Tag: finance

We noted that during Monday’s much anticipated meeting between embattled Belarusian President Alexander Lukashenko and Putin in Sochi, the Russian leader appeared unmoved by Lukashenko’s urging that the two countries prepare their armies to “resist” the external threat of NATO forces. 

Though Putin announced a $1.5 billion loan to Belarus, he made it clear that the smaller Russian neighbor which was formerly part of the Soviet Union would have to solve its own problems internally and in a “calm manner”. 

Underscoring that Kremlin focus appears to be moving away from any level of direct intervention, it has ordered national guard troops and police away from the border.

Russian troops are returning from the border with Belarus to their bases after a decision was made yesterday to disband the reserve group formed by Putin’s order in case situation in Belarus gets out of Lukashenko’s control. pic.twitter.com/OrtuYLO6HT

— Tadeusz Giczan (@TadeuszGiczan) September 15, 2020

Russian media showed live images of truckloads of the border security units returning to their regular bases on Tuesday morning. 

“An important result of the two presidents’ talks in Sochi became an agreement that Russia removes the reserve of law enforcement bodies and the national guard, which was deployed near the Russia-Belarus border, and withdraws people to their permanent bases,” Putin’s press secretary Dmitry Peskov said according to TASS.

As for the loan it likely serves to given Lukashenko more negotiating leverage in terms of gaining support from other powerful Belarusian officials and civic leaders at a moment mass demonstrations continue to swell in the capital of Minsk. 

The Guardian reported on Monday’s somewhat awkward press conference that Lukashenko urged, “A friend is in trouble, and I say that sincerely.” 

In case you were wondering about how the Lukashenko-Putin talks are going in Sochi. Check out the body language. pic.twitter.com/qSProSQl2N

— Christopher Miller (@ChristopherJM) September 14, 2020

But the report noted that “Putin at times seemed visibly bored, tapping his hands and feet as Lukashenko embarked on a long monologue.”

So long as there’s not overt evidence of US-NATO and EU meddling in Belarus’ affairs, it seems Russia is content to stay of the sidelines. But the question still remains: ahead of the US November election, will Washington and its intelligence services be willing to go full-blown Ukraine to oust the longtime strongman from office? 

Authored by Celine Ryan via Campus Reform,

University of Chicago English Department graduate programs will only be open to applicants who plan to study “Black Studies” this year. 

According to its admissions information webpage, the department is only accepting graduate applications from those who are “interested in working in and with Black Studies” for this academic year.

“For the 2020-2021 graduate admissions cycle, the University of Chicago English Department is accepting only applicants interested in working in and with Black Studies. We understand Black Studies to be a capacious intellectual project that spans a variety of methodological approaches, fields, geographical areas, languages, and time periods,” the university’s English Department website states.

The department’s Black Studies program works “in close collaboration with other departments to study African American, African, and African diaspora literature and media, as well as in the histories of political struggle, collective action, and protest that Black, Indigenous and other racialized peoples have pursued, both here in the United States and in solidarity with international movements.”

The program boasts a “commitment” not just to “ideas in the abstract,” but also to more concrete action in the form of “activating histories of engaged art, debate, struggle, collective action, and counterrevolution as contexts for the emergence of ideas and narratives.”

The university introduced this information by proclaiming “that Black Lives Matter, and that the lives of George Floyd, Breonna Taylor, Tony McDade, and Rayshard Brooks matter, as do thousands of others named and unnamed who have been subject to police violence.”

“As literary scholars, we attend to the histories, atmospheres, and scenes of anti-Black racism and racial violence in the United States and across the world. We are committed to the struggle of Black and Indigenous people, and all racialized and dispossessed people, against inequality and brutality.”

The Black Studies program boasts a number of working groups available to students, including the “Race and Capitalism Project,” an initiative with work focusing on “how processes of racialization within the U.S. shaped capitalist society and economy and how capitalism has simultaneously shaped processes of racialization.”

Black Studies courses advertised by the department include “Black Shakespeare,” during which students will learn how Shakespeare played a role in “the shaping of Western ideas about blackness,” and focus on “Shakespearean plays portraying Black characters.”

Campus Reform reached out to the university for comment but did not receive a response in time for publication. 

The initial surge recovery from April’s collapse in Industrial Production was expected to slow further in August (from +3.0% MoM in July to +1.0% MoM in August) and in fact it slowed even more with a mere 0.4% MoM rise…pushing the YoY loss in IP down to 7.73%…

Source: Bloomberg

US Manufacturing’s rebound also slowed in August (+1/0% vs +1.3% exp) leaving it down 6.9% YoY

Source: Bloomberg

And finally, the Dow Jones INDUSTRIAL average continues to forecast a much faster and more aggressive recovery in INDUSTRIAL production than hard data suggests…

Source: Bloomberg

But since when did reality have anything to do with market valuations.

By Michael Every of Rabobank

Chinese data for August show it is moving again. Industrial production was up 5.6% y/y, above the 5.1% consensus; retail sales were up 0.5% y/y vs. flat consensus (though still -8.6% year-to-date); fixed-asset investment was -0.3% y/y vs. -0.4%; property investment 4.6% y/y vs. 4.1%; and, for those who are going to bother following the series, the jobless rate was unchanged at 5.6%.

So spending is up, marginally, but still well behind where it would have been in a normal year. Guess what? The same is true in Western countries: UK and US retail sales are both stronger than China’s measured in some ways; that’s what happens when you pump most of your stimulus into handouts to households. Chinese production is up much, much more, however. Which isn’t really a surprise when exports are running strongly due to global demand for the work-from-home stuff China provides, and as the equivalent of USD500bn in new credit was pumped in during August alone, and as the usual mega SOE infrastructure schemes are rolled out.

Of course, CNY loved this and has broken 6.80. Can it move much further than this? Well, until now the currency —which is not a free float!— has been tracking the overall movement of the USD. If that keeps declining, then perhaps. There seems to be far less of a case to suggest China is suddenly happy with a strong currency ‘because it is going to be looking inwards’. How much deflation does a deflation-prone economy need? Ask the giant property developer who cut prices 30% for a month from 6 September.

Indeed, consider even as net exports mean major USD inflows in recent months, and as net bond portfolio inflows are up too due to the inclusion of Chinese sovereign debt in foreign bond indices –I continue to try to write the scenario where China is in any way restrained in its fiscal actions by what foreign bond holders think– large net capital outflows continue. How else to explain that with all this cash coming in, FX reserves are still USD3.1 trillion (the magic level from which they cannot move)? Local money is moving out even as China is ostensibly ‘moving’.

