Iraq PM Announces Resignation After 40 Protesters Killed On Single Deadliest Day
After two months of anti-corruption and anti-government protests have rocked Iraq, resulting in a death toll into the hundreds as the unrest turns increasingly sectarian and which has included the burning of two Iranian consulates, Iraqi Prime Minister Adel Abdul Mahdi says he will resign.
He announced in an official statement put out by his office that he will submit his resignation to parliament after the country’s top Shia cleric, Grand Ayatollah Ali al-Sistani, suddenly pulled support, telling the nation in a Friday sermon that parliament should “reconsider its options” after putting Mahdi in power in the first place.
The subsequent statement signed by Abdul Mahdi indicated the following: “In response to this call, and in order to facilitate it as quickly as possible, I will present to parliament a demand (to accept) my resignation from the leadership of the current government.”
Iraqi Prime Minister Adel Abdul Mahd, via Reuters.
Local authorities estimate the death toll since protests erupted on Oct. 1 has soared to over 400 people, with thousands wounded, amid reports of ‘live fire’ used by police. This includes security forces reportedly shooting some 40 people dead in Baghdad and in southern provinces in what was possibly the deadliest single day on Thursday.
At least on top provincial police chief was removed over shooting deaths this week, after Iraqi clerics had previously urged government forces to refrain from using deadly force.
Iraq remains a sectarian powder keg waiting to erupt further, given anti-corruption protests have quickly turned to target neighboring Iran’s influence; however Mahdi’s stepping down may relieve some of that pressure, given he had the close backing of Iran.
Iranian consulate in Najaf burning overnight Wednesday, via Reuters.
Meanwhile, Iran-backed Iraqi Shia militias have reportedly been increasingly involved in assisting security forces in putting down the popular unrest which has swept the country – by some accounts even deploying snipers.
Washington too has pointed the finger at Tehran and its paramilitaries inside of Iraq of stoking the unrest and destabilizing its neighbor in order to tighten its grip of influence over the country, which still has thousands of American troops present in an advisory capacity.
Four United Parcel Service (UPS) employees are accused of being involved in a decade-long operation to import and traffic large amounts of drugs and counterfeit vaping oils, police said, as 11 arrests were made over the past two weeks.
The scheme often saw thousands of pounds of narcotics and marijuana shipped weekly from narco-traffickers into the United States and then to various destinations across the nation. Authorities said the substances were transported meticulously in cardboard boxes through UPS’s trucking and delivery systems, the Washington Post reported.
Money made from the lucrative operation was then spent on purchasing luxury homes and properties, vehicles, and vacations, according to detectives.
Investigations first began in 2017 when the Tucson Police Department and an arm of ICE found evidence which pointed to the elaborate scheme.
John Leavitt, commander of the Tucson Police Department’s Counter Narcotics Alliance, said in a statement: “This investigation has identified and mitigated vulnerabilities in the shipping infrastructure that has allowed for the undetected trafficking of narcotics for more than a decade.
Over the past couple of weeks, agents arrested 11 individuals aged between 24 and 49, including four UPS employees. Authorities seized substantial sums of money, around 50,000 counterfeit THC vape pens, equipment to manufacture drugs, and vehicles, according to a police statement.
All eleven face charges related to narcotics smuggling, drug possession, money laundering and misconduct involving weapons, the New York Times reported.
A 49-year-old UPS employee of the Tucson distribution facility, Mario Barcelo, is accused of leading the operation, and allegedly used his position as supervisor to bypass security measures as drug shipments were loaded onto trucks and delivered, investigators from the Counter Narcotics Alliance said.
Barcelo was arrested on Nov. 13.
“He’s been able to provide this service to drug traffickers without being detected both internally and externally by law enforcement for years,” Tucson Police Sgt. William Kaderly told the Post.
“They’ve been doing it for so long that they were truly comfortable that they were never going to get caught.”
UPS told the Post in a statement that the company is “not at liberty to discuss the details of the arrests as this is an ongoing investigation,” but added that it is cooperating with law enforcement officials.
Trump to Designate Mexican Drug Cartels as Terror Organizations
President Donald Trump said this week he intends to designate Mexican drug cartels as terrorist groups for their role in trafficking narcotics and people. The day before, Mexican President Andres Manuel Lopez Obrador said he disagreed with the move.
During an interview on Nov. 26 with Fox News host Bill O’Reilly on the topic, Trump confirmed it is something he has been working on for several months.
“Absolutely,” Trump told O’Reilly when asked whether Mexican drug cartels would be designated as terror groups.
“I’ve been working on that for the last 90 days. You know designation is not that easy, you have to go through a process, and we’re well into that process.”
Mexico’s foreign ministry promptly reacted to Trump’s comments, saying it would quickly seek a high-level meeting with U.S. State Department officials to address the legal designation as well as the flow of arms and money to organized crime.
