooding. The result overshadowed plans for a new €500 million buyback program.

Earlier in the session, the Asian stock rally lost some momentum as the yen temporarily resumed its rise. Japan’s Topix index narrowed its gain to 0.9% from as much as 2% earlier. Chinese shares turned flat after an earlier advance as perceptions grew that a better-than-expected inflation print mainly resulted from seasonal factors like weather.

In rates, treasury long-end yields are richer by 4bp near session lows as US trading day begins with bull-flattening move, partially unwinding Thursday’s selloff sparked by jobless claims data. Similar long-end-led gains seen in core European rates. Front-end yields are little changed, flattening 2s10s spread by ~3bp, 5s30s by ~1bp; 10-year around 3.95% is near top of 3.665% – 4.02% weekly range with bunds and gilts lagging slightly in the sector.

In FX, the Bloomberg Dollar Spot Index fell 0.2%, extending Thursday’s 0.2% drop as jobless claims data alleviated jitters about recession. The yen fluctuated between gain and losses. USD/JPY is down 0.1% at 146.90, erasing an earlier 0.4% advance; the pair has been whipsawed this week, falling as low as 141.70 as yen-carry positions were unwound amid a jump in volatility. 

“Risk conditions are improving and the great bulk of JPY-funded carry positions have apparently been cleared,” said Westpac Banking Corp.’s Richard Franulovich and Tim Riddell wrote in a note to clients. “Against that backdrop USD/JPY has found a short term floor and probably spins its wheels around 146-148”

In commodities, oil was steady following a Thursday rally, against the backdrop of simmering tensions in the Middle East. Gold slipped.

Bitcoin is in the green and back above the $60k mark, but has eased back from a $62.7k high which printed in APAC trade.

There is nothing on today’s macro calendar. Investors now wait for next week’s data, which includes reports on the all important CPI and retail sales.

Market Snapshot

• S&P 500 futures unch to 5,346
• STOXX Europe 600 up 0.8% to 500.39
• MXAP up 1.4% to 175.30
• MXAPJ up 1.7% to 553.52
• Nikkei up 0.6% to 35,025.00
• Topix up 0.9% to 2,483.30
• Hang Seng Index up 1.2% to 17,090.23
• Shanghai Composite down 0.3% to 2,862.19
• Sensex up 1.1% to 79,739.49
• Australia S&P/ASX 200 up 1.2% to 7,777.70
• Kospi up 1.2% to 2,588.43
• German 10Y yield -1.7 bps at 2.25%
• Euro little changed at $1.0920
• Brent Futures up 0.7% to $79.53/bbl
• Gold spot down 0.1% to $2,423.98
• US Dollar Index little changed at 103.18

