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Fuel retailers sue state over requirement that stations post signs advertising gas tax freeze

A trade organization that represents gas station owners alleges in a lawsuit that a requirement that businesses display signs advertising a freeze on the state’s gas tax violates their freedom of speech and is unconstitutional.A trade organization that represents gas station owners alleges in a lawsuit that a requirement that businesses display signs advertising a freeze on the state’s gas tax violates their freedom of speech and is unconstitutional......»»

Category: topSource: chicagotribuneMay 19th, 2022

Futures Flat Amid Fresh Inflation Jitters; Yen Tumbles To 5 Year Low

Futures Flat Amid Fresh Inflation Jitters; Yen Tumbles To 5 Year Low Price action has been generally uninspiring, with US index futures and European stocks flat after UK inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates, while Asian markets fell as investors fretted over early rate hikes by the Federal Reserve after strong retail earnings dented the stagflation narrative.  Ten-year Treasury yields held around 1.63% and the dollar was steady. Cryptocurrencies suffered a broad selloff, while oil extended losses amid talk of a coordinated U.S.-China release of reserves to tame prices. Gold rose. At 7:30 a.m. ET, Dow e-minis were down 14 points, or 0.04%. S&P 500 e-minis were up 1.25 points, or 0.0.3% and Nasdaq 100 e-minis were up 24.75 points, or 0.15%, boosted by gains in Tesla and other electric car-makers amid growing demand for EV makers. Target Corp was the latest big-name retailer to report positive results, as it raised its annual forecasts and beat profit expectations, citing an early start in holiday shopping. But similar to Walmart, shares of the retailer fell 3.1% in premarket trade as its third-quarter margins were hit by supply-chain issues. Lowe's rose 2.2% after the home improvement chain raised its full-year sales forecast on higher demand from builders and contractors, as well as a strong U.S. housing market. Wall Street indexes had ended higher on Tuesday after data showed retail sales jumped in October, and Walmart and Home Depot both flagged strength in consumer demand going into the holiday season. While the readings showed that a rise in inflation has not stifled economic growth so far, any further gains in prices could potentially dampen an economic recovery. Indeed, even as global stocks trade near all-time highs, worries are rising that growth could be derailed by inflation, the resurgent virus, or both. The question remains whether the jump in costs will prove transitory or become a bigger challenge that forces a sharper monetary policy response, roiling both shares and bonds. The market now sees a 19% probability of a rate hike by the Fed in their March 2022 meet, up from 11.8% probability last month. “The markets are still driven by uncertainty regarding how transitory inflation is,” according to Sebastien Galy, senior macro strategist at Nordea Investment Funds. “The market is assessing the situation about inflation -- what is in the price and what is not.” On the earnings front, Baidu reported a 13% jump in sales after growth in newer businesses such as the cloud helped offset a slowdown in its main internet advertising division. Nvidia and Cisco Systems are scheduled to report results later today In premarket trading, Tesla inexplicably rose as much as 2.4% in U.S. pre-market trading, extending a bounce from the previous session after CEO Elon Musk disclosed even more stock sales. Peers Rivian and Lucid added 0.9% and 8.8%, respectively. Here are some of the biggest U.S. movers today: Electric-vehicle makers Rivian Automotive (RIVN US), Lucid (LCID US) and Canoo (GOEV US) all move higher in U.S. premarket trading on heavy volumes, extending their gains and after Rivian and Lucid notched up milestones in their market values on Tuesday. The gains for Rivian on Tuesday saw its market capitalization surpass Germany’s Volkswagen, while Lucid’s market value leapfrogged General Motors and Ford. Tesla (TSLA US) shares rise 1.3% in U.S. premarket trading, extending the bounce the EV maker saw in the prior session and after CEO Elon Musk disclosed more share sales. Visa (V US) shares slip in U.S. premarket trading after Amazon.com said it will stop accepting payments using Visa credit cards issued in the U.K. starting next year. Boeing (BA US) gains 1.9% in premarket trading after Wells Fargo upgrades the airplane maker to overweight from equal weight in a note, saying the risk-reward is now skewed positive. Citi initiates a pair trade of overweight Plug Power (PLUG US) and underweight Ballard Power Systems (BLDP US), downgrading the latter to neutral on weak sales in China and likely delay in meaningful fuel cell adoption. Ballard Power falls 3.4% in premarket trading. La-Z-Boy (LZB US) climbed 7% in postmarket trading after it reported adjusted earnings per share for the fiscal second quarter of 2022 that beat the average analyst estimate and boosted its quarterly dividend. StoneCo’s (STNE US) shares fall as much as 9% in postmarket trading Tuesday after the fintech reported a weaker-than-expected adjusted results for the third quarter. Chembio Diagnostics (CEMI US) rose 11% in extended trading after saying it submitted an Emergency Use Authorization application to the U.S FDA for its new DPP SARS-CoV-2 Antigen test. European stocks treaded water with U.S. equity futures as the worst outbreak of Covid infections since the start of the pandemic held the rally in check. In the U.K., inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates, pressing on the FTSE 100 to lag peer markets. Asian stocks fell, halting a four-day rally, as investors factored in higher Treasury yields and the outlook for U.S. monetary policy to assess whether the region’s recent gains were excessive.   The MSCI Asia Pacific Index slid as much as 0.7%, pulling back from a two-month high reached Tuesday. The banking sector contributed the most to Wednesday’s drop as the Commonwealth Bank of Australia reported cash earnings that were below some estimates. South Korea led the region’s decline, with the Kospi falling more than 1%, weighed down by bio-pharmaceutical firms. Asia’s stocks are taking a breather from a run-up driven by expectations for earnings to improve and economies to recover from quarters of pandemic-induced weakness. The benchmark is coming off a two-week gain of 1.5%.  “Shares are correcting recent gains, although I’d say it’s not much of a correction as the drop is mild,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo. “The relatively solid economic performances in the U.S. and Europe signal positive trends for Asian exporters,” which will support equities over the long term, he said.  U.S. stocks climbed after data showed the biggest increase in U.S. retail sales since March, while results from Walmart Inc. and Home Depot Inc. showed robust demand. The 10-year Treasury yield hit 1.64%, gaining for a fourth day. Japanese equities fell, cooling off after a four-day advance despite the yen’s drop to the lowest level against the dollar since 2017. Service providers and retailers were the biggest drags on the Topix, which dropped 0.6%. Recruit and Fast Retailing were the largest contributors to a 0.4% loss in the Nikkei 225. The yen slightly extended its decline after tumbling 0.6% against the greenback on Tuesday. The value of Japan’s exports gained 9.4% in October, the slowest pace in eight months, adding to signs that global supply constraints are still weighing on the economy. Indian stocks fell, led by banking and energy companies, as worries over economic recovery and inflation hurt investors’ sentiment. The S&P BSE Sensex fell 0.5% to 60,008.33 in Mumbai, while the NSE Nifty 50 Index declined by 0.6%. The benchmark index has now dropped for five of seven sessions and is off 3.7% its record level reached on Oct. 18. All but five of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of real estate companies.  Fitch Ratings kept a negative outlook on India’s sovereign rating, already at the lowest investment grade, citing concerns over public debt that’s the highest among similar rated emerging-market sovereigns.  While high-frequency data suggests India’s economic recovery is taking hold, central bank Governor Shaktikanta Das said at an event on Tuesday that the recovery is uneven. “Feeble global cues are weighing on sentiment,” Ajit Mishra, a strategist with Religare Broking, said in a note. He expects indexes to slide further but the pace of decline to be gradual with Nifty having support at 17,700-17,800 level. Shares of Paytm are scheduled to start trading on Thursday after the digital payment company raised $2.5b in India’s biggest initial share sale. Local markets will be closed on Friday for a holiday.  Reliance Industries contributed the most to Sensex’s decline, decreasing 2.1%. The index heavyweight has lost 5% this week, headed for the biggest weekly drop since June 27. In rates, Treasuries were steady with yields slightly richer across the curve and gilts mildly outperforming after paring early losses. Treasury yields except 20-year are richer by less than 1bp across curve with 30-year sector outperforming slightly; 10-year yields around 1.63% after rising as high as 1.647% in early Asia session. Focal points for U.S. session include 20-year bond auction -- against backdrop of Fed decision to not taper in the sector, made after last week’s poorly bid 30-year bond sale, and seven Fed speakers scheduled. The $23BN 20-year new issue at 1pm ET is first at that size after cuts announced this month; WI yield at 2.06% is 4bp richer than last month’s, which tailed the WI by 2.5bp. In Europe, gilts richen slightly across the short end, short-sterling futures fade an open drop after a hot inflation print. Peripheral spreads are marginally wider to core. In FX, the Bloomberg Dollar Spot Index drifted after earlier rising to its highest level in over a year, spurred by strong U.S. retail sales and factory output data Tuesday; the greenback traded mixed versus its Group-of-10 peers though most currencies were consolidating recent losses against the greenback. The pound reached its strongest level against the euro in nearly nine months after U.K. inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates. The Australian dollar hit a six-week low as third quarter wage data missed the central bank’s target, prompting offshore funds to sell the currency; the three-year yield fell back under 1%. The yen declined to its lowest level in more than four years as growing wagers of quicker policy normalization in the U.S. contrasted with the outlook in Japan, where interest rates are expected to be kept low. Super-long bonds fell. Volatility broke through the recent calm in currency markets, where the cost of hedging against volatility in the euro against the dollar over the next month climbed the most since the pandemic struck in March 2020. The move comes as traders bake in bets on faster rate hikes to curb inflation. The Turkish lira extended the week’s downward move, weakening another 2% against the dollar after comments from Erdogan sent the USDTRY hitting record highs of 10.5619 The Chinese yuan advanced to its highest level since 2015 against a basket of trading partners’ currencies following the dollar’s surge. Bloomberg’s replica of the CFETS basket index rises 0.3% to 101.9571, closer to the level that triggered a shock devaluation by the PBOC in 2015, testing the central bank’s tolerance before stepping in with intervention. In commodities, crude futures dropped as the market weighs the potential for a join U.S.-China stockpile-reserve release. WTI is down more than 1%, back on a $79-handle; Brent slips back toward $81.50, trading near the middle of this week’s range. Most base metals are under pressure with LME copper down as much as 1.4%. Spot gold adds $10 near $1,860/oz. European gas surged to the highest level in a month as delays to a controversial new pipeline from Russia stoked fears of a supply shortage with winter setting in. Cryptocurrencies remained lower after a tumble, with Bitcoin steadying around the $60,000 level. Looking at the day ahead now, and data releases include October data on UK and Canadian CPI, as well as US housing starts and building permits. Central bank speakers include ECB President Lagarde and the ECB’s Schnabel, the Fed’s Williams, Bowman, Mester, Waller, Daly, Evans and Bostic, and the BoE’s Mann. Finally, the ECB will be publishing their Financial Stability Review, and earnings releases today include Nvidia, Cisco, Lowe’s and Target. Market Snapshot S&P 500 futures little changed at 4,696.00 STOXX Europe 600 up 0.1% to 489.79 MXAP down 0.5% to 200.06 MXAPJ down 0.4% to 656.01 Nikkei down 0.4% to 29,688.33 Topix down 0.6% to 2,038.34 Hang Seng Index down 0.2% to 25,650.08 Shanghai Composite up 0.4% to 3,537.37 Sensex down 0.4% to 60,064.33 Australia S&P/ASX 200 down 0.7% to 7,369.93 Kospi down 1.2% to 2,962.42 Brent Futures down 0.8% to $81.79/bbl Gold spot up 0.5% to $1,859.93 U.S. Dollar Index little changed at 95.95 German 10Y yield little changed at -0.25% Euro little changed at $1.1310 Top Overnight News from Bloomberg Bond traders are bracing for a key test Wednesday as the Treasury looks to sell its first long-dated debt since inflation worries spooked buyers at last week’s poorly received 30-year auction Increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to euro-area stability, the European Central Bank warned Germany is giving investors a rare chance to grab some of Europe’s safest and positive-yielding debt. The country will sell one billion euros ($1.13 billion) of its longest-dated debt at 10:30 a.m. London on Wednesday. The country’s 30-year notes are currently trading with a yield 0.09%. It’s a paltry rate, but probably the last time for a while that Germany will offer the maturity ECB Governing Council member Olli Rehn says euro- area inflation is accelerating due to increasing demand pushing up the price of energy and supply bottlenecks, according to interview in Finland’s Talouselama magazine The yuan’s advance to a six-year high versus China’s trading partners this week has investors asking how far the central bank will let the rally run. The yuan extended gains on Wednesday against a basket of 24 currencies of the nation’s trading partners, bringing it close to the level that triggered a shock devaluation by the People’s Bank of China in 2015 Turkish President Recep Tayyip Erdogan vowed to continue fighting for lower interest rates, sending a clear signal to investors a day before the central bank sets its policy. The lira weakened A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed and struggled to sustain the positive lead from the US where better than expected Industrial Production and Retail Sales data spurred the major indices, in which the S&P 500 reclaimed the 4,700 level and briefly approached to within four points of its all-time high. ASX 200 (-0.7%) was led lower by underperformance in the top-weighted financials sector amid weakness in the largest lender CBA despite a 20% jump in quarterly cash profit, as operating income was steady and it noted that loan margins were significantly lower. Mining related stocks also lagged in Australia due to the recent declines in global commodity prices amid the stronger USD and higher US yields. Nikkei 225 (-0.4%) retraced its opening gains after disappointing Machinery Orders and miss on Exports which grew at the slowest pace in eight months, while the KOSPI (-1.2%) suffered due to virus concerns with daily infections at the second highest on record for South Korea. Hang Seng (-0.3%) and Shanghai Comp. (+0.4%) were varied with Hong Kong dragged lower by tech stocks including NetEase post-earnings, while the mainland was choppy as markets continued to digest the recent Biden-Xi meeting that was described by President Biden as a 'good meeting' and in which they discussed the need for nuclear “strategic stability” talks. US and China also agreed to provide access to each other’s journalists, although there were also comments from Commerce Secretary Raimondo that China is not living up to phase 1 trade commitments and it was reported that China is to speed up plans to replace US and foreign tech. Finally, 10yr JGBs were flat with demand hampered following the declines in T-notes, although downside was stemmed amid the flimsy sentiment across Asia-Pac trade and with the BoJ also in the market for JPY 925bln of JGBs mostly concentrated in 1-3yr and 5-10yr maturities. Top Asian News Asia Stocks Set to Snap Four-Day Advance as Kospi Leads Decline Gold Rises as Fed Officials Feed Debate on Inflation Response Deadly Toxic Air Chokes Delhi as India Clings to Coal Power PBOC May Start Raising Rates by 10bps Every Quarter in 2022: TD European equities (Stoxx 600 +0.1%) trade with little in the way of firm direction as the Stoxx 600 lingers around its ATH printed during yesterday’s session. The handover from the APAC session was mostly a softer one after the region failed to sustain the positive lead from the US which saw the S&P 500 approach within four points of its all-time high. Stateside, US futures are just as uninspiring as their European counterparts (ES flat) ahead of another busy day of Fed speak and pre-market earnings from retail names Target (TGT) and TJX Companies (TJK) with Cisco (CSCO) and NVIDIA (NVDA) due to report after-hours. Markets still await a decision on the next Fed Chair which President Biden said will come in around four days yesterday; as it stands, PredictIt assigns a circa 65% chance of Powell winning the renomination. Sectors in Europe have a marginal positive tilt with Media names outperforming peers alongside gains in Vivendi (+1.0%) after Italian prosecutors asked a judge to drop a case against Vivendi's owner and CEO for alleged market manipulation. Travel & Leisure names are the notable underperformer amid losses in sector heavyweight Evolution Gaming (-9.6%) who account for 14% of the sector with the Co. accused of taking illegal wagers. In terms of individual movers, Siemens Healthineers (+4.6%) is one of the best performers in the region after the Co. noted that revenues are on track to grow 6-8% between 2023 and 2025. UK Banking names such as Lloyds (+1.3%) and Natwest (+1.1%) have benefitted from the favourable rate environment in the UK with today’s inflation data further cementing expectations for a move in rates by the BoE next month. Conversely, this acted as a drag on the UK homebuilder sector at the open before moves were eventually scaled back. SSE (-4.5%) underperforms after announcing a GBP 12.5bln investment to accelerate its net zero ambitions. Top European News Epstein’s Paris Apartment Listed for $14 Million, Telegraph Says Volkswagen Shares Stall as Analysts Doubt Its EV Street Cred Germany to Move Ahead With Tighter Covid Curbs Amid Record Cases U.K. Urges EU Not to Start Trade War If Brexit Deal Suspended In FX, the Greenback extended Tuesday’s post-US retail sales and ip gains to set new 2021/multi-year highs overnight when the index hit 96.266 and several Dollar pairs probed or crossed psychological round numbers. However, the latest bull run has abated somewhat amidst some recovery gains in certain rival currencies and a general bout of consolidation ahead of housing data, another raft of Fed speakers and Usd 23 bn 20 year supply that will be of note after a bad debut for new long londs last week, not to mention tepid receptions for 3 and 10 year offerings prior to that. NZD/AUD - A marked change in the tide down under as the Aud/Nzd cross reverses sharply from around 1.0450 to sub-1.0400 and gives the Kiwi enough impetus to regain 0.7000+ status vs its US peer with extra incentive provided by NZ PM Ardern announcing that the entire country is expected to end lockdown and move to a new traffic light system after November 29, while Auckland’s domestic borders will reopen from December 15 for the fully vaccinated and those with negative COVID-19 tests. Conversely, the Aussie is struggling to stay within sight of 0.7300 against its US counterpart in wake of broadly in line Q3 wage prices that leaves the y/y rate still some way short of the 3% pace deemed necessary to lift overall inflation by the RBA. GBP/CAD - Sterling is striving to buck the overall trend with help from more forecast-topping UK data that should give the BoE a green light for lifting the Bank Rate in December, as headline CPI came in at 4.2% y/y, core at 3.4% and PPI prints indicate more price pressure building in the pipeline. Cable printed a minor new w-t-d peak circa 1.3474 in response before waning and Eur/Gbp fell below the prior y-t-d low and 0.8400, but is now back above awaiting more news on the Brexit front and a speech from one of the less hawkish MPC members, Mann. Elsewhere, the Loonie is hovering around 1.2550 vs the Greenback and looking toward Canadian inflation for some fundamental direction as oil prices continue to fluctuate near recent lows, but Usd/Cad may also be attracted to decent option expiry interest between 1.2540-55 in 1.12 bn. CHF/EUR/JPY - All straddling or adjacent to round numbers against the Dollar, but the Franc lagging below 0.9300 on yield differentials, while the Euro has recovered from a fresh 2021 trough under 1.1300 and Fib support at 1.1290 to fill a gap if nothing else, and the Yen just defended 115.00 irrespective of disappointing Japanese machinery orders and internals within the latest trade balance. In commodities, WTI and Brent benchmarks are pressured this morning but the magnitude of the action, circa USD 0.70/bbl at the time of writing, is less pronounced when compared to the range of the week thus far and particularly against last week’s moves. Newsflow has been slim and the downside action has arisen without fresh catalysts or drivers; note, participants are cognisant of influence perhaps being exerted by today’s WTI Dec’21 option expiry. To briefly surmise the morning’s action, Vitol executives provided bullish commentary citing limited capacity to deal with shocks and on that theme, there were reports of an explosion at an oil pipeline in Southern Iran, said to be due to aging equipment. This, alongside reports that Belarus is restricting oil flows to Poland for three-days for maintenance purposes, have not steadied the benchmarks. Elsewhere, last night’s private inventories were mixed but bullish overall, with the headline a smaller than expected build and gasoline a larger than expected draw. On gasoline, some desks posit that this draw may serve to increase pressure for a US SPR release, and as such look to today’s EIA release which is expected to print a gasoline draw of 0.575M. Moving to metals, spot gold and silver are firmer this morning but, in a similar vein to crude, remain well within familiar ranges as specific catalysts have been light and initial USD action has largely fizzled out to the index pivoting the U/C mark. More broadly, base metals are pressured as inventories of iron ore are at their highest for almost three years in China as demand drops, with this having a knock-on impact on coking coal, for instance. US Event Calendar 7am: Nov. MBA Mortgage Applications, prior 5.5% 8:30am: Oct. Building Permits, est. 1.63m, prior 1.59m, revised 1.59m 8:30am: Oct. Building Permits MoM, est. 2.8%, prior -7.7%, revised -7.8% 8:30am: Oct. Housing Starts MoM, est. 1.5%, prior -1.6%; Housing Starts, est. 1.58m, prior 1.56m DB's Henry Allen concludes the overnight wrap Even as inflation jitters remained on investors’ radars, that didn’t prevent risk assets pushing onto fresh highs yesterday, as investor sentiment was bolstered by strong economic data and decent corporate earnings releases. In fact by the close of trade, the S&P 500 (+0.39%) had closed just -0.02% beneath its all-time closing record, in a move that also brought the index’s YTD gains back above +25%, whilst Europe’s STOXX 600 (+0.17%) hit an all-time high as it posted its 16th gain in the last 18 sessions. Starting with the data, we had a number of positive US releases for October out yesterday, which echoed the strength we’d seen in some of the other prints, including the ISMs and nonfarm payrolls that had both surprised to the upside in the last couple of weeks. Headline retail sales posted their biggest gain since March, with a +1.7% advance (vs. +1.4% expected), whilst the measure excluding autos and gas stations was also up by a stronger-than-expected +1.4% (vs. +0.7% expected). Then we had the industrial production numbers, which showed a +1.6% gain in October (vs. +0.9% expected), though it’s worth noting around half of that increase was a recovery from Hurricane Ida’s effects. And that came against the backdrop of solid earnings results from Walmart and Home Depot as well earlier in the session. They saw Walmart raise their full-year guidance for adjusted EPS to around $6.40, up from $6.20-$6.35 previously, whilst Home Depot reported comparable sales that were up +6.1%. To be honest it was difficult to find much in the way of weak data, with the NAHB’s housing market index for November up to a 6-month high of 83 (vs. 80 expected). Amidst the optimism however, concerns about near-term (and longer-term) inflation pressures haven’t gone away just yet, and the 5yr US breakeven rose again, increasing +1.1bps yesterday to an all-time high of 3.21%. Bear in mind that just 12 days ago (before the upside CPI release) that measure stood at 2.89%, so we’ve seen a pretty sizeable shift in investor expectations in a very short space of time as they’ve reacted to the prospect inflation won’t be as transitory as previously believed. The increase was matched by a +1.3bps increase in nominal 5yr yields to a post-pandemic high of 1.27%. The 10yr yield also saw a slight gain of +1.9bps to close at 1.63%, and this morning is up a further +0.7bps. Against this backdrop, the dollar index (+0.58%) strengthened further to its highest level in over a year yesterday, though the reverse picture has seen the euro weaken beneath $1.13 this morning for the first time since July 2020. Speaking of inflation, there were fresh pressures on European natural gas prices yesterday, which surged by +17.81% to €94.19 per megawatt-hour. That’s their biggest move higher in over a month, and follows the decision from the German energy regulator to temporarily suspend the certification of the Nord Stream 2 pipeline, adding further short-term uncertainty to the winter outlook. UK natural gas futures (+17.15%) witnessed a similar surge, and their US counterparts were also up +3.19%. Elsewhere in the energy complex, Brent crude (+0.46%) oil prices moved higher as well. Overnight in Asia, equity indices are trading lower this morning including the CSI (-0.05%), the Nikkei (-0.45%) and the Hang Seng (-0.55%), though the Shanghai Composite (+0.19%) has posted a modest advance. There were also some constructive discussions in the aftermath of the Biden-Xi summit the previous day, with US national security adviser Jake Sullivan saying that the two had spoken about the need for nuclear “strategic stability” talks, which could offer the prospect of a further easing in tensions if they do come about. Looking forward, futures are indicating a muted start in US & Europe later on, with those on the S&P 500 (-0.03%) and the DAX (-0.15%) pointing to modest declines. Elsewhere, markets are still awaiting some concrete news on who might be nominated as the next Fed Chair, though President Biden did say to reporters that an announcement would be coming “in about four days”, so investors will be paying close attention to any announcements. Senator Sherrod Brown, who chairs the Senate Banking Committee, who earlier in the week noted a pick was imminent, followed up by proclaiming he was “certain” that the Senate would confirm either of Chair Powell or Governor Brainard. Staying on the US, as Congress waits for the Congressional Budget Office’s score on Biden’s social and climate spending bill, moderate Democratic Senator Manchin noted continued uncertainty about the bill’s anti-inflationary bona fides. Elsewhere, the impending debt ceiling has worked its way back into the spotlight, with Treasury Secretary Yellen saying that she’ll soon provide updates on how much cash the Treasury will have to pay the government’s bills. The market has started to price in at least some risk, with yields on Treasury bills maturing in mid-to-late December higher than neighbouring maturities, and the Washington Post’s Tony Romm tweeted yesterday that the new deadline that the Treasury was expected to share soon was on December 15. Turning to Germany, coalition negotiations are continuing between the centre-left SPD, the Greens and the liberal FDP, and yesterday saw SPD general secretary Lars Klingbeil state that “The goal is very clear, to have a completed coalition agreement in the next week”. We’ve heard similar comments from the Greens’ general secretary, Michael Kellner, who also said that “We aim to achieve a coalition agreement next week". One issue they’ll have to grapple with is the resurgence in Covid-19 cases there, and Chancellor Merkel and Vice Chancellor Scholz (who would become chancellor if agreement on a traffic-light coalition is reached) are set to have a video conference with regional leaders tomorrow on the issue. Staying on the pandemic, it’s been reported by the Washington Post that the Biden administration will announce this week that it plans to purchase 10 million doses of Pfizer’s Covid pill. The company will submit data for the pill to regulators before Thanksgiving. It’s not just the US that will benefit from Pfizer’s pill however, as the pharmaceutical company will also license generic, inexpensive versions of the pill to low- and middle-income countries, which should be a global boost in the fight against the virus. Looking at yesterday’s other data, the main release came from the UK employment numbers, which showed that the number of payrolled employees rose by +160k in October, whilst the unemployment rate in the three months to September fell to 4.3% (vs. 4.4% expected). That release was better than the Bank of England’s MPC had expected in their November projections, and sterling was the top-performing G10 currency yesterday (+0.06% vs. USD) as the statistics were seen strengthening the case for a December rate hike. In response to that, gilts underperformed their European counterparts, with 10yr yields up +2.7bps. That contrasted with yields on 10yr bunds (-1.4bps), OATs (-1.8bps) and BTPs (-2.6bps), which all moved lower on the day. Interestingly, that divergence between bunds and treasury yields widened further yesterday, moving up to 188bps, the widest since late-April. To the day ahead now, and data releases include October data on UK and Canadian CPI, as well as US housing starts and building permits. Central bank speakers include ECB President Lagarde and the ECB’s Schnabel, the Fed’s Williams, Bowman, Mester, Waller, Daly, Evans and Bostic, and the BoE’s Mann. Finally, the ECB will be publishing their Financial Stability Review, and earnings releases today include Nvidia, Cisco, Lowe’s and Target. Tyler Durden Wed, 11/17/2021 - 07:50.....»»