“The foreign minister will establish contact with his counterpart, Michael R. Pompeo, in order to discuss this very important issue for the bilateral agenda,” the ministry said.
Under U.S. law, members of a particular group designated as a terrorist organization cannot enter the country. They may be deported, and it is also illegal for people in the United States to knowingly offer support. Financial institutions must also block funds connected to the group and alert the U.S. Treasury Department.
Terror groups currently on the U.S. Foreign Terror Organization list include Islamic State, al-Qaeda and Boko Haram in Nigeria.
Earlier, Mexican President Andres Manuel Lopez Obrador said Mexico doesn’t agree with the United States potentially designating cartels as terrorists.
“We will never accept that, we are not ‘vendepatrias’ (nation sellers),” Lopez Obrador said at his morning press conference on Nov. 25, Breitbart reported.
Lopez Obrador’s foreign relations minister Marcelo Ebrard said that the designation would be unnecessary. He noted that if America designates cartels as terrorists, it could open up a legal avenue for the United States to take action against cartels inside of Mexico.
US Consumers Abandon Brick And Mortar, Spend Money Online As Black Friday Begins
Reuters is reporting that consumers spent billions of dollars online on Thanksgiving day, while the era of people lining up around the block at stores on the eve of Black Friday could be a dying trend. Spotters surveyed stores across the country in the overnight, noted that traffic volumes at brick-and-mortar stores were soft.
Lauren Bitar, head of retail consulting at analytics firm RetailNext, told Reuters that department stores extended shopping incentives from Halloween through Black Friday.
The abnormally long periods of incentives leading into Black Friday could have an impact on holiday sales, Bitar said.
“We’ve seen many merchants start their promotions pretty much right after the trick-or-treaters have gone to bed,” she said.
Bitar said stores offering promotions for an entire month leading to Black Friday could erode “the spike that we have seen in sales dollars historically.”
The National Retail Federation (NRF) said at least half of the consumers polled earlier this month have already taken advantage of the deals ahead of Black Friday.
Spotters told Reuters that crowds at stores on the eve of Black Friday were low.
Many consumers, who are on the prowl — scanning for deals on Black Friday, are expected to use credit cards. Though credit card interest rates are at 25-year highs, this could limit holiday spending.
Nearly 165 million Americans are expected to take part in the holiday shopping season through the weekend.
The latest trend of consumers abandoning retail stores for online shopping could further stress retailers this year as the already retail apocalypse has forced record store closings.
Adobe Analytics is reporting that online transactions of top retailers could be around $7.5 billion in sales on Friday, a 20.5% YoY increase.
Adobe showed online spending on Thursday was $4.4 billion, representing a 20.2% YoY rise.
NRF’s retail sales forecast for November through December could increase by 3.8% to 4.2% YoY, for a total of around $730 billion.
The most significant retail trend this year could be consumers ditching retail stores for online shopping. There’s also a major risk that this holiday shopping season underwhelms:
Department store retail sales continue a downward sloped move.
Department store retail sales verse Amazon’s stock price.
Many Americans are at least vaguely familiar with the My Lai massacre during the Vietnam War, which is a story of the evil that ordinary men can do. In 1968, U.S. troops were reeling from surprise attacks by the Viet Cong during the Tet Offensive and they unleashed their fury on the residents of a tiny village during a search-and-destroy mission.
American troops slaughtered hundreds of elderly people, women, and children, with many of them under age 4. As History.com explained, some soldiers “stabbed, clubbed, and carved ‘C (for Charlie) Company’ into the chests of their victims; and herded them into ditches and blew them to bits with grenades.” Many of the company’s soldiers reportedly participated in the atrocities, but those who weren’t involved didn’t stop it. It was shameful.
People often know the name Lt. William Calley, who was the only serviceman convicted of a crime related to those events. He was sentenced to life in prison, but President Richard Nixon ordered his sentence reduced. Calley spent three years under house arrest and then went on with his life and apologized during a speech in 2009.
Sadly, few remember the name, Hugh Thompson, the helicopter pilot who helped stop the massacre. Even fewer realize that that Army covered up the attacks for 20 months, that some war supporters smeared Thompson and others treated Calley as a hero. The Army recognized Thompson’s heroism 30 years later, when it awarded him the Soldier’s Medal. But, apparently, the disturbing lessons of that event have long been forgotten.
Earlier this month, President Donald Trump pardoned a former Army lieutenant who was convicted of ordering his troops to fire on unarmed civilians. He granted a pardon to an Army major who had been awaiting trial for killing an Afghan man. Trump reversed the demotion of another officer, who had been acquitted of alleged war crimes charges but was convicted of a lesser charge of posing with a dead Taliban fighter.