Top Overnight News

• China’s Jul CPI comes in a bit firmer than expected in Jul because of weather-linked food inflation (+0.5% vs. the Street +0.3% and up from +0.2% in June) while PPI deflation persists (-0.8% vs. the Street -0.9% and flat vs. -0.8% in June). RTRS  
• TSMC’s revenue jumped 45% in July from a year ago on strong demand for AI chips, an early sign the company may beat quarterly sales forecasts. Separately, SMIC is expediting plans to add capacity as the US restricts China’s access to foreign technology. BBG
• The U.S. has warned Iran that its newly elected government and economy could suffer a devastating blow if it were to mount a major attack against Israel, a U.S. official said. WSJ
• Iran and its allies are considering how to retaliate against Israel without triggering an all-out war. WSJ
• Federal Reserve policymakers are increasingly confident that inflation is cooling enough to allow interest-rate cuts ahead, and they will take their cues on the size and timing of those rate cuts not from stock-market turmoil but from the economic data. RTRS
• Trump says presidents should have influence over monetary policy (“I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman”). WSJ
• Trump and Harris will meet for a debate Sept 10 on ABC (Trump proposed two other debate dates, but the fate of those is unclear at the moment). CNN
• Consumer staples firms turn their focus to India as the next major growth opportunity as China optimism fades. RTRS
• Disney plans to spend at least $5 billion in the UK and Europe over the next five years to produce movies and TV shows. FT
• The biggest publicly traded alternative asset managers have more than a half-trillion dollars to put to work — and they’re gearing up for a deals comeback. Seven of the firms reported a collective $722 billion in dry powder as of June 30 — a 9% increase from a year earlier, according to earnings data compiled by Bloomberg. Now that the Federal Reserve is expected to cut interest rates, money managers have extra firepower to make deals again. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks took impetus from the relief rally on Wall St where sentiment was underpinned after a larger-than-expected decline in Initial Jobless Claims soothed some of the recent labour market concerns. ASX 200 gained with outperformance in tech front-running the advances seen across all sectors. Nikkei 225 briefly reclaimed the 35,000 status and momentarily turned positive for the week after fully recovering from Monday’s turmoil, but later faltered heading into the Japanese long weekend. Hang Seng and Shanghai Comp. were positive after encouraging signals from China’s inflation data and with notable strength in China’s largest chipmaker SMIC after its Q2 results which showed profits dropped sharply but beat expectations and revenue climbed, while it also forecasts double-digit percentage sequential revenue growth for Q3. However, the gains in the mainland were limited after the PBoC’s open market operations for this week resulted in the largest net liquidity drain in four months.

Top Asian News

• TSMC (2330 TT) July Sales TWD 256.95bln (207.8bln in June).
• China’s Industry Association reports July vehicles sales -5.2% Y/Y (prev. -2.7%), January-July +4.4% (prev. +7.9%); NEV July sales +27 Y/Y.

European bourses are firmer, Euro Stoxx 50 +0.4%, having begun the session with modest gains in limited newsflow and have been extended modestly on opening levels thereafter. Sectors primarily in the green, action overall though somewhat modest given the lack of specific drivers. Materials and Energy outperform slightly, with Chinese CPI and geopolitics respectively assisting. Breakdown has slight outperformance in the FTSE 100 +0.5%, with the region’s housing sector performing well after Hargreaves Lansdown accepted a takeover offer. Stateside, futures are in the green with the tone largely a continuation of the post-claims move, ES +0.2%, NQ +0.4%; as above, specifics light and the docket ahead devoid of US-related Tier 1 catalysts or earnings.

Top European News

• China Commerce Ministry says findings in the EU’s EV prelim ruling lacks factual and legal basis and seriously violate WTO rules. Resorted to the dispute mechanism of the WTO.

FX

• DXY is slightly softer but still holding steady above the 103.00 mark and by extension Thursday’s 102.91 base.
• G10s are rangebound; EUR and GBP both slightly firmer vs. the USD with the single currency just above 1.09 and Cable around 1.2750.
• JPY essentially unchanged despite posting a fairly large range overnight, though one that is dwarfed in comparison to the WTD band of 141.66-147.89.
• NOK unreactive to an in-line CPI-ATE print when compared to market expectations but one that came in 0.3pps lower than the Norges Bank’s view for the month.
• CAD holding steady into jobs data for the region this morning.
• PBoC set USD/CNY mid-point at 7.1449 vs exp. 7.1690 (prev. 7.1460)
• Peru Central Bank cut its reference rate by 25bps to 5.50% (exp. unchanged at 5.75%), while it stated that future rate changes will be dependent on new information about inflation and its determinants.

Fixed Income

• Overall, benchmarks are bid but with specifics light and action thus far in familiar ranges.
• USTs firmer and just shy of the 113-00 handle having picked up from a 112-17+ base after a particularly poor 30yr tap last night.
• Bunds in the green, but again only modestly so. No reaction to final inflation metrics from Germany or Italy.
• For reference, next week’s auction docket for EZ member nations generally has been heavily trimmed, as is usually the case given low summer liquidity.