Category: dealsSource: nytNov 17th, 2021

Live updates: Russia advances towards Kyiv, Ukrainian death toll passes 137 as official predicts "hardest day"

Russia began its attack on Ukraine on Thursday morning. One official warned Friday would be the "hardest day." Ukrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr Ratushniak Russia continued its attack on Ukraine on Friday, advancing toward the capital, Kyiv. One Ukrainian official warned Friday would be the "hardest day" and the military issued instructions on how to make Molotov cocktails. 137 Ukrainians were dead as of early Friday morning. The death toll has since risen. Recap: Ukraine says 137 people died on Thursday alone. The death toll has since risen.A building hit by a missile in Kyiv, Ukraine, seen on February 25, 2022.Wolfgang Schwan/Anadolu Agency via Getty ImagesUkrainian President Volodomyr Zelensky said that 137 people, including 10 military officers, had been killed and 316 were wounded on Thursday.He did not say how many were civilians, but Ukrainian officials have confirmed that civilians were killed.There were more deaths reported on Friday, though the exact number is not clear.Zelensky said that "people died" in heavy fighting on Friday, but did not say now many or what country they were from.One of Zelensky's advisors said that around 400 Russian soldiers had died as of Friday, the Associated Press reported. Russia has not given a death toll.Ukraine says radiation levels around Chernobyl are increasing after Russia captured itView of the Chernobyl nuclear power on April 26, 1986, after the explosion.Photo by SHONE/GAMMA/Gamma-Rapho via Getty ImagesUkraine said on Friday that the radiation levels around the Chernobyl nuclear disaster site were increasing, though Russia said on Thursday that they were still normal.Ukrainian officials said that Russian troops seized the remnants of the nuclear plant on Thursday.Experts from Ukraine's nuclear agency told Reuters that the radiation increase was caused by radioactive dust being kicked up into the air by heavy military equipment there.Read Full Story Russian foreign minister says his country will talk to Ukraine once it stops fighting, doubles down on claim it wants 'de-Nazification'Russian Foreign Minister Sergei Lavrov in January 2022.Photo by DIMITAR DILKOFF/AFP via Getty ImagesSergei Lavrov said on Friday that Russia will only talk to Ukraine if its troops stop fighting, adding: "We do not want Neo-Nazis to rule Ukraine."He was repeating Russia's baseless claim that its attack on Ukraine was motivated by Nazism in Ukraine.Ukraine's president is a Jewish man whose native language is Russian. He came into office after a democratic election.Russia has previously tried to justify its attack by claiming it wanted to prevent a "genocide" in Ukraine and to achieve the "de-Nazification" of the country. Kyiv mayor and former heavyweight boxing champion says he'll fight for UkraineWladimir and Vitali Klitschko.Getty/Richard HeathcoteUkrainian boxing icons Vitali and Wladimir Klitschko said they would take up arms to defend Ukraine against Russia.Vitali, who has also been the mayor of Ukraine's capital, Kyiv, since 2014, said he was ready to fight in a "bloody war.""I don't have another choice, I have to do that. I'll be fighting," he told ITV's Good Morning Britain on Friday. "I believe in Ukraine, I believe in my country and I believe in my people."Wladimir wrote in a LinkedIn post on Thursday: "Democracy cannot defend itself; it needs the will of the citizens, the commitment of everyone.""Here, we will defend ourselves with all our might and fight for freedom and democracy. You can also act. Let not fear seize us; let's not remain frozen."Read Full StoryUkraine official predicts 'hardest day' as Russia advances on KyivPeople rest in the Kyiv subway, using it as a bomb shelter on Thursday.AP Photo/Emilio MorenattiUkraine Interior Ministry advisor Anton Gerashenko said on Friday: "The hardest day will be today. The enemy's plan is to break through with tanks from Ivankiv and Chernihiv to Kyiv."Ukraine has been 'left alone' to defend itself from Russia, president saysUkrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr RatushniakVolodomyr Zelensky said in an early Friday speech that Ukraine was not getting help on the ground, saying: "We are left alone in defense of our state.""Who is ready to fight with us? Honestly — I do not see such. Who is ready to guarantee Ukraine's accession to NATO? Honestly, everyone is afraid."Many nations have condemned Russia and sent weapons to Ukraine. But they have not sent troops, and NATO and the US have said they won't do so.Zelensky also praised the people of Ukraine in his speech, saying: "You are brilliantly defending the country from one of the most powerful countries in the world."Read Full Story Ukraine posts instructions for making Molotov cocktails and asks people who own drones for helpThe post below, from Ukraine's national guard, contained instructions on how to make Molotov cocktails to use against Russian troops.—НГУ (@ng_ukraine) February 25, 2022Ukraine's military also posted a Facebook callout on Friday asking for drone owners to help out."Do you know how to drive a drone? Join the joint patrol with units 112 of the separate brigade of the city of Kyiv!" it said.The Champions League final is moved from Russia to FranceGetty Images/Daniele BadolatoEuropean soccer governing body UEFA said Russia has been stripped of the 2022 Champions League final, and that it will now take place in Paris.UEFA said the game being moved comes after "the grave escalation of the security situation in Europe."Read Full StoryRussia 'failed to deliver' its day-one aims for invading Ukraine, UK defense secretary saysUK Secretary for Defence Ben Wallace.Luka Dakskobler/SOPA Images/LightRocket via Getty ImagesBen Wallace told Sky News on Friday: "Our assessment, as of this morning, is that Russia has not taken any of its major objectives,"  "In fact it's behind its hoped-for timetable. They've lost over 450 personnel.""The Russian army has failed to deliver on day one its main objective."He gave the example that Russian special forces had failed to secure a "significant" airport that was once again under Ukrainian control. Read Full Story Ukrainian leaders compare Russia's attack on Kyiv to Nazi Germany's assault in 1941A night view of Kyiv, Ukraine's capital city.Pierre Crom/Getty ImagesRussia's attack on the Ukrainian capital of Kyiv has prompted comparisons to Nazi Germany's assault on the city in 1941.Ukrainian President Volodymyr Zelensky invoked World War II while speaking directly to the Russian people in a speech Friday morning as explosions were reported over Kyiv."Tonight, you began bombing residential areas in the hero city of Kyiv. This is like 1941. I want to tell all Russian citizens who are coming out to protest: we hear you, you heard us, you started to believe us. Fight for us. Fight the war," Zelensky said.Read Full StoryRussia's richest 22 billionaires lost $39 billion in one day after the invasion of UkraineVladimir Potanin, Russia's richest man, lost $3 billion in one day on Thursday. He is now worth $26.1 billion.Mikhail Svetlov/Getty ImagesRussia's 22 richest individuals saw their net worths plunge by a collective $39 billion in less than 24 hours after their country invaded Ukraine, according to the Bloomberg Billionaires Index.The wealth wipeout came after Moscow's benchmark MOEX Russia Index crashed and closed 33% lower on Thursday.The Russian billionaires lost more money on Thursday than they had lost year-to-date up until Wednesday, according to Bloomberg.Read Full StoryAustralian PM Scott Morrison slams China for throwing a 'lifeline' to RussiaMorrison said that it is "simply unacceptable" for China to ease trade restrictions on Russia when other countries are imposing sanctions.STEVEN SAPHORE/AFP via Getty ImagesAustralian Prime Minister Scott Morrison has condemned China for easing its restrictions on Russian wheat amid the Ukraine crisis, even as other countries impose fresh sanctions on Russia."You don't go and throw a lifeline to Russia in the middle of a period when they're invading another country," he told reporters at a press conference on Friday morning, per Australia's ABC News. Read Full StoryMitch McConnell has urged Biden to 'ratchet the sanctions all the way up' against RussiaSenate Minority Leader Mitch McConnell has urged President Joe Biden not to hold back with tough sanctions on Russia.Drew Angerer/Getty ImagesSenate Minority Leader Mitch McConnell on Thursday advised President Joe Biden to hold nothing back when imposing sanctions on Russia following the country's invasion of Ukraine. "We're all together at this point, and we need to be together about what should be done," McConnell said."Ratchet the sanctions all the way up. Don't hold any back," he added. "Every single available tough sanction should be employed and should be employed now." Read Full StoryLarge explosions heard in Kyiv, Ukraine's capital cityA night view of Kyiv, Ukraine's capital city, as seen on Thursday.Photo by Pierre Crom/Getty ImagesKyiv, the capital of Ukraine, was awakened by explosions in the early hours of Friday morning local time, CNN reported."Strikes on Kyiv with cruise or ballistic missiles continued," Anton Gerashchenko, adviser to the head of the Ministry of Internal Affairs in Ukraine, told CNN Thursday.The outlet also reported multiple bombardments — two blasts in Kyiv and an explosion in the distance. Read Full StoryUkraine is crowdfunding to shore up its defenses against the Russian militarySoldiers seen aboard a Ukrainian tank in Mariupol, Ukraine, on Thursday.REUTERS/Carlos BarriaUkraine is crowdfunding to bolster its armed forces against the Russian invasion.In a tweet on Thursday, the official Twitter account of Ukraine called for donations and provided a link to the country's official website.Collected funds will be used for the "logistical and medical support" of the Ukrainian armed forces, said the webpage, which is operated by Ukraine's Ministry of Foreign Affairs and Ukrainian Institution.Read Full Story5 reasons Putin and others have given for the invasionRussian President Vladimir Putin claims the Ukraine invasion is aimed at preventing the "genocide" of ethnic Russians in the country.Photo by Kay Nietfeld/picture alliance via Getty ImagesRussian forces attacked Ukraine early Thursday morning, launching a large-scale and unprovoked invasion that was feared for weeks.Here are some reasons Russian President Vladimir Putin has given for why Russia invaded Ukraine — some of which are based on falsehoods — along with what the US and NATO have said about his motivations.Read Full StoryThe Biden administration is considering training Ukrainian soldiers in an outside country, according to AxiosUkrainian soldiers patrol on the frontline in Zolote, Ukraine on January 20, 2022.Wolfgang Schwan/Getty ImagesAs Russian forces enclose on Ukraine's capital Kyiv, the Biden administration is eyeing its next steps in the ongoing conflict.Defense Secretary Lloyd Austin told House lawmakers on Thursday that the US government is considering possible ways to train Ukrainian troops outside of Ukraine, should Russia seize control of the country, according to Axios.Austin reportedly told lawmakers that officials are trying to find ways to provide more defense equipment, including ammunition to Ukrainian forces — a feat made more challenging as Russian forces assault the country.The secretary also told House members that the Biden administration will continue to support Ukrainian President Volodymyr Zelensky's government as long as it is "viable," the outlet reported.Ukrainian president announces general mobilization of all conscripts and reservists to last 90 daysUkrainian soldiers sit on top of a military vehicle parked outside the hotel in Prypiat, Ukraine on February 4.Volodymyr Tarasov/Ukrinform/Future Publishing via Getty ImageUkrainian President Volodymyr Zelensky on Thursday ordered a general military mobilization throughout the country as Russia continues its large-scale military assault in Ukraine. The declaration ordered the conscription of conscripts and reservists for military service, as well as their delivery to military units and institutions of the Armed Forces of Ukraine in order to "ensure the defense of the state." The mobilization, which included all of Ukraine's major cities, will be carried out within 90 days, the decree said. It will provide personnel, vehicles, infrastructure, and land use for the Ukrainian government and military amid Russia's ongoing invasion, according to the decree. Ukraine has also banned all male citizens ages 18-60 from leaving the country, according to CNN, which cited the State Border Guard Service. READ FULL STORYZelensky says 'enemy sabotage groups have entered Kyiv' and that he is 'number one target'Ukrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesIn his second video address on Thursday, Ukraine's President Volodymyr Zelensky said that "enemy sabotage groups" entered Kyiv, and that he plans to remain, despite being Russia's "number one target.""According to preliminary data, unfortunately, we have lost 137 of our heroes today — our citizens. Ten of them are officers," Zelensky said in his address. "316 are wounded."He also used the opportunity to dispel rumors that he had fled Kyiv, and that his family had left the country."I stay in the capital, I stay with my people. During the day, I held dozens of international talks, directly managed our country. And I will stay in the capital," he said. "My family is also in Ukraine. My children are also in Ukraine. My family is not traitors. They are the citizens of Ukraine. But I have no right to say where they are now."READ FULL STORYWhite House is 'outraged' over reports that staff at Chernobyl have been taken hostage by Russian forcesServicemen take part in a joint tactical and special exercises of the Ukrainian Ministry of Internal Affairs, the Ukrainian National Guard and Ministry Emergency in a ghost city of Pripyat, near Chernobyl Nuclear Power Plant on February 4, 2022.Sergei Supinsky/AFP/Getty ImagesPress secretary Jen Psaki said the White House is outraged over reports from Ukrainian officials that staff at the Chernobyl nuclear plant in Ukraine have been taken hostage by Russian troops.Russian forces took over the remnants of Chernobyl earlier on Thursday during the country's invasion of Ukraine. The move indicated Russia is likely to assault Ukraine's capital city, Kyiv, which is located just south of Chernobyl, the site of one of the worst nuclear disasters in history."We're outraged by credible reports that Russian soldiers are currently holding the staff of the Chernobyl facility hostage," Psaki said during a press briefing on Thursday afternoon, adding "we condemn it and we request their release."Psaki said the situation at Chernobyl was not clear but that the hostage taking was "incredibly alarming and greatly concerning," adding it could hurt efforts to maintain the facility, which is dangerously contaminated with radioactivity as a result of the 1986 nuclear disaster.read full STORYUS secretary of state is 'convinced' Russia will try to overthrow the Ukrainian governmentUS Secretary of State Antony Blinken during an appearance on NBC's "Meet the Press" on April 11, 2021.Meet The Press/NBCUS Secretary of State Antony Blinken on Thursday said he is "convinced" Moscow will try to overthrow Ukraine's government."You don't need intelligence to tell you that that's exactly what President Putin wants. He has made clear he'd like to reconstitute the Soviet Empire, short of that he'd like to reassert a sphere of influence around the neighboring countries that were once part of the Soviet bloc," Blinken said during a national TV interview. The secretary pledged that NATO would intervene before Putin successfully accomplished his ultimate goal."Now, when it comes to a threat beyond Ukraine's borders. There's something very powerful standing in his way. That's article five of NATO, an attack on one is an attack on all," the top diplomat said.  Expert says Russia's Ukraine invasion will result in 'horrific scenes,' could be launch of 'Cold War 2.0'Ukrainians gather in front of the White House in Washington, USA to stage a protest against Russia's attack in Ukraine on February 24, 2022.Yasin Öztürk/Anadolu Agency via Getty ImagesA former aide to President Barack Obama is warning that Russia's invasion of Ukraine is a "game changer" in international relations that will result in "horrific scenes" in the coming days, with President Vladimir Putin intent on pursuing regime change at all costs."I think it's just a matter of time before Kyiv falls," Charles Kupchan, a senior fellow at the Council on Foreign Relations who also served on the National Security Council in both the Obama and Clinton administrations, told Insider.READ FULL STORYThe White House says it's ready to accept Ukrainians fleeing the Russian invasionWhite House press secretary Jen Psaki.Anna Moneymaker/Getty ImagesThe US is prepared to accept Ukrainian refugees fleeing Russia's invasion, White House press secretary Jen Psaki told CNN."We are," Psaki said when asked whether the US was ready to assist fleeing Ukrainians. "But we certainly expect that most if not the majority will want to go to Europe and neighboring countries. So, we are also working with European countries on what the needs are, where there is capacity. Poland, for example, where we are seeing an increasing flow of refugees over the last 24 hours."She added that US officials have been engaging with Europeans on the matter "for some time." Ukrainian and Russian forces have been fighting for hours over a critical airfield just outside KyivUkraine army says battle under way for airbase near Kyiv on February 24, 2022Daniel LEAL / Getty ImagesUkrainian and Russian forces have been fighting for hours over a critical airfield on the outskirts of Kyiv, Ukraine's capital city.Russian forces attacked and seized Hostomel (Gostomel) airfield, a cargo airport near Kyiv that is also known as Antonov airport, early Thursday, according to AFP. Ukraine's leadership reportedly vowed to take it back."The enemy paratroopers in Hostomel have been blocked, and troops have received an order to destroy them," Ukraine's President Volodymyr Zelensky said in a video address.Read Full StoryUkraine's health minister says dozens killed and over 160 injuredBlack smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.ARIS MESSINIS/AFP via Getty ImagesUkraine's health minister said 57 Ukrainians have been killed and 169 were wounded after Russia attacked on Thursday, the Associated Press reported.Explosions, gunfire, and sirens were reportedly heard in Kyiv on Thursday. Witnesses also described missile blasts in other cities, including Kramatorsk, Dnipro, and Odesa, reports said. Sean Penn is filming a documentary in Ukraine while Russia invadesActor and director Sean Penn attends a press briefing at the Presidential Office in Kyiv, Ukraine February 24, 2022.Ukrainian Presidential Press Service/Handout via ReutersSean Penn was spotted in Ukraine on Thursday just after Russia invaded the country. Penn was seen in the front row of a press briefing at the Presidential Office in Kyiv, photos obtained by Reuters show. The actor and director has been working on a documentary about tensions in Ukraine since last year.Read Full StoryUkrainians and Russians are packing ATM lines, prompting fears of what happened in the US during the Great DepressionPeople wait in line at an ATM in Kyiv.DANIEL LEAL/AFP via Getty Images.Many Ukrainians who haven't already fled the country as Russia's threat turned into invasion stood in long lines outside of banks and ATMs hoping to take out their funds, Reuters reported on Thursday. Meanwhile in Russia, people are also queuing outside of ATMs trying to get US dollars as its citizens worry their own currency's value will continue to tank, according to the Wall Street Journal. Banks in the capital city of Moscow are running out of money, MSNBC reported. All of this has led to fears of bank runs, which is when people withdraw money en masse because they worry banks will cease to function. That's what happened in the United States during the Great Depression, and it triggered mass unemployment and loan scarcities.  Read Full StoryA top Russian business lobbyist pleaded with Putin to 'demonstrate as much as possible' that Russia wants to remain 'part of the global economy'Russian President Vladimir Putin, left, and head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin attend a meeting of the Russian Union of Industrialists and Entrepreneurs in Moscow, Russia, Thursday, March 16, 2017.Sergei Ilnitsky/AP PhotoThe head of one of Russia's biggest business groups urged President Vladimir Putin on Thursday to avoid severe economic pain and remain "part of the global economy" as NATO members ready a harsher salvo of sanctions.Putin held a televised meeting with the Russian Union of Industrialists and Entrepreneurs just hours after Russian forces began attacks in Ukraine.The threat of new sanctions was enough for Alexander Shokhin, the business group's president, to raise concerns with Putin about remaining a member of the world economy.The lobbyist urged the president to pad against major economic pain and to ensure conflict in Ukraine doesn't fuel widespread harm to the global financial system."Everything should be done to demonstrate as much as possible that Russia remains part of the global economy and will not provoke, including through some kind of response measures, global negative phenomena on world markets," Shokhin said.Read Full StoryBiden says he'll try to limit what Americans pay at the gas pump as the US slaps Russia with more sanctions: 'This is critical to me'U.S. President Joe Biden answers questions after delivering remarks about Russia's “unprovoked and unjustified" military invasion of Ukraine on February 24, 2022.Drew Angerer/Getty ImagesPresident Joe Biden sought to quell fears of another spike in gas prices on Thursday after Russia unleashed a military assault on Ukraine that threatened to upend the global economy.The threat of war in Ukraine in recent weeks has contributed to spiking oil prices, with the benchmark Brent crude oil hitting $100 for the first time since 2014 Wednesday night amid the early stages of Russia's invasion."I know this is hard and Americans are already hurting," he said at a White House address. "I will do everything in my power to limit the pain the American people are feeling at the gas pump."He opened the door to another release of oil from the Strategic Petroleum Reserve, a step the Biden administration also took in November to try and provide relief at the pump.Read Full StoryBiden says Putin's Ukraine invasion will cause a 'complete rupture' in US-Russia relationsPresident Joe Biden listens to questions from reporters while speaking about the Russian invasion of Ukraine in the East Room of the White House, Thursday, Feb. 24, 2022, in Washington.Alex Brandon/APPresident Joe Biden on Thursday said Russian President Vladimir Putin's invasion of Ukraine will cause a "complete rupture" of US-Russia relations if it continues. Biden condemned Putin and his escalating invasion of Ukraine in a speech from the White House.Biden, who met with G7 members on Thursday morning, also announced a raft of new sanctions against Russia on Thursday."What's the risk that we are watching the beginning of another Cold War, and is there now a complete rupture in US-Russian relations?," a reporter asked Biden following his address. Read Full StoryFamed Russian rapper cancels concerts in protest, saying he can't perform while 'Russian missiles fall on Ukraine'Rapper Oxxxymiron, whose real name is Miron Fyodorov, performs during a concert in support of rapper Husky, whose real name is Dmitry Kuznetsov, in Moscow, Russia, Monday, Nov. 26, 2018.AP Photo/Pavel GolovkinA prominent Russian rapper canceled his concert in protest of the Russian invasion on Ukraine, saying he can't perform while "Russian missiles fall on Ukraine."Rapper Oxxxymiron announced via a video posted to his Instagram account that he is postponing "six of my major gigs in Moscow and Saint Petersburg indefinitely," because he said he is "specifically against the war Russia has escalated against the people of Ukraine.""I'm sure you can understand me; I can't entertain you while Russian missiles fall on Ukraine, while Kyiv residents are forced to hide in the basements and subway, and while people are dying," he said.Read Full StoryUS Treasury targets Belarusian support for Russian invasion of UkraineBelarusian President Alexander LukashenkoDmitry Astakhov/Pool/AFP via Getty ImagesIn addition to the second round of sanctions imposed on Russia by the US Thursday, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced it is sanctioning 24 Belarusian individuals for their support of the Russian invasion. The sanctions target Belarus's defense sector and financial institutions — two sectors closely tied to Russia.Massive protests erupted in Putin's hometown of St. Petersburg as Russians voice opposition to war in UkraineA demonstrator holding a placard reading "No to war" protests against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.Photo by SERGEI MIKHAILICHENKO/AFP via Getty ImagesMassive protests erupted on Thursday in Russian President Vladimir Putin's hometown of St. Petersburg, as people voiced their opposition to the invasion of Ukraine.Videos posted to Twitter show a sea of people gathered in a section of St. Petersburg, Russia's second-largest city, chanting and holding signs to object to Russia's offensive in Ukraine.Russian government forces have threatened to arrest anti-war protesters, who took to the streets after Putin announced military action against Ukraine on Thursday.Read Full StoryPhotos show Russian authorities dragging away protesters opposed to Putin's invasion of UkrainePolice Police detain a demonstrator during a protest against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.SERGEI MIKHAILICHENKO/AFP via Getty ImagesAnti-war protesters in Russia quickly took to the streets following Russian President Vladimir Putin's invasion of Ukraine. Some activists were met with hostility by Russian authorities who hauled them away. More than 1,000 anti-war protesters have already been detained in dozens of cities across Russia, according to protest-monitoring group OVD-Info. Russia's Investigative Committee warned citizens not to take part in the "unauthorized" protests "associated with the tense foreign political situation."Read Full StoryBiden slaps 'additional strong sanctions' on Russia as it mounts a large-scale attack on UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesPresident Joe Biden on Thursday announced that the US will impose a second, harsher round of sanctions on Russia following its large-scale invasion of Ukraine.Biden announced that he had authorized "additional strong sanctions" and "new limitations" on what can be exported to Russia."We have purposely designed these sanctions to maximize the long term impact on Russia and minimize the impact on the United States and our allies," Biden said."We will limit Russia's ability to do business in dollars, euros, pounds and yen to be part of the global economy," the president said of the sanctions. "We're going to stop the ability to finance and grow the Russian military. We're going to impair their ability to compete in a high-tech 21st-century economy."Read Full StoryA Ukrainian lawmaker broke down in tears and begged the world to 'save our people' from being 'murdered' by Russian forcesUkrainian Parliament member Halyna Yanchenko speaks during a CBS interviewCBS NewsA Ukrainian lawmaker broke down in tears during an interview with CBS News and begged the international community to "save our people" from being "murdered" by Russian forces."I beg you, please save our people. Dozens of people — maybe hundreds of people — might be murdered tonight," Member of Parliament Halyna Yanchenko said as she sobbed during an interview with CBS News on Thursday.  She added: "Please save Ukrainian men, women, and children." Read Full StoryPhotos show Ukrainian families fleeing the Russian invasion amid warnings of a mass refugee crisisPeople wait for trains at a train station as they attempt to evacuate the city on February 24, 2022 in Kyiv, Ukraine. Overnight, Russia began a large-scale attack on Ukraine, with explosions reported in multiple cities and far outside the restive eastern regions held by Russian-backed rebels.Pierre Crom/Getty Images)Ukrainian residents fled their homes after the first day of Russia's full-scale invasion. Train stations were packed with people on the move and roads filled with cars of people leaving the country, with their loved ones and prized possessions in tow.Before the invasion took place, there were warnings of a mass refugee crisis.Read Full StoryRussian government websites — including ones for the Kremlin and the legislature — went dark after cyberattacks target UkraineA night view of Kyiv as the Kyiv mayor declared a curfew from 10pm to 7am on February 24, 2022 in Kyiv, Ukraine.Photo by Pierre Crom/Getty ImagesMultiple Russian government websites reportedly went down on Thursday after the country launched an attack on Ukraine. NetBlocks, which tracks disruptions and shutdowns, confirmed on Twitter that multiple sites went offline shortly after 8:45 p.m. local time in Moscow.The Kremlin's website and that of the Russian Federal Assembly's lower house — or State Duma — were both down for at least 15 minutes. As of 9 p.m. local time, the State Duma website was since restored. Shortly after 9:10 p.m. local time, the Kremlin's website was also back online.  Read Full StoryPutin had a range of ways to attack Ukraine. He went with the worst-case scenario for the West.A convoy of Russian military vehicles is seen as the vehicles move towards border in Donbas region of eastern Ukraine on February 23, 2022 in Russian border city Rostov.Stringer/Anadolu Agency via Getty ImagesIn the build-up to Russia's assault on Ukraine, analysts and leaders envisioned numerous ways the conflict might play out, from a limited incursion to an all-out invasion.Putin used precision missile strikes and airstrikes, followed shortly later by ground maneuvers, the officials said.Analysts said attacks came from the east, south, and north, a description consistent with reports on the ground and Insider's map of the invasion.All three lines of attack — as per this analysis in The Conversation — had previously been floated as individual possibilities for an invasion.Defense analysts warned that Russia's multipronged attack was full-scale but still in an early phase, with a lot more forces to push into Ukraine to seize key areas or capture its leadership.Putin's overall endgame remains an area of pressing debate.Read Full StoryKey Democratic congressman says the US can't send support to Ukraine quickly enough 'to repel' Russia's invasionRep. Adam Smith, Chairman of the House Armed Services Committee.Tom Williams/CQ-Roll Call, Inc via Getty ImagesRep. Adam Smith, the chairman of the House Armed Services Committee, ruled out surging supplies into Ukraine as a last-ditch effort to stall Russia's invasion, arguing it's unlikely such support would arrive quickly enough to make a difference."The odd of us being able to do that in a rapid enough fashion to be able to repel the invasion are remote," Smith told CNN on Thursday when asked about a Ukrainian official's request for more equipment. "I don't think it's realistic to think that we can reinforce them enough in the short term to be able to repel the invasion."Read Full StoryPoland, Czech Republic, and Sweden are refusing to play their 2022 World Cup qualifying matches in Russia after it attacked UkraineA protester holds a poster reading "Sanctions against Russia now" during a rally in front of the Russian Embassy in Stockholm on February 24, 2022, after Russia launched military operations in Ukraine.Photo by CLAUDIO BRESCIANI/TT News Agency/AFP via Getty ImagesPoland, Czech Republic, and Sweden said they are refusing to play their upcoming 2022 World Cup qualifying playoff matches in Russia after it attacked Ukraine on Thursday.Based on the latest Russian aggression against Ukraine, "the signatories to this appeal do not consider travelling to Russia and playing football matches there," the three countries said in a joint statement addressed to FIFA's General Secretary Fatma Samoura. The statement continued: "The military escalation that we are observing entails serious consequences and considerably lower safety for our national football teams and official delegations."Read Full StoryRussia's moving on Kyiv and the plan appears to be to take out Ukraine's leadership, US defense official warnsA column of army trucks approaches the Perekop checkpoint on the Ukrainian border. Early on February 24, President Putin announced a special military operation to be conducted by the Russian Armed Forces against Ukraine.Sergei MalgavkobackslashTASS via Getty ImagesRussian forces invaded Ukraine Thursday morning, and a senior US defense official says they are moving on Kyiv, likely to topple the country's government and install their own.Russia is "making a move on Kyiv" a senior defense official who addressed reporters Thursday said, according to CNN. "We would describe what you are seeing as an initial phase" of a "large-scale invasion," the official said, according to The Washington Post's Dan Lamothe.Read Full StoryMaps show Russia's invasion of UkraineMaps of Ukraine.Shayanne Gal/InsiderRussia invaded Ukraine early Thursday, leading to dozens of Ukrainian and Russian casualties.These maps show where Russian troops have attacked Ukraine, which is happening from multiple sides.Read Full StoryUK plots far harsher sanctions on Russia to punish it for invading UkraineBritish Prime Minister Boris JohnsonAdrian Dennis/Pool via REUTERS/File PhotoThe UK announced a new set of harsher sanctions on Russia after the country invaded Ukraine early Thursday. A spokesman for the UK government told journalists at a briefing that the UK plans to impose a second round of sanctions. The most intense of the new list of sanctions is an asset freeze on all major Russian banks and an asset freeze against VTB — the second largest bank with assets totaling £154 billion. The UK also plans to sanction another 100 individuals and entities.This is a large step up from the sanctions it announced Wednesday, which were limited to five smaller banks, three individuals close to Putin, and politicians in Russia who voted for military action. Russia has begun arresting anti-war protesters as demonstrations break out after Putin invades UkrainePolice officer detain a woman during an action against Russia's attack on Ukraine in Moscow, Russia, Thursday, Feb. 24, 2022.AP Photo/Dmitry SerebryakovThe Russian government on Thursday threatened anti-war protesters demonstrating against Russia's invasion of Ukraine, warning they could face arrest for organizing.And according to a protest monitoring group, the detentions have already begun as small protests have broken out in some Russian cities.Russia's Investigative Committee warned citizens in a statement not to take part in the "unauthorized" protests "associated with the tense foreign political situation."The committee said that people should be aware of the "negative legal consequences of these actions," which it said includes criminal liability. Read Full StoryUkraine's official Twitter is using memes to rip into Putin's bogus comparison between it and Nazi GermanyRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressAfter Russian President Vladimir Putin gave the marching orders for an attack on Ukraine early Thursday morning, Ukraine's official Twitter account got busy. One photo showed what appeared to be caricature images of Adolf Hitler tending to a small Putin. "This is not a 'meme', but our and your reality right now," Ukraine said in a follow-up tweet.  The account also called for a so-called "Twitter-storm" at 12 p.m. local time in Kyiv on Thursday, urging people to use various hashtags to "tell the world of the ongoing Russian aggression against Ukraine and the fact that Ukraine is under attack."Ukraine's latest post said to "Tag @Russia and tell them what you think about them," racking up tens of thousands of likes and quote tweets. Read Full StoryMap shows reported movement of Russian troops in Ukraine Thursday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Live updates: Ukraine official says Friday will be "hardest day" as Russia advances toward capital Kyiv