Meanwhile, it’s not as if one cannot see bumps in the road. The EU-China virtual investment summit, for one. Germany’s Angela Merkel, true to neoliberal form on trade, suggested human rights issues are not the kind of thing to stop Germany from wanting to sell more German stuff. (Is anything?) However, China told the EU that human rights were its internal affair, a European problem too, and that it would take no lectures. The EU meanwhile insist China has to open up its markets and scaling back the role of its SOEs – just as China talks about a shift to internal circulation and as the same SOEs drive the recovery Europeans are salivating over. “China has to convince us that it is worth having an investment agreement,” said the EU’s von der Leyen. “We need China to move.” Will it? Or will the EU blink in the one area in which it sees itself as having global power? What does that say about its strategic options if it does – or if it doesn’t?

On which note, last night UK PM Johnson saw off a Tory rebellion to force through the first reading of legislation that seems to aim for a Hard Brexit and, according to critics, further strain on peace in Northern Ireland and union with Scotland. Boris says this is necessary to prevent the EU ‘blockading’ Northern Ireland’s food supplies; but will we really see EU bureaucrats sailing the Irish Sea like pirates to seize gold, silver, and Marmite? Suffice to say that either the UK or the EU need to move, and soon, or smooth EU-UK trading relations are likely to walk the plank. GBP and EUR with it, presumably….which then flows back to USD and so to CNY.

Meanwhile, in the US, TikTok is perhaps going to have a new ‘owner’, or rather licensee(?),… although that would seem to imply the White House doing a major policy FlipFlop (which is a great name for an app: I may now be able to retire immediately). Being overlooked is that Senator Tom Cotton –of whom I wanted to write the Daily headline “Just a Cotton-picking minute” when his name was, oddly, floated as a potential Supreme Court nomination should President Trump win re-election– has introduced legislation to repeal China’s permanent most favored nation (MFN) trade status. According to Cotton, MFN status would depend on China’s behaviour annually. In other words, “we need China to move”.

China itself is sending a not-so-subtle signal of its own that it wants Australia to move: or at least that’s the interpretation Down Under of the sudden move to declare that Aussie wheat exports are to be subject to enhanced scrutiny for phytosanitary standards: add them to beef and wine and barley, eh?

Of course, the RBA’s minutes today couldn’t capture this further negative development, but the language on the AUD had already shifted. In August, we saw AUD “had also appreciated against the USD to be a little above where it had started the year. The AUD had been broadly in line with its fundamental determinants, such as commodity prices and interest rate differentials, which had returned to their levels at the start of the year”. In September we saw: “While members noted that the AUD was broadly aligned with its fundamental determinants, a lower exchange rate would provide more assistance to the Australian economy in its recovery.” Of course, nobody is going to actually sell AUD on this: the RBA needs to walk the walk rather than mumbling the talk – and it has almost no track record of doing so. However, a journey of 1,000 pips starts with a single step, as they say; and we can see which direction movement will ultimately be in (a lower AUD).

The same can be said for the movement regarding US-China links (away from each other), and for China itself (inwards: it does not attempt to hide what it is doing, after all) – but it cannot be said for either Europe, or the UK.

In addition to being the company’s D&O insurance, Elon Musk now appears to be the reason why Tesla can’t get D&O insurance.

Recall, back in April we wrote about (now $300 billion plus) Tesla dropping its D&O insurance and, instead, having Elon Musk personally cover the company.  

Now, nearly 6 months later, Tesla is still shopping for D&O insurance but has excluded CEO Elon Musk from its policy, according to Insurance Insider. Tesla is currently “in the market” for a binding quote on a D&O policy with a $100 million aggregate limit, according to the report. 

In order to combat the “excessive quotes” the company got in the past (which are what ultimately led Musk to providing insurance to the company personally), the “Marsh JLT Specialty-brokered Tesla policy is currently circulating in the London market” with the one key exemption.

In fact, sources called the CEO “effectively uninsurable” based on his erratic behavior, which notably included a fake $80 billion buyout bid for his company that didn’t exist that ultimately led to allegations of securities fraud with the SEC.

The ironic thing is that Musk is – by far and away – the biggest liability at Tesla. Excluding him from D&O insurance would be akin to excluding arson from fire insurance. 

Regardless, D&O insurance is absolutely vital for any public company, but especially for a company that finds itself embroiled in far more controversy and litigation than others. Like a company where the CEO bails out his cousin’s failing solar company. Or a company where the CEO openly and brazenly commits securities fraud on Twitter.

We speculated back in April that nobody wanted to be on the hook for insuring Tesla and it appears we were right; kind of. It appears that no one wants to be on the hook for insuring Musk. But given the company’s massive market cap – which has only grown over the last 5 months – we find it baffling that Tesla doesn’t have the means to pay for insurance including Musk, even if it’s expensive.

Unless, of course, there is simply no offer.

Authored by Bill Blain via The Morning Porridge,

“Never so much owed to so few.”

Today is the 80th anniversary of the climax of The Battle of Britain. After weeks trying to win air superiority and clobbering 11 Group airfields, the Luftwaffe were given orders to hit London with the biggest raids yet. Far from encountering a few ragtag squadrons cobbled together from the last patched up Spitfires and Hurricanes, London was in range of the RAF reserves held North of London. The RAF’s full force hit the Germans and the Big Wings shot them down in droves. 

Later this morning my home village will get a fly-past: the Supermarine Spitfire factory is just down the road, while Hamble’s airfield was the base of the Spitfire-Girls, the Ladies of the Air Transport Auxiliary, who delivered the iconic fighters to RAF bases across the land. There is nothing like the sound of a Merlin engine to brighten up one’s day.

What we remember today is the Blitz spirit, when the whole nation cheerfully rallied to face down the enemy menace. Our resilience then shocked and surprised the world. 

As we wake to the news 700,000 UK jobs have been lost to Covid, and redundancies are rising at their fastest rate since 2008, its likely to get worse as the furlough programme ends, and the approaching winter ends our struggling efforts to staycation. Compare and contrast Winston’s rhetoric in 1940 with Boris Johnson’s incoherence today… 

I’m sure it’s just a coincidence, but British casualties from the Blitz that followed the Battle of Britain were around 43,000, a not dissimilar number to those who have died from Covid.  

The official number of cumulative deaths in the UK ascribed to COVID this morning is 41,637. 