Not even the worst allegations here came close to My Lai, but there’s a reason a number of writers have raised these parallels. Pentagon brass, who urged the president not to issue these orders, fear that the president’s actions will undermine the system of military justice. Gen. Martin Dempsey, former chairman of the Joint Chiefs of Staff, tweeted that it signals “that we don’t take the Law of Armed Conflict seriously.” He called it an “abdication of moral responsibility.” He’s right.
“The tragedy of pardoning (Lt. Clint) Lorance isn’t that he will be released from prison – I’ve found room for compassion there,” Patrick Swanson, Lorance’s commander in Afghanistan told The New York Times. “The tragedy is that people will hail him as a hero.” Given some common public sentiments after My Lai, that fear is well-founded. Sure enough, Trump referred in a Tweet to one of the accused men as a “U.S. military hero.”
Is it fair to say that it’s now official policy that there are no rules of war, that the military’s process of enforcing those rules is a farce and that soldiers accused of committing crimes actually are heroes? We certainly should hope not.
There are practical reasons for opposing these pardons. They endanger our troops. If there are no limits in wartime, then our nation’s enemies don’t have to follow them, either. I understand that the other side rarely plays by Marquess of Queensbury rules, but that doesn’t mean that anything goes. By winking at bad behavior, we’re likely to get more of it from those in combat, which undermines America’s often-touted moral authority.
Our country claims to be different, to be a model for the rest of the world. Maybe not so much anymore. Common Dreams argued that the president’s action conforms to “a pattern of refusing accountability for violations of international law and a litany of war crimes over recent decades.” I don’t buy that leftist narrative, but why give fodder to those who do? The pardons stain the nation’s honorable service members by saying that they can’t be held responsible for their own actions. If they do atrocious things, well, boys will be boys.
The pardons also suggest that “Trump holds a dangerous, obsolete view of warfare—one that had fallen into disrepute after the horrors of World War II,” wrote Cornell law professor Jens David Ohlin, in a Washington Postcolumn. “His actions suggest that he believes in ‘total war,’ in which warfare is conducted not only by professional soldiers but also by entire societies, including their civilians.” Indeed.
I’m pleased that Trump seems less likely than his predecessors to insert the nation into these messy, dangerous international conflicts that endanger our troops and have little bearing on our security. But in giving a pass to those few military members accused of war crimes, the president is reinforcing the kind of dangerous attitudes that led to My Lai.
This column was first published in the Orange County Register.
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The gold options market saw $1.75 million in block trades betting the precious metal could almost triple in more than a year, surpassing the record.
Around noon in New York Wednesday, 5,000 lots of a gold option giving the holder the right to buy the precious metal at $4,000 an ounce in June 2021 changed hands. The bets were sold at $3.50 an ounce.
“It’s like 18-month term life insurance; what will the world look like if gold is at $4,000,” Tai Wong, the head of metals derivatives trading at BMO Capital Markets, said in an email. “They are hoping for a quick violent move,” he said, referring to the people who bought the call options.
Gold Headed to $4000?
For the call buyer, it’s not a matter of gold hitting $4,000 but rather gold hitting $4,000 by June 2021.
Of course one would not have to hold the options all the way through.
If gold suddenly spiked by $1,000 right away perhaps the entity cold sell the options for $15 or more at least tripling the bet. Otherwise these options will quickly decay.
Let’s assume the options are held to the bitter end.
Returns On Options Held Full Term
Return Synopsis
At a June 2021 price of $4,000 or less, the call buyer will lose $1.75 million.
Between $4,000.01 and $4003.49 the call buyer will lose some but not all of the bet.
At precisely $4003.50 the call buyer breaks even
At $4,000 the call buyer nets $48.25 million ($50 million minus the initial $1.75 million bet).
At $5,000 the call buyer nets $498.25 million ($500 million minus the initial $1.75 million bet).
The most likely thing, by far, in any time frame is the buyer losses $1.75 million.
Many Americans are at least vaguely familiar with the My Lai massacre during the Vietnam War, which is a story of the evil that ordinary men can do. In 1968, U.S. troops were reeling from surprise attacks by the Viet Cong during the Tet Offensive and they unleashed their fury on the residents of a tiny village during a search-and-destroy mission.
American troops slaughtered hundreds of elderly people, women, and children, with many of them under age 4. As History.com explained, some soldiers “stabbed, clubbed, and carved ‘C (for Charlie) Company’ into the chests of their victims; and herded them into ditches and blew them to bits with grenades.” Many of the company’s soldiers reportedly participated in the atrocities, but those who weren’t involved didn’t stop it. It was shameful.
People often know the name Lt. William Calley, who was the only serviceman convicted of a crime related to those events. He was sentenced to life in prison, but President Richard Nixon ordered his sentence reduced. Calley spent three years under house arrest and then went on with his life and apologized during a speech in 2009.