Russia attacked Ukraine on Thursday morning and was reported to be advancing toward the capital, Kyiv, on Friday. Ukrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr Ratushniak Russia continued its attack on Ukraine on Friday, advancing toward the capital, Kyiv. One Ukrainian official warned Friday would be the "hardest day" and the president called for help. The UK's defense minister said Russia did not achieve what it wanted on the first day of its attack. Russian foreign minister says it will talk to Ukraine once it stops fighting, doubles down on claim it wants 'de-Nazification' if UkraineRussian Foreign Minister Sergei Lavrov in January 2022.Photo by DIMITAR DILKOFF/AFP via Getty ImagesSergei Lavrov said on Friday that Russia will only talk to Ukraine if its troops stop fighting, and said: "We do not want Neo-Nazis to rule Ukraine."He was repeating Russia's baseless claim that its attack on Ukraine was motiviated by Naziism in Ukraine.Ukraine's president is a Jewish man whose native language is Russian and who came into office after a democratic election.Russia has tried to justify its attacks by claiming it wants to prevent a "genocide" in Ukraine and to achieve the "de-Nazification" of the country. Former heavyweight boxing champions Vitali and Wladimir Klitschko say they'll go to war for Ukraine against RussiaWladimir and Vitali Klitschko.Getty/Richard HeathcoteUkrainian boxing icons Vitali and Wladimir Klitschko said they would take up arms to defend Ukraine against Russia.Vitali, who has been the mayor of Ukraine's capital, Kyiv, since 2014, said he was ready to fight in a "bloody war.""I don't have another choice, I have to do that. I'll be fighting," he told ITV's Good Morning Britain on Friday."I believe in Ukraine, I believe in my country and I believe in my people."Wladimir wrote in a LinkedIn post on Thursday: "Democracy cannot defend itself; it needs the will of the citizens, the commitment of everyone," he wrote. "Basically, there is no democracy without democrats."Here, we will defend ourselves with all our might and fight for freedom and democracy. You can also act. Let not fear seize us; let's not remain frozen."Read Full StoryUkraine official predicts 'hardest day' as Russia advances on KyivPeople rest in the Kyiv subway, using it as a bomb shelter on Thursday.AP Photo/Emilio MorenattiUkraine Interior Ministry advisor Anton Gerashenko said on Friday: "The hardest day will be today. The enemy's plan is to break through with tanks from Ivankiv and Chernihiv to Kyiv."Ukraine has been 'left alone' to defend itself from Russia, president saysUkrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr RatushniakVolodomyr Zelensky said in an early Friday speech that Ukraine was not getting help on the ground, saying: "We are left alone in defense of our state.""Who is ready to fight with us? Honestly — I do not see such. Who is ready to guarantee Ukraine's accession to NATO? Honestly, everyone is afraid."Many nations have condemned Russia and sent weapons to Ukraine. But they have not sent troops, and NATO and the US have said they won't do so.Zelensky also praised the people of Ukraine in his speech, saying: "You are brilliantly defending the country from one of the most powerful countries in the world."Read Full Story Ukraine posts instructions for making Molotov cocktails and asks people who own drones for helpThe post below, from Ukraine's national guard, contained instructions on how to make Molotov cocktails to use against Russian troops.—НГУ (@ng_ukraine) February 25, 2022Ukraine's military also posted a Facebook callout on Friday asking for drone owners to help out."Do you know how to drive a drone? Join the joint patrol with units 112 of the separate brigade of the city of Kyiv!" it said.The Champions League final is moved from Russia to FranceGetty Images/Daniele BadolatoEuropean soccer governing body UEFA said Russia has been stripped of the 2022 Champions League final, and that it will now take place in Paris.UEFA said the game being moved comes after "the grave escalation of the security situation in Europe."Read Full StoryRussia 'failed to deliver' its day-one aims for invading Ukraine, UK defense secretary saysUK Secretary for Defence Ben Wallace.Luka Dakskobler/SOPA Images/LightRocket via Getty ImagesBen Wallace told Sky News on Friday: "Our assessment, as of this morning, is that Russia has not taken any of its major objectives,"  "In fact it's behind its hoped-for timetable. They've lost over 450 personnel.""The Russian army has failed to deliver on day one its main objective."He gave the example that Russian special forces had failed to secure a "significant" airport that was once again under Ukrainian control. Read Full Story Ukrainian leaders compare Russia's attack on Kyiv to Nazi Germany's assault in 1941A night view of Kyiv, Ukraine's capital city.Pierre Crom/Getty ImagesRussia's attack on the Ukrainian capital of Kyiv has prompted comparisons to Nazi Germany's assault on the city in 1941.Ukrainian President Volodymyr Zelensky invoked World War II while speaking directly to the Russian people in a speech Friday morning as explosions were reported over Kyiv."Tonight, you began bombing residential areas in the hero city of Kyiv. This is like 1941. I want to tell all Russian citizens who are coming out to protest: we hear you, you heard us, you started to believe us. Fight for us. Fight the war," Zelensky said.Read Full StoryRussia's richest 22 billionaires lost $39 billion in one day after the invasion of UkraineVladimir Potanin, Russia's richest man, lost $3 billion in one day on Thursday. He is now worth $26.1 billion.Mikhail Svetlov/Getty ImagesRussia's 22 richest individuals saw their net worths plunge by a collective $39 billion in less than 24 hours after their country invaded Ukraine, according to the Bloomberg Billionaires Index.The wealth wipeout came after Moscow's benchmark MOEX Russia Index crashed and closed 33% lower on Thursday.The Russian billionaires lost more money on Thursday than they had lost year-to-date up until Wednesday, according to Bloomberg.Read Full StoryAustralian PM Scott Morrison slams China for throwing a 'lifeline' to RussiaMorrison said that it is "simply unacceptable" for China to ease trade restrictions on Russia when other countries are imposing sanctions.STEVEN SAPHORE/AFP via Getty ImagesAustralian Prime Minister Scott Morrison has condemned China for easing its restrictions on Russian wheat amid the Ukraine crisis, even as other countries impose fresh sanctions on Russia."You don't go and throw a lifeline to Russia in the middle of a period when they're invading another country," he told reporters at a press conference on Friday morning, per Australia's ABC News. Read Full StoryMitch McConnell has urged Biden to 'ratchet the sanctions all the way up' against RussiaSenate Minority Leader Mitch McConnell has urged President Joe Biden not to hold back with tough sanctions on Russia.Drew Angerer/Getty ImagesSenate Minority Leader Mitch McConnell on Thursday advised President Joe Biden to hold nothing back when imposing sanctions on Russia following the country's invasion of Ukraine. "We're all together at this point, and we need to be together about what should be done," McConnell said."Ratchet the sanctions all the way up. Don't hold any back," he added. "Every single available tough sanction should be employed and should be employed now." Read Full StoryLarge explosions heard in Kyiv, Ukraine's capital cityA night view of Kyiv, Ukraine's capital city, as seen on Thursday.Photo by Pierre Crom/Getty ImagesKyiv, the capital of Ukraine, was awakened by explosions in the early hours of Friday morning local time, CNN reported."Strikes on Kyiv with cruise or ballistic missiles continued," Anton Gerashchenko, adviser to the head of the Ministry of Internal Affairs in Ukraine, told CNN Thursday.The outlet also reported multiple bombardments — two blasts in Kyiv and an explosion in the distance. Read Full StoryUkraine is crowdfunding to shore up its defenses against the Russian militarySoldiers seen aboard a Ukrainian tank in Mariupol, Ukraine, on Thursday.REUTERS/Carlos BarriaUkraine is crowdfunding to bolster its armed forces against the Russian invasion.In a tweet on Thursday, the official Twitter account of Ukraine called for donations and provided a link to the country's official website.Collected funds will be used for the "logistical and medical support" of the Ukrainian armed forces, said the webpage, which is operated by Ukraine's Ministry of Foreign Affairs and Ukrainian Institution.Read Full Story5 reasons Putin and others have given for the invasionRussian President Vladimir Putin claims the Ukraine invasion is aimed at preventing the "genocide" of ethnic Russians in the country.Photo by Kay Nietfeld/picture alliance via Getty ImagesRussian forces attacked Ukraine early Thursday morning, launching a large-scale and unprovoked invasion that was feared for weeks.Here are some reasons Russian President Vladimir Putin has given for why Russia invaded Ukraine — some of which are based on falsehoods — along with what the US and NATO have said about his motivations.Read Full StoryThe Biden administration is considering training Ukrainian soldiers in an outside country, according to AxiosUkrainian soldiers patrol on the frontline in Zolote, Ukraine on January 20, 2022.Wolfgang Schwan/Getty ImagesAs Russian forces enclose on Ukraine's capital Kyiv, the Biden administration is eyeing its next steps in the ongoing conflict.Defense Secretary Lloyd Austin told House lawmakers on Thursday that the US government is considering possible ways to train Ukrainian troops outside of Ukraine, should Russia seize control of the country, according to Axios.Austin reportedly told lawmakers that officials are trying to find ways to provide more defense equipment, including ammunition to Ukrainian forces — a feat made more challenging as Russian forces assault the country.The secretary also told House members that the Biden administration will continue to support Ukrainian President Volodymyr Zelensky's government as long as it is "viable," the outlet reported.Ukrainian president announces general mobilization of all conscripts and reservists to last 90 daysUkrainian soldiers sit on top of a military vehicle parked outside the hotel in Prypiat, Ukraine on February 4.Volodymyr Tarasov/Ukrinform/Future Publishing via Getty ImageUkrainian President Volodymyr Zelensky on Thursday ordered a general military mobilization throughout the country as Russia continues its large-scale military assault in Ukraine. The declaration ordered the conscription of conscripts and reservists for military service, as well as their delivery to military units and institutions of the Armed Forces of Ukraine in order to "ensure the defense of the state." The mobilization, which included all of Ukraine's major cities, will be carried out within 90 days, the decree said. It will provide personnel, vehicles, infrastructure, and land use for the Ukrainian government and military amid Russia's ongoing invasion, according to the decree. Ukraine has also banned all male citizens ages 18-60 from leaving the country, according to CNN, which cited the State Border Guard Service. READ FULL STORYZelensky says 'enemy sabotage groups have entered Kyiv' and that he is 'number one target'Ukrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesIn his second video address on Thursday, Ukraine's President Volodymyr Zelensky said that "enemy sabotage groups" entered Kyiv, and that he plans to remain, despite being Russia's "number one target.""According to preliminary data, unfortunately, we have lost 137 of our heroes today — our citizens. Ten of them are officers," Zelensky said in his address. "316 are wounded."He also used the opportunity to dispel rumors that he had fled Kyiv, and that his family had left the country."I stay in the capital, I stay with my people. During the day, I held dozens of international talks, directly managed our country. And I will stay in the capital," he said. "My family is also in Ukraine. My children are also in Ukraine. My family is not traitors. They are the citizens of Ukraine. But I have no right to say where they are now."READ FULL STORYWhite House is 'outraged' over reports that staff at Chernobyl have been taken hostage by Russian forcesServicemen take part in a joint tactical and special exercises of the Ukrainian Ministry of Internal Affairs, the Ukrainian National Guard and Ministry Emergency in a ghost city of Pripyat, near Chernobyl Nuclear Power Plant on February 4, 2022.Sergei Supinsky/AFP/Getty ImagesPress secretary Jen Psaki said the White House is outraged over reports from Ukrainian officials that staff at the Chernobyl nuclear plant in Ukraine have been taken hostage by Russian troops.Russian forces took over the remnants of Chernobyl earlier on Thursday during the country's invasion of Ukraine. The move indicated Russia is likely to assault Ukraine's capital city, Kyiv, which is located just south of Chernobyl, the site of one of the worst nuclear disasters in history."We're outraged by credible reports that Russian soldiers are currently holding the staff of the Chernobyl facility hostage," Psaki said during a press briefing on Thursday afternoon, adding "we condemn it and we request their release."Psaki said the situation at Chernobyl was not clear but that the hostage taking was "incredibly alarming and greatly concerning," adding it could hurt efforts to maintain the facility, which is dangerously contaminated with radioactivity as a result of the 1986 nuclear disaster.read full STORYUS secretary of state is 'convinced' Russia will try to overthrow the Ukrainian governmentUS Secretary of State Antony Blinken during an appearance on NBC's "Meet the Press" on April 11, 2021.Meet The Press/NBCUS Secretary of State Antony Blinken on Thursday said he is "convinced" Moscow will try to overthrow Ukraine's government."You don't need intelligence to tell you that that's exactly what President Putin wants. He has made clear he'd like to reconstitute the Soviet Empire, short of that he'd like to reassert a sphere of influence around the neighboring countries that were once part of the Soviet bloc," Blinken said during a national TV interview. The secretary pledged that NATO would intervene before Putin successfully accomplished his ultimate goal."Now, when it comes to a threat beyond Ukraine's borders. There's something very powerful standing in his way. That's article five of NATO, an attack on one is an attack on all," the top diplomat said.  Expert says Russia's Ukraine invasion will result in 'horrific scenes,' could be launch of 'Cold War 2.0'Ukrainians gather in front of the White House in Washington, USA to stage a protest against Russia's attack in Ukraine on February 24, 2022.Yasin Öztürk/Anadolu Agency via Getty ImagesA former aide to President Barack Obama is warning that Russia's invasion of Ukraine is a "game changer" in international relations that will result in "horrific scenes" in the coming days, with President Vladimir Putin intent on pursuing regime change at all costs."I think it's just a matter of time before Kyiv falls," Charles Kupchan, a senior fellow at the Council on Foreign Relations who also served on the National Security Council in both the Obama and Clinton administrations, told Insider.READ FULL STORYThe White House says it's ready to accept Ukrainians fleeing the Russian invasionWhite House press secretary Jen Psaki.Anna Moneymaker/Getty ImagesThe US is prepared to accept Ukrainian refugees fleeing Russia's invasion, White House press secretary Jen Psaki told CNN."We are," Psaki said when asked whether the US was ready to assist fleeing Ukrainians. "But we certainly expect that most if not the majority will want to go to Europe and neighboring countries. So, we are also working with European countries on what the needs are, where there is capacity. Poland, for example, where we are seeing an increasing flow of refugees over the last 24 hours."She added that US officials have been engaging with Europeans on the matter "for some time." Ukrainian and Russian forces have been fighting for hours over a critical airfield just outside KyivUkraine army says battle under way for airbase near Kyiv on February 24, 2022Daniel LEAL / Getty ImagesUkrainian and Russian forces have been fighting for hours over a critical airfield on the outskirts of Kyiv, Ukraine's capital city.Russian forces attacked and seized Hostomel (Gostomel) airfield, a cargo airport near Kyiv that is also known as Antonov airport, early Thursday, according to AFP. Ukraine's leadership reportedly vowed to take it back."The enemy paratroopers in Hostomel have been blocked, and troops have received an order to destroy them," Ukraine's President Volodymyr Zelensky said in a video address.Read Full StoryUkraine's health minister says dozens killed and over 160 injuredBlack smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.ARIS MESSINIS/AFP via Getty ImagesUkraine's health minister said 57 Ukrainians have been killed and 169 were wounded after Russia attacked on Thursday, the Associated Press reported.Explosions, gunfire, and sirens were reportedly heard in Kyiv on Thursday. Witnesses also described missile blasts in other cities, including Kramatorsk, Dnipro, and Odesa, reports said. Sean Penn is filming a documentary in Ukraine while Russia invadesActor and director Sean Penn attends a press briefing at the Presidential Office in Kyiv, Ukraine February 24, 2022.Ukrainian Presidential Press Service/Handout via ReutersSean Penn was spotted in Ukraine on Thursday just after Russia invaded the country. Penn was seen in the front row of a press briefing at the Presidential Office in Kyiv, photos obtained by Reuters show. The actor and director has been working on a documentary about tensions in Ukraine since last year.Read Full StoryUkrainians and Russians are packing ATM lines, prompting fears of what happened in the US during the Great DepressionPeople wait in line at an ATM in Kyiv.DANIEL LEAL/AFP via Getty Images.Many Ukrainians who haven't already fled the country as Russia's threat turned into invasion stood in long lines outside of banks and ATMs hoping to take out their funds, Reuters reported on Thursday. Meanwhile in Russia, people are also queuing outside of ATMs trying to get US dollars as its citizens worry their own currency's value will continue to tank, according to the Wall Street Journal. Banks in the capital city of Moscow are running out of money, MSNBC reported. All of this has led to fears of bank runs, which is when people withdraw money en masse because they worry banks will cease to function. That's what happened in the United States during the Great Depression, and it triggered mass unemployment and loan scarcities.  Read Full StoryA top Russian business lobbyist pleaded with Putin to 'demonstrate as much as possible' that Russia wants to remain 'part of the global economy'Russian President Vladimir Putin, left, and head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin attend a meeting of the Russian Union of Industrialists and Entrepreneurs in Moscow, Russia, Thursday, March 16, 2017.Sergei Ilnitsky/AP PhotoThe head of one of Russia's biggest business groups urged President Vladimir Putin on Thursday to avoid severe economic pain and remain "part of the global economy" as NATO members ready a harsher salvo of sanctions.Putin held a televised meeting with the Russian Union of Industrialists and Entrepreneurs just hours after Russian forces began attacks in Ukraine.The threat of new sanctions was enough for Alexander Shokhin, the business group's president, to raise concerns with Putin about remaining a member of the world economy.The lobbyist urged the president to pad against major economic pain and to ensure conflict in Ukraine doesn't fuel widespread harm to the global financial system."Everything should be done to demonstrate as much as possible that Russia remains part of the global economy and will not provoke, including through some kind of response measures, global negative phenomena on world markets," Shokhin said.Read Full StoryBiden says he'll try to limit what Americans pay at the gas pump as the US slaps Russia with more sanctions: 'This is critical to me'U.S. President Joe Biden answers questions after delivering remarks about Russia's “unprovoked and unjustified" military invasion of Ukraine on February 24, 2022.Drew Angerer/Getty ImagesPresident Joe Biden sought to quell fears of another spike in gas prices on Thursday after Russia unleashed a military assault on Ukraine that threatened to upend the global economy.The threat of war in Ukraine in recent weeks has contributed to spiking oil prices, with the benchmark Brent crude oil hitting $100 for the first time since 2014 Wednesday night amid the early stages of Russia's invasion."I know this is hard and Americans are already hurting," he said at a White House address. "I will do everything in my power to limit the pain the American people are feeling at the gas pump."He opened the door to another release of oil from the Strategic Petroleum Reserve, a step the Biden administration also took in November to try and provide relief at the pump.Read Full StoryBiden says Putin's Ukraine invasion will cause a 'complete rupture' in US-Russia relationsPresident Joe Biden listens to questions from reporters while speaking about the Russian invasion of Ukraine in the East Room of the White House, Thursday, Feb. 24, 2022, in Washington.Alex Brandon/APPresident Joe Biden on Thursday said Russian President Vladimir Putin's invasion of Ukraine will cause a "complete rupture" of US-Russia relations if it continues. Biden condemned Putin and his escalating invasion of Ukraine in a speech from the White House.Biden, who met with G7 members on Thursday morning, also announced a raft of new sanctions against Russia on Thursday."What's the risk that we are watching the beginning of another Cold War, and is there now a complete rupture in US-Russian relations?," a reporter asked Biden following his address. Read Full StoryFamed Russian rapper cancels concerts in protest, saying he can't perform while 'Russian missiles fall on Ukraine'Rapper Oxxxymiron, whose real name is Miron Fyodorov, performs during a concert in support of rapper Husky, whose real name is Dmitry Kuznetsov, in Moscow, Russia, Monday, Nov. 26, 2018.AP Photo/Pavel GolovkinA prominent Russian rapper canceled his concert in protest of the Russian invasion on Ukraine, saying he can't perform while "Russian missiles fall on Ukraine."Rapper Oxxxymiron announced via a video posted to his Instagram account that he is postponing "six of my major gigs in Moscow and Saint Petersburg indefinitely," because he said he is "specifically against the war Russia has escalated against the people of Ukraine.""I'm sure you can understand me; I can't entertain you while Russian missiles fall on Ukraine, while Kyiv residents are forced to hide in the basements and subway, and while people are dying," he said.Read Full StoryUS Treasury targets Belarusian support for Russian invasion of UkraineBelarusian President Alexander LukashenkoDmitry Astakhov/Pool/AFP via Getty ImagesIn addition to the second round of sanctions imposed on Russia by the US Thursday, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced it is sanctioning 24 Belarusian individuals for their support of the Russian invasion. The sanctions target Belarus's defense sector and financial institutions — two sectors closely tied to Russia.Massive protests erupted in Putin's hometown of St. Petersburg as Russians voice opposition to war in UkraineA demonstrator holding a placard reading "No to war" protests against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.Photo by SERGEI MIKHAILICHENKO/AFP via Getty ImagesMassive protests erupted on Thursday in Russian President Vladimir Putin's hometown of St. Petersburg, as people voiced their opposition to the invasion of Ukraine.Videos posted to Twitter show a sea of people gathered in a section of St. Petersburg, Russia's second-largest city, chanting and holding signs to object to Russia's offensive in Ukraine.Russian government forces have threatened to arrest anti-war protesters, who took to the streets after Putin announced military action against Ukraine on Thursday.Read Full StoryPhotos show Russian authorities dragging away protesters opposed to Putin's invasion of UkrainePolice Police detain a demonstrator during a protest against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.SERGEI MIKHAILICHENKO/AFP via Getty ImagesAnti-war protesters in Russia quickly took to the streets following Russian President Vladimir Putin's invasion of Ukraine. Some activists were met with hostility by Russian authorities who hauled them away. More than 1,000 anti-war protesters have already been detained in dozens of cities across Russia, according to protest-monitoring group OVD-Info. Russia's Investigative Committee warned citizens not to take part in the "unauthorized" protests "associated with the tense foreign political situation."Read Full StoryBiden slaps 'additional strong sanctions' on Russia as it mounts a large-scale attack on UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesPresident Joe Biden on Thursday announced that the US will impose a second, harsher round of sanctions on Russia following its large-scale invasion of Ukraine.Biden announced that he had authorized "additional strong sanctions" and "new limitations" on what can be exported to Russia."We have purposely designed these sanctions to maximize the long term impact on Russia and minimize the impact on the United States and our allies," Biden said."We will limit Russia's ability to do business in dollars, euros, pounds and yen to be part of the global economy," the president said of the sanctions. "We're going to stop the ability to finance and grow the Russian military. We're going to impair their ability to compete in a high-tech 21st-century economy."Read Full StoryA Ukrainian lawmaker broke down in tears and begged the world to 'save our people' from being 'murdered' by Russian forcesUkrainian Parliament member Halyna Yanchenko speaks during a CBS interviewCBS NewsA Ukrainian lawmaker broke down in tears during an interview with CBS News and begged the international community to "save our people" from being "murdered" by Russian forces."I beg you, please save our people. Dozens of people — maybe hundreds of people — might be murdered tonight," Member of Parliament Halyna Yanchenko said as she sobbed during an interview with CBS News on Thursday.  She added: "Please save Ukrainian men, women, and children." Read Full StoryPhotos show Ukrainian families fleeing the Russian invasion amid warnings of a mass refugee crisisPeople wait for trains at a train station as they attempt to evacuate the city on February 24, 2022 in Kyiv, Ukraine. Overnight, Russia began a large-scale attack on Ukraine, with explosions reported in multiple cities and far outside the restive eastern regions held by Russian-backed rebels.Pierre Crom/Getty Images)Ukrainian residents fled their homes after the first day of Russia's full-scale invasion. Train stations were packed with people on the move and roads filled with cars of people leaving the country, with their loved ones and prized possessions in tow.Before the invasion took place, there were warnings of a mass refugee crisis.Read Full StoryRussian government websites — including ones for the Kremlin and the legislature — went dark after cyberattacks target UkraineA night view of Kyiv as the Kyiv mayor declared a curfew from 10pm to 7am on February 24, 2022 in Kyiv, Ukraine.Photo by Pierre Crom/Getty ImagesMultiple Russian government websites reportedly went down on Thursday after the country launched an attack on Ukraine. NetBlocks, which tracks disruptions and shutdowns, confirmed on Twitter that multiple sites went offline shortly after 8:45 p.m. local time in Moscow.The Kremlin's website and that of the Russian Federal Assembly's lower house — or State Duma — were both down for at least 15 minutes. As of 9 p.m. local time, the State Duma website was since restored. Shortly after 9:10 p.m. local time, the Kremlin's website was also back online.  Read Full StoryPutin had a range of ways to attack Ukraine. He went with the worst-case scenario for the West.A convoy of Russian military vehicles is seen as the vehicles move towards border in Donbas region of eastern Ukraine on February 23, 2022 in Russian border city Rostov.Stringer/Anadolu Agency via Getty ImagesIn the build-up to Russia's assault on Ukraine, analysts and leaders envisioned numerous ways the conflict might play out, from a limited incursion to an all-out invasion.Putin used precision missile strikes and airstrikes, followed shortly later by ground maneuvers, the officials said.Analysts said attacks came from the east, south, and north, a description consistent with reports on the ground and Insider's map of the invasion.All three lines of attack — as per this analysis in The Conversation — had previously been floated as individual possibilities for an invasion.Defense analysts warned that Russia's multipronged attack was full-scale but still in an early phase, with a lot more forces to push into Ukraine to seize key areas or capture its leadership.Putin's overall endgame remains an area of pressing debate.Read Full StoryKey Democratic congressman says the US can't send support to Ukraine quickly enough 'to repel' Russia's invasionRep. Adam Smith, Chairman of the House Armed Services Committee.Tom Williams/CQ-Roll Call, Inc via Getty ImagesRep. Adam Smith, the chairman of the House Armed Services Committee, ruled out surging supplies into Ukraine as a last-ditch effort to stall Russia's invasion, arguing it's unlikely such support would arrive quickly enough to make a difference."The odd of us being able to do that in a rapid enough fashion to be able to repel the invasion are remote," Smith told CNN on Thursday when asked about a Ukrainian official's request for more equipment. "I don't think it's realistic to think that we can reinforce them enough in the short term to be able to repel the invasion."Read Full StoryPoland, Czech Republic, and Sweden are refusing to play their 2022 World Cup qualifying matches in Russia after it attacked UkraineA protester holds a poster reading "Sanctions against Russia now" during a rally in front of the Russian Embassy in Stockholm on February 24, 2022, after Russia launched military operations in Ukraine.Photo by CLAUDIO BRESCIANI/TT News Agency/AFP via Getty ImagesPoland, Czech Republic, and Sweden said they are refusing to play their upcoming 2022 World Cup qualifying playoff matches in Russia after it attacked Ukraine on Thursday.Based on the latest Russian aggression against Ukraine, "the signatories to this appeal do not consider travelling to Russia and playing football matches there," the three countries said in a joint statement addressed to FIFA's General Secretary Fatma Samoura. The statement continued: "The military escalation that we are observing entails serious consequences and considerably lower safety for our national football teams and official delegations."Read Full StoryRussia's moving on Kyiv and the plan appears to be to take out Ukraine's leadership, US defense official warnsA column of army trucks approaches the Perekop checkpoint on the Ukrainian border. Early on February 24, President Putin announced a special military operation to be conducted by the Russian Armed Forces against Ukraine.Sergei MalgavkobackslashTASS via Getty ImagesRussian forces invaded Ukraine Thursday morning, and a senior US defense official says they are moving on Kyiv, likely to topple the country's government and install their own.Russia is "making a move on Kyiv" a senior defense official who addressed reporters Thursday said, according to CNN. "We would describe what you are seeing as an initial phase" of a "large-scale invasion," the official said, according to The Washington Post's Dan Lamothe.Read Full StoryMaps show Russia's invasion of UkraineMaps of Ukraine.Shayanne Gal/InsiderRussia invaded Ukraine early Thursday, leading to dozens of Ukrainian and Russian casualties.These maps show where Russian troops have attacked Ukraine, which is happening from multiple sides.Read Full StoryUK plots far harsher sanctions on Russia to punish it for invading UkraineBritish Prime Minister Boris JohnsonAdrian Dennis/Pool via REUTERS/File PhotoThe UK announced a new set of harsher sanctions on Russia after the country invaded Ukraine early Thursday. A spokesman for the UK government told journalists at a briefing that the UK plans to impose a second round of sanctions. The most intense of the new list of sanctions is an asset freeze on all major Russian banks and an asset freeze against VTB — the second largest bank with assets totaling £154 billion. The UK also plans to sanction another 100 individuals and entities.This is a large step up from the sanctions it announced Wednesday, which were limited to five smaller banks, three individuals close to Putin, and politicians in Russia who voted for military action. Russia has begun arresting anti-war protesters as demonstrations break out after Putin invades UkrainePolice officer detain a woman during an action against Russia's attack on Ukraine in Moscow, Russia, Thursday, Feb. 24, 2022.AP Photo/Dmitry SerebryakovThe Russian government on Thursday threatened anti-war protesters demonstrating against Russia's invasion of Ukraine, warning they could face arrest for organizing.And according to a protest monitoring group, the detentions have already begun as small protests have broken out in some Russian cities.Russia's Investigative Committee warned citizens in a statement not to take part in the "unauthorized" protests "associated with the tense foreign political situation."The committee said that people should be aware of the "negative legal consequences of these actions," which it said includes criminal liability. Read Full StoryUkraine's official Twitter is using memes to rip into Putin's bogus comparison between it and Nazi GermanyRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressAfter Russian President Vladimir Putin gave the marching orders for an attack on Ukraine early Thursday morning, Ukraine's official Twitter account got busy. One photo showed what appeared to be caricature images of Adolf Hitler tending to a small Putin. "This is not a 'meme', but our and your reality right now," Ukraine said in a follow-up tweet.  The account also called for a so-called "Twitter-storm" at 12 p.m. local time in Kyiv on Thursday, urging people to use various hashtags to "tell the world of the ongoing Russian aggression against Ukraine and the fact that Ukraine is under attack."Ukraine's latest post said to "Tag @Russia and tell them what you think about them," racking up tens of thousands of likes and quote tweets. Read Full StoryMap shows reported movement of Russian troops in Ukraine Thursday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Live updates: Ukraine official says Friday will be "hardest day" as Russia advances toward country"s capital