That number says little about the human tragedy of each case. It also says nothing about the unidentified excess deaths from the “Big Five” killers that take 150,000 mainly elderly Brits each year. We should shortly be able to work out real excess deaths: how many more dementia sufferers departed early, heart attacks which killed because patients stayed home, cancers missed, respiratory diseases untreated or recorded as Covid, or strokes that missed the golden first hour because hospitals were focused on the disease. 

These will be cold statistical numbers. No official data will record the grief, the anxiety, the mental stress the pandemic has raised. It won’t record the social consequences of lockdown or the misery and hopelessness of those who lose their jobs and the financial stresses they face. The markets will tell us all about the long-term economic damage inflicted – rightly or wrongly – on our island. 

The numbers won’t record the shattered dreams of young people who make up the bulk of employees in tourism, hospitality and travel who have been most impacted by job losses. That has serious social implications in terms of future votes. It was demonstrating against Margaret Thatcher’s destruction of the Scottish economy in my early 20s that moulded me into the closet lefty I remain today – although I did grow up just enough not to vote for Corbyn last year.

What we will remember long-term about the Pandemic is fear and anxiety, and the apparent confusion in government. The banality of “the rule of six” when we are being told to go back to work is insane. Sound bites don’t make up for stupidity. Resilience has gone out the window. We have become a nation of scared and anxious Corona-nazis encouraged to report our neighbours, or sullen Corona-renegades who want to get the economy moving again and get on with living our lives. 

We need Government to be realistic about the Virus.  I am seriously wondering if Johnson is up to it. Let’s acknowledge some truths. 

The UK has some great statistics on death rates – they are very informative: improved heart-disease treatments have reduced heart-attack deaths since 2000, but that fall has been matched by a rise in deaths from Dementia and Alzheimers. These numbers remind us – death is inevitable. The bulk of Covid deaths have been the elderly and infirm. That’s tragic but the reality is that death comes sooner if you are elderly and have other serious conditions.  Covid is an opportunistic predator – it picks the easy targets, the weak and vulnerable just ahead of other conditions. 

In younger people the leading cause of death in young men is suicide – 1233 in 2018 compared to only 353 women. That is going to be a key number to watch in coming months. Overall, for all age groups influenza and pneumonia is the leading cause of death (except in Scotland!) 

90 people under the age of 30 have died of Covid in the UK. That compares to 434 folk under 30 who died in road traffic accidents. I don’t know how many of these young Covid victims had other underlying conditions. 

What we do know for certain is Covid is bad. If you are overweight its likely to be worse. It can take months to recover from the long-term cardio-vascular, gastric, neurological and respiration issues it raises in some patients. Yet the brutal reality remains it is more likely to kill you if you are elderly and have co-morbidities. 

Covid is a risk. It’s a virus – like Chickenpox, Measles, Flue, Aids and Herpes. We treat them, cope with them and factor the risk of Shingles or catching Aids into our social decisions. I’m writing this with a painful cold sore on my lip from sailing – risk/reward.  There isn’t much we can do to avoid the flue – except quarantine or accept it. We don’t ban people for using private transport because they are 4 times more likely to die that Covid. We acknowledge it’s a risk, a choice and accept the economic and social consequences of 434 young people dying tragic unfulfilled lives

Governments need to be realistic about the Virus and make the risk calculations to inform some tough decisions. Be clear about it. There will be more deaths – but acknowledge they are going to happen. Balance theses against the economic and mental damage being done to the economy. We need to press the resilience button. Now.  

It may be too late. Part of the the nation is so scared and traumatised its staying at home. 

I am not a herd-immunity or vaccine expert – but it seems pretty clear the reason the numbers are rising are because more people are being tested. That hints the virus is becoming more widespread – but until we all get antibody tests we just don’t know about the health of the herd. But fewer people are dying. The death rate is falling because treatment is better, and more of the people being tested aren’t as susceptible to getting it bad and don’t need hospitalisation. The infections and death rate numbers are increasing in less developed economies less able to cope and still at early stage.

Deaths are well below the forecast levels we were hearing back in March.  If we get to 10,000 new cases per day in the UK, but death rates remain low then isn’t it time to reassess the risks?  Is it right to close a city because 21 people in 100,000 get it and very few are dying? Would it be better to close the factory that has ignored social distancing and thus allowed the virus to spread like wildfire round workers? You can find the official UK numbers here. Infections are heading back to where they were months ago. Death rates are a fraction of what they were. 

And is it right to be wondering if we have herd immunity or pinning our hopes on a vaccine? Probably not. The virus is bad. It kills. But we need to get on and face it. Life is a risk. 

Meanwhile… back in la-la-land

The Nikola story is a gas. They filmed a truck but never specifically said it wasn’t actually powering itself. You can’t make it up. But what’s even funnier is its apparently pushed Tesla higher? On the basis there might be far less to Nikola than we were told does that makes Tesla more valuable? If Tesla is vulnerable to competiton, then if you are watching Nikola you are watching the wrong thing. 

Despite some v-shaped recovering (with a small ‘v’), US Import and Export YoY prices remain deep in deflationary territory in August.

Import prices rose 0.9% MoM (well above the 0.5% expected) and Export prices rose 0.5% MoM (also better than the +0.4% expected). But despite both the beats, import and export prices remain underwater on a YoY basis.

Source: Bloomberg

However, we note that this deflationary impulse is at odds with the lagged response that is typically seen when China’s credit impulse is expanding so dramatically…

Source: Bloomberg

So either we will see dramatic resurgences in import and export prices or China’s credit impulse is simply filling up an endless bucket of malinvestment domestically… as import prices from China remain stubbornly stuck at 13-year lows…

 

By Stas Margaronis of AJot Insights,

A Northern California logistics consultant was unable to book containers on the Burlington Northern Santa Fe (BNSF) or Union Pacific (UP) railroads for the first week of September going to and from U.S. West Coast ports and Midwest destinations.

The consultant said, “I have been working in the industry for thirty years and I have never seen anything like this. It’s weird.”

The result is that importers of low value products being shipped by containers such as tee shirts would be at an economic disadvantage transporting containers by truck as opposed to by rail between U.S. West Coast ports and Midwest destinations, because of the higher cost.

The consultant explained that there is a huge shortage of rail capacity: “There are no rail cars and there are no chassis.”

The consultant, who is not identified, was contracted to research container rail bookings on the UP and BNSF to and from U.S. West Coast ports including:

• Los Angeles

• Long Beach

• Oakland

• Seattle

The result of the research was that: “The railroads will not take any bookings right now and so all the containers going to and from the West Coast to places such as Chicago and Memphis must go by truck.”