Sadly, few remember the name, Hugh Thompson, the helicopter pilot who helped stop the massacre. Even fewer realize that that Army covered up the attacks for 20 months, that some war supporters smeared Thompson and others treated Calley as a hero. The Army recognized Thompson’s heroism 30 years later, when it awarded him the Soldier’s Medal. But, apparently, the disturbing lessons of that event have long been forgotten.
Earlier this month, President Donald Trump pardoned a former Army lieutenant who was convicted of ordering his troops to fire on unarmed civilians. He granted a pardon to an Army major who had been awaiting trial for killing an Afghan man. Trump reversed the demotion of another officer, who had been acquitted of alleged war crimes charges but was convicted of a lesser charge of posing with a dead Taliban fighter.
Not even the worst allegations here came close to My Lai, but there’s a reason a number of writers have raised these parallels. Pentagon brass, who urged the president not to issue these orders, fear that the president’s actions will undermine the system of military justice. Gen. Martin Dempsey, former chairman of the Joint Chiefs of Staff, tweeted that it signals “that we don’t take the Law of Armed Conflict seriously.” He called it an “abdication of moral responsibility.” He’s right.
“The tragedy of pardoning (Lt. Clint) Lorance isn’t that he will be released from prison – I’ve found room for compassion there,” Patrick Swanson, Lorance’s commander in Afghanistan told The New York Times. “The tragedy is that people will hail him as a hero.” Given some common public sentiments after My Lai, that fear is well-founded. Sure enough, Trump referred in a Tweet to one of the accused men as a “U.S. military hero.”
Is it fair to say that it’s now official policy that there are no rules of war, that the military’s process of enforcing those rules is a farce and that soldiers accused of committing crimes actually are heroes? We certainly should hope not.
There are practical reasons for opposing these pardons. They endanger our troops. If there are no limits in wartime, then our nation’s enemies don’t have to follow them, either. I understand that the other side rarely plays by Marquess of Queensbury rules, but that doesn’t mean that anything goes. By winking at bad behavior, we’re likely to get more of it from those in combat, which undermines America’s often-touted moral authority.
Our country claims to be different, to be a model for the rest of the world. Maybe not so much anymore. Common Dreams argued that the president’s action conforms to “a pattern of refusing accountability for violations of international law and a litany of war crimes over recent decades.” I don’t buy that leftist narrative, but why give fodder to those who do? The pardons stain the nation’s honorable service members by saying that they can’t be held responsible for their own actions. If they do atrocious things, well, boys will be boys.
The pardons also suggest that “Trump holds a dangerous, obsolete view of warfare—one that had fallen into disrepute after the horrors of World War II,” wrote Cornell law professor Jens David Ohlin, in a Washington Postcolumn. “His actions suggest that he believes in ‘total war,’ in which warfare is conducted not only by professional soldiers but also by entire societies, including their civilians.” Indeed.
I’m pleased that Trump seems less likely than his predecessors to insert the nation into these messy, dangerous international conflicts that endanger our troops and have little bearing on our security. But in giving a pass to those few military members accused of war crimes, the president is reinforcing the kind of dangerous attitudes that led to My Lai.
This column was first published in the Orange County Register.
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via IFTTT
For only $19.99, you can instantly stream our 11-hour library, and learn about the 100 Supreme Court cases everyone should know. Or jump around to watch the cases you studied in class. Here is a preview of all 100 videos. Click the “playlist” feature (3rd icon from the right):
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Futures Flat On Lack Of “Trade Deal Optimism”; Traders Puzzled By Sudden Hang Seng Tumble
Futures were caught in the narrow range in which they traded for much of Thanksgiving Day holiday amid a lack of both trade deal optimism but more importantly, a lack of an actual retaliatory act from China which appears satisfied to jawbone in response to the passage of HK law, but is unwilling to do anything else to risk the trade deal as reported overnight.
And with the failure to break out to fresh highs, world shares also slipped on Friday as the MSCI World index strained for a record high, with investor nerves from Asia to Europe frayed over how or when the United States and China can agree a truce in their damaging trade war. The MSCI All Country world index again fell 0.2% to 548.48 points, remaining just short of the record 550.63 scaled in January 2018 before the eruption of tensions over trade between Washington and Beijing.
In Europe, the Stoxx 600 recovered from an early drop but after levitating modestly in the green, as declines in mining and construction shares offset increases in technology and travel, was back to unchanged if still near a four-year high. In holiday-thinned trade, stronger than expected eurozone inflation data was the main piece of economic data. The data showed inflation accelerated in November, comforting EcoCB policymakers, even if some factors pushing up prices may be only temporary. The ECB will next meet on Dec. 12, with its loose policy stance not expected to change for months to come. It may, however, decide to dump all bonds issued by companies that are not determined “green” by Christine Lagarde (we are only joking… we hope).