Russia started its attack on Ukraine on Thursday morning. President Volodomyr Zelensky said Ukraine needs help from the rest of the world. Ukrainian servicemen walk by fragments of a downed aircraft seen in in Kyiv, Ukraine, on Friday.AP Photo/Oleksandr Ratushniak Russia continued its attack on Ukraine on Friday, advancing towards the capital. One Ukrainian official warned Friday would be the "hardest day" and the president said Ukraine needs help. The UK's defense minister said Russia did not achieve what it wanted on its first day of attack. Ukraine official predicts 'hardest day' as Russia advances on KyivPeople rest in the Kyiv subway, using it as a bomb shelter on Thursday.AP Photo/Emilio MorenattiUkraine Interior Ministry advisor Anton Gerashenko said on Friday: "The hardest day will be today. The enemy's plan is to break through with tanks from Ivankiv and Chernihiv to Kyiv." Ukraine has been 'left alone' to defend itself from Russia, president saysUkrainian servicemen walk at fragments of a downed aircraft seen in in Kyiv, Ukraine, Friday, Feb. 25, 2022AP Photo/Oleksandr RatushniakVolodomyr Zelensky said in a Friday speech that Ukraine was not getting on-the-ground help, saying "we are left alone in defense of our state.""Who is ready to fight with us? Honestly — I do not see such. Who is ready to guarantee Ukraine's accession to NATO? Honestly, everyone is afraid."Many nations have condemned Russia, and sent weapons to Ukraine. But they have not sent troops, and NATO and the US have said they won't do so.Zelensky also praised the people of Ukraine in his speech, saying: "You are brilliantly defending the country from one of the most powerful countries in the world."Read Full Story Ukraine national guard posts instructions for making Molotov Cocktails—НГУ (@ng_ukraine) February 25, 2022 The Champions League final has been moved from Russia to FranceGetty Images/Daniele BadolatoSoccer's biggest annual match has been moved from Russia.European soccer governing body UEFA said Russia has been stripped of the 2022 Champions League final, and that it will now take place in Paris.UEFA said the game being moved comes after "the grave escalation of the security situation in Europe."Read Full StoryRussia 'failed to deliver' its day-one aims for invading Ukraine, the UK defense secretary saysThe UK Secretary of State for Defense, Ben Wallace.Luka Dakskobler/SOPA Images/LightRocket via Getty ImagesBen Wallace told Sky News on Friday: "Our assessment, as of this morning, is that Russia has not taken any of its major objectives,"  "In fact it's behind its hoped-for timetable. They've lost over 450 personnel.""The Russian army has failed to deliver on day one its main objective."He gave the example that Russian special forces had failed to secure a "significant" airport that was once again under Ukrainian control. Read Full Story Ukrainian leaders compare Russia's attack on Kyiv to Nazi Germany's assault in 1941A night view of Kyiv, Ukraine's capital city.Pierre Crom/Getty ImagesRussia's attack on the Ukrainian capital of Kyiv has prompted comparisons to Nazi Germany's assault on the city in 1941.Ukrainian President Volodymyr Zelensky invoked World War II while speaking directly to the Russian people in a speech Friday morning as explosions were reported over Kyiv."Tonight, you began bombing residential areas in the hero city of Kyiv. This is like 1941. I want to tell all Russian citizens who are coming out to protest: we hear you, you heard us, you started to believe us. Fight for us. Fight the war," Zelensky said.Read Full StoryRussia's richest 22 billionaires lost $39 billion in one day after the invasion of UkraineVladimir Potanin, Russia's richest man, lost $3 billion in one day on Thursday. He is now worth $26.1 billion.Mikhail Svetlov/Getty ImagesRussia's 22 richest individuals saw their net worths plunge by a collective $39 billion in less than 24 hours after their country invaded Ukraine, according to the Bloomberg Billionaires Index.The wealth wipeout came after Moscow's benchmark MOEX Russia Index crashed and closed 33% lower on Thursday.The Russian billionaires lost more money on Thursday than they had lost year-to-date up until Wednesday, according to Bloomberg.Read Full StoryAustralian PM Scott Morrison slams China for throwing a 'lifeline' to RussiaMorrison said that it is "simply unacceptable" for China to ease trade restrictions on Russia when other countries are imposing sanctions.STEVEN SAPHORE/AFP via Getty ImagesAustralian Prime Minister Scott Morrison has condemned China for easing its restrictions on Russian wheat amid the Ukraine crisis, even as other countries impose fresh sanctions on Russia."You don't go and throw a lifeline to Russia in the middle of a period when they're invading another country," he told reporters at a press conference on Friday morning, per Australia's ABC News. Read Full StoryMitch McConnell has urged Biden to 'ratchet the sanctions all the way up' against RussiaSenate Minority Leader Mitch McConnell has urged President Joe Biden not to hold back with tough sanctions on Russia.Drew Angerer/Getty ImagesSenate Minority Leader Mitch McConnell on Thursday advised President Joe Biden to hold nothing back when imposing sanctions on Russia following the country's invasion of Ukraine. "We're all together at this point, and we need to be together about what should be done," McConnell said."Ratchet the sanctions all the way up. Don't hold any back," he added. "Every single available tough sanction should be employed and should be employed now." Read Full StoryLarge explosions heard in Kyiv, Ukraine's capital cityA night view of Kyiv, Ukraine's capital city, as seen on Thursday.Photo by Pierre Crom/Getty ImagesKyiv, the capital of Ukraine, was awakened by explosions in the early hours of Friday morning local time, CNN reported."Strikes on Kyiv with cruise or ballistic missiles continued," Anton Gerashchenko, adviser to the head of the Ministry of Internal Affairs in Ukraine, told CNN Thursday.The outlet also reported multiple bombardments — two blasts in Kyiv and an explosion in the distance. Read Full StoryUkraine is crowdfunding to shore up its defenses against the Russian militarySoldiers seen aboard a Ukrainian tank in Mariupol, Ukraine, on Thursday.REUTERS/Carlos BarriaUkraine is crowdfunding to bolster its armed forces against the Russian invasion.In a tweet on Thursday, the official Twitter account of Ukraine called for donations and provided a link to the country's official website.Collected funds will be used for the "logistical and medical support" of the Ukrainian armed forces, said the webpage, which is operated by Ukraine's Ministry of Foreign Affairs and Ukrainian Institution.Read Full Story5 reasons Putin and others have given for the invasionRussian President Vladimir Putin claims the Ukraine invasion is aimed at preventing the "genocide" of ethnic Russians in the country.Photo by Kay Nietfeld/picture alliance via Getty ImagesRussian forces attacked Ukraine early Thursday morning, launching a large-scale and unprovoked invasion that was feared for weeks.Here are some reasons Russian President Vladimir Putin has given for why Russia invaded Ukraine — some of which are based on falsehoods — along with what the US and NATO have said about his motivations.Read Full StoryThe Biden administration is considering training Ukrainian soldiers in an outside country, according to AxiosUkrainian soldiers patrol on the frontline in Zolote, Ukraine on January 20, 2022.Wolfgang Schwan/Getty ImagesAs Russian forces enclose on Ukraine's capital Kyiv, the Biden administration is eyeing its next steps in the ongoing conflict.Defense Secretary Lloyd Austin told House lawmakers on Thursday that the US government is considering possible ways to train Ukrainian troops outside of Ukraine, should Russia seize control of the country, according to Axios.Austin reportedly told lawmakers that officials are trying to find ways to provide more defense equipment, including ammunition to Ukrainian forces — a feat made more challenging as Russian forces assault the country.The secretary also told House members that the Biden administration will continue to support Ukrainian President Volodymyr Zelensky's government as long as it is "viable," the outlet reported.Ukrainian president announces general mobilization of all conscripts and reservists to last 90 daysUkrainian soldiers sit on top of a military vehicle parked outside the hotel in Prypiat, Ukraine on February 4.Volodymyr Tarasov/Ukrinform/Future Publishing via Getty ImageUkrainian President Volodymyr Zelensky on Thursday ordered a general military mobilization throughout the country as Russia continues its large-scale military assault in Ukraine. The declaration ordered the conscription of conscripts and reservists for military service, as well as their delivery to military units and institutions of the Armed Forces of Ukraine in order to "ensure the defense of the state." The mobilization, which included all of Ukraine's major cities, will be carried out within 90 days, the decree said. It will provide personnel, vehicles, infrastructure, and land use for the Ukrainian government and military amid Russia's ongoing invasion, according to the decree. Ukraine has also banned all male citizens ages 18-60 from leaving the country, according to CNN, which cited the State Border Guard Service. READ FULL STORYZelensky says 'enemy sabotage groups have entered Kyiv' and that he is 'number one target'Ukrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesIn his second video address on Thursday, Ukraine's President Volodymyr Zelensky said that "enemy sabotage groups" entered Kyiv, and that he plans to remain, despite being Russia's "number one target.""According to preliminary data, unfortunately, we have lost 137 of our heroes today — our citizens. Ten of them are officers," Zelensky said in his address. "316 are wounded."He also used the opportunity to dispel rumors that he had fled Kyiv, and that his family had left the country."I stay in the capital, I stay with my people. During the day, I held dozens of international talks, directly managed our country. And I will stay in the capital," he said. "My family is also in Ukraine. My children are also in Ukraine. My family is not traitors. They are the citizens of Ukraine. But I have no right to say where they are now."READ FULL STORYWhite House is 'outraged' over reports that staff at Chernobyl have been taken hostage by Russian forcesServicemen take part in a joint tactical and special exercises of the Ukrainian Ministry of Internal Affairs, the Ukrainian National Guard and Ministry Emergency in a ghost city of Pripyat, near Chernobyl Nuclear Power Plant on February 4, 2022.Sergei Supinsky/AFP/Getty ImagesPress secretary Jen Psaki said the White House is outraged over reports from Ukrainian officials that staff at the Chernobyl nuclear plant in Ukraine have been taken hostage by Russian troops.Russian forces took over the remnants of Chernobyl earlier on Thursday during the country's invasion of Ukraine. The move indicated Russia is likely to assault Ukraine's capital city, Kyiv, which is located just south of Chernobyl, the site of one of the worst nuclear disasters in history."We're outraged by credible reports that Russian soldiers are currently holding the staff of the Chernobyl facility hostage," Psaki said during a press briefing on Thursday afternoon, adding "we condemn it and we request their release."Psaki said the situation at Chernobyl was not clear but that the hostage taking was "incredibly alarming and greatly concerning," adding it could hurt efforts to maintain the facility, which is dangerously contaminated with radioactivity as a result of the 1986 nuclear disaster.read full STORYUS secretary of state is 'convinced' Russia will try to overthrow the Ukrainian governmentUS Secretary of State Antony Blinken during an appearance on NBC's "Meet the Press" on April 11, 2021.Meet The Press/NBCUS Secretary of State Antony Blinken on Thursday said he is "convinced" Moscow will try to overthrow Ukraine's government."You don't need intelligence to tell you that that's exactly what President Putin wants. He has made clear he'd like to reconstitute the Soviet Empire, short of that he'd like to reassert a sphere of influence around the neighboring countries that were once part of the Soviet bloc," Blinken said during a national TV interview. The secretary pledged that NATO would intervene before Putin successfully accomplished his ultimate goal."Now, when it comes to a threat beyond Ukraine's borders. There's something very powerful standing in his way. That's article five of NATO, an attack on one is an attack on all," the top diplomat said.  Expert says Russia's Ukraine invasion will result in 'horrific scenes,' could be launch of 'Cold War 2.0'Ukrainians gather in front of the White House in Washington, USA to stage a protest against Russia's attack in Ukraine on February 24, 2022.Yasin Öztürk/Anadolu Agency via Getty ImagesA former aide to President Barack Obama is warning that Russia's invasion of Ukraine is a "game changer" in international relations that will result in "horrific scenes" in the coming days, with President Vladimir Putin intent on pursuing regime change at all costs."I think it's just a matter of time before Kyiv falls," Charles Kupchan, a senior fellow at the Council on Foreign Relations who also served on the National Security Council in both the Obama and Clinton administrations, told Insider.READ FULL STORYThe White House says it's ready to accept Ukrainians fleeing the Russian invasionWhite House press secretary Jen Psaki.Anna Moneymaker/Getty ImagesThe US is prepared to accept Ukrainian refugees fleeing Russia's invasion, White House press secretary Jen Psaki told CNN."We are," Psaki said when asked whether the US was ready to assist fleeing Ukrainians. "But we certainly expect that most if not the majority will want to go to Europe and neighboring countries. So, we are also working with European countries on what the needs are, where there is capacity. Poland, for example, where we are seeing an increasing flow of refugees over the last 24 hours."She added that US officials have been engaging with Europeans on the matter "for some time." Ukrainian and Russian forces have been fighting for hours over a critical airfield just outside KyivUkraine army says battle under way for airbase near Kyiv on February 24, 2022Daniel LEAL / Getty ImagesUkrainian and Russian forces have been fighting for hours over a critical airfield on the outskirts of Kyiv, Ukraine's capital city.Russian forces attacked and seized Hostomel (Gostomel) airfield, a cargo airport near Kyiv that is also known as Antonov airport, early Thursday, according to AFP. Ukraine's leadership reportedly vowed to take it back."The enemy paratroopers in Hostomel have been blocked, and troops have received an order to destroy them," Ukraine's President Volodymyr Zelensky said in a video address.Read Full StoryUkraine's health minister says dozens killed and over 160 injuredBlack smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.ARIS MESSINIS/AFP via Getty ImagesUkraine's health minister said 57 Ukrainians have been killed and 169 were wounded after Russia attacked on Thursday, the Associated Press reported.Explosions, gunfire, and sirens were reportedly heard in Kyiv on Thursday. Witnesses also described missile blasts in other cities, including Kramatorsk, Dnipro, and Odesa, reports said. Sean Penn is filming a documentary in Ukraine while Russia invadesActor and director Sean Penn attends a press briefing at the Presidential Office in Kyiv, Ukraine February 24, 2022.Ukrainian Presidential Press Service/Handout via ReutersSean Penn was spotted in Ukraine on Thursday just after Russia invaded the country. Penn was seen in the front row of a press briefing at the Presidential Office in Kyiv, photos obtained by Reuters show. The actor and director has been working on a documentary about tensions in Ukraine since last year.Read Full StoryUkrainians and Russians are packing ATM lines, prompting fears of what happened in the US during the Great DepressionPeople wait in line at an ATM in Kyiv.DANIEL LEAL/AFP via Getty Images.Many Ukrainians who haven't already fled the country as Russia's threat turned into invasion stood in long lines outside of banks and ATMs hoping to take out their funds, Reuters reported on Thursday. Meanwhile in Russia, people are also queuing outside of ATMs trying to get US dollars as its citizens worry their own currency's value will continue to tank, according to the Wall Street Journal. Banks in the capital city of Moscow are running out of money, MSNBC reported. All of this has led to fears of bank runs, which is when people withdraw money en masse because they worry banks will cease to function. That's what happened in the United States during the Great Depression, and it triggered mass unemployment and loan scarcities.  Read Full StoryA top Russian business lobbyist pleaded with Putin to 'demonstrate as much as possible' that Russia wants to remain 'part of the global economy'Russian President Vladimir Putin, left, and head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin attend a meeting of the Russian Union of Industrialists and Entrepreneurs in Moscow, Russia, Thursday, March 16, 2017.Sergei Ilnitsky/AP PhotoThe head of one of Russia's biggest business groups urged President Vladimir Putin on Thursday to avoid severe economic pain and remain "part of the global economy" as NATO members ready a harsher salvo of sanctions.Putin held a televised meeting with the Russian Union of Industrialists and Entrepreneurs just hours after Russian forces began attacks in Ukraine.The threat of new sanctions was enough for Alexander Shokhin, the business group's president, to raise concerns with Putin about remaining a member of the world economy.The lobbyist urged the president to pad against major economic pain and to ensure conflict in Ukraine doesn't fuel widespread harm to the global financial system."Everything should be done to demonstrate as much as possible that Russia remains part of the global economy and will not provoke, including through some kind of response measures, global negative phenomena on world markets," Shokhin said.Read Full StoryBiden says he'll try to limit what Americans pay at the gas pump as the US slaps Russia with more sanctions: 'This is critical to me'U.S. President Joe Biden answers questions after delivering remarks about Russia's “unprovoked and unjustified" military invasion of Ukraine on February 24, 2022.Drew Angerer/Getty ImagesPresident Joe Biden sought to quell fears of another spike in gas prices on Thursday after Russia unleashed a military assault on Ukraine that threatened to upend the global economy.The threat of war in Ukraine in recent weeks has contributed to spiking oil prices, with the benchmark Brent crude oil hitting $100 for the first time since 2014 Wednesday night amid the early stages of Russia's invasion."I know this is hard and Americans are already hurting," he said at a White House address. "I will do everything in my power to limit the pain the American people are feeling at the gas pump."He opened the door to another release of oil from the Strategic Petroleum Reserve, a step the Biden administration also took in November to try and provide relief at the pump.Read Full StoryBiden says Putin's Ukraine invasion will cause a 'complete rupture' in US-Russia relationsPresident Joe Biden listens to questions from reporters while speaking about the Russian invasion of Ukraine in the East Room of the White House, Thursday, Feb. 24, 2022, in Washington.Alex Brandon/APPresident Joe Biden on Thursday said Russian President Vladimir Putin's invasion of Ukraine will cause a "complete rupture" of US-Russia relations if it continues. Biden condemned Putin and his escalating invasion of Ukraine in a speech from the White House.Biden, who met with G7 members on Thursday morning, also announced a raft of new sanctions against Russia on Thursday."What's the risk that we are watching the beginning of another Cold War, and is there now a complete rupture in US-Russian relations?," a reporter asked Biden following his address. Read Full StoryFamed Russian rapper cancels concerts in protest, saying he can't perform while 'Russian missiles fall on Ukraine'Rapper Oxxxymiron, whose real name is Miron Fyodorov, performs during a concert in support of rapper Husky, whose real name is Dmitry Kuznetsov, in Moscow, Russia, Monday, Nov. 26, 2018.AP Photo/Pavel GolovkinA prominent Russian rapper canceled his concert in protest of the Russian invasion on Ukraine, saying he can't perform while "Russian missiles fall on Ukraine."Rapper Oxxxymiron announced via a video posted to his Instagram account that he is postponing "six of my major gigs in Moscow and Saint Petersburg indefinitely," because he said he is "specifically against the war Russia has escalated against the people of Ukraine.""I'm sure you can understand me; I can't entertain you while Russian missiles fall on Ukraine, while Kyiv residents are forced to hide in the basements and subway, and while people are dying," he said.Read Full StoryUS Treasury targets Belarusian support for Russian invasion of UkraineBelarusian President Alexander LukashenkoDmitry Astakhov/Pool/AFP via Getty ImagesIn addition to the second round of sanctions imposed on Russia by the US Thursday, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced it is sanctioning 24 Belarusian individuals for their support of the Russian invasion. The sanctions target Belarus's defense sector and financial institutions — two sectors closely tied to Russia.Massive protests erupted in Putin's hometown of St. Petersburg as Russians voice opposition to war in UkraineA demonstrator holding a placard reading "No to war" protests against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.Photo by SERGEI MIKHAILICHENKO/AFP via Getty ImagesMassive protests erupted on Thursday in Russian President Vladimir Putin's hometown of St. Petersburg, as people voiced their opposition to the invasion of Ukraine.Videos posted to Twitter show a sea of people gathered in a section of St. Petersburg, Russia's second-largest city, chanting and holding signs to object to Russia's offensive in Ukraine.Russian government forces have threatened to arrest anti-war protesters, who took to the streets after Putin announced military action against Ukraine on Thursday.Read Full StoryPhotos show Russian authorities dragging away protesters opposed to Putin's invasion of UkrainePolice Police detain a demonstrator during a protest against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.SERGEI MIKHAILICHENKO/AFP via Getty ImagesAnti-war protesters in Russia quickly took to the streets following Russian President Vladimir Putin's invasion of Ukraine. Some activists were met with hostility by Russian authorities who hauled them away. More than 1,000 anti-war protesters have already been detained in dozens of cities across Russia, according to protest-monitoring group OVD-Info. Russia's Investigative Committee warned citizens not to take part in the "unauthorized" protests "associated with the tense foreign political situation."Read Full StoryBiden slaps 'additional strong sanctions' on Russia as it mounts a large-scale attack on UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesPresident Joe Biden on Thursday announced that the US will impose a second, harsher round of sanctions on Russia following its large-scale invasion of Ukraine.Biden announced that he had authorized "additional strong sanctions" and "new limitations" on what can be exported to Russia."We have purposely designed these sanctions to maximize the long term impact on Russia and minimize the impact on the United States and our allies," Biden said."We will limit Russia's ability to do business in dollars, euros, pounds and yen to be part of the global economy," the president said of the sanctions. "We're going to stop the ability to finance and grow the Russian military. We're going to impair their ability to compete in a high-tech 21st-century economy."Read Full StoryA Ukrainian lawmaker broke down in tears and begged the world to 'save our people' from being 'murdered' by Russian forcesUkrainian Parliament member Halyna Yanchenko speaks during a CBS interviewCBS NewsA Ukrainian lawmaker broke down in tears during an interview with CBS News and begged the international community to "save our people" from being "murdered" by Russian forces."I beg you, please save our people. Dozens of people — maybe hundreds of people — might be murdered tonight," Member of Parliament Halyna Yanchenko said as she sobbed during an interview with CBS News on Thursday.  She added: "Please save Ukrainian men, women, and children." Read Full StoryPhotos show Ukrainian families fleeing the Russian invasion amid warnings of a mass refugee crisisPeople wait for trains at a train station as they attempt to evacuate the city on February 24, 2022 in Kyiv, Ukraine. Overnight, Russia began a large-scale attack on Ukraine, with explosions reported in multiple cities and far outside the restive eastern regions held by Russian-backed rebels.Pierre Crom/Getty Images)Ukrainian residents fled their homes after the first day of Russia's full-scale invasion. Train stations were packed with people on the move and roads filled with cars of people leaving the country, with their loved ones and prized possessions in tow.Before the invasion took place, there were warnings of a mass refugee crisis.Read Full StoryRussian government websites — including ones for the Kremlin and the legislature — went dark after cyberattacks target UkraineA night view of Kyiv as the Kyiv mayor declared a curfew from 10pm to 7am on February 24, 2022 in Kyiv, Ukraine.Photo by Pierre Crom/Getty ImagesMultiple Russian government websites reportedly went down on Thursday after the country launched an attack on Ukraine. NetBlocks, which tracks disruptions and shutdowns, confirmed on Twitter that multiple sites went offline shortly after 8:45 p.m. local time in Moscow.The Kremlin's website and that of the Russian Federal Assembly's lower house — or State Duma — were both down for at least 15 minutes. As of 9 p.m. local time, the State Duma website was since restored. Shortly after 9:10 p.m. local time, the Kremlin's website was also back online.  Read Full StoryPutin had a range of ways to attack Ukraine. He went with the worst-case scenario for the West.A convoy of Russian military vehicles is seen as the vehicles move towards border in Donbas region of eastern Ukraine on February 23, 2022 in Russian border city Rostov.Stringer/Anadolu Agency via Getty ImagesIn the build-up to Russia's assault on Ukraine, analysts and leaders envisioned numerous ways the conflict might play out, from a limited incursion to an all-out invasion.Putin used precision missile strikes and airstrikes, followed shortly later by ground maneuvers, the officials said.Analysts said attacks came from the east, south, and north, a description consistent with reports on the ground and Insider's map of the invasion.All three lines of attack — as per this analysis in The Conversation — had previously been floated as individual possibilities for an invasion.Defense analysts warned that Russia's multipronged attack was full-scale but still in an early phase, with a lot more forces to push into Ukraine to seize key areas or capture its leadership.Putin's overall endgame remains an area of pressing debate.Read Full StoryKey Democratic congressman says the US can't send support to Ukraine quickly enough 'to repel' Russia's invasionRep. Adam Smith, Chairman of the House Armed Services Committee.Tom Williams/CQ-Roll Call, Inc via Getty ImagesRep. Adam Smith, the chairman of the House Armed Services Committee, ruled out surging supplies into Ukraine as a last-ditch effort to stall Russia's invasion, arguing it's unlikely such support would arrive quickly enough to make a difference."The odd of us being able to do that in a rapid enough fashion to be able to repel the invasion are remote," Smith told CNN on Thursday when asked about a Ukrainian official's request for more equipment. "I don't think it's realistic to think that we can reinforce them enough in the short term to be able to repel the invasion."Read Full StoryPoland, Czech Republic, and Sweden are refusing to play their 2022 World Cup qualifying matches in Russia after it attacked UkraineA protester holds a poster reading "Sanctions against Russia now" during a rally in front of the Russian Embassy in Stockholm on February 24, 2022, after Russia launched military operations in Ukraine.Photo by CLAUDIO BRESCIANI/TT News Agency/AFP via Getty ImagesPoland, Czech Republic, and Sweden said they are refusing to play their upcoming 2022 World Cup qualifying playoff matches in Russia after it attacked Ukraine on Thursday.Based on the latest Russian aggression against Ukraine, "the signatories to this appeal do not consider travelling to Russia and playing football matches there," the three countries said in a joint statement addressed to FIFA's General Secretary Fatma Samoura. The statement continued: "The military escalation that we are observing entails serious consequences and considerably lower safety for our national football teams and official delegations."Read Full StoryRussia's moving on Kyiv and the plan appears to be to take out Ukraine's leadership, US defense official warnsA column of army trucks approaches the Perekop checkpoint on the Ukrainian border. Early on February 24, President Putin announced a special military operation to be conducted by the Russian Armed Forces against Ukraine.Sergei MalgavkobackslashTASS via Getty ImagesRussian forces invaded Ukraine Thursday morning, and a senior US defense official says they are moving on Kyiv, likely to topple the country's government and install their own.Russia is "making a move on Kyiv" a senior defense official who addressed reporters Thursday said, according to CNN. "We would describe what you are seeing as an initial phase" of a "large-scale invasion," the official said, according to The Washington Post's Dan Lamothe.Read Full StoryMaps show Russia's invasion of UkraineMaps of Ukraine.Shayanne Gal/InsiderRussia invaded Ukraine early Thursday, leading to dozens of Ukrainian and Russian casualties.These maps show where Russian troops have attacked Ukraine, which is happening from multiple sides.Read Full StoryUK plots far harsher sanctions on Russia to punish it for invading UkraineBritish Prime Minister Boris JohnsonAdrian Dennis/Pool via REUTERS/File PhotoThe UK announced a new set of harsher sanctions on Russia after the country invaded Ukraine early Thursday. A spokesman for the UK government told journalists at a briefing that the UK plans to impose a second round of sanctions. The most intense of the new list of sanctions is an asset freeze on all major Russian banks and an asset freeze against VTB — the second largest bank with assets totaling £154 billion. The UK also plans to sanction another 100 individuals and entities.This is a large step up from the sanctions it announced Wednesday, which were limited to five smaller banks, three individuals close to Putin, and politicians in Russia who voted for military action. Russia has begun arresting anti-war protesters as demonstrations break out after Putin invades UkrainePolice officer detain a woman during an action against Russia's attack on Ukraine in Moscow, Russia, Thursday, Feb. 24, 2022.AP Photo/Dmitry SerebryakovThe Russian government on Thursday threatened anti-war protesters demonstrating against Russia's invasion of Ukraine, warning they could face arrest for organizing.And according to a protest monitoring group, the detentions have already begun as small protests have broken out in some Russian cities.Russia's Investigative Committee warned citizens in a statement not to take part in the "unauthorized" protests "associated with the tense foreign political situation."The committee said that people should be aware of the "negative legal consequences of these actions," which it said includes criminal liability. Read Full StoryUkraine's official Twitter is using memes to rip into Putin's bogus comparison between it and Nazi GermanyRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressAfter Russian President Vladimir Putin gave the marching orders for an attack on Ukraine early Thursday morning, Ukraine's official Twitter account got busy. One photo showed what appeared to be caricature images of Adolf Hitler tending to a small Putin. "This is not a 'meme', but our and your reality right now," Ukraine said in a follow-up tweet.  The account also called for a so-called "Twitter-storm" at 12 p.m. local time in Kyiv on Thursday, urging people to use various hashtags to "tell the world of the ongoing Russian aggression against Ukraine and the fact that Ukraine is under attack."Ukraine's latest post said to "Tag @Russia and tell them what you think about them," racking up tens of thousands of likes and quote tweets. Read Full StoryMap shows reported movement of Russian troops in Ukraine Thursday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Live updates: Zelensky says "enemy sabotage groups have entered Kyiv" and that he is "number one target"