Commodities

• Crude benchmarks have been steady thus far, despite the ongoing creeping up of geopolitical tensions.
• Geopols. remain in focus and a potential market-driver over the next few sessions, as it stands talks are ongoing regarding a ceasefire while language from the IRGC remains escalatory.
• NatGas is in the red, with lows still running smoothly from Russia to Europe through Ukraine thus far. However, lows still running smoothly from Russia to Europe through Ukraine thus far.
• Metals mixed with spot gold softer as the risk tone is becoming incrementally more constructive while base metals continue to climb after firmer-than-expected Chinese inflation.
• Ukraine gas transmission operator says Russian gas transit via Ukraine is flowing normally.

Fed Speakers

• Fed’s Goolsbee (non-voter) said the Fed watches markets but they do not drive policy, while he added they are getting back to more normal conditions in the US economy and the question is if the job market will hold or keep worsening. Furthermore, he said that they need to see more than payrolls and more than one month, as well as noted they need to watch the real economy if they are too tight for too long.
• Fed’s Schmid (non-voter) said if inflation continues to come in low, it will be appropriate to adjust policy, as well as noted the current stance of Fed policy is not that restrictive and the Fed is close but still not quite there on reaching 2% inflation goal. Furthermore, Schmid said the path of Fed policy will be determined by data and the strength of the economy, while he would not want to assume any particular path or endpoint for the policy rate.
• Fed’s Collins (2025) on Thursday said: if the data continue the way that I expect, I do believe that it will be appropriate soon to begin adjusting policy and easing how restrictive the policy is.

Geopolitics: Middle East

• Qatari, Egyptian and US leaders said it is time to conclude a Gaza ceasefire agreement and release hostages and prisoners, while they have worked for months to reach a framework agreement and it is now on the table, with only details of implementation missing. Furthermore, they called on the sides to resume urgent talks on Thursday, August 15th, in Doha or Cairo to bridge all remaining gaps and start implementing an agreement without any delay.
• CNN source said lead mediators will attend the next round of negotiations with the CIA director to lead the US delegation, while the meeting that is being planned is expected to take place but needs the approval of Israel and Hamas, while it was later reported that Israeli PM Netanyahu’s office said Israel will send negotiators for August 15th meeting on a Gaza deal and a Hamas official also said that they are ready for ceasefire negotiations to stop the bloodshed, according to source on X
• US senior administration official said President Biden and Defense Secretary Austin reviewed Middle East military deployments, while the official added that there is no expectation that an agreement will be signed by next Thursday and that issues on the table include the sequencing of the exchange. The official added that it is a negotiation and they need some things from the Israelis and the Hamas side, as well as noted that an Iranian escalation would jeopardise hope of getting a ceasefire deal because the focus would shift.
• US Secretary of Defence Austin briefed his Israeli on the nature of the deployment of US forces in the Middle East and stressed the importance of the ceasefire agreement in Gaza, while Austin said the arrival of F-22 jets in the region is part of the efforts to deter, defend Israel and protect US forces.
• Officials believe an Iran assault could be more sudden, larger and longer possibly lasting several days instead of several hours and could also be a coordinated barrage from multiple directions involving Iranian proxies in Iraq, Yemen, Syria and Lebanon, according to Washington Post.
• US CENTCOM said the US military destroyed two Houthi cruise missiles targeting ships.
• Rockets were fired at Kiryat Shmona and Manara settlement in northern Israel, while the Israeli army said air defence systems intercepted a rocket fired from the Gaza Strip towards Zikim and Ashkelon south of Israel, according to Al Arabiya.
• Yemeni sources noted US-British raids on Houthi military sites in Ras Issa and Salif areas in Hodeidah, according to Sky News Arabia.
• “The Israeli army announces the start of an “offensive” military operation in the city of Khan Yunis in the Gaza Strip”, according to Sky News Arabia.
• Iran’s Tasnim says the Iranian Guards Navy’s new missiles have capabilities such as a “highly explosive warhead”, which is undetectable; added “large number” of anti-ship missiles to the IRGC navy.