Earlier in the session, Asian stocks declined for a second day, led by tech firms, as investors awaited China’s possible retaliation against a U.S. bill supporting Hong Kong protesters. Most markets in the region were down, with Hong Kong leading losses and Indonesia rebounding. Despite Friday’s weakness, the MSCI Asia Pacific Index is heading for a third straight month of gains. The Topix fell 0.5% in thin trading, driven by Toyota Motor and Recruit Holdings. Japan looks set to re-embrace the power of public spending with one of its biggest ever stimulus packages. The Shanghai Composite Index closed 0.6% lower, capping a third week of declines, as signs of financial stress in China are putting the nation’s policy makers to the test. India’s Sensex retreated ahead of a quarterly economic report, which is expected to show the weakest growth in more than six years.
The big surprise in Asian trading was the a sudden, unexplained tumble in Hong Kong stocks which spread to the onshore market, with selling reflexively accelerating amid nervousness over a lack of clear triggers for the slump. As Bloomberg reports, the market was rife with speculation for the cause: health-care shares tumbled in Hong Kong when a document circulating on social media suggested Beijing could add dozens of new drugs to another round of procurement. Others said there was too much macro risk going into the weekend, with increasing uncertainty on the trade-war front. In onshore trading, the selling accelerated in the afternoon session as investors took profits in crowd favorites like Kweichow Moutai.
In total, Hong Kong’s Hang Seng Index tumbled 2% on volume that was 36% higher than the 30-day average. Quoted by Bloomberg, some traders said Thursday’s U.S. holiday meant investors lacked cues in Friday’s Asian session.
“There’s no obvious trigger” for the selloff according to First Shanghai Securities strategist Linus Yip who speculated that continued uncertainty over the outcome of U.S.-China trade negotiations could be one factor weighing on sentiment.
The Hong Kong sell-off came as investors grew uncertain over how U.S. markets will perceive the latest clash between Washington and Beijing over Hong Kong. “The more recent news on the trade front is how the Hong Kong situation might play into the U.S.-China trade negotiations,” said Hugh Gimber, strategist at J.P. Morgan Asset Management. “The market is now waiting on the next clear steer on when investors might be able to expect a deal to be reached.”
Meanwhile, across the Pacific, Wall Street will start the half-day session on Friday following Thanksgiving with futures gauges suggesting losses of around 0.2%, just shy of all time highs.
The lack of a more powerful selloff following Trump’s Wednesday’s night signature indicates that markets do not believe the trade deal will collapse as a result as investors bet it remains in the interest of both Washington and Beijing to move forward with talks to get a trade deal. Meanwhile, the MSCI world index climbed 2.5% this month, its third straight month of gains, helped in part by hopes the world’s two biggest economies are moving toward a resolution. The trade conflict has upset financial markets and disrupted supply chains even if stocks have continued to climb buoyed by nonstop optimism and hope that a deal is just around the corner… ever since the summer of 2018!
Meanwhile, what really matters is central bank policy and the Fed’s NOT QE: for the year, the MSCI world index is up over 20% this year, helped by a lowering of interest rates and injections of government stimulus around the world.
In rates, 10Y Treasurys were unchanged from Wednesday, trading at 1.764%; Benchmark European bonds, including Germany’s 10-year Bund yield, were also little changed, trading off one-month lows hit the previous session.
In FX, the dollar traded initially flat at 98.387, and edged up slightly against the Japanese yen. In early London trading, the greenback reached 109.55 yen, not far off a six-month peak of 109.61 set on Wednesday. The dollar then took off and the Bloomberg dollar index rose again, spiking above 1,210, headed for its biggest monthly gains since July. The pound eyed its longest monthly run of advances against the euro in more than 4.5 years, while the relative cost of hedging sterling climbed ahead of next month’s U.K. election. The euro stood at $1.1005, and has been stuck in a tight range for the past week. As trading in major currencies slumbers, their implied volatilities, key gauges of expected swings measured by their option prices, plumbed record lows this week.
Elsewhere, bitcoin gained 1.5%, with the original cryptocurrency on course for its worst month in a year. Bitcoin had been heavily sold off by investors as expectations fade that China’s embrace of blockchain would help cryptocurrencies enter the mainstream.
In commodities, oil prices dipped, with investors awaiting a meeting of OPEC and its allies next week. OPEC watchers expect an extension to a pact to throttle oil output but no deeper cuts to be agreed by the producer group and its allies next week. Brent crude futures were down 44 cents, or 0.7%, at $63.43 a barrel.