The consultant cited the following trucking rates per container as examples:

• Los Angeles/ Long Beach to Chicago: $7000.

• LA/LB to New Berlin, Wisconsin: $6,700.

• LA/LB to Nashville, Tennessee: $7,200.

• LA/LB to Dallas, Texas: $5000.

• LA/LB to Jacksonville, Florida: $8,800.

The consultant said that in the past it had been possible to truck a container coast-to-coast for $2,000: “But those days are gone.”

In addition, “In the good old days you could ship a container from the West Coast to Chicago or Memphis by rail for $1000 dollars.”

The research found one exception. It was possible to ship a container on a COSCO vessel to Shanghai from Memphis, Tennessee via the Port of Prince Rupert, British Columbia utilizing the Canadian National Railway.

The problem: “The travel time was over twenty-one days which is way too slow.”

However, rail intermodal moves are a complex affair, particularly when there is a significant freight imbalance as there is at the moment on the West Coast. A BNSF spokesman told AJOT, “The claim that we have a lack of railcar capacity for international shipments is inaccurate. BNSF is open for business and ready to receive all freight from ocean carriers at the West Coast ports. We have a railcar fleet in excess of demand and have sufficient locomotives, equipment and people across our network to handle current and additional volumes. As always, we are in constant communication with our customers and remain focused on meeting their shipment needs.”

And a UP spokeswoman referred AJOT to an August 26th statement by Kenny Rocker, executive vice president, Marketi:

“We continue to align our resources to handle the increase in demand and are excited to build on the positive momentum we’re seeing this month. And to specifically address the surge of intermodal demand, we are modifying our ingate windows at several intermodal terminals across our network to help manage gate and ramp fluidity. We continue to evaluate our terminal activity and will make any necessary adjustments to accommodate your needs and, at the same time, deliver the safe and reliable service you expect.”

On August 24th, the heads of the Surface Transportation Board (STB) and the Federal Railway Administration (FRA) sent identical letters to the heads of the leading U.S. railroads, including the Union Pacific (UP) and the Burlington Northern Santa Fe (BNSF) expressing concerns about the adequacy of U.S. railroad service and the adequacy of personnel to transport freight.

The letter, signed by Federal Railroad Administrator Ron Batory and Surface Transportation Board Chair Ann Begeman read as follows:

“Recently, however, we have been made aware of service issues, including missed industrial switches and excessively late or annulled trains due to crew availability issues. As you know, with both increasing intermodal and carload volumes and a projected robust harvest fast approaching, railroad employee availability, together with sufficient equipment resourcing, is essential for safe, fluid rail service in support of the nation’s economic recovery. Given the challenges related to changing demand patterns and operating conditions, increased communication and transparency with rail shippers is especially important to ensure they have the information needed to plan their businesses and meet their own customers’ needs.”

Jack Hedge, Executive Director, Utah Inland Port Authority and formerly with the Port of Los Angeles, told AJOT that U.S. West Coast ports are also losing business to the Port of Prince Rupert, British Columbia for containers transported by the Canadian National Railway to and from Chicago and U.S. Midwest destinations: “Imports and exports transiting through the Canadian Port of Prince Rupert and Chicago pay $500 to $1000 less per move than by transporting containers to and from the West Coast ports and Chicago on the UP and BNSF.”

In an August 27th analysis, Trains Magazine reporter Bill Stephens, contrasted responses of the BNSF and UP to spikes in summer imports at the Ports of Los Angeles and Long Beach:

“BNSF Railway and Union Pacific are facing the same problem: An unprecedented spike in intermodal traffic that wants to move out of Southern California to Texas, Chicago, and elsewhere in the Midwest … The onslaught of containers and trailers that began in June and continues today followed record declines in April [and] in May due to the economic impact of the coronavirus pandemic…”

Stephens first cited the response of BNSF:

“As you can imagine, we quickly moved to position resources to be able to handle that increase.” BNSF Chief Operating Officer Katie Farmer told an Intermodal Association of North America webcast earlier this month. “BNSF recalled crews, fired up parked locomotives, and pulled miles of cars out of storage and sent them west as baretable trains. It added drayage support and parking spaces at its Los Angeles area terminals. And BNSF even flew terminal personnel from Chicago and elsewhere on the system to its terminals in Southern California …”

Stephens says UP did not move as fast: “UP took a much more measured approach, even as volume in June jumped 40% in Southern California from one week to the next. UP recalled crews and pulled locomotives and cars from storage, too. But UP did so at its own pace because railroads simply can’t handle such sudden swings in volume, UP Chief Operating Officer Jim Vena explained on the company’s earnings call in July.”

“ There was no way I was going to flow trains one way and have all the deadheads and extra costs. We took it on a systematic basis, and we’re fluid now,” Vena said …

Stephens added, “But UP also has used increasingly expensive surcharges in California – first $500 per container, then $1,500, and now a record $3,500, the Journal of Commerce reports – that tell potential low volume customers to hit the highway. This hurts UP’s partners, the intermodal marketing companies it relies on to fill its railroad-supplied containers.”

Stephens wondered about the different responses: “Why would BNSF move heaven and earth to capture volume while UP aimed to tightly manage its capacity?”

He says, “The most obvious answer is that UP’s response was straight out of the Precision Scheduled Railroading [PSR] playbook. Container traffic isn’t a high-margin business. Running empty trains, or repositioning empties, increases your costs and burns crews and locomotives while throwing your network out of balance.”

Bill Gates just ratcheted up his PR campaign to sow doubts about President Trump’s alleged ‘political meddling’ with the FDA, while also placing him in league – if only temporarily – with the vaccine skeptics Gates frequently rails against. During an interview with Bloomberg News, the Microsoft founder and Gates Foundation chairman, who has persisted in his defenses of the WHO despite growing evidence of missteps, attacked the FDA’s credibility, claiming that he no longer believes the FDA is ‘the world’s premier public-health authority’, as Bloomberg says during the opening paragraph of the post.

Gates, who has helped finance several vaccine projects around the world, said he doesn’t trust the CDC, either, because credibility and a focus public welfare have become “casualties of a presidency that has downplayed or dismissed science and medicine in the pursuit of political gain.”

He cited FDA chief Stephen Hahn’s decision to “backtrack” on the agency’s statement on convalescent plasma to back up his claims.

“We saw with the completely bungled plasma statements that when you start pressuring people to say optimistic things, they go completely off the rails. The FDA lost a lot of credibility there,” Gates, the billionaire philanthropist, said in an interview on Bloomberg Television. “Historically, just like the CDC was viewed as the best in the world, the FDA had that same reputation as a top-notch regulator,” Gates said. “But there’s been some cracks with some of the things they’ve said at the commissioner level.”