Geopolitics: Ukraine

• Sevastopol authorities announced a state of air emergency and the shooting down of a Ukrainian anti-ship missile, while it was also reported that a state of emergency was declared after a march attack on Belgorod and Voronezh, according to Al Arabiya.
• Source on X reported that residents said there was a huge blast heard in Rylsk, Rostov-On-Don, Russia.
• A fire broke out at a military airfield in Russia’s Lipetsk region, according to agencies cited by AFP.
• Russia declares Federal emergency in Kursk region, according to RIA.
• Russian official says fighting is ongoing several dozen kilometres from Kurchatov, where Kursk nuclear plant is located.

US Event Calendar

• Nothing major scheduled

A massive explosion rocked a container ship loaded with hazardous goods at the Port of Ningbo-Zhoushan, China’s busiest port by cargo tonnage. The port is situated along the East China Sea coast and faces operational disruptions.

The vessel tracking website MarineTraffic reported that the explosion occurred on the Liberia-flagged containership called YM Mobility at the Beilun terminal. 

MarineTraffic said, “Fortunately, no injuries were reported, but the incident involved hazardous materials and led to substantial damage nearby. As authorities conduct safety inspections, temporary disruptions in port operations are expected.” 

Explosion at Ningbo-Zhoushan Port Disrupts Major Shipping Hub

A powerful #explosion rocked Ningbo-Zhoushan Port, one of the world’s busiest #shipping hubs, on Friday. The blast occurred on the YM Mobility, a container ship, causing significant disruption at the Beilun terminal.… pic.twitter.com/Xs6joobN3G

— MarineTraffic (@MarineTraffic) August 9, 2024

CCTV images of the massive blast have been circulating X for the last several hours.

BREAKING: Online videos show an explosion on a ship at a container terminal in #Ningbo, China.
The exact cause is subject to official investigation. pic.twitter.com/ti3cnebJgk

— Asia Tech (@asiatechwire) August 9, 2024

【緊急：寧波港で重大な爆発事故発生】
本日（8月9日）午後、寧波港（ BEILUN SECOND CONTAINER TERMINAL ）で重大な爆発・火災事故が発生しました！
爆発事故が発生した本船はYM MOBILITY
状況については確認中です。 pic.twitter.com/TJSQW0wO2W

— 川嶋　章義 (@AkiyoshiKawash1) August 9, 2024

#BREAKING
This afternoon, a container ship docked at the Beilun Port area of Zhejiang Ningbo-Zhoushan Port exploded. No report of casualties so far. #China #shipping pic.twitter.com/XZygH58BP0

— CN Wire (@Sino_Market) August 9, 2024

Aerial footage after the blast shows the vessel’s bow is on fire. 

寧波北侖港三期的集裝箱在船上爆了
不知是化工品還是電動車
YM MOBILITY V.079W pic.twitter.com/rQf6CVo9Qv

— bitex (@bitex2047) August 9, 2024

AP News cited the Zhejiang Province Emergency Management Administration, which said YM Mobility was loaded with Class 5 hazardous materials but didn’t specify what they were. Some examples of these hazardous materials include ferric nitrate, hydrogen peroxide, lead perchlorate, lithium nitrate, organic peroxide solids or liquids, and some swimming–pool chemicals.

The blast was so powerful that Qilu Evening News told Reuters their office windows a half mile away were damaged. 

Authored by Nik Hoffman via BitcoinMagazine.com,

Russian President Vladimir Putin has officially signed a law that legalizes cryptocurrency mining in Russia.

According to a report by Russian news agency TASS, the law introduces several key concepts, including digital currency mining, mining pools, and mining infrastructure operators.

Mining activities are now recognized by Russia as part of turnover rather than the issuance of digital currency.