Markets Snapshot
S&P 500 futures down 0.2% to 3,147.00
STOXX Europe 600 down 0.07% to 408.97
MXAP down 0.9% to 163.88
MXAPJ down 1.1% to 524.25
Nikkei down 0.5% to 23,293.91
Topix down 0.5% to 1,699.36
Hang Seng Index down 2% to 26,346.49
Shanghai Composite down 0.6% to 2,871.98
Sensex down 0.7% to 40,839.78
Australia S&P/ASX 200 down 0.3% to 6,846.00
Kospi down 1.5% to 2,087.96
German 10Y yield fell 1.2 bps to -0.373%
Euro down 0.02% to $1.1007
Italian 10Y yield rose 2.7 bps to 0.888%
Spanish 10Y yield fell 1.4 bps to 0.397%
Brent futures down 0.6% to $63.49/bbl
Gold spot little changed at $1,456.71
U.S. Dollar Index little changed at 98.37
Top Overnight News from Bloomberg
Banks have been wrong for most of the past 10 years with their krona predictions as Sweden’s economy, often seen as a barometer for global trade, found itself battered by recessionary fears and tariff wars
The worst is over for the European economy, according to buyers of exchange-traded funds. Investors have poured $1.5 billion into U.S. ETFs focused on European assets in November, data compiled by Bloomberg show
Chancellor Angela Merkel’s government plans to tighten restrictions on foreign takeovers amid growing concerns China is scooping up Germany’s technology jewels
The ECB should integrate climate change and energy transition into its forecasting and assessment of collateral, Governing Council Member Villeroy said
For the last year, Saudi Arabia has largely turned a blind eye to cheaters within the OPEC+ alliance, cutting its own output more than agreed to offset over-production from the likes of Iraq and even Russia. Now, Riyadh’s had enough
Police said they had lifted lifted their blockade on Hong Kong Polytechnic University after officers cleared a campus that’s been besieged for nearly two weeks amid a violent standoff with demonstrators
Asian markets were mostly subdued after the holiday closure stateside for Thanksgiving Day and amid continued trade uncertainty, despite a more conciliatory tone from China’s State Council and with the retaliation so far to US President Trump’s Hong Kong bill signing seen as a mere slap on the wrist. ASX 200 (-0.3%) initially prodded record levels but with gains later reversed by underperformance in miners and the largest weighted financials sector, while the opening gains for the Nikkei 225 (-0.5%) eventually succumbed to the pressure from currency flows and substandard data in which Industrial Production matched its worst contraction since January last year. Hang Seng (-2.0%) and Shanghai Comp. (-0.6%) declined as markets second-guessed China’s retaliation measures for the HK bill and after PBoC’s inaction this week resulted to a CNY 300bln net liquidity drain, with the losses in the Hong Kong benchmark exacerbated as all its components resided in negative territory following the recent increased IPO activity and as the city braces for a resumption of protests over the weekend. Finally, 10yr JGBs weakened in an extension of yesterday’s post-2yr auction selling pressure and with demand also kept subdued by the lack of BoJ presence in the market, as well as mixed Japanese data releases.
Top Asian News
Ambani Said in Talks to Sell News Assets to Times Group
BOJ Cuts Buying Range for 10-25 Year Bonds in December Plan
India Braces for Shock GDP as Modi Scrambles to Spur Economy
Indiabulls Erases Gain as Court Allows More Time for Findings
Major European bourses (Euro Stoxx 50 +0.1%) are mixed and off of morning lows, after a broadly negative Asia-Pac session during which sentiment was undermined by the hangover from recent trade concerns. Month-end factors coupled with low liquidity also seem likely to distort the price action. Sector performance is mixed with no clear standout. In terms of individual movers; Ocado (+12.4%) shares shot higher on the news that the Co. has agreed to a partnership with Japanese grocer Aeon, the companies first partnership in the region. Elsewhere, positive broker moves for Bouygues (+1.5%) and Scout24 (+0.8%) saw their respective shares supported. In terms of the laggards; St James’ Place (-3.5%) fell to the bottom of the Stoxx 600 following a downgrade at Goldman Sachs. Elsewhere, negative broker movers put Remy Cointreau (-1.2%), Air France (-1.5%) and Royal Mail (-2.2%) shares under pressure. Separately, E.ON (+2.0%) posted strong Q3 earnings, which were roughly 20% above the prior year’s figures, while the Co. also raised the outlook on the completion of Innogy’s (-0.2%) transaction. On which note, Innogy and E.ON presented proposals for the restructuring of Innogy’s Npower unit – which could lead to 4.5k in job losses and closures of a number of call centres. Finally, Renault (+1.4%) shares are supported amid reports that the Co. is reportedly mulling a program that would boost efficiency with Nissan and Mitsubishi.
Top European News
German Unemployment Unexpectedly Drops as Optimism Edges Up
Euro- Area Inflation Quickens, But Remains Far Below ECB’s Goal
Merkel’s Fate Rests With Disgruntled Members of Battered Partner
Ocado Expands Into Asia With Japan Robot Warehouse Deal
In FX, the major outperformers and movers outside of recent ranges, as an improvement in NZ consumer confidence gives the Kiwi a further fillip following more upbeat business sentiment or less bleak to be precise on Thursday. Nzd/Usd is extending gains above 0.6400 and threatening to break free from the 0.6425 level that has been keeping the pair tethered, while Eur/Sek is now eyeing the psychological 10.5000 mark in wake of firmer than forecast Swedish Q3 GDP that has given the Swedish Krona a fundamental lift on top of renewed bullish technical impetus after the cross retreated through 10.5500 chart support more convincingly.