While he said he applauds the Trump Administration’s “Project Warp Speed”, which has put up billions of dollars for private partnerships and pharmaceutical companies to fund trials and research, Gates is taking issue with the lack of funding for “manufacturing and procurement” – ie building out permanent supply chains for medicines and vaccines – in the developed world.

Hmm…if only somebody had thought of that…

Anyway, by spending another $8 to $10 billion – peanuts in the grand scheme of things, where Democrat are pushing to dump trillions more in fiscal stimulus – the US government could save “trillions” in lost economic output, Gates insists.

“The inequity of this – whether it’s between citizens in the country, blue collar versus white collar, blacks experiencing a higher sickness rate than others – poor countries can’t borrow money and spend money like the U.S. and other rich countries have,” Gates said. “Almost every dimension of inequity has been accentuated here.”

Asked about his newfound status as a “polarizing figure” in the pandemic era, Gates insisted that “conspiracy theories” circulating about him on social media are “crazy” – and that social media companies are to blame for the reputational damage he has endured.

To sum up: Gates doesn’t think you should trust bureaucratic institutions (which, by extension, includes Dr. Fauci and Dr. Birx) anymore. Just trust him.

Asked about Gates’ comments during an interview on Squawk Box Tuesday morning, White House advisor Jared Kushner largely brushed them aside.

Watch the interview below:

US equity futures and world stocks continued their ramp higher on Tuesday following upbeat German and Chinese data showed the economic recovery was gaining traction, coupled with the usual optimism about coronavirus vaccines while the struggling dollar kept the hot streaks for the euro and some of the biggest emerging market currencies sizzling. The USDJPY slumped to 105.53 while the Chinese yuan rose above 6.80, the highest level since May 2019.

E-Mini futures for the S&P 500 put on 0.6%, also reversing early losses. Tesla, Apple and Nvidia all climbed in pre-market trading, while in Europe Hennes & Mauritz AB led a rally among fashion retailers after beating profit estimates. Ocado Group gained after the U.K. grocery delivery company reported a strong surge in sales. Sentiment was also boosted by hopes for a COVID-19 vaccine after British drugmaker AstraZeneca restarted its vaccine trial and the dollar extending recent losses, other currencies were also on the rise.

“It is better risk appetite and the softer dollar environment,” ING’s Chief EMEA FX and interest rate strategist, Petr Krpata, said, though the approaching U.S. election was likely to prevent too much of a run up, he added.

“Market volatility is returning after months of steady advances in risk assets,” BlackRock Investment Institute strategists led by Elga Bartsch said. “Valuations have risen, and we could see greater volatility as a result, especially as the U.S. election closes in.”

Europe’s STOXX 600 was last up 0.5% having shaken off its slow start after a surprise jump too in Germany’s ZEW sentiment survey, which surged to 77.4 (up from 71.5), smashing expectations of 69.8, and the highest since June 2000.

“The September ZEW was a strong beat, with expectations reaching a 20-year high and current conditions also exceeding expectations,” Morgan Stanley economist Markus Guetschow said, although he did caution most other data was still gloomier.

Earlier in the session, the MSCI index of Asia-Pacific shares ex-Japan added 0.5%, for a fourth straight day of gains that propelled it up 3% for the year  with health care rising and consumer staples falling, after rising in the last session. Most markets in the region were up, with Thailand’s SET gaining 0.8% and South Korea’s Kospi Index rising 0.6%, while Jakarta Composite dropped 1.2%. The Topix declined 0.6%, with Hamee and Diamond Electric Holdings falling the most. The Shanghai Composite Index rose 0.5%, with Junzheng Energy and Ningbo Shanshan posting the biggest advances.

The offshore yuan climbed to the highest level in a year and stocks in Shanghai advanced on evidence that China is accelerating out of the virus slump. As noted last night, industrial production beat expectations, while retail sales rose for the first time this year in August.

The day’s eye-catching move was a 16-month high for the yuan as 5.6% jump in Chinese industrial output in August and the first pick-up in retail sales since the coronavirus outbreak gave it its best day since July. “Strong external demand, a further recovery from the pandemic and pent-up demand from the floods all contributed to the robust activity data in August,” Ting Lu, chief China economist at Nomura, said in a note to clients. “We expect a further, albeit gradual, recovery of the services sector, a steady improvement in retail sales and elevated fixed-asset investment growth.”

With the yuan leading the charge, MSCI’s EM FX index also climbed to a near 7-month high. The Australian dollar led an advance among Group-of-10 currencies against the greenback after the central bank’s latest minutes showed it didn’t plan to ease further anytime soon. The Bloomberg Dollar Spot Index gave up an earlier advance after China posted its first growth in retail sales since Covid-19 hit early in the year. The euro rose a fifth day against the greenback, up 0.2% at $1.1891 after the surprise jump too in Germany’s ZEW sentiment survey, while the pound advanced for a second day on improved global risk appetite. The yen nudged higher as Japanese Chief Cabinet Secretary Yoshihide Suga won a ruling party leadership vote, as expected, paving the way for Japan’s first change of leader in nearly eight years.

“He’s seen as someone who’s particularly stock market friendly. The fact that we’ve got political certainty for the next two years from someone who’s connected to the free market is going to be good news for Japan,” said Jim McCafferty, joint head of Asia Pacific equity research at Nomura.

Investors now turn their attention to the Federal Reserve whose two-day policy meeting begins today to gauge the outlook for markets following a slide of about 2% in global stocks this month. The Fed is expected to maintain its dovish stance after earlier saying it will shift to a more relaxed approach on inflation. Central bank largesse is shoring up sentiment in the face of risks from the pandemic, the U.S. presidential election and the possibility of a no-deal Brexit.

In rates, treasuries were weaker as U.S. trading gets under way, led by long end ahead of $22b 20-year bond reopening at 1pm. U.S. yields lag steeper increase in several European markets, especially supply-driven move in U.K. gilts. Yields were higher by about 2bp at long end, 10-year by less than 1bp at 0.68%; WI 20-year yield is around 1.22% vs 1.185% stop in August new-issue auction. Last week’s 30-year reopening stopped through slightly, arresting a bear-steepening move in Treasuries and easing concern about appetite for record-size auctions; Tuesday’s 20-year reopening is $5b larger than last quarter’s taps, and the projected total issue size for the August 2040 bond is $69b vs $44 billion for the May 2040 according to Bloomberg.