The new legislation specifies that only Russian legal entities and individual entrepreneurs registered with the government will be allowed to engage in cryptocurrency mining.

However, individual miners can participate without registration, provided their energy consumption remains within government-set limits.

Additionally, the law permits the trading of foreign digital financial assets on Russian blockchain platforms.

However, the Bank of Russia retains the authority to ban the placement of certain assets if they are deemed a threat to the country’s financial stability.

According to TASS, during a recent government meeting, President Putin emphasized Russia needs “to seize the moment” in establishing a legal framework for digital currencies.

He highlighted the potential of digital currencies to contribute to Russia’s economic development, stressing the need for proper regulation and infrastructure.

The law is set to take effect ten days after its official publication, except for specific provisions that may have different implementation dates.

Authored by Charles Kennedy via OilPrice.com,

• Russian gas exports to Europe have continued despite reports of Ukrainian forces seizing a key gas metering station near the Russia-Ukraine border.

• Concerns over potential disruptions to gas flows have led to a spike in European gas prices.

• The ongoing conflict between Russia and Ukraine highlights the vulnerability of Europe’s energy supply and the potential for disruptions.

Natural gas flows from Russia to Europe via Ukraine continued on Thursday despite clashes at the Russia-Ukraine border near the only gas metering station that still sends Russian gas west to Europe.

Unconfirmed reports emerged on Wednesday that Ukraine had seized Sudzha gas metering station in the Russian region of Kursk, a theater of heavy clashes in recent hours after Ukrainian troops crossed into Russian territory with tanks and armored vehicles earlier this week.

The Ukrainian ground assault on Russian regions across the border continued on Wednesday for their second day, forcing Russia to evacuate residents from the Kursk region, sparking a backlash against President Vladimir Putin for failing to thwart the attacks.

Reports of Ukrainian troops seizing the Sudzha gas transfer and measuring stations in the Kursk region of Russia have not been confirmed.

After the Sokhranivka entry point for Russian gas transit via Ukraine was closed, Gazprom had to divert all the gas it can send to the Sudzha entry point.

Russian gas deliveries to Europe have fallen off a cliff since the Russian invasion of Ukraine, but some European customers in central Europe – including Slovakia and Austria – continue to receive Russian gas via the route through Ukraine and a pipeline via Turkey.

Due to concerns about the flows of Russian gas to its few remaining customers in Europe, the Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, has surged to its highest level since December 2023…

On Thursday, gas transit at Sudzha for delivery west to Europe continued.

“Gazprom is supplying Russian gas for transit through the territory of Ukraine in the volume confirmed by the Ukrainian side through the Sudzha gas metering station – 37.3 million cubic meters(1.3 billion cubic feet) as of Aug. 8,” Gazprom representative Sergei Kupriyanov said, as carried by Russian news agency Interfax.

Data from European information platform ENTSOG also shows that the flow of natural gas leaving Ukraine for the EU remains uninterrupted.

Authored by Andrew Korybko via substack,

Ukraine’s sneak attack against Russia’s Kursk Region appears to have successfully penetrated the border according to RT’s update on Wednesday, which followed the Defense Ministry’s claim that the fighting was only taking place on the Ukrainian side of the border.

Even though it appears destined to fail and be seen in hindsight as this generation’s “Battle of the Bulge” like many social commentators have described it as, it still taught Russia five very important lessons that it would do well to consider implementing:

1. It Might Finally Be Time To Take Out All The Bridges Across The Dnieper

Russia has hitherto been reluctant to take out bridges across the Dnieper, but it might finally be time to do so in order to prevent Western arms and equipment from reaching its pre-2014 borders in possible preparation of more sneak attacks. Continuing to prioritize political objectives over military ones, such as remaining averse to inconveniencing civilians through the proposed means in order to avoid losing more hearts and minds, has arguably proven to have more drawbacks than benefits.