GBP – Far from hero to zero, but Sterling is losing more of its YouGov pre-UK election poll mojo with negative month end cross winds also weighing on the Pound via Eur/Gbp demand. Cable has now lost grip of the 1.2900 handle and briefly slipped below the 21 DMA (1.2884), while 0.8500 continues to cushion the aforementioned cross.
AUD/EUR/JPY/CAD/CHF – All narrowly mixed vs the Dollar that is still doing well if not quite defying gravity amidst rebalancing models flagging various strains of Greenback selling for month end (DXY holding ‘comfortably’ above 98.000 and towards the upper end of a 98.412-301 range). The Aussie is trying to piggy-back its Antipodean counterpart, but remains top heavy into 0.6800 and Aud/Nzd has pulled back from 1.0550 again after weaker than expected private sector credit data overnight. In similar vein, Eur/Usd seems destined to stay anchored around 1.1000 with yet more hefty option expiries hampering attempts to the upside vs decent technical support limiting losses beneath the big figure, while mixed Eurozone data is broadly being ignored. Elsewhere, Usd/Jpy, Usd/Cad and Usd/Chf are also treading familiar ground in narrow parameters of 109.60-45, 1.3292-79 and parity-0.9980 respectively, with the Yen torn between conflicting Japanese data and standard BoJ policy rhetoric from Governor Kuroda, Franc largely shrugging off a decline in the Swiss KOF indicator and Loonie awaiting Canadian GDP along with any USMCA developments for some independent direction.
In commodities, crude markets are subdued (albeit off intraday lows) amid a lack of fresh catalysts, as prices pull back slightly following a strong finish to yesterday’s session. In terms of crude specific news; OPEC’s Economic Commission Board yesterday reportedly suggested that OPEC does not need to implement deeper cuts over H1 2020, premised on the assumption that the surplus in production over the first half of the year will be later offset by a deficit in the latter part of the year. This is broadly in line with expectations for the outcome of the 5-6 December meeting, as indicated by multiple sources in recent weeks. Elsewhere, Russian oil production for the month of November stood at 11.24mln BPD, according to IFAX citing sources, which is relatively unchanged from the prior month. In terms of metals, gold prices are subdued and well within recent ranges; the precious metal managed to meander just under yesterday’s 1458.32/oz high, but has since pulled back slightly, and remains well off this week’s USD 1470/oz high. Copper prices, meanwhile, continue to slip, with poor Industrial Output/Production readings out of Japan and South Korea overnight doing little to help sentiment.
US Event Calendar
Nothing major scheduled
DB’s Jim Reid concludes the overnight wrap
Yesterday was spent mostly waiting to see if we’d get a response from China following President Trump’s signing of legislation expressing support for Hong Kong protestors. Other than a statement from the foreign ministry and a tweet from the editor-in-chief of the state run Global Times saying that China was considering putting the drafters of the law on a no-entry list, we didn’t really get any. So we’ll have to wait and see if this impedes “phase one” trade negotiations. This morning Asian markets are down again with the Nikkei (-0.38%), Hang Seng (-1.98%), Shanghai Comp (-0.64%) and Kospi (-1.32%) all in the red. The declines in Hong Kong and China are being led by drugmakers over unconfirmed reports that China will accelerate a centralized procurement program that’s driving down generic drug prices. Elsewhere, futures on the S&P 500 are down -0.28%.
The decline for the Kospi overnight follows the Bank of Korea decision to keep interest rates unchanged; however, they did cut growth forecasts in 2019 and 2020, both by 0.2pp to 2.0% and 2.3%, respectively.
In other news, BoJ governor Kuroda said that the central bank needs to pay attention to downside risks to the economy, especially stemming from overseas, while adding that, to reach its inflation target, the BoJ will continue with powerful monetary easing. He also said that it’s important to weigh costs and benefits of policy and added that Japan needs structural reforms, deregulation to boost its potential growth. Yields on 10y JGBs are up +1.6bps to -0.089%.
As for the rest of markets yesterday, in Europe we ended with modest declines across most equity markets. The STOXX 600 closed down -0.14% for its first decline in a week with volumes close to 40% below average with the auto sector (-0.78%) down notably. The DAX, CAC and FTSE MIB closed -0.31%, -0.24% and -0.61% respectively while the FTSE 100 was -0.18%. European Banks also nudged down -0.69% despite bond markets being a touch weaker. Indeed 10y Bunds were +1.3bps and BTPs +2.9bps higher in yield. The latter seemingly underperforming post a 10y auction, which saw a drop in demand. In FX, having touched a high of $1.2951 on Thursday evening following the release of the YouGov MRP mode, Sterling faded slightly through yesterday’s session and is trading at 1.2914 this morning.