In commodities, Brent crude climbed back to $40 a barrel and gold prices put on 0.4%, extending a sharp rise in the previous session. WTI and Brent futures have been on an upward trajectory in the latter part of the European morning as traders balance the supply and demand implication arising from developments in the Gulf of Mexico alongside a resurgence of the pandemic ahead of the JMMC meeting on Thursday. Most industrial metals were bolstered by the robust Chinese data; gold jumped on the back of the weaker dollar.

Looking at the day ahead, we’ll get the Empire State manufacturing survey for September, as well as industrial production, capacity utilisation and the import price index for August. FedEx is among companies reporting earnings.

Market Snapshot

 

• S&P 500 futures up 0.4% to 3,395.00
• STOXX Europe 600 up 0.2% to 369.30
• MXAP up 0.09% to 173.18
• MXAPJ up 0.5% to 569.87
• Nikkei down 0.4% to 23,454.89
• Topix down 0.6% to 1,640.84
• Hang Seng Index up 0.4% to 24,732.76
• Shanghai Composite up 0.5% to 3,295.68
• Sensex up 0.5% to 38,966.30
• Australia S&P/ASX 200 down 0.08% to 5,894.83
• Kospi up 0.7% to 2,443.58
• Brent Futures up 0.3% to $39.72/bbl
• Gold spot up 0.3% to $1,963.16
• U.S. Dollar Index down 0.1% to 92.92
• German 10Y yield rose 0.9 bps to -0.471%
• Euro up 0.2% to $1.1884
• Brent Futures up 0.3% to $39.72/bbl
• Italian 10Y yield fell 4.1 bps to 0.815%
• Spanish 10Y yield rose 1.7 bps to 0.3%

Top Overnight News from Bloomberg

• The Federal Reserve’s new approach to setting interest rates will probably be hard to divine from the economic projections it’s set to publish on Wednesday
• The head of macro strategies at Record Currency Management is shorting government bonds of Spain, France and Italy — as well as the euro itself — on the expectation that Turkey’s market ructions will soon be felt on the balance sheets of European banks
• Barclays Plc asked Pritpal Gill, head of foreign exchange trading in Asia Pacific, to leave after about 18 months with the British lender

A quick look at global markets courtesy of NewsSquawk:

Asian equity markets were somewhat mixed as the region only partially sustained the momentum from the firm handover from the US where the tech sector resumed its outperformance and sentiment was underpinned by vaccine and M&A developments. ASX 200 (-0.1%) was indecisive and only briefly benefitted from the announcement to ease regional Victoria coronavirus restrictions, with strength in tech and mining stocks offset by losses in energy and financials, while Nikkei 225 (-0.4%) underperformed as exporters suffered from the ill-effects of a firmer currency and with Sony shares pressured by reports it is to reduce its PS5 sales forecast by 4mln units due to chip supply issues. Hang Seng (+0.4%) and Shanghai Comp. (+0.5%) eventually gained following a CNY 600bln MLF announcement by the PBoC and better than expected Chinese data where Industrial Production and Retail Sales both topped forecasts. In addition, China announced to extend tariff exemptions for 1 year on imports of some US products which were due to expire tomorrow, although the support for stocks was limited as uncertainty regarding TikTok remained given the no-algorithm inclusion aspect of the deal and with the US to block imports of cotton, linen, hair products and computer parts made by specific entities in Xinjiang. Finally, 10yr JGBs were flat following similar rangebound trade in T-notes, while firmer demand at today’s enhanced liquidity auction for long-end JGBs only mildly supported as price action was once again hampered by resistance at the 152.00 level.

Top Asian News

• Chinese Consumers Join Industrial Recovery From Covid-19
• China Gives Markets Just Enough Support, Lets Yuan Strengthen
• Hong Kong to Reopen Pubs, Pools and Theme Parks From Friday
• Singapore Trader Rhodium Sued by Maybank for $3 Million Payment

Europe saw an uninspiring cash open following a mixed APAC handover, but thereafter upside momentum seeped into the markets (Euro Stoxx 50 +0.6%) – with little by way of fresh catalysts to shift the dials ahead of the FOMC policy decision tomorrow. Nonetheless, performance across bourses remain mixed but tilted to the upside, with the DAX (+0.2%) the laggard in the region whilst IBEX (+1.6%) leads the gains, propped up by solid gains in index heavyweight Inditex amid broader consumer discretionary outperformance, with the sector underpinned by H&M (+13%) after a well-received trading update. Sticking with sectors, material names are supported by the USD-induced gains in copper coupled with strong Chinese data and a slew of broker upgrades for the UK mining sectors; for the likes of Anglo American (+2.4%), Glenore (+2.8%), BHP (+2.5%), Rio Tinto (+2.82%), Fresnillo (+0.6%) and Polymetal (+0.8%). To the downside, Financials are weighed by the European banking sector consolidation, with Spanish banks pressured after Caixabank (+0.9%) is said to be mulling a EUR 4bln bid for Bankia (-0.9%) vs. current market cap EUR 4.2bln, whilst UBS (-1.5%) threatened to move its HQ to Frankfurt if officials were to forbid a merger with Credit Suisse (-2.0%). In terms of other individual movers, Fiat Chrysler (+7.1%) has benefitting from a revision of its planned merger with PSA (-0.9%) which includes dividend cut in order to keep cash inside the merged entity. This has also weighed on the likes of Faurecia (-6.5%) as PSA is the majority shareholder in the group, will in turn delay the planned spinoff of Faurecia until after the mergers’ closing. Finally, Carrefour (-2.5%) shares remain on the backfoot after Credit Agricole corporate and investment bank launched the disposal of around 3.1% of Carrefour share capital.

Top European News

• Panetta Says ECB Needs to Remain Vigilant on Inflation Outlook
• Trial Against Carlos Ghosn Begins as Kelly Faces Charges Alone
• U.K. Says ‘No Magic Solution’ for Struggling Covid Test System
• William Hill Soars to 22-Month High; Partner Signs ESPN Deal

In FX, in contrast to yesterday, news that COVID-19 restrictions have been eased in the state of Victoria allied to a relatively upbeat economic assessment in the RBA minutes have boosted Aud/Usd and Aud/Nzd from sub-0.7300 and circa 1.0860 respectively, while the ongoing appreciation of the Yuan (CNY and CNH both through key resistance at 6.8000 vs the US Dollar) following stronger than expected Chinese data (ip and retail sales) has also propelled the Aussie a bit further than the Kiwi as Nzd/Usd pivots 0.6700 before Q2 current account data.