Russia attacked Ukraine Thursday morning. Blasts were heard across the country, with reports of artillery fire from Russian forces across the border. Black smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.Aris Messinis / AFP via Getty Images US President Joe Biden announced a new round of "strong sanctions" on Russia. Russian forces attacked Ukraine on Thursday morning. Ukraine called it a "full-scale invasion." Ukraine said eight civilians were killed, as well as dozens more troops on both sides. Large explosions heard in Kyiv, Ukraine's capital cityA night view of Kyiv, Ukraine's capital city, as seen on Thursday.Photo by Pierre Crom/Getty ImagesKyiv, the capital of Ukraine, was awakened by explosions in the early hours of Friday morning local time, CNN reported."Strikes on Kyiv with cruise or ballistic missiles continued," Anton Gerashchenko, adviser to the head of the Ministry of Internal Affairs in Ukraine, told CNN Thursday.The outlet also reported multiple bombardments — two blasts in Kyiv and an explosion in the distance. Read Full StoryUkraine is crowdfunding to shore up its defenses against the Russian militarySoldiers seen aboard a Ukrainian tank in Mariupol, Ukraine, on Thursday.REUTERS/Carlos BarriaUkraine is crowdfunding to bolster its armed forces against the Russian invasion.In a tweet on Thursday, the official Twitter account of Ukraine called for donations and provided a link to the country's official website.Collected funds will be used for the "logistical and medical support" of the Ukrainian armed forces, said the webpage, which is operated by Ukraine's Ministry of Foreign Affairs and Ukrainian Institution.Read Full Story5 reasons Putin and others have given for the invasionRussian President Vladimir Putin claims the Ukraine invasion is aimed at preventing the "genocide" of ethnic Russians in the country.Photo by Kay Nietfeld/picture alliance via Getty ImagesRussian forces attacked Ukraine early Thursday morning, launching a large-scale and unprovoked invasion that was feared for weeks.Here are some reasons Russian President Vladimir Putin has given for why Russia invaded Ukraine — some of which are based on falsehoods — along with what the US and NATO have said about his motivations.Read Full StoryThe Biden administration is considering training Ukrainian soldiers in an outside country, according to AxiosUkrainian soldiers patrol on the frontline in Zolote, Ukraine on January 20, 2022.Wolfgang Schwan/Getty ImagesAs Russian forces enclose on Ukraine's capital Kyiv, the Biden administration is eyeing its next steps in the ongoing conflict.Defense Secretary Lloyd Austin told House lawmakers on Thursday that the US government is considering possible ways to train Ukrainian troops outside of Ukraine, should Russia seize control of the country, according to Axios.Austin reportedly told lawmakers that officials are trying to find ways to provide more defense equipment, including ammunition to Ukrainian forces — a feat made more challenging as Russian forces assault the country.The secretary also told House members that the Biden administration will continue to support Ukrainian President Volodymyr Zelensky's government as long as it is "viable," the outlet reported.Ukrainian president announces general mobilization of all conscripts and reservists to last 90 daysUkrainian soldiers sit on top of a military vehicle parked outside the hotel in Prypiat, Ukraine on February 4.Volodymyr Tarasov/Ukrinform/Future Publishing via Getty ImageUkrainian President Volodymyr Zelensky on Thursday ordered a general military mobilization throughout the country as Russia continues its large-scale military assault in Ukraine. The declaration ordered the conscription of conscripts and reservists for military service, as well as their delivery to military units and institutions of the Armed Forces of Ukraine in order to "ensure the defense of the state." The mobilization, which included all of Ukraine's major cities, will be carried out within 90 days, the decree said. It will provide personnel, vehicles, infrastructure, and land use for the Ukrainian government and military amid Russia's ongoing invasion, according to the decree. Ukraine has also banned all male citizens ages 18-60 from leaving the country, according to CNN, which cited the State Border Guard Service. READ FULL STORYZelensky says 'enemy sabotage groups have entered Kyiv' and that he is 'number one target'Ukrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesIn his second video address on Thursday, Ukraine's President Volodymyr Zelensky said that "enemy sabotage groups" entered Kyiv, and that he plans to remain, despite being Russia's "number one target.""According to preliminary data, unfortunately, we have lost 137 of our heroes today — our citizens. Ten of them are officers," Zelensky said in his address. "316 are wounded."He also used the opportunity to dispel rumors that he had fled Kyiv, and that his family had left the country."I stay in the capital, I stay with my people. During the day, I held dozens of international talks, directly managed our country. And I will stay in the capital," he said. "My family is also in Ukraine. My children are also in Ukraine. My family is not traitors. They are the citizens of Ukraine. But I have no right to say where they are now."READ FULL STORYWhite House is 'outraged' over reports that staff at Chernobyl have been taken hostage by Russian forcesServicemen take part in a joint tactical and special exercises of the Ukrainian Ministry of Internal Affairs, the Ukrainian National Guard and Ministry Emergency in a ghost city of Pripyat, near Chernobyl Nuclear Power Plant on February 4, 2022.Sergei Supinsky/AFP/Getty ImagesPress secretary Jen Psaki said the White House is outraged over reports from Ukrainian officials that staff at the Chernobyl nuclear plant in Ukraine have been taken hostage by Russian troops.Russian forces took over the remnants of Chernobyl earlier on Thursday during the country's invasion of Ukraine. The move indicated Russia is likely to assault Ukraine's capital city, Kyiv, which is located just south of Chernobyl, the site of one of the worst nuclear disasters in history."We're outraged by credible reports that Russian soldiers are currently holding the staff of the Chernobyl facility hostage," Psaki said during a press briefing on Thursday afternoon, adding "we condemn it and we request their release."Psaki said the situation at Chernobyl was not clear but that the hostage taking was "incredibly alarming and greatly concerning," adding it could hurt efforts to maintain the facility, which is dangerously contaminated with radioactivity as a result of the 1986 nuclear disaster.read full STORYUS secretary of state is 'convinced' Russia will try to overthrow the Ukrainian governmentUS Secretary of State Antony Blinken during an appearance on NBC's "Meet the Press" on April 11, 2021.Meet The Press/NBCUS Secretary of State Antony Blinken on Thursday said he is "convinced" Moscow will try to overthrow Ukraine's government."You don't need intelligence to tell you that that's exactly what President Putin wants. He has made clear he'd like to reconstitute the Soviet Empire, short of that he'd like to reassert a sphere of influence around the neighboring countries that were once part of the Soviet bloc," Blinken said during a national TV interview. The secretary pledged that NATO would intervene before Putin successfully accomplished his ultimate goal."Now, when it comes to a threat beyond Ukraine's borders. There's something very powerful standing in his way. That's article five of NATO, an attack on one is an attack on all," the top diplomat said.  Expert says Russia's Ukraine invasion will result in 'horrific scenes,' could be launch of 'Cold War 2.0'Ukrainians gather in front of the White House in Washington, USA to stage a protest against Russia's attack in Ukraine on February 24, 2022.Yasin Öztürk/Anadolu Agency via Getty ImagesA former aide to President Barack Obama is warning that Russia's invasion of Ukraine is a "game changer" in international relations that will result in "horrific scenes" in the coming days, with President Vladimir Putin intent on pursuing regime change at all costs."I think it's just a matter of time before Kyiv falls," Charles Kupchan, a senior fellow at the Council on Foreign Relations who also served on the National Security Council in both the Obama and Clinton administrations, told Insider.READ FULL STORYThe White House says it's ready to accept Ukrainians fleeing the Russian invasionWhite House press secretary Jen Psaki.Anna Moneymaker/Getty ImagesThe US is prepared to accept Ukrainian refugees fleeing Russia's invasion, White House press secretary Jen Psaki told CNN."We are," Psaki said when asked whether the US was ready to assist fleeing Ukrainians. "But we certainly expect that most if not the majority will want to go to Europe and neighboring countries. So, we are also working with European countries on what the needs are, where there is capacity. Poland, for example, where we are seeing an increasing flow of refugees over the last 24 hours."She added that US officials have been engaging with Europeans on the matter "for some time." Ukrainian and Russian forces have been fighting for hours over a critical airfield just outside KyivUkraine army says battle under way for airbase near Kyiv on February 24, 2022Daniel LEAL / Getty ImagesUkrainian and Russian forces have been fighting for hours over a critical airfield on the outskirts of Kyiv, Ukraine's capital city.Russian forces attacked and seized Hostomel (Gostomel) airfield, a cargo airport near Kyiv that is also known as Antonov airport, early Thursday, according to AFP. Ukraine's leadership reportedly vowed to take it back."The enemy paratroopers in Hostomel have been blocked, and troops have received an order to destroy them," Ukraine's President Volodymyr Zelensky said in a video address.Read Full StoryUkraine's health minister says dozens killed and over 160 injuredBlack smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.ARIS MESSINIS/AFP via Getty ImagesUkraine's health minister said 57 Ukrainians have been killed and 169 were wounded after Russia attacked on Thursday, the Associated Press reported.Explosions, gunfire, and sirens were reportedly heard in Kyiv on Thursday. Witnesses also described missile blasts in other cities, including Kramatorsk, Dnipro, and Odesa, reports said. Sean Penn is filming a documentary in Ukraine while Russia invadesActor and director Sean Penn attends a press briefing at the Presidential Office in Kyiv, Ukraine February 24, 2022.Ukrainian Presidential Press Service/Handout via ReutersSean Penn was spotted in Ukraine on Thursday just after Russia invaded the country. Penn was seen in the front row of a press briefing at the Presidential Office in Kyiv, photos obtained by Reuters show. The actor and director has been working on a documentary about tensions in Ukraine since last year.Read Full StoryUkrainians and Russians are packing ATM lines, prompting fears of what happened in the US during the Great DepressionPeople wait in line at an ATM in Kyiv.DANIEL LEAL/AFP via Getty Images.Many Ukrainians who haven't already fled the country as Russia's threat turned into invasion stood in long lines outside of banks and ATMs hoping to take out their funds, Reuters reported on Thursday. Meanwhile in Russia, people are also queuing outside of ATMs trying to get US dollars as its citizens worry their own currency's value will continue to tank, according to the Wall Street Journal. Banks in the capital city of Moscow are running out of money, MSNBC reported. All of this has led to fears of bank runs, which is when people withdraw money en masse because they worry banks will cease to function. That's what happened in the United States during the Great Depression, and it triggered mass unemployment and loan scarcities.  Read Full StoryA top Russian business lobbyist pleaded with Putin to 'demonstrate as much as possible' that Russia wants to remain 'part of the global economy'Russian President Vladimir Putin, left, and head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin attend a meeting of the Russian Union of Industrialists and Entrepreneurs in Moscow, Russia, Thursday, March 16, 2017.Sergei Ilnitsky/AP PhotoThe head of one of Russia's biggest business groups urged President Vladimir Putin on Thursday to avoid severe economic pain and remain "part of the global economy" as NATO members ready a harsher salvo of sanctions.Putin held a televised meeting with the Russian Union of Industrialists and Entrepreneurs just hours after Russian forces began attacks in Ukraine.The threat of new sanctions was enough for Alexander Shokhin, the business group's president, to raise concerns with Putin about remaining a member of the world economy.The lobbyist urged the president to pad against major economic pain and to ensure conflict in Ukraine doesn't fuel widespread harm to the global financial system."Everything should be done to demonstrate as much as possible that Russia remains part of the global economy and will not provoke, including through some kind of response measures, global negative phenomena on world markets," Shokhin said.Read Full StoryBiden says he'll try to limit what Americans pay at the gas pump as the US slaps Russia with more sanctions: 'This is critical to me'U.S. President Joe Biden answers questions after delivering remarks about Russia's “unprovoked and unjustified" military invasion of Ukraine on February 24, 2022.Drew Angerer/Getty ImagesPresident Joe Biden sought to quell fears of another spike in gas prices on Thursday after Russia unleashed a military assault on Ukraine that threatened to upend the global economy.The threat of war in Ukraine in recent weeks has contributed to spiking oil prices, with the benchmark Brent crude oil hitting $100 for the first time since 2014 Wednesday night amid the early stages of Russia's invasion."I know this is hard and Americans are already hurting," he said at a White House address. "I will do everything in my power to limit the pain the American people are feeling at the gas pump."He opened the door to another release of oil from the Strategic Petroleum Reserve, a step the Biden administration also took in November to try and provide relief at the pump.Read Full StoryBiden says Putin's Ukraine invasion will cause a 'complete rupture' in US-Russia relationsPresident Joe Biden listens to questions from reporters while speaking about the Russian invasion of Ukraine in the East Room of the White House, Thursday, Feb. 24, 2022, in Washington.Alex Brandon/APPresident Joe Biden on Thursday said Russian President Vladimir Putin's invasion of Ukraine will cause a "complete rupture" of US-Russia relations if it continues. Biden condemned Putin and his escalating invasion of Ukraine in a speech from the White House.Biden, who met with G7 members on Thursday morning, also announced a raft of new sanctions against Russia on Thursday."What's the risk that we are watching the beginning of another Cold War, and is there now a complete rupture in US-Russian relations?," a reporter asked Biden following his address. Read Full StoryFamed Russian rapper cancels concerts in protest, saying he can't perform while 'Russian missiles fall on Ukraine'Rapper Oxxxymiron, whose real name is Miron Fyodorov, performs during a concert in support of rapper Husky, whose real name is Dmitry Kuznetsov, in Moscow, Russia, Monday, Nov. 26, 2018.AP Photo/Pavel GolovkinA prominent Russian rapper canceled his concert in protest of the Russian invasion on Ukraine, saying he can't perform while "Russian missiles fall on Ukraine."Rapper Oxxxymiron announced via a video posted to his Instagram account that he is postponing "six of my major gigs in Moscow and Saint Petersburg indefinitely," because he said he is "specifically against the war Russia has escalated against the people of Ukraine.""I'm sure you can understand me; I can't entertain you while Russian missiles fall on Ukraine, while Kyiv residents are forced to hide in the basements and subway, and while people are dying," he said.Read Full StoryUS Treasury targets Belarusian support for Russian invasion of UkraineBelarusian President Alexander LukashenkoDmitry Astakhov/Pool/AFP via Getty ImagesIn addition to the second round of sanctions imposed on Russia by the US Thursday, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced it is sanctioning 24 Belarusian individuals for their support of the Russian invasion. The sanctions target Belarus's defense sector and financial institutions — two sectors closely tied to Russia.Massive protests erupted in Putin's hometown of St. Petersburg as Russians voice opposition to war in UkraineA demonstrator holding a placard reading "No to war" protests against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.Photo by SERGEI MIKHAILICHENKO/AFP via Getty ImagesMassive protests erupted on Thursday in Russian President Vladimir Putin's hometown of St. Petersburg, as people voiced their opposition to the invasion of Ukraine.Videos posted to Twitter show a sea of people gathered in a section of St. Petersburg, Russia's second-largest city, chanting and holding signs to object to Russia's offensive in Ukraine.Russian government forces have threatened to arrest anti-war protesters, who took to the streets after Putin announced military action against Ukraine on Thursday.Read Full StoryPhotos show Russian authorities dragging away protesters opposed to Putin's invasion of UkrainePolice Police detain a demonstrator during a protest against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.SERGEI MIKHAILICHENKO/AFP via Getty ImagesAnti-war protesters in Russia quickly took to the streets following Russian President Vladimir Putin's invasion of Ukraine. Some activists were met with hostility by Russian authorities who hauled them away. More than 1,000 anti-war protesters have already been detained in dozens of cities across Russia, according to protest-monitoring group OVD-Info. Russia's Investigative Committee warned citizens not to take part in the "unauthorized" protests "associated with the tense foreign political situation."Read Full StoryBiden slaps 'additional strong sanctions' on Russia as it mounts a large-scale attack on UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesPresident Joe Biden on Thursday announced that the US will impose a second, harsher round of sanctions on Russia following its large-scale invasion of Ukraine.Biden announced that he had authorized "additional strong sanctions" and "new limitations" on what can be exported to Russia."We have purposely designed these sanctions to maximize the long term impact on Russia and minimize the impact on the United States and our allies," Biden said."We will limit Russia's ability to do business in dollars, euros, pounds and yen to be part of the global economy," the president said of the sanctions. "We're going to stop the ability to finance and grow the Russian military. We're going to impair their ability to compete in a high-tech 21st-century economy."Read Full StoryA Ukrainian lawmaker broke down in tears and begged the world to 'save our people' from being 'murdered' by Russian forcesUkrainian Parliament member Halyna Yanchenko speaks during a CBS interviewCBS NewsA Ukrainian lawmaker broke down in tears during an interview with CBS News and begged the international community to "save our people" from being "murdered" by Russian forces."I beg you, please save our people. Dozens of people — maybe hundreds of people — might be murdered tonight," Member of Parliament Halyna Yanchenko said as she sobbed during an interview with CBS News on Thursday.  She added: "Please save Ukrainian men, women, and children." Read Full StoryPhotos show Ukrainian families fleeing the Russian invasion amid warnings of a mass refugee crisisPeople wait for trains at a train station as they attempt to evacuate the city on February 24, 2022 in Kyiv, Ukraine. Overnight, Russia began a large-scale attack on Ukraine, with explosions reported in multiple cities and far outside the restive eastern regions held by Russian-backed rebels.Pierre Crom/Getty Images)Ukrainian residents fled their homes after the first day of Russia's full-scale invasion. Train stations were packed with people on the move and roads filled with cars of people leaving the country, with their loved ones and prized possessions in tow.Before the invasion took place, there were warnings of a mass refugee crisis.Read Full StoryRussian government websites — including ones for the Kremlin and the legislature — went dark after cyberattacks target UkraineA night view of Kyiv as the Kyiv mayor declared a curfew from 10pm to 7am on February 24, 2022 in Kyiv, Ukraine.Photo by Pierre Crom/Getty ImagesMultiple Russian government websites reportedly went down on Thursday after the country launched an attack on Ukraine. NetBlocks, which tracks disruptions and shutdowns, confirmed on Twitter that multiple sites went offline shortly after 8:45 p.m. local time in Moscow.The Kremlin's website and that of the Russian Federal Assembly's lower house — or State Duma — were both down for at least 15 minutes. As of 9 p.m. local time, the State Duma website was since restored. Shortly after 9:10 p.m. local time, the Kremlin's website was also back online.  Read Full StoryPutin had a range of ways to attack Ukraine. He went with the worst-case scenario for the West.A convoy of Russian military vehicles is seen as the vehicles move towards border in Donbas region of eastern Ukraine on February 23, 2022 in Russian border city Rostov.Stringer/Anadolu Agency via Getty ImagesIn the build-up to Russia's assault on Ukraine, analysts and leaders envisioned numerous ways the conflict might play out, from a limited incursion to an all-out invasion.Putin used precision missile strikes and airstrikes, followed shortly later by ground maneuvers, the officials said.Analysts said attacks came from the east, south, and north, a description consistent with reports on the ground and Insider's map of the invasion.All three lines of attack — as per this analysis in The Conversation — had previously been floated as individual possibilities for an invasion.Defense analysts warned that Russia's multipronged attack was full-scale but still in an early phase, with a lot more forces to push into Ukraine to seize key areas or capture its leadership.Putin's overall endgame remains an area of pressing debate.Read Full StoryKey Democratic congressman says the US can't send support to Ukraine quickly enough 'to repel' Russia's invasionRep. Adam Smith, Chairman of the House Armed Services Committee.Tom Williams/CQ-Roll Call, Inc via Getty ImagesRep. Adam Smith, the chairman of the House Armed Services Committee, ruled out surging supplies into Ukraine as a last-ditch effort to stall Russia's invasion, arguing it's unlikely such support would arrive quickly enough to make a difference."The odd of us being able to do that in a rapid enough fashion to be able to repel the invasion are remote," Smith told CNN on Thursday when asked about a Ukrainian official's request for more equipment. "I don't think it's realistic to think that we can reinforce them enough in the short term to be able to repel the invasion."Read Full StoryPoland, Czech Republic, and Sweden are refusing to play their 2022 World Cup qualifying matches in Russia after it attacked UkraineA protester holds a poster reading "Sanctions against Russia now" during a rally in front of the Russian Embassy in Stockholm on February 24, 2022, after Russia launched military operations in Ukraine.Photo by CLAUDIO BRESCIANI/TT News Agency/AFP via Getty ImagesPoland, Czech Republic, and Sweden said they are refusing to play their upcoming 2022 World Cup qualifying playoff matches in Russia after it attacked Ukraine on Thursday.Based on the latest Russian aggression against Ukraine, "the signatories to this appeal do not consider travelling to Russia and playing football matches there," the three countries said in a joint statement addressed to FIFA's General Secretary Fatma Samoura. The statement continued: "The military escalation that we are observing entails serious consequences and considerably lower safety for our national football teams and official delegations."Read Full StoryRussia's moving on Kyiv and the plan appears to be to take out Ukraine's leadership, US defense official warnsA column of army trucks approaches the Perekop checkpoint on the Ukrainian border. Early on February 24, President Putin announced a special military operation to be conducted by the Russian Armed Forces against Ukraine.Sergei MalgavkobackslashTASS via Getty ImagesRussian forces invaded Ukraine Thursday morning, and a senior US defense official says they are moving on Kyiv, likely to topple the country's government and install their own.Russia is "making a move on Kyiv" a senior defense official who addressed reporters Thursday said, according to CNN. "We would describe what you are seeing as an initial phase" of a "large-scale invasion," the official said, according to The Washington Post's Dan Lamothe.Read Full StoryMaps show Russia's invasion of UkraineMaps of Ukraine.Shayanne Gal/InsiderRussia invaded Ukraine early Thursday, leading to dozens of Ukrainian and Russian casualties.These maps show where Russian troops have attacked Ukraine, which is happening from multiple sides.Read Full StoryUK plots far harsher sanctions on Russia to punish it for invading UkraineBritish Prime Minister Boris JohnsonAdrian Dennis/Pool via REUTERS/File PhotoThe UK announced a new set of harsher sanctions on Russia after the country invaded Ukraine early Thursday. A spokesman for the UK government told journalists at a briefing that the UK plans to impose a second round of sanctions. The most intense of the new list of sanctions is an asset freeze on all major Russian banks and an asset freeze against VTB — the second largest bank with assets totaling £154 billion. The UK also plans to sanction another 100 individuals and entities.This is a large step up from the sanctions it announced Wednesday, which were limited to five smaller banks, three individuals close to Putin, and politicians in Russia who voted for military action. Russia has begun arresting anti-war protesters as demonstrations break out after Putin invades UkrainePolice officer detain a woman during an action against Russia's attack on Ukraine in Moscow, Russia, Thursday, Feb. 24, 2022.AP Photo/Dmitry SerebryakovThe Russian government on Thursday threatened anti-war protesters demonstrating against Russia's invasion of Ukraine, warning they could face arrest for organizing.And according to a protest monitoring group, the detentions have already begun as small protests have broken out in some Russian cities.Russia's Investigative Committee warned citizens in a statement not to take part in the "unauthorized" protests "associated with the tense foreign political situation."The committee said that people should be aware of the "negative legal consequences of these actions," which it said includes criminal liability. Read Full StoryUkraine's official Twitter is using memes to rip into Putin's bogus comparison between it and Nazi GermanyRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressAfter Russian President Vladimir Putin gave the marching orders for an attack on Ukraine early Thursday morning, Ukraine's official Twitter account got busy. One photo showed what appeared to be caricature images of Adolf Hitler tending to a small Putin. "This is not a 'meme', but our and your reality right now," Ukraine said in a follow-up tweet.  The account also called for a so-called "Twitter-storm" at 12 p.m. local time in Kyiv on Thursday, urging people to use various hashtags to "tell the world of the ongoing Russian aggression against Ukraine and the fact that Ukraine is under attack."Ukraine's latest post said to "Tag @Russia and tell them what you think about them," racking up tens of thousands of likes and quote tweets. Read Full StoryMap shows reported movement of Russian troops in Ukraine Thursday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Live updates: Biden slaps "strong sanctions" on Russia as Ukrainian invasion continues