Staying with FX, the rout for the Chilean Peso (-1.17%) continued yesterday and along with the Colombian Peso hit a new all-time low. The Brazilian Real (+1.17%) did manage to strengthen but also remains a shade above its own record low as political turmoil in the region continues following anti-government demonstrations. Meanwhile, Chile’s central bank said overnight that it will sell as much as $10bn on the spot market and provide an equal amount of currency hedges to arrest the currency’s decline. EM FX is now down -0.64% for the year with 4 of the biggest 6 decliners being currencies in LatAm.
Lastly, yesterday’s data included a softer-than-expected November HICP print in Germany (-0.8% mom vs. -0.7% expected) although it was noted that the year-over-year rate printed ahead of expectations (+1.2% yoy vs. +1.1% expected) seemingly due to a methodology change for package holidays. Meanwhile in Spain CPI was also a tad softer than expected (0.0% mom vs. +0.1% expected). Elsewhere the October M3 money supply reading for the Euro Area stayed put at +5.6%, which was a tenth ahead of expectations while finally November confidence indicators for the Euro Area on average improved from October.
Looking at the day ahead, with no data due out of the US the focus will be here in Europe where we’re due to get the preliminary CPI report for the Euro Area, France and Italy, October money and credit aggregates data in the UK, November unemployment and October retail sales in Germany and final Q3 GDP revisions for France. Away from that we’re expecting to get some comments out of the ECB, specifically from Hernandez de Cos, Villeroy and Guindos.
The Thrombeys are a sprawling family that’s rich in nitwits. Not so much the old man, wealthy crime novelist Harlan Thrombey (Christopher Plummer), who is in any case suddenly dead, but his heirs and in-laws, all hungry for an inheritance and just the kind of devious schemers you’d expect to find in a country manor murder mystery such as this.
Writer-director Rian Johnson, still being nerd-roasted for his smash-hit Star Wars installment, The Last Jedi, happily acknowledges his influences in constructing Knives Out—primarily Agatha Christie novels and the movies made from them (Death on the Nile, Evil Under the Sun), as well as pictures like Gosford Park and the super-tricky Deathtrap. Johnson appears to be having a lot of fun here, as does the large and star-filled cast, so it’s a shame that, despite the story’s many incidental pleasures, it never really takes off.
The plot is ridiculously complicated, of course. There are several prime suspects in the murder of Harlan Thrombey, whose throat was slit on the night of his 85th birthday party. The man assigned to crack the case (assigned by whom is another mystery) is Benoit Blanc (Daniel Craig), “the last of the gentleman sleuths,” as someone amusingly puts it. Blanc is a Poirot-like outsider, a southerner who sounds as if he’s mumbling through a mouthful of magnolias. He’s about as far removed from James Bond as Craig could possibly get, and the actor seems to be enjoying the respite (although he doesn’t do a lot of virtuoso crime-solving of the sort you might expect).
In time-honored fashion, Blanc assembles his suspects in a large drawing room filled with vast carpets and elaborate bric-a-brac. (The movie’s production design is impressively deluxe.) Among those submitting to the detective’s questioning are Harlan’s wimpy son Walt (Michael Shannon), who has a cushy sinecure running his father’s publishing house; his daughter Linda (Jamie Lee Curtis), a real-estate shark whose business has long been financed by her dad; Linda’s husband Richard (Don Johnson), a dodgy customer whose own misdeeds will eventually be made clear; Harlan’s widowed daughter-in-law Joni (Toni Collette), a “lifestyle guru” constantly in need of money; and Harlan’s smug, smirky grandson Ransome (Chris Evans, playing way against type).
Also nibbling around the edges of the plot are a pair of ineffective cops (LaKeith Stanfield and Noah Segan), the family’s sharp-eyed housekeeper (Edi Patterson), and Walt’s creepy alt-right son (Jaeden Martell).
And then there’s Marta Cabrera (Ana de Armas), Harlan’s live-in nurse, the only good-hearted person on the scene. Marta is physically incapable of deceit—she vomits if compelled to tell a lie—so Blanc recruits her to be his Watson. (“The game is afoot, eh?”)
A lot of stuff happens, Lord knows, and the story’s frenzied twists and turns never stop. There’s a secret entrance to the house, a suspiciously missing toxicology report, some lethally mixed-up meds, and a bit of rote political nudging (about illegal immigrants and children in cages) that the movie could have done without. There’s also an amusing car chase and wonderfully caustic performances by Collette and Evans. But Armas doesn’t bring a lot of spark to what is in fact the movie’s central character and Craig sometimes seems like a bystander as the action unfolds around him. His character may have a Southland drawl, but it’s so weirdly thick that you begin to wonder if he’s actually from anywhere at all.
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