• GBP – Encouraging UK labour market metrics and some LHS interest in the Eur/Gbp cross appear to be propping up the Pound rather than safe enough passage of the IMB through parliament last night, as Cable bounces from the low 1.2800 zone to retest 1.2900 and Sterling takes another look at bids/support protecting 0.9200 vs against the Euro. However, the 200 WMA at 1.2933 still poses a technical hurdle if 1.2900 is breached again and market contacts suggest a breach of 0.9200 may be shallow given ongoing no deal Brexit risk.
• CHF/EUR – Also firmer vs the Greenback, with the Franc holding near the top of a 0.9090-55 range and undeterred by more deflationary Swiss import and produce prices, while the Euro trades closer to 1.1900 than 1.1850 amidst decent option expiry interest (1 bn between 1.1900-10, 1 bn at 1.1885 and 2.4 bn at 1.1850) and underpinned by ZEW readings beating consensus comfortably.
• CAD/JPY/USD – The Loonie and Yen are narrowly mixed against the Buck, as Usd/Cad straddles 1.3150 in advance of Canadian manufacturing sales and Usd/Jpy hovers below 106.00 before several US data points and Japanese trade ahead of the Fed. Meanwhile, the DXY is tethered to 93.000 awaiting impetus in the run up to the FOMC or via fresh guidance and SEP forecasts in the newly adopted flexible AIT era.
• SCANDI/EM – Moderately firmer oil prices and risk sentiment overall appear to have nudged the Norwegian and Swedish Crowns off Monday’s lows instead of data in the form of a wider trade deficit and fractionally softer than anticipated SA unemployment rate respectively. Moreover, improvements in the latest Norges Bank regional survey and the Riksbank rolling out Usd swap agreements until the end of Q1 next year may be keeping Eur/Nok and Eur/Sek capped at 10.7000 and 10.4000. Conversely, Turkey’s Lira is struggling to rebound after slipping briefly and marginally beneath 7.5000 as EU’s Borell warns that the country’s future relationship with the bloc is on the line. Elsewhere, the Rand will be eyeing SA business confidence for more pre-SARB pointers.

In commodities, WTI and Brent front month futures have been on an upward trajectory in the latter part of the European morning as traders balance the supply and demand implication arising from developments in the Gulf of Mexico alongside a resurgence of the pandemic ahead of the JMMC meeting on Thursday. In terms of the breakdown, the supply side sees disruptions from the myriad of hurricanes and tropical storms developing in the Atlantic, with Hurricane Sally the most pertinent as it is poised for landfall in the Gulf later today – with BSEE yesterday estimating that that approximately 21.39% of the current oil production and ~25.28% of the natural gas production in the Gulf of Mexico has been shut-in, with today’s update due at 1900BST. Sticking with supply side, sources yesterday suggested the OPEC+ meeting is unlikely to advocate deeper oil output cuts, with Saudi to reportedly not looking to lift oil prices, in-fitting with recent source reports via the FT. Moving to demand, the IEA cut its 2020 global oil demand growth forecast by 200k BPD, citing resurgence of COVID-19 cases, local lockdown measures, remote working and weak aviation for the downgrade. The agency also expects the recovery in oil demand to decelerate markedly in H2 this year. The report aligned itself with both the OPEC and EIA STEO, with OPEC and IEA also highlighting the renewed weakness in the Indian markets dragging on demand. Nonetheless, WTI resides around USD 38/bbl (vs. low 37.06/bbl) while its Brent counterpart regains a footing above 40.00 (vs. low 39.39/bbl). Elsewhere, spot gold and silver derive support from the softer USD to eke mild gains around USD 1960/oz and above USD 27/oz respectively. In terms of base metals, LME copper is supported and Shanghai copper was underpinned by the strong Chinese industrial production data and the recent gains in the stock markets, whilst Dalian iron ore futures came under pressure from lower Chinese steel margins.

US Event Calendar

• 8:30am: Empire Manufacturing, est. 6.8, prior 3.7
• 8:30am: Import Price Index MoM, est. 0.5%, prior 0.7%; YoY, est. -2.1%, prior -3.3%
• 8:30am: Export Price Index MoM, est. 0.4%, prior 0.8%; Index YoY, est. -3.2%, prior -4.4%
• 9:15am: Industrial Production MoM, est. 1.0%, prior 3.0%; Capacity Utilization, est. 71.35%, prior 70.6%

DB’s Jim Reid concludes the overnight wrap

 

I’ll be publishing my monthly chart book later today so please keep an eye out for that. We released a single off this new album yesterday and previewed our “Print money not babies” chart which basically reinforces our long standing view that money printing is going to increase for years to come unless in part we can magic up more people in the generations behind us. See the CoTD here and a reminder that if you want it straight to your mailbox daily please email Jim-Reid.ThematicResearch@db.com. Also a reminder that we published our annual long-term study last week. This year’s is entitled “The Age of Disorder” (link here).

It was “Merger Monday” in markets yesterday which must mean its “Takeover Tuesday” today? What will Wednesday welcome? Anyway, this M&A theme helped kick US equity markets off on a strong footing ahead of tomorrow’s Federal Reserve decision, as the S&P (+1.27%) and the NASDAQ (+1.87%) both saw major gains. The NASDAQ particularly benefited from the large M&A deals in Tech and Biotech, the two biggest components of the index. Although tech stocks led the advance, every sector in the S&P and 90% of all stocks in the index moved higher on the day. Meanwhile the VIX volatility index fell -1.0pts to 25.85, a lower mark than when the S&P hit record highs back on 2 Sept.

Oracle (+4.32%) had a good day after press reports (per Bloomberg) said that the company had reached a preliminary agreement in its bid for TikTok’s US operations, while Immunomedics was the top performer in the NASDAQ, seeing a massive +97.99%% advance after Gilead Sciences agreed to acquire the company for $21bn. Softbank remained in the tech headlines after agreeing to sell its chip division Arm Ltd. to Nvidia for $40bn. Nvidia, the seventh biggest company in the NASDAQ, rose +5.82% on the news. As has generally been the case this year however, European equities lagged behind, with the STOXX 600 up just +0.15% in spite of the tech outperformance there as well.

There were M&A headlines in Europe as well in the form of the perennial UBS / Credit Suisse merger story. The story emanated from an Inside Paradeplatz story, a Swiss Finance blog, claiming that the Chairmen of both banks are working on it together and had discussed the idea with the Swiss Finance Minister Maurer. Shares of Credit Suisse (+4.33%) and UBS (+2.47%) rose more than the Euro banking sector (+0.96%) – of which they are not eligible of course – on the reports.