Russia attacked Ukraine Thursday morning. Blasts were heard across the country, with reports of artillery fire from Russian forces across the border. Black smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.Aris Messinis / AFP via Getty Images US President Joe Biden announced a new round of "strong sanctions" on Russia. Russian forces attacked Ukraine on Thursday morning. Ukraine called it a "full-scale invasion." Ukraine said eight civilians were killed, as well as dozens more troops on both sides. Zelensky says 'enemy sabotage groups have entered Kyiv' and that he is 'number one target'Ukrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesIn his second video address on Thursday, Ukraine's President Volodymyr Zelensky said that "enemy sabotage groups" entered Kyiv, and that he plans to remain, despite being Russia's "number one target.""According to preliminary data, unfortunately, we have lost 137 of our heroes today — our citizens. Ten of them are officers," Zelensky said in his address. "316 are wounded."He also used the opportunity to dispel rumors that he had fled Kyiv, and that his family had left the country."I stay in the capital, I stay with my people. During the day, I held dozens of international talks, directly managed our country. And I will stay in the capital," he said. "My family is also in Ukraine. My children are also in Ukraine. My family is not traitors. They are the citizens of Ukraine. But I have no right to say where they are now."READ FULL STORYWhite House is 'outraged' over reports that staff at Chernobyl have been taken hostage by Russian forcesServicemen take part in a joint tactical and special exercises of the Ukrainian Ministry of Internal Affairs, the Ukrainian National Guard and Ministry Emergency in a ghost city of Pripyat, near Chernobyl Nuclear Power Plant on February 4, 2022.Sergei Supinsky/AFP/Getty ImagesPress secretary Jen Psaki said the White House is outraged over reports from Ukrainian officials that staff at the Chernobyl nuclear plant in Ukraine have been taken hostage by Russian troops.Russian forces took over the remnants of Chernobyl earlier on Thursday during the country's invasion of Ukraine. The move indicated Russia is likely to assault Ukraine's capital city, Kyiv, which is located just south of Chernobyl, the site of one of the worst nuclear disasters in history."We're outraged by credible reports that Russian soldiers are currently holding the staff of the Chernobyl facility hostage," Psaki said during a press briefing on Thursday afternoon, adding "we condemn it and we request their release."Psaki said the situation at Chernobyl was not clear but that the hostage taking was "incredibly alarming and greatly concerning," adding it could hurt efforts to maintain the facility, which is dangerously contaminated with radioactivity as a result of the 1986 nuclear disaster.read full STORYUS secretary of state is 'convinced' Russia will try to overthrow the Ukrainian governmentUS Secretary of State Antony Blinken during an appearance on NBC's "Meet the Press" on April 11, 2021.Meet The Press/NBCUS Secrertary of State Antony Blinken on Thursday said he is "convinced" Moscow will try to overthrow Ukraine's government."You don't need intelligence to tell you that that's exactly what President Putin wants. He has made clear he'd like to reconstitute the Soviet Empire, short of that he'd like to reassert a sphere of influence around the neighboring countries that were once part of the Soviet bloc," Blinken said during a national TV interview. The secretary pledged that NATO would intervene before Putin succesfully accomplished his ultimate goal."Now, when it comes to a threat beyond Ukraine's borders. There's something very powerful standing in his way. That's article five of NATO, an attack on one is an attack on all," the top diplomat said.  Expert says Russia's Ukraine invasion will result in 'horrific scenes,' could be launch of 'Cold War 2.0'Ukrainians gather in front of the White House in Washington, USA to stage a protest against Russia's attack in Ukraine on February 24, 2022.Yasin Öztürk/Anadolu Agency via Getty ImagesA former aide to President Barack Obama is warning that Russia's invasion of Ukraine is a "game changer" in international relations that will result in "horrific scenes" in the coming days, with President Vladimir Putin intent on pursuing regime change at all costs."I think it's just a matter of time before Kyiv falls," Charles Kupchan, a senior fellow at the Council on Foreign Relations who also served on the National Security Council in both the Obama and Clinton administrations, told Insider.READ FULL STORYThe White House says it's ready to accept Ukrainians fleeing the Russian invasionWhite House press secretary Jen Psaki.Anna Moneymaker/Getty ImagesThe US is prepared to accept Ukrainian refugees fleeing Russia's invasion, White House press secretary Jen Psaki told CNN."We are," Psaki said when asked whether the US was ready to assist fleeing Ukrainians. "But we certainly expect that most if not the majority will want to go to Europe and neighboring countries. So, we are also working with European countries on what the needs are, where there is capacity. Poland, for example, where we are seeing an increasing flow of refugees over the last 24 hours."She added that US officials have been engaging with Europeans on the matter "for some time." Ukrainian and Russian forces have been fighting for hours over a critical airfield just outside KyivUkraine army says battle under way for airbase near Kyiv on February 24, 2022Daniel LEAL / Getty ImagesUkrainian and Russian forces have been fighting for hours over a critical airfield on the outskirts of Kyiv, Ukraine's capital city.Russian forces attacked and seized Hostomel (Gostomel) airfield, a cargo airport near Kyiv that is also known as Antonov airport, early Thursday, according to AFP. Ukraine's leadership reportedly vowed to take it back."The enemy paratroopers in Hostomel have been blocked, and troops have received an order to destroy them," Ukraine's President Volodymyr Zelensky said in a video address.Read Full StoryUkraine's health minister says dozens killed and over 160 injuredBlack smoke rises from a military airport in Chuguyev near Kharkiv, Ukraine, on February 24, 2022.ARIS MESSINIS/AFP via Getty ImagesUkraine's health minister said 57 Ukrainians have been killed and 169 were wounded after Russia attacked on Thursday, the Associated Press reported.Explosions, gunfire, and sirens were reportedly heard in Kyiv on Thursday. Witnesses also described missile blasts in other cities, including Kramatorsk, Dnipro, and Odesa, reports said. Sean Penn is filming a documentary in Ukraine while Russia invadesActor and director Sean Penn attends a press briefing at the Presidential Office in Kyiv, Ukraine February 24, 2022.Ukrainian Presidential Press Service/Handout via ReutersSean Penn was spotted in Ukraine on Thursday just after Russia invaded the country. Penn was seen in the front row of a press briefing at the Presidential Office in Kyiv, photos obtained by Reuters show. The actor and director has been working on a documentary about tensions in Ukraine since last year.Read Full StoryUkrainians and Russians are packing ATM lines, prompting fears of what happened in the US during the Great DepressionPeople wait in line at an ATM in Kyiv.DANIEL LEAL/AFP via Getty Images.Many Ukrainians who haven't already fled the country as Russia's threat turned into invasion stood in long lines outside of banks and ATMs hoping to take out their funds, Reuters reported on Thursday. Meanwhile in Russia, people are also queuing outside of ATMs trying to get US dollars as its citizens worry their own currency's value will continue to tank, according to the Wall Street Journal. Banks in the capital city of Moscow are running out of money, MSNBC reported. All of this has led to fears of bank runs, which is when people withdraw money en masse because they worry banks will cease to function. That's what happened in the United States during the Great Depression, and it triggered mass unemployment and loan scarcities.  Read Full StoryA top Russian business lobbyist pleaded with Putin to 'demonstrate as much as possible' that Russia wants to remain 'part of the global economy'Russian President Vladimir Putin, left, and head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin attend a meeting of the Russian Union of Industrialists and Entrepreneurs in Moscow, Russia, Thursday, March 16, 2017.Sergei Ilnitsky/AP PhotoThe head of one of Russia's biggest business groups urged President Vladimir Putin on Thursday to avoid severe economic pain and remain "part of the global economy" as NATO members ready a harsher salvo of sanctions.Putin held a televised meeting with the Russian Union of Industrialists and Entrepreneurs just hours after Russian forces began attacks in Ukraine.The threat of new sanctions was enough for Alexander Shokhin, the business group's president, to raise concerns with Putin about remaining a member of the world economy.The lobbyist urged the president to pad against major economic pain and to ensure conflict in Ukraine doesn't fuel widespread harm to the global financial system."Everything should be done to demonstrate as much as possible that Russia remains part of the global economy and will not provoke, including through some kind of response measures, global negative phenomena on world markets," Shokhin said.Read Full StoryBiden says he'll try to limit what Americans pay at the gas pump as the US slaps Russia with more sanctions: 'This is critical to me'U.S. President Joe Biden answers questions after delivering remarks about Russia's “unprovoked and unjustified" military invasion of Ukraine on February 24, 2022.Drew Angerer/Getty ImagesPresident Joe Biden sought to quell fears of another spike in gas prices on Thursday after Russia unleashed a military assault on Ukraine that threatened to upend the global economy.The threat of war in Ukraine in recent weeks has contributed to spiking oil prices, with the benchmark Brent crude oil hitting $100 for the first time since 2014 Wednesday night amid the early stages of Russia's invasion."I know this is hard and Americans are already hurting," he said at a White House address. "I will do everything in my power to limit the pain the American people are feeling at the gas pump."He opened the door to another release of oil from the Strategic Petroleum Reserve, a step the Biden administration also took in November to try and provide relief at the pump.Read Full StoryBiden says Putin's Ukraine invasion will cause a 'complete rupture' in US-Russia relationsPresident Joe Biden listens to questions from reporters while speaking about the Russian invasion of Ukraine in the East Room of the White House, Thursday, Feb. 24, 2022, in Washington.Alex Brandon/APPresident Joe Biden on Thursday said Russian President Vladimir Putin's invasion of Ukraine will cause a "complete rupture" of US-Russia relations if it continues. Biden condemned Putin and his escalating invasion of Ukraine in a speech from the White House.Biden, who met with G7 members on Thursday morning, also announced a raft of new sanctions against Russia on Thursday."What's the risk that we are watching the beginning of another Cold War, and is there now a complete rupture in US-Russian relations?," a reporter asked Biden following his address. Read Full StoryFamed Russian rapper cancels concerts in protest, saying he can't perform while 'Russian missiles fall on Ukraine'Rapper Oxxxymiron, whose real name is Miron Fyodorov, performs during a concert in support of rapper Husky, whose real name is Dmitry Kuznetsov, in Moscow, Russia, Monday, Nov. 26, 2018.AP Photo/Pavel GolovkinA prominent Russian rapper canceled his concert in protest of the Russian invasion on Ukraine, saying he can't perform while "Russian missiles fall on Ukraine."Rapper Oxxxymiron announced via a video posted to his Instagram account that he is postponing "six of my major gigs in Moscow and Saint Petersburg indefinitely," because he said he is "specifically against the war Russia has escalated against the people of Ukraine.""I'm sure you can understand me; I can't entertain you while Russian missiles fall on Ukraine, while Kyiv residents are forced to hide in the basements and subway, and while people are dying," he said.Read Full StoryUS Treasury targets Belarusian support for Russian invasion of UkraineBelarusian President Alexander LukashenkoDmitry Astakhov/Pool/AFP via Getty ImagesIn addition to the second round of sanctions imposed on Russia by the US Thursday, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced it is sanctioning 24 Belarusian individuals for their support of the Russian invasion. The sanctions target Belarus's defense sector and financial institutions — two sectors closely tied to Russia.Massive protests erupted in Putin's hometown of St. Petersburg as Russians voice opposition to war in UkraineA demonstrator holding a placard reading "No to war" protests against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.Photo by SERGEI MIKHAILICHENKO/AFP via Getty ImagesMassive protests erupted on Thursday in Russian President Vladimir Putin's hometown of St. Petersburg, as people voiced their opposition to the invasion of Ukraine.Videos posted to Twitter show a sea of people gathered in a section of St. Petersburg, Russia's second-largest city, chanting and holding signs to object to Russia's offensive in Ukraine.Russian government forces have threatened to arrest anti-war protesters, who took to the streets after Putin announced military action against Ukraine on Thursday.Read Full StoryPhotos show Russian authorities dragging away protesters opposed to Putin's invasion of UkrainePolice Police detain a demonstrator during a protest against Russia's invasion of Ukraine in central Saint Petersburg on February 24, 2022.SERGEI MIKHAILICHENKO/AFP via Getty ImagesAnti-war protesters in Russia quickly took to the streets following Russian President Vladimir Putin's invasion of Ukraine. Some activists were met with hostility by Russian authorities who hauled them away. More than 1,000 anti-war protesters have already been detained in dozens of cities across Russia, according to protest-monitoring group OVD-Info. Russia's Investigative Committee warned citizens not to take part in the "unauthorized" protests "associated with the tense foreign political situation."Read Full StoryBiden slaps 'additional strong sanctions' on Russia as it mounts a large-scale attack on UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesPresident Joe Biden on Thursday announced that the US will impose a second, harsher round of sanctions on Russia following its large-scale invasion of Ukraine.Biden announced that he had authorized "additional strong sanctions" and "new limitations" on what can be exported to Russia."We have purposely designed these sanctions to maximize the long term impact on Russia and minimize the impact on the United States and our allies," Biden said."We will limit Russia's ability to do business in dollars, euros, pounds and yen to be part of the global economy," the president said of the sanctions. "We're going to stop the ability to finance and grow the Russian military. We're going to impair their ability to compete in a high-tech 21st-century economy."Read Full StoryA Ukrainian lawmaker broke down in tears and begged the world to 'save our people' from being 'murdered' by Russian forcesUkrainian Parliament member Halyna Yanchenko speaks during a CBS interviewCBS NewsA Ukrainian lawmaker broke down in tears during an interview with CBS News and begged the international community to "save our people" from being "murdered" by Russian forces."I beg you, please save our people. Dozens of people — maybe hundreds of people — might be murdered tonight," Member of Parliament Halyna Yanchenko said as she sobbed during an interview with CBS News on Thursday.  She added: "Please save Ukrainian men, women, and children." Read Full StoryPhotos show Ukrainian families fleeing the Russian invasion amid warnings of a mass refugee crisisPeople wait for trains at a train station as they attempt to evacuate the city on February 24, 2022 in Kyiv, Ukraine. Overnight, Russia began a large-scale attack on Ukraine, with explosions reported in multiple cities and far outside the restive eastern regions held by Russian-backed rebels.Pierre Crom/Getty Images)Ukrainian residents fled their homes after the first day of Russia's full-scale invasion. Train stations were packed with people on the move and roads filled with cars of people leaving the country, with their loved ones and prized possessions in tow.Before the invasion took place, there were warnings of a mass refugee crisis.Read Full StoryRussian government websites — including ones for the Kremlin and the legislature — went dark after cyberattacks target UkraineA night view of Kyiv as the Kyiv mayor declared a curfew from 10pm to 7am on February 24, 2022 in Kyiv, Ukraine.Photo by Pierre Crom/Getty ImagesMultiple Russian government websites reportedly went down on Thursday after the country launched an attack on Ukraine. NetBlocks, which tracks disruptions and shutdowns, confirmed on Twitter that multiple sites went offline shortly after 8:45 p.m. local time in Moscow.The Kremlin's website and that of the Russian Federal Assembly's lower house — or State Duma — were both down for at least 15 minutes. As of 9 p.m. local time, the State Duma website was since restored. Shortly after 9:10 p.m. local time, the Kremlin's website was also back online.  Read Full StoryPutin had a range of ways to attack Ukraine. He went with the worst-case scenario for the West.A convoy of Russian military vehicles is seen as the vehicles move towards border in Donbas region of eastern Ukraine on February 23, 2022 in Russian border city Rostov.Stringer/Anadolu Agency via Getty ImagesIn the build-up to Russia's assault on Ukraine, analysts and leaders envisioned numerous ways the conflict might play out, from a limited incursion to an all-out invasion.Putin used precision missile strikes and airstrikes, followed shortly later by ground maneuvers, the officials said.Analysts said attacks came from the east, south, and north, a description consistent with reports on the ground and Insider's map of the invasion.All three lines of attack — as per this analysis in The Conversation — had previously been floated as individual possibilities for an invasion.Defense analysts warned that Russia's multipronged attack was full-scale but still in an early phase, with a lot more forces to push into Ukraine to seize key areas or capture its leadership.Putin's overall endgame remains an area of pressing debate.Read Full StoryKey Democratic congressman says the US can't send support to Ukraine quickly enough 'to repel' Russia's invasionRep. Adam Smith, Chairman of the House Armed Services Committee.Tom Williams/CQ-Roll Call, Inc via Getty ImagesRep. Adam Smith, the chairman of the House Armed Services Committee, ruled out surging supplies into Ukraine as a last-ditch effort to stall Russia's invasion, arguing it's unlikely such support would arrive quickly enough to make a difference."The odd of us being able to do that in a rapid enough fashion to be able to repel the invasion are remote," Smith told CNN on Thursday when asked about a Ukrainian official's request for more equipment. "I don't think it's realistic to think that we can reinforce them enough in the short term to be able to repel the invasion."Read Full StoryPoland, Czech Republic, and Sweden are refusing to play their 2022 World Cup qualifying matches in Russia after it attacked UkraineA protester holds a poster reading "Sanctions against Russia now" during a rally in front of the Russian Embassy in Stockholm on February 24, 2022, after Russia launched military operations in Ukraine.Photo by CLAUDIO BRESCIANI/TT News Agency/AFP via Getty ImagesPoland, Czech Republic, and Sweden said they are refusing to play their upcoming 2022 World Cup qualifying playoff matches in Russia after it attacked Ukraine on Thursday.Based on the latest Russian aggression against Ukraine, "the signatories to this appeal do not consider travelling to Russia and playing football matches there," the three countries said in a joint statement addressed to FIFA's General Secretary Fatma Samoura. The statement continued: "The military escalation that we are observing entails serious consequences and considerably lower safety for our national football teams and official delegations."Read Full StoryRussia's moving on Kyiv and the plan appears to be to take out Ukraine's leadership, US defense official warnsA column of army trucks approaches the Perekop checkpoint on the Ukrainian border. Early on February 24, President Putin announced a special military operation to be conducted by the Russian Armed Forces against Ukraine.Sergei MalgavkobackslashTASS via Getty ImagesRussian forces invaded Ukraine Thursday morning, and a senior US defense official says they are moving on Kyiv, likely to topple the country's government and install their own.Russia is "making a move on Kyiv" a senior defense official who addressed reporters Thursday said, according to CNN. "We would describe what you are seeing as an initial phase" of a "large-scale invasion," the official said, according to The Washington Post's Dan Lamothe.Read Full StoryMaps show Russia's invasion of UkraineMaps of Ukraine.Shayanne Gal/InsiderRussia invaded Ukraine early Thursday, leading to dozens of Ukrainian and Russian casualties.These maps show where Russian troops have attacked Ukraine, which is happening from multiple sides.Read Full StoryUK plots far harsher sanctions on Russia to punish it for invading UkraineBritish Prime Minister Boris JohnsonAdrian Dennis/Pool via REUTERS/File PhotoThe UK announced a new set of harsher sanctions on Russia after the country invaded Ukraine early Thursday. A spokesman for the UK government told journalists at a briefing that the UK plans to impose a second round of sanctions. The most intense of the new list of sanctions is an asset freeze on all major Russian banks and an asset freeze against VTB — the second largest bank with assets totaling £154 billion. The UK also plans to sanction another 100 individuals and entities.This is a large step up from the sanctions it announced Wednesday, which were limited to five smaller banks, three individuals close to Putin, and politicians in Russia who voted for military action. Russia has begun arresting anti-war protesters as demonstrations break out after Putin invades UkrainePolice officer detain a woman during an action against Russia's attack on Ukraine in Moscow, Russia, Thursday, Feb. 24, 2022.AP Photo/Dmitry SerebryakovThe Russian government on Thursday threatened anti-war protesters demonstrating against Russia's invasion of Ukraine, warning they could face arrest for organizing.And according to a protest monitoring group, the detentions have already begun as small protests have broken out in some Russian cities.Russia's Investigative Committee warned citizens in a statement not to take part in the "unauthorized" protests "associated with the tense foreign political situation."The committee said that people should be aware of the "negative legal consequences of these actions," which it said includes criminal liability. Read Full StoryUkraine's official Twitter is using memes to rip into Putin's bogus comparison between it and Nazi GermanyRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressAfter Russian President Vladimir Putin gave the marching orders for an attack on Ukraine early Thursday morning, Ukraine's official Twitter account got busy. One photo showed what appeared to be caricature images of Adolf Hitler tending to a small Putin. "This is not a 'meme', but our and your reality right now," Ukraine said in a follow-up tweet.  The account also called for a so-called "Twitter-storm" at 12 p.m. local time in Kyiv on Thursday, urging people to use various hashtags to "tell the world of the ongoing Russian aggression against Ukraine and the fact that Ukraine is under attack."Ukraine's latest post said to "Tag @Russia and tell them what you think about them," racking up tens of thousands of likes and quote tweets. Read Full StoryMap shows reported movement of Russian troops in Ukraine Thursday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 24th, 2022