2. Better ISR & Less Groupthink Can Reduce Russia’s Blind Spots  

NATO has proven that it has impressive tactical capabilities after successfully disguising its proxy’s sneak attack, but Russia is the bloc’s peer and thus shouldn’t have been fooled. Better intelligence, surveillance, and reconnaissance (ISR) could have prevented this, as could the optimization of feedback loops from the front. Per the latter, higher-ups might not have taken reports of a military build-up seriously since they could have deemed it “irrational”, but they should have listened if that was the case.

3. Preemptive Resettlement & More Physical Border Defenses Would Have Helped A Lot

In hindsight, it might have been wise to preemptively resettle folks who were living in proximity to the border and turn these areas into a security zone with many more physical defenses. Two reasons why this wasn’t done might have been fear of it being spun by its foes as setting up a “buffer zone” inside of Russia and not wanting to inconvenience the locals. The first should never influence policymakers while the second could be mitigated by proper planning and funding (with possible “oligarch” contributions).

4. Border Militias Might Not Be A Bad Idea If They’re Supervised By The State

The now-rebranded Wagner’s late founder Prigozhin had previously proposed creating a border militia in Belgorod Region, but he ultimately turned out to be the West’s “useful idiot” as explained in the preceding hyperlinked analysis so that might have been a very bad idea at the time had he succeeded. Nevertheless, properly supervised border militias might in fact be a good idea, such as if there were FSB agents embedded within them to ensure these non-state actors’ continued loyalty to the state.

5. “Active Defense” Is Better Than “Passive Defense”

Even in the absence of proper ISR, Ukraine would have still struggled to assemble the forces needed for its sneak attack and then storm across the border had Russia been engaged in a policy of “active defense” (regular low-level attacks) instead of “passive defense” (sitting back and waiting for an attack). Going forward, Russia should consider the merits of implementing “active defense” all along the front, which would keep Ukraine on edge and possibly force it to voluntarily create its own “buffer zones”.

The five lessons enumerated above could reshape how policymakers perceive the special operation and therefore improve the way in which it’s being waged, particularly with regards to addressing some of the constructive critiques thereof that were shared in this analysis here from November 2022. Retaining the same mindset risks more sneak attacks.

It’s only through the pragmatic evolution of policymakers’ viewpoints in response to the past 2.5 years’ events that success can best be achieved.

Authored by Grzegorz Adamczyk via Remix News,

The Bulgarian parliament has passed an amendment to the preschool and school education law, which bans the “promotion of ideas and views related to non-traditional sexual orientation.”

The amendment was adopted with 135 deputies voting in favor, 57 against, and 8 abstentions.

The new regulations stem from a survey conducted in schools about the attitudes of students aged 14 to 18 towards LGBT issues.

The draft amendment was quickly passed on Wednesday after being introduced in the national parliament.

Under the new law, Bulgarian preschools and schools face a total ban on promoting “in any way ideas and views related to non-traditional sexual orientation or defining a gender identity different from biological sex.”

Members of the nationalist Vazrazhdane party, the leftist BSP, the Turkish Movement for Rights and Freedoms, the There Is Such a People party, and part of the center-right GERB party supported the amendment.

The entire center coalition, We Continue the Change – Democratic Bulgaria, opposed it.

Supporters of the coalition organized a protest outside the parliament on Wednesday evening, arguing that the amendment would hinder efforts to combat bullying of young lesbians, gays, bisexuals, and transgender individuals in schools.

In 2023, the Bulgarian Supreme Court ruled that “changing sex” through judicial proceedings is not permissible under the current legal framework, emphasizing that “gender is recognized at birth and defines a person until death.”

Meanwhile, in another European country, Georgia’s parliament approved in the first reading a package of laws banning LGBT propaganda proposed by the ruling Georgian Dream party.

The second and third readings are scheduled for the autumn parliamentary session, just before the elections set for Oct. 26.

Read more here…