On the coronavirus, there was mixed news on the vaccine front. AstraZeneca have restarted their trials in the U.K. (as we discussed yesterday), after an 8 day delay due to a subject falling ill, though the U.S. trial could remain on hold through midweek pending its independent probe. Separately, Pfizer CEO Bourla saw his weekend comments that it’s “likely” that the U.S. could deploy a vaccine before year-end expanded upon. He added that Pfizer and Germany partner, BioNTech, have a 60% chance of having an idea on the efficacy by the end of October.

Any positive vaccine news will be welcome as restrictions are once again being enacted as caseloads rise. France had over 6000 new cases on Monday, with Marseille and Bordeaux limiting public gatherings for individuals to 10 people or fewer, while the limit for large outdoor gatherings such as sporting events and concerts have been lowered to 1000 from 5000 people. Both regions are outlawing standing outdoor bars and will be shutting down bars and restaurants that are not strictly observing and enforcing distancing guidelines. Weekly cases in France are now up to 58,400 compared to a high of 41,000 back in April. Here in the UK the new guidelines restricting gatherings to no more than 6 people in both indoor and outdoor settings went into place yesterday as weekly cases are now over 21,000 for the first time since mid-May. Meanwhile Israel’s cabinet have voted to enact a second national lockdown starting at the end of this week as the country is currently seeing 25,000 new cases a week, compared to 12,000 weekly cases at the start of September. Cases in the US continue to fall as the major hotspots see cases coming back under control, however the weekly cases (243,800) have still not fallen under the highs of the first wave (217,700). Though as we have noted in the past the second wave saw fewer hospitalisations than the first, see the aforementioned upcoming chartbook for more on this.

Overnight we have seen China’s August economic data with retail sales (at +0.5% yoy vs. unchanged expected) and industrial production (at +5.6% yoy vs. +5.1% yoy expected) both beating expectations and thereby underscoring a rebound in economic activity due to fiscal stimulus and strong exports. Meanwhile the surveyed jobless rate came in line with expectations at 5.6% and YtD fixed asset ex rural were a touch better than expectations at -0.3% yoy. The Hang Seng (+0.57%) and Shanghai Comp (+0.28%) are advancing this morning on the back of these data beats. Other bourses in the region are trading a bit more mixed with the Nikkei (-0.56%) and Asx (-0.17%) both down while the Kospi (+0.64%) is up. In FX, all G-10 currencies are up against the greenback with the euro advancing +0.20% to 1.1890 and the onshore Chinese yuan up +0.35% to 6.7868, the highest level since May 2019. Other EM currencies are also trading up. Futures on the S&P 500 are up +0.17% this morning.

While we’re on Asia, in Japan just after we went to print yesterday the ruling Liberal Democratic Party’s leadership election was won by chief cabinet secretary Yoshihide Suga, in line with expectations. Suga won more than 70% of the available votes, and is now almost certain to replace Shinzo Abe as Prime Minister in a parliamentary vote tomorrow, with the new cabinet also expected to be announced the same day. Meanwhile overnight reports (per the Nikkei newspaper and Nippon TV) are suggesting that incumbent Finance Minister Taro Aso will keep his post in new cabinet. Aso has served as finance minister since the start of the Abe government in late 2012 and keeping him on would reinforce Suga’s message that he intends to keep the main policies of the outgoing Abe administration. Elsewhere, Aso has said overnight that the incoming government should consider calling an early election given plans to hold the postponed summer Olympics next year.

Staying on politics, Brexit got further attention yesterday, as the House of Commons began debating the Internal Market Bill, which passed its second reading vote by 340-263. However, that included 20 Conservative MPs who rebelled/abstained, including former Chancellor of the Exchequer Sajid Javid, who said “It is not clear to me why it is necessary for the UK to break international law”. For those who haven’t been following this as closely as us in the UK, the controversy behind this bill is that elements of it would allow the government to override parts of the Brexit Withdrawal Agreement reached with the EU, and hence break the UK’s international treaty obligations. The EU have given the UK until the end of the month to withdraw the relevant measures, but the UK government have shown no sign of backing down thus far, in spite of the fact that every former UK Prime Minister has now offered at least some criticism of the measures, albeit of varying degrees. Having passed its second reading, the bill now goes into committee stage from today and carries in into next week, during which amendments can be made by MPs. An important one there to look out for will be that from Tory MP Bob Neill, which would add the requirement that the House of Commons approve any measures before the government could decide to override the Northern Ireland Protocol in the Withdrawal Agreement.

On yesterday’s meeting between the EU and China over a trade deal, Xinhua has reported overnight that President Xi Jinping agreed that both sides need to “accelerate” the negotiations for the deal but shrugged off Europe’s “lecturing” over human rights issues and doubled down on the stance that any criticism of China’s policies in Xinjiang and Hong Kong is meddling in China’s internal affairs. Meanwhile, the EC Chief Ursula von der Leyen said of the meeting that “China has to convince us that it is worth having an investment agreement,” and the EU summit chair Michel told reporters that Xi Jinping appeared to be willing to allow visits by diplomats into the far western province of Xinjiang, however, details of this need to be worked out.

Turning back to yesterday and core sovereign bonds fell on both sides of the Atlantic, with gilts seeing the largest move as 10yr yields rose +1.2bps. Otherwise, yields on 10yr Treasuries (+0.7bps) and bunds (+0.1bps) all moved just slightly lower. Safe havens elsewhere advanced, with gold (+0.84%) recording its strongest performance in 2 weeks, and platinum (+2.88%) seeing its best day in a month. Oil lost ground however, as Brent crude (-0.55%) closed at its lowest level in 3 months.

There wasn’t a great deal of data yesterday, though we did get Euro Area industrial production for July, which saw a +4.1% increase (vs. +4.2% expected). That still leaves IP down -7.7% year-on-year however, compared to the -2.2% yoy decline in February, so there’s still some way to go before reaching pre-Covid levels again. Otherwise, the Bank of France’s industry sentiment indicator rose to 106 in August, its highest level since May 2017.

To the day ahead now, and today’s data highlights include the UK labour market statistics, the German ZEW survey for September, and Canadian manufacturing sales for July. Meanwhile from the US, we’ll get the Empire State manufacturing survey for September, as well as industrial production, capacity utilisation and the import price index for August. Otherwise, the ECB’s Panetta will be speaking.