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero"

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero" One day after futures ramped overnight (if only to crater during the regular session) on hopes China was easing its highly politicized  Zero Covid policy after it cut the time of quarantine lockdowns, this morning futures slumped early on after China's President Xi Jinping made clear that Covid Zero isn't going anywhere and remains the most “economic and effective” policy for China during a symbolic visit to the virus ground zero in Wuhan, in which he cast the strategy as proof of the superiority of the country’s political system. That coupled with renewed recession worries (market is again pricing in a rate cut in Q1 2023) even as monetary policy tightens in much of the world to fight supply-side inflation, sent US futures and global markets lower. S&P futures dropped 0.2% and Nasdaq 100 futures were down 0.4% after the underlying index slumped on 3.1% on Tuesday. The dollar was steady after rising the most in over a week while WTI crude climbed above $112 a barrel, set for a fourth session of gains. In cryptocurrencies, Bitcoin dipped below the closely watched $20,000 level on news crypto hedge fund 3 Arrows Capital was ordered to liquidate. The Nasdaq's Tuesday’s slump added to what was already one of the worst years in terms of big daily selloffs in US stocks. The S&P 500 Index has fallen 2% or more on 14 occasions, putting 2022 in the top 10 list, according to Bloomberg data. Not helping the tech sector, on Wednesday morning JPMorgan cut its earnings estimates across the sector, especially for companies exposed to online advertising, citing macroeconomic pressures, forex and company-specific dynamics. One of the chief drivers for overnight weakness, China's Xi said during a trip Tuesday to Wuhan where the virus first emerged in late 2019 that relaxing Covid controls would risk too many lives in the world’s most populous country. China would rather endure some temporary impact on economic development than let the virus hurt people’s safety and health, he said, in remarks reported Wednesday by state media. As a result, China’s CSI 300 Index extended loss to 1.4% after the headline, while the yuan drops as much as 0.2% to trade 6.7132 against the dollar in the offshore market. Among key premarket movers, Tesla slipped in US premarket trading. The electric-vehicle maker laid off hundreds of workers on its Autopilot team as it shuttered a California facility, according to people familiar with the matter. Carnival slumped as Morgan Stanley analysts warned that the London and New York-listed cruise vacation company’s shares could lose all their value in the event of another demand shock. Pinterest gained 3.7% as the company’s co- founder and CEO Ben Silbermann quit and handed the reins to Google and PayPal veteran Bill Ready in a sign the social-media company will focus more on e-commerce. Also, despite the pervasive weakness, the Energy Select Sector SPDR Fund ETF (XLE) rebounded off key support (50% Fibonacci) relative to the SPDR S&P 500 ETF (SPY). That said, energy was alone and most other notable movers were down in the premarket: Carnival (CCL US) shares fall 8% premarket as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Nio (NIO US) shares drop 8.2% after short-seller Grizzly Research published a report on Tuesday alleging that the electric carmaker used battery sales to a related party to inflate revenue and boost net income margins. The company rejected the claims. Upstart Holdings (UPST US) shares slump about 9% after Morgan Stanley downgraded the consumer finance company to underweight from equal-weight amid rising cyclical headwinds. Ormat Technologies (ORA US) rallies as much as 5% after the renewable energy company is set to be included in the S&P Midcap 400 Index. 2U (TWOU US) shares rise 16% premarket. Indian online-education provider Byju’s has offered to buy the company in a cash deal that values the US-listed edtech firm at more than $1 billion, a person familiar with the matter said. Watch Amazon (AMZN US) shares as Redburn initiated coverage of the stock with a buy recommendation and set a Street-high price target, saying “there is a clear path toward a $3 trillion value for AWS alone.” Shares in data center REITs could be active later in the trading session after short-seller Jim Chanos said in an FT interview that he’s betting against “legacy” data centers. Watch Digital Realty (DLR US) and Equinix (EQIX US), as well as data center operators Cyxtera Technologies (CYXT US) and Iron Mountain (IRM US) Investors are growing increasingly skeptical that the Fed can avoid a bruising economic downturn amid sharp interest-rate hikes. Evaporating consumer confidence is feeding into concerns that the US might tip into a recession. Naturally, Fed officials sought to play down recession risk. New York Fed President John Williams and San Francisco’s Mary Daly both acknowledged they had to cool inflation, but insisted that a soft landing was still possible. “It seems the market is in this tug of war between on the one hand the hope that we are close to the peak in inflation and rates, and on the other hand the challenge of a slowing economy and potential recession,” Emmanuel Cau, head of European equity strategy at Barclays Bank Plc, said in an interview with Bloomberg TV. “Central banks are walking a very tight line and to a certain extent dictate the mood in the markets.” European equities snapped three days of gains, trading poorly but off worst levels with sentiment also hurt by China remaining committed to its zero-Covid approach. Spanish inflation unexpectedly surged to a record, dashing hopes that inflation in the euro zone’s fourth-biggest economy had peaked, and emboldening European Central Bank policy makers pushing for big increases in interest rates. The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow. German benchmark bonds rose, while 10-year Treasury yields slipped to 3.16%. DAX lags, dropping as much as 1.8%. Real estate, autos and miners are the worst performing sectors. In notable moves in European stocks, Hennes & Mauritz (H&M) gained after the Swedish low-cost retailer’s earnings beat analyst estimates. Just Eat Takeaway.com NV tumbled to a record low after Berenberg analysts rated the stock sell, saying the food delivery firm’s UK business will remain under pressure. Here are some of the biggest European movers today: Just Eat Takeaway shares plunge as much as 21% after Berenberg initiated coverage with a sell rating, saying the firm’s UK business will remain under pressure and a sale of its Grubhub unit is unlikely to satisfy the bulls. Carnival stocks slumped over 12% in London as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Pearson drops as much as 6.1% after the education company was cut to sell at UBS, which reduced forecasts to reflect a weak outlook for 2022 college enrollments. Grifols shares plunge as much as 13% on a media report the Spanish plasma firm is weighing a capital raise of as much as EU2b to cut its debt. Diageo shares fall after downgrades for the spirits group from Deutsche Bank and Kepler Cheuvreux, while Pernod Ricard also dips on a rating cut from the latter. Diageo declines as much as 4.2%, Pernod Ricard -3.7% Fluidra shares fall as much as 8.4% after Santander cut its rating on the Spanish swimming pools company. The bank’s analyst Alejandro Conde cut the recommendation to neutral from outperform. H&M shares rise as much as 6.8% after the Swedish apparel retailer reported 2Q earnings that beat estimates. Jefferies said the margin beat in particular was reassuring, while Morgan Stanley said it was a “positive surprise” overall. Ipsen shares rise as much as 3.1% after UBS analyst Michael Leuchten said that accepting palovarotene refiling priority review should be a net present value and confidence boost. Asian stocks fell, halting a four-day gain, as renewed angst over the outlook for global economic growth and inflation help drive a selloff across most of the region’s equity markets. The MSCI Asia Pacific Index dropped as much as 1.5%, led by consumer discretionary and information sectors. Chinese equities in particular took a hit, as the CSI 300 Index fell 1.5% Wednesday after Xi Jinping reiterated his firm stance on Covid zero. Tech-heavy indexes in markets such as South Korea and Taiwan took the brunt of Wednesday’s drop amid lingering concerns that monetary tightening in much of the world to fight inflation will cause an economic slowdown. While Federal Reserve members have played down the risk of a US recession, gloomy data such as US consumer confidence have damped investor sentiment. “Volatility is going to be the enduring feature of the market, I suspect, for the next couple of quarters at least until we get a firm sense that peak inflation has passed,” John Woods, Credit Suisse Group AG’s Asia-Pacific chief investment officer, said in an interview with Bloomberg TV. “Markets, I think, have aggressively priced in quite a serious or steep recession.”  China’s four-day winning streak came to a halt, putting its advance toward a bull market on hold.  “We will continue to see a risk of targeted lockdowns, and that spoils the initial euphoria seen in the markets from the announcement on relaxation of quarantine requirements,” said Charu Chanana, market strategist at Saxo Capital Markets. “Still, economic growth will likely be prioritized as this is a politically important year for China.”  Japanese equities decline as investors digested data that showed a drop in US consumer confidence over inflation worries and increased concerns of an economic downturn.  The Topix Index fell 0.7% to 1,893.57 in Tokyo on Wednesday, while the Nikkei declined 0.9% to 26,804.60. Toyota Motor Corp. contributed the most to the Topix’s decline, decreasing 1.8%. Out of 2,170 shares in the index, 1,114 fell, 984 rose and 72 were unchanged. “There are concerns about stagflation,” said Hideyuki Suzuki a general manager at SBI Securities. “The consumer sentiment from the University of Michigan, which provides one of the fastest data points, has already shown poor figures.” Stocks in India tracked their Asian peers lower as brent rose to the highest level in two weeks, while high inflation and slowing global growth continued to dampen risk-appetite for global equities. The S&P BSE Sensex fell 0.3% to 53,026.97 in Mumbai, while the NSE Nifty 50 Index declined by an equal measure. Both gauges have lost more than 4% in June and are set for their third consecutive month of declines. The main indexes have dropped for all but one month this year. Twelve of the 19 sub-sector gauges compiled by BSE Ltd. eased, led by banking companies while power producers were the top performers.   Investors will also be watching the expiry of monthly derivative contracts on Thursday, which may lead to some volatility in the markets.  Hindustan Unilever was the biggest contributor to the Sensex’s decline, decreasing 3.5%. Out of 30 shares in the Sensex, 10 rose and 20 fell. The Bloomberg Dollar Spot Index inched up modestly as the greenback traded mixed against its Group-of-10 peers; the Swiss franc led gains while Antipodean currencies were the worst performers and the euro traded in a narrow range around $1.05. The relative cost to own optionality in the euro heading into the July meetings of the ECB and the Federal Reserve was too low for investors to ignore and has become less and less underpriced. The yen strengthened and US and Japanese bond yields fell. In rates, fixed income has a choppy start. Bund futures initially surged just shy of 200 ticks on a soft regional German CPI print before fading the entire move over the course of the morning as Spanish data hit the tape, delivering a surprise record 10% reading for June and more hawkish ECB comments crossed the wires. Treasuries and gilts followed with curves eventually fading a bull-steepening move. Long-end gilts underperform, cheapening ~4bps near 2.75%. Peripheral spreads are tighter to core.  Treasuries are slightly higher as US trading day begins, off the session lows reached as bund futures jumped after the first monthly drop since November in a German regional CPI gauge. Yields are lower across the curve, by 1bp-2bp for tenors out to the 10-year with long-end yields little changed; 10-year declined as much as 5.3bp vs as much as 8.2bp for German 10- year, which remains lower by ~3bp. Focal points for the US session include a final revision of 1Q GDP, comments by Fed Chair Powell, and anticipation of quarter-end flows favoring bonds. Quarter-end is anticipated to cause rebalancing flows into bonds; Wells Fargo estimated that $5b will be added to bonds, with most of the flows occurring Wednesday and Thursday. In commodities, crude futures advance. WTI drifts 0.3% higher to trade near $112.13. Base metals are mixed; LME tin falls 5.6% while LME zinc gains 0.4%. Spot gold falls roughly $5 to trade near $1,815/oz Looking ahead, the highlight will be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Market Snapshot S&P 500 futures little changed at 3,829.00 STOXX Europe 600 down 0.8% to 412.69 MXAP down 1.3% to 159.96 MXAPJ down 1.6% to 531.04 Nikkei down 0.9% to 26,804.60 Topix down 0.7% to 1,893.57 Hang Seng Index down 1.9% to 21,996.89 Shanghai Composite down 1.4% to 3,361.52 Sensex little changed at 53,204.17 Australia S&P/ASX 200 down 0.9% to 6,700.23 Kospi down 1.8% to 2,377.99 German 10Y yield little changed at 1.59% Euro little changed at $1.0510 Brent Futures down 0.4% to $117.46/bbl Gold spot down 0.2% to $1,816.09 U.S. Dollar Index little changed at 104.55 Top Overnight News from Bloomberg The Fed’s Loretta Mester said she wants to see the benchmark lending rate reach 3% to 3.5% this year and “a little bit above 4% next year” to rein in price pressures even if that tips the economy into a recession The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow ECB has “ample room” to hike in 25bps-50bps steps to “whatever rate we think, we consider reasonable,” Governing Council member Robert Holzmann said in interview with CNBC Swedish consumers are gloomier than they have been since the mid-1990s, as prices surge on everything from fuel to food and furniture China’s President Xi Jinping declared Covid Zero the most “economic and effective” policy for the nation, during a symbolic visit to Wuhan in which he cast the strategy as proof of the superiority of the country’s political system NATO moved one step closer to bolstering its eastern front with Russia after Turkey dropped its opposition to Swedish and Finnish bids to join the military alliance A more detailed look at markets courtesy of Newsquawk Asia-Pac stocks were pressured amid headwinds from the US where disappointing Consumer Confidence data added to the growth concerns. ASX 200 failed to benefit from better than expected Retail Sales and was dragged lower by weakness in miners and tech. Nikkei 225 fell beneath the 27,000 level as industries remained pressured by the ongoing power crunch. Hang Seng and Shanghai Comp. conformed to the negative picture in the region although losses in the mainland were initially stemmed after China cut its quarantine requirements which the National Health Commission caveated was not a relaxation but an optimization to make it more scientific and precise. Top Asian News Chinese President Xi said China's COVID prevention control and strategy is correct and effective and must stick with it, via state media. Shanghai will gradually reopen museums and scenic sports from July 1st, state media reports. US Deputy Commerce Secretary Graves said the US will take a balanced approach on Chinese tariffs and that a clear response on China tariffs is coming soon, according to Bloomberg. China State Council's Taiwan Affairs Office said it firmly opposes the US signing any agreement that has sovereign connotations with Taiwan, according to Global Times. BoJ Governor Kuroda said Japanese Core CPI reached 2.1% in April and May which is almost fully due to international energy prices and Japan's economy has not been affected much by the global inflationary trend so monetary policy will stay accommodative, according to Reuters. Japanese govt to issue power supply shortage warning for a fourth consecutive day on Thursday, according to a statement. European bourses are on the backfoot as the region plays catch-up to the losses on Wall Street yesterday. Sectors are mostly lower (ex-Energy) with a defensive tilt as Healthcare, Consumer Products, Food & Beverages, and Utilities are more cushioned than their cyclical peers. Stateside, US equity futures trade on either side of the unchanged mark with no stand-out performers thus far, with the contracts awaiting the next catalyst. Top European News UK expects defence spending to reach 2.3% of GDP and said PM Johnson will announce new military commitments to NATO, according to Reuters. UK Weighs Capping Maximum Stake in Online Casinos at £5 Europe Is the Only Region Where Earnings Estimates Are Rising European Gas Prices Rise as Supply Risks Add to Storage Concerns Gold Steady as Traders Weigh Fed Comments on US Recession Risks Choppy Start for Euro-Area Bonds on Mixed Inflation FX Dollar mostly bid otherwise as rebalancing demand underpins - DXY pivots 104.500 within 104.700-350 confines. Franc outperforms on rate and risk considerations - Usd/Chf breaches 0.9550 and Eur/Chf approaches parity. Euro erratic in line with conflicting inflation data - Eur/Usd rotates around 1.0500. Aussie and Kiwi undermined by downturn in sentiment - Aud/Usd loses 0.6900+ status, Nzd/Usd wanes from just over 0.6250. Yen rangy following firmer than forecast Japanese retail sales and BoJ Governor Kuroda reaffirming intent to remain accommodative - Usd/Jpy straddles 136.00. Nokkie welcomes oil worker wage agreement with unions to avert strike action, but Sekkie hampered by softer Swedish macro releases pre-Riksbank policy call tomorrow - Eur/Nok probes 10.3000, Eur/Sek hovers around 10.6800. Rand rattled by decline in Gold and ongoing SA power supply problems, but Rouble rallies irrespective of CBR and Russian Economy Ministry divergence over deflation. Central Banks ECB's Lane said there are two-way inflation risks: "on the one side, there could be forces that keep inflation higher than expected for longer. On the other side, we do have the risk of a slowdown in the economy, which would reduce inflationary pressure", via ECB. ECB's Holzmann said "We will have to make an assessment where the economic development is going and where inflation stands and afterwards there’s ample room to hike in 0.25 and 0.5 levels to whatever rate we think, we consider reasonable" via CNBC. ECB's Simkus said if data worsens, then he wants a 50bps July hike as an option, 50bps hike is very likely in September; ECB's fragmentation tool should serve as a deterrent, via Bloomberg. ECB's Herodotou said EZ inflation will peak this year, via CNBC. ECB's Wunsch said government aid may spell more rate hikes, via Bloomberg; 150bps of hikes by March 2023 is reasonable ECB is said to be weighting whether or not they should announce the size and duration of their upcoming bond-buying scheme, according to Reuters sources. Fed's Mester (2022, 2024 voter) said on a path towards restrictive interest rates; July debate between 50bps and 75bps hike, via CNBC. Mester said if inflation expectations become unanchored, monetary policy would have to act more forcefully; current inflation situation is a very challenging one, via Reuters. SARB Governor said a 50bps hike is "not off the table", Via Bloomberg CBR Governor said she does not see risks of deflation; sees room to cut rates; sticking to policy of floating RUB exchange rate. PBoC will step up implementation of prudent monetary policy, will keep liquidity reasonably ample. Fixed Income Bunds unwind all and a bit more of their hefty post-NRW CPI gains as other German states show smaller inflation slowdowns and Spanish HICP soars. Gilts suffer more pronounced fall from grace in relative terms and US Treasuries slip from overnight peaks in sympathy. UK debt and STIRs also await testimony from MPC member elect to see if newbie leans dovish, hawkish or middle of the road 10 year benchmarks settle off worst levels within 147.37-145.14, 112.66-11.85 and 117-12+/116-27 respective ranges awaiting comments from ECB, Fed and BoE heads at Sintra Forum. Commodities WTI and Brent front-month futures traded with no firm direction in early European hours before picking up modestly in recent trade. US Private Inventory (bbls): Crude -3.8mln (exp. -0.6mln), Cushing -0.7mln, Distillate +2.6mln (exp. -0.2mln) and Gasoline +2.9mln (exp. -0.1mln). Norway's Industri Energi and SAFE labour unions agreed a wage deal for oil drilling workers and will not go on strike, according to Reuters. OPEC to start today at 12:00BST/07:00EDT; JMMC on Thursday at 12:00BST/07:00EDT followed by OPEC+ at 12:30BST/07:30EDT, via EnergyIntel. Libya's NOC suspends oil exports from Es Sider port. Spot gold is under some mild pressure as the Buck and Bond yields picked up, with the yellow metal back to near-two-week lows Base metals are mixed but off best levels after President Xi reaffirmed China's COVID stance – LME copper fell back under USD 8,500/t US Event Calendar 07:00: June MBA Mortgage Applications, prior 4.2% 08:30: 1Q PCE Core QoQ, est. 5.1%, prior 5.1% 08:30: 1Q GDP Price Index, est. 8.1%, prior 8.1% 08:30: 1Q Personal Consumption, est. 3.1%, prior 3.1% 08:30: 1Q GDP Annualized QoQ, est. -1.5%, prior -1.5% Central Banks 09:00: Powell Takes Part in Panel Discussion at ECB Forum in Sintra 09:00: Lagarde, Powell, Bailey, Carstens Speak in Sintra 11:30: Fed’s Mester Speaks on Panel at ECB Forum in Sintra 13:05: Fed’s Bullard Makes Introductory Remarks DB's Jim Reid concludes the overnight wrap I'm finishing this off in a taxi on the way to the Eurostar this morning and I made the mistake of telling the driver I was slightly pressed for time. He seems to be taking the racing line everywhere and my motion sickness is kicking in. A little like this car journey, it's been another volatile 24 hours in markets, with a succession of weak data releases raising further questions about how close the US and Europe might be to a recession. That saw equities give up their initial gains to post a decent decline on the day, whilst there was little respite from central bankers either, with sovereign bonds selling off further as multiple speakers doubled down on their hawkish rhetoric. That comes ahead of another eventful day ahead on the calendar, with investors primarily focused on a panel featuring Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey, as well as the flash German CPI print for June, who are the first G7 economy to release their inflation print for the month, which will provide some further clues on how fast central banks will need to move on rate hikes. Just as we go to print the NRW region of Germany has seen CPI print at 7.5% YoY, way below last month's 8.1%. This region is around a quarter of GDP so it could imply the national numbers will be notably softer when we get them later. The energy tax cuts were always going to come through in June so some respite was always possible but at first glance this seems materially below what might have been expected. This comes after a significant sovereign bond selloff in Europe once again yesterday as President Lagarde reiterated the central bank’s determination to bring down inflation, and described inflation pressures that were “broadening and intensifying”. And although Lagarde stuck to the existing script about the ECB raising rates by 25bps at the next meeting, we also heard from Latvia’s Kazaks who said that “front-loading the increase would be a reasonable choice” in the event that the situation with inflation or inflation expectations deteriorates. Lagarde did nod to this in part, saying that if the ECB was “to see higher inflation threatening to de-anchor inflation expectations, or signs of a more permanent loss of economic potential that limits resources availability, we would need to withdraw accommodation more promptly to stamp out the risk of a self-fulfilling spiral.” Separately on fragmentation, Lagarde said that they could “use flexibility in reinvesting redemptions” from PEPP starting July 1 in order to deal with the issue. For now, overnight index swaps are only pricing in a +31.3bps move in July from the ECB, so still closer to 25 than 50 for the time being. Meanwhile the rate priced in by year-end rose also by +7.9bps as investors interpreted the comments in a hawkish light. That supported a further rise in yields, with those on 10yr bunds up another +8.1bps yesterday, following on from their +10.7bps move in the previous session. That’s now almost reversed the -21.9ps move over the previous week, which itself was the third-largest weekly decline in bund yields for a decade, and brought the 10yr yield back up to 1.63%, so not far off its multi-year high of 1.77% seen last week. A similar pattern was seen elsewhere, with 10yr yields on 10yr OATs (+9.6bps), BTPs (+4.2bps) and gilts (+7.2bps) all moving higher too. Things turned near the European close with some poor US data releases piling on to some lacklustre confidence figures in Europe. Earlier in the day the GfK consumer confidence reading from Germany fell to -27.4 (vs. -27.3 expected), taking it to another record low. Separately in France, consumer confidence fell to 82 on the INSEE’s measure (vs. 84 expected), which we haven’t seen since 2013. Then in the US, the Conference Board’s measure fell to 98.7 (vs. 100.0 expected), which is the lowest since February 2021. The Conference Board’s one-year ahead inflation expectations hit a record high of 8.0%, surpassing the June 2008 record of 7.7%, adding to the pessimism. Along with waning confidence, the Richmond Fed’s Manufacturing Index registered a -19, its lowest since the peak onset of the pandemic, versus expectations of -7 and a prior of -9, showing that production data has weakened as well. This put a serious damper on risk sentiment which drove Treasury yields and equities lower intraday during the New York session. 10yr Treasury yields ended down -2.8bps after trading as much as +5.5bps higher during the European session. They are down another -4bps this morning. Concerningly as well, there was a fresh flattening in the Fed’s preferred yield curve indicator (which is 18m3m – 3m), which came down another -9.1bps to 165bps, which is the flattest its been since early March. With that succession of bad news helping to dampen risk appetite, US equities gave up their opening gains to leave the S&P 500 down -2.01% on the day. Tech stocks saw the worst losses, with the NASDAQ (-2.98%) and the FANG+ (-3.74%) seeing even larger declines. And whilst there was a stronger performance in Europe, the STOXX 600 ended the day up just +0.27%, having been as high as +0.95% in the couple of hours before the close. We didn’t hear so much from the Fed ahead of Chair Powell’s appearance today, although New York Fed President Williams said that at the upcoming July meeting “I think 50 to 75 is clearly going to be the debate”. Markets are continuing to price something in between the two, although since the last Fed meeting futures have been consistently closer to 75 than 50, with 69.0 bps right now. Those sharp losses in US equities are echoing across Asia this morning. The Hang Seng (-1.86%) is leading the losses followed by the Kospi (-1.82%), the Nikkei (-1.07%) and the ASX 200 (-1.06%). Over in mainland China, the Shanghai Composite (-0.77%) and the CSI (-0.80%) are slightly out-performing after yesterday’s surprise move by China to slash the quarantine period for inbound travellers (more on this below). Looking ahead, US stock index futures point to a positive opening with contracts on the S&P 500 (+0.18%) and NASDAQ 100 (+0.19%) mildly higher. Earlier today, data released showed that Japan’s retail sales advanced for the third consecutive month in May (+3.6% y/y) but lower than the consensus of +4.0%, but with the previous month's data revised up to +3.1% (vs +2.9% preliminary). Meanwhile, South Korea’s consumer sentiment index (CSI) fell sharply to 96.4 in June (vs 102.6 in May), sliding below the long-term average of 100 for the first time since Feb 2021. Separately, Australia’s retail sales put in another strong performance as it climbed +0.9% m/m in May, surpassing analyst estimates of a +0.4% increase. Oil has fallen back slightly overnight after three sessions of gains with Brent futures down -0.84% at $116.99 and WTI futures (-0.64%) at $111.04/bbl as I type. Just after we went to press yesterday, it was also announced that China would be shortening the required quarantine period for inbound travellers to one week from two. So although China is still very-much committed to a Covid-zero strategy for the time being, this step towards loosening rather than tightening restrictions is an interesting development that helped support Chinese equities in yesterday’s session towards the close which filtered through into early northern hemisphere risk performance. In terms of other data yesterday, there were signs that US house price growth might finally be slowing somewhat, with the S&P CoreLogic Case-Shiller index up by +20.4% in April, which is down slightly from the +20.6% gain in March. So still a long way from an absolute decline, but that marks a reversal in the trend after the previous 4 months of rises in the year-on-year measure. To the day ahead now, and the highlight will likely be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Tyler Durden Wed, 06/29/2022 - 08:00.....»»

Category: smallbizSource: nytJun 29th, 2022

Futures Surge To Two Week High As Traders Eye End Of Fed"s Hiking Cycle

Futures Surge To Two Week High As Traders Eye End Of Fed's Hiking Cycle Futures are pointing to solid close to the week - now that a recession and earlier rate cuts are assured... .... with a continuation of the rally which has pushed stocks to two week highs, with Tech continuing to lead while Chinese Tech is helping to fuel the global risk-on rally to end the week. Tech-heavy Nasdaq 100 futures added 1% while contracts on the S&P 500 gained 0.9%, trading near session highs  at 3,833 after the main US stock gauge closed near session highs Thursday, adding more than 3% in three days. In Europe, the Stoxx Europe 600 rose 1.5%, with the benchmark set for a small bounce this week. 10-year Treasury yields rose to 3.13% after earlier sliding as low as 3.04%. In premarket trading, software maker Zendesk Inc. soared over 50% on reports it’s close to reaching a deal to be acquired by a group of buyout firms led by Hellman & Friedman and Permira. Bank stocks were mostly higher as well after the latest stress test that results showed all 34 participating banks had passed (of course). In corporate news, Coinbase will launch its first crypto derivative product on Monday in the midst of the current crypto winter. US-listed Chinese stocks rise in premarket trading, on track for their best week since April as more market watchers turn positive on the group amid a gradual easing in Beijing’s crackdown on tech. Alibaba (BABA US) +3%, Nio (NIO US) +2.8%. Here are some other notable premarket movers: FedEx Corp. (FDX US) shares gained in premarket trading with analysts mostly welcoming its annual earnings forecast that was above expectations amid higher package prices and resolution on some operation issues related to labor shortage. Nevertheless, they still maintained caution amid cost pressures and macroeconomic uncertainty. US bank stocks may be volatile Friday after the Federal Reserve announced after the close of trading on Thursday that all banks had passed its annual stress test. Blackberry (BB CN) gained in postmarket trading after it reported an adjusted basic loss per share for the first quarter of 5c, in line with estimates. LendingTree (TREE US) shares dropped 10% in extended trading on Thursday, after the consumer finance company cut its second-quarter forecast for both revenue and adjusted Ebitda. Sarepta Therapeutics (SRPT US) shares may be under pressure after it announced that the FDA has placed a clinical hold on the company’s peptide-conjugated phosphorodiamidate morpholino oligomer to treat patients with Duchenne muscular dystrophy. That said, analysts believe this is mostly a hiccup and that the stock should get a lift once data from the company’s NT gene therapy is disclosed. In his market wrap note, JPM's Andrew Tyler asks "Does this rally have legs" and answers: "The next major catalyst is the June 30 PCE data. This current rally is seeing Tech and Defensive sectors as the largest outperformers. While some investors may play momentum, there seems to be a collective lack of conviction with many believing that this rally fizzles. Traders are looking for confirmation from a breakout above ~3900 resistant level." To be sure, investors are grappling with the question of what comes next if an economic downturn takes hold. One scenario - the bullish one - predicts cooling price pressures and thus scope for central banks to ease up on the pace of interest-rate hikes. In the other one, Jerome Powell hardened his resolve to cool inflation in testimony to lawmakers this week, after acknowledging that a recession may be the price to pay. “In spite of the hawkish remarks from Fed officials, the growing worries that their hikes would trigger a recession actually meant that investors priced in a shallower pace of rate hikes over the coming 12-18 months,” Deutsche Bank AG strategists led by Jim Reid wrote in a note. “That had a knock-on impact on Treasuries.” We discussed this extensively last night. The rising probability of a peak in rates put the policy-sensitive US two-year yield on course for one of its biggest weekly drops since March 2020. Meanwhile, traders are starting to price out any Fed action on rates beyond the December meeting, scaling back the additional tightening they expect and flirting with the possibility of cuts by in 2023. In Europe, equities traded well with the Stoxx rising 1.5% and the Euro Stoxx 50 1% higher back near Thursday’s highs. CAC 40 outperforms peers. Health care and media are the strongest sectors, autos and retail names lag. Here are some of the biggest European movers today: European health care stocks jump, outperforming the broader market. Societe Generale says the fundamentals of the European pharma sector are healthier than US peers. Roche rises as much as 3.4%, Novo Nordisk +3.2% and AstraZeneca +2.6% among the biggest contributors to the gain Ultra Electronics shares rise as much as 13% after a statement that the UK government is leaning toward approving Cobham’s planned takeover of the British defense-technology specialist. LVMH shares rise as much as 2.9% on Bernstein’s top luxury pick at a time of macroeconomic and geopolitical uncertanties, thanks in part to the French giant’s Dior mega-brand, which analyst Luca Solca says is one of the industry’s biggest success stories Telenet shares rise as much as 6.4%, with Barclays and New Street Research both noting that the stock is cheap and it may become more attractive for majority holder Liberty Global to consider buying the rest of the shares. Zalando shares sink as much as 18%, hitting the lowest since Jan. 2019. The online retailer warning on its sales and earnings outlook was not a total surprise, but the scale of the downgrade to its expectations was more significant than anticipated, analysts say. Fast fashion and online retailers decline in Europe following another warning in the sector, this time from Germany’s Zalando. HelloFresh slumps as much as -9.7%, Delivery Hero -6.0%, Deliveroo -2.7%. Fertilizer stocks sink in Europe with Morgan Stanley flagging the industry’s exposure to surging gas prices, gas supply uncertainties and related government measures in Europe to prevent shortages. K+S shares fall as much as 4.9%, Yara down as much as 4.8% and OCI down 3.9% Earlier in the session, Asian stocks headed for a second day of gains as technology shares staged a comeback amid falling yields, with investors continuing to weigh the prospect of higher inflation and monetary tightening. The MSCI Asia Pacific Index rose as much as 1.2%, lifted by tech-heavy markets such as South Korea. A gauge of Asian tech stocks jumped, rallying from the lowest level since September 2020. A Chinese tech measure in Hong Kong advanced 4%. Consumer and health care names also contributed to Friday’s gains amid a global shift to defensive stocks. Asian equities headed for their first weekly gain in three, as the market took a breather from intense selling pressure fueled by fears that aggressive monetary tightening will push the US economy into a recession. Federal Reserve Chair Jerome Powell in testimony to lawmakers stressed his “unconditional” commitment to bringing down inflation. Stocks have fared relatively better in Asia than in other regions as China’s move to dial back Covid restrictions supports market sentiment. Asia’s benchmark is down about 6% this month, compared with at least 8% declines in the S&P 500 Index and the Euro Stoxx 50. “The growth differentials are going to open up between China and the rest of the world,” Kinger Lau, chief China equity strategist at Goldman Sachs, said in a Bloomberg TV interview. Chinese equities “tend to do quite well going into the party congress, three to six months before that. Right now seems like we are in the sweet spot.” Japanese stocks climbed as investors assessed hawkish comments by Fed Chair Jerome Powell on further interest rate hikes and a rally in Treasuries that sent yields lower, boosting tech shares. The Topix Index rose 0.8% to 1,866.72 as of market close Tokyo time, while the Nikkei advanced 1.2% to 26,491.97. Japan’s Mothers index rallied as much as 5.8%.  Nidec Corp. contributed the most to the Topix Index gain, increasing 6.5%. Out of 2,170 shares in the index, 1,540 rose and 550 fell, while 80 were unchanged. In Australia, the S&P/ASX 200 index completed a weekly gain of 1.6% to close at 6578.70, as technology shares staged a comeback amid falling yields. The tech benchmark had a weekly gain of 8.1%, the most since August. Nine of the 11 subgauges ended Friday higher, with only energy and mining stocks sliding after a gauge of commodities retreated.   New Zealand’s market was closed for a public holiday In FX, the Bloomberg dollar spot index dipped into the red, poised for its first weekly decline in a month as investors gauge whether aggressive Federal Reserve rate hikes would tip the US economy into a recession; the Bloomberg Dollar Spot Index fell 0.5% this week while the policy-sensitive US two-year yield is on course for its biggest weekly drop since March 2020. The Japanese yen was the only Group-of-10 currency to fare worse than the dollar, sliding back under 135. “The dollar is undermined by the weakness in PMI data and growing concerns that aggressive rate hikes will eventually cause growth slowdown,” said Akira Moroga, manager of currency products at Aozora Bank in Tokyo. “US yields are also stabilizing from recent sharp climb to weigh on the dollar,” he said. NOK and SEK are the strongest in G-10 FX, JPY is the weakest. Rates erase initial gains, with Treasuries now slightly cheaper across the curve as US stock futures advance beyond Thursday’s highs, while core European bond gains fade and European stocks rally. US yields cheaper by 1bp-3bp across the curve and spreads within a basis point of Thursday’s close; 10-year higher by 1.5bp at 3.10%, bunds in the sector by an additional 3.5bp. Bunds futures complete a ~150 tick round trip, rallying near 149.00 before returning toward 147.50. Cash curves remain bear-steeper, long end bunds cheapen ~3bps having initially richened ~5bps. Cash USTs and gilts are comparatively quiet after following bunds price action in early trade. Italian bonds lag peers, widening the 10y BTP/Bund spread back above 200bps. Focal points of US session include early Bullard comments and University of Michigan inflation expectations, cited by Fed Chair Powell in latest policy decision.  In commodities, crude futures advance, albeit holding within a relatively narrow range. West Texas Intermediate crude traded near $105 a barrel after retreating over the previous two sessions. The US benchmark has lost almost 4% this week, putting prices on course for their first monthly drop since November. Base metals complex is under pressure, LME tin drops over 12%, nickel down over 6%. Spot gold rises roughly $4 to trade near $1,827/oz.  Bitcoin traded rangebound on either side of the 21,000 level. Sliding raw materials prices have contributed to a moderation in market-based measures of inflation expectations. Oil headed for its first back-to-back weekly loss since early April amid a broader selloff in commodities markets. To the day ahead now, and data releases include Germany’s Ifo business climate indicator for June, Italian consumer confidence for June, and UK retail sales for May. Over in the US, there’s also the University of Michigan’s final consumer sentiment index for June, and new home sales for May. From central banks, we’ll hear from the ECB’s Centeno and de Cos, the Fed’s Bullard and Daly, the BoE’s Pill and Haskel, and BoJ Deputy Governor Amamiya. Market snapshot S&P 500 futures up 0.7% to 3,826.75 STOXX Europe 600 up 1.1% to 406.65 German 10Y yield little changed at 1.40% Euro little changed at $1.0525 Brent Futures up 0.4% to $110.51/bbl Gold spot up 0.2% to $1,826.53 MXAP up 1.1% to 159.08 MXAPJ up 1.3% to 527.68 Nikkei up 1.2% to 26,491.97 Topix up 0.8% to 1,866.72 Hang Seng Index up 2.1% to 21,719.06 Shanghai Composite up 0.9% to 3,349.75 Sensex up 0.7% to 52,652.22 Australia S&P/ASX 200 up 0.8% to 6,578.70 Kospi up 2.3% to 2,366.60 U.S. Dollar Index little changed at 104.35 Top Overnight News from Bloomberg Global equity funds saw their biggest outflows in nine weeks as investors piled into cash amid fears that the US economy could be headed for a recession. UK consumers are starting to crumple in the face of soaring prices, according a series of reports that paint a grim picture of the nation’s cost of living crisis. Germany’s economy minister said he can’t be sure that Russia will resume shipments through a key gas pipeline following planned maintenance next month, raising the prospect of a fresh surge in prices and rationing this winter. A more detailed look at global markets from Newsquawk Asia-Pac stocks ultimately followed suit to the gains on Wall St where a decline in yields and lower commodity prices helped the major indices claw back from the opening losses which were triggered by disappointing PMI data. ASX 200 was positive with tech stocks encouraged by US counterparts which benefitted from the lower yield environment although gains in the index were capped by weakness in the commodity-related sectors after the recent pressure in energy and metal prices. Nikkei 225 found early momentum alongside currency flows and held on to gains despite the JPY reversal. Hang Seng and Shanghai Comp. were positive after officials recently suggested ample policy space to sustain a steady economic performance and with the PBoC upping its liquidity efforts. Top Asian News PBoC injected CNY 60bln via 7-day reverse repos with the rate at 2.10% for a CNY 50bln net daily injection, according to Reuters. Xi Trip to Hong Kong in Doubt After Top Officials Get Covid Hong Kong’s Jumbo Mystery Deepens as Restaurant May Be Afloat Gold Set for Weekly Drop on Powell’s Unconditional Inflation Vow Iron Ore Poised to End Wild Week Down as Steel Inventories Rise Hedge Funds Buy Dollar-Yen Downside Options on Recession Risks European bourses have coat-tailed on the positivity seen on Wall Street yesterday and across APAC overnight, with European indices firmer to varying degrees. Sectors overall project a modest defensive bias as Healthcare, Media, Consumer Products, and Food & Beverages reside among the winners, although Tech is also buoyed by the pullback in bond yields. Europe's largest online retailer Zalando (-12%) slumped following a profit warning, and in turn dragged the European Retail sector to the lowest level since March 2020. Stateside, US equity futures are firmer across the board – with the NQ narrowly leading the pack – participants also flagged the ES overcoming resistance at 3,800. Top European News UK PM Johnson's Conservatives lost the parliamentary seat in the Wakefield by-election to the Labour Party and lost the by-election in Tiverton and Honiton to the Liberal Democrats, according to Reuters. Subsequently, PM Johnson has been warned to "watch out for a coup", according to reporting in The Telegraph. Furthermore, Conservative Party Chairman Dowden has resigned following the by-elections. 1922 Committee treasurer Sir Geoffrey Clifton-Brown hints that Tory leadership rules could be changed to allow rebels another shot at the PM, according to Mail's Grove. Boris Johnson’s Party Chair Quits After Double Election Blow Zurich Insurance Sells Legacy German Life Portfolio to Viridium Ukraine Latest: Troops to Leave Key Eastern City as Russia Gains Airlines 2Q Seen Profitable for Most, Deterioration in 2023: DB FX Kiwi elevated amidst favourable crosswinds on NZ market holiday - Nzd/Usd probes 0.6300 as Aud/Nzd retreats towards 1.0950. Euro encouraged by elements of German Ifo survey and Pound shrugs off mixed UK consumption data, all time low consumer sentiment and more pain for PM Johnson on risk factors and gravitating Greenback - Eur/Usd firm on 1.0500 handle, Cable tests 1.2300 and DXY close to base of 104.120-510 range. Aussie, Loonie and Franc all bounce within ranges as Buck backs off, but Yen continues to encounter resistance after decent retracement - Aud/Usd back over 0.6900, Usd/Cad fades from pop above 1.3000 and Usd/Chf reverses through 0.9600 pivot. Scandi Crowns claw back lost ground, Yuan underpinned by PBoC liquidity injection and Peso by hawkish Banxico guidance to supplement 75 bp hike - Eur/Sek sub-10.7000, Eur/Nok near 10.4500, Usd/Cnh under 6.7000 and Usd/Mxn beneath 20.0000. Fixed Income Debt recoils after stretching recovery limits further - Bunds top out at 149.00, Gilts at 114.55 and 10 year T-note 118-00 Trading volumes pick-up on the way back down towards or to intraday lows of 147.21, 113.54 and 117-10+, as risk appetite steadily improves and focus turns to pm agenda Commodities WTI and Brent August futures are extending their modest gains in recent trade despite a lack of news flow. EIA said a status update on the weekly DOE oil inventories report will be provided on Monday. Spot gold remains uneventful under USD 1,850/oz – with the Dollar similarly contained intraday thus far. Focus has turned to base metals, with nickel, zinc, and tin among the biggest losers amid demand woes and surplus concerns. Chile state copper miner Codelco reached an agreement with workers to end the strike, according to Reuters. China is to auction 500k tonnes of imported soybeans from state reserves on July 1st, according to the trade centre cited by Reuters. US Event Calendar 10:00: June U. of Mich. Sentiment, est. 50.2, prior 50.2 10:00: June U. of Mich. Expectations, prior 46.8; Current Conditions, est. 55.4, prior 55.4 10:00: June U. of Mich. 1 Yr Inflation, est. 5.4%, prior 5.4%; 5-10 Yr Inflation, est. 3.3%, prior 3.3% 10:00: May New Home Sales, est. 590,000, prior 591,000 MoM, est. -0.2%, prior -16.6% Central Bank speakers 07:30: Fed’s Bullard Discusses Central banks and Inflation 13:15: Fed’s Daly Interviewed on Fox Business News 16:00: Fed’s Daly Speaks at Shadow Open Market Conference DB's Jim Reid concludes the overnight wrap Fears about an imminent recession have continued to dominate markets over the last 24 hours, with a combination of Chair Powell’s comments, weak economic data and renewed concerns about a European gas cutoff all helping to sound the alarm for investors. Indeed, the sudden rush for safe havens (along with doubts over how far central banks will actually hike if there’s a recession) meant that sovereign bonds rallied sharply, with yields on 10yr bunds (-20.6bps) seeing their largest daily decline in over a decade, which is quite something considering just how volatile bonds have been this year. Having said that the S&P 500 finished up +0.95% so it wasn't all doom and gloom on what was a pretty bad day for news. In terms of the various developments, weak data hampered the narrative and led to a flight to bonds from the outset, with the flash PMIs from Europe and the US painting a gloomy economic picture as we round out Q2. For instance, the Euro Area composite PMI fell to a 16-month low of 51.9 (vs. 54.0 expected), including larger-than-expected declines in both Germany and France. Later in the day, the US composite PMI also fell to 51.2 (vs. 53.0 expected), whilst the weekly initial jobless claims of the week through June 18 came in at 229k, thus taking the smoother 4-week moving average to its highest level since early February. So a bad run of numbers that at the very least add to the growing signs that we’re seeing a noticeable slowdown in growth. As the data was getting weaker, there was no sign that Fed Chair Powell was going to be put off from his challenge of restoring price stability, and he even reiterated before the House Financial Services Committee that their commitment to deal with inflation was “unconditional”. Bear in mind that he left that word out of his testimony before the Senate Banking Committee the previous day, which some had interpreted in a dovish light, so there’s no sign that the Fed are set to let up on the task ahead. Furthermore, Fed Governor Bowman became the latest member of the FOMC to endorse another 75bp hike at the next meeting in July, saying beyond that she favoured “increases of at least 50 basis points in the next few subsequent meetings”. In spite of the hawkish remarks from Fed officials, the growing worries that their hikes would trigger a recession actually meant that investors priced in a shallower pace of rate hikes over the coming 12-18 months. For instance, the rate priced in by the December meeting came down a further -5.5bps to 3.46%, whilst the terminal rate is now seen at just over 3.5%, having expected to be above 4% just before the Fed meeting. The market now sees the terminal rate being hit as early as February 2023 after most of the year so far has seen hikes priced in through the third quarter of 2023. That had a knock-on impact on Treasuries, with the 10yr yield down -6.9bps to 3.09%, and the 2s10s curve flattened -2.9bps to just 6.4bps. The Fed’s preferred indicator of the near-term forward spread also saw a large decline, with a -11.8bps move lower to 168bps, which was the lowest since early March. US equities continued trading in wide intraday ranges but were ultimately boosted by the shallower expected path of policy tightening. The S&P 500 gained +0.95%, leaving it +3.29% on the holiday-shortened week and on pace for its first weekly gain in a month. It was an interesting sector breakdown with shares sensitive to discount rates gaining, as one might expect with the rate move, sending the NASDAQ +1.62% higher. Otherwise, there was a clear delineation between defensives, which outperformed due to the slowing outlook, and cyclicals which ended the day in the red. Utilities, health care, real estate, and staples led the index and all ended in the green, while industrials, financials, materials, and energy all finished in the red. So a risk-off defensive rally in the States. Energy was particularly hit by the fall in brent crude futures, which were -1.51% lower on the day and nearly back beneath $110/bbl for the first time since mid-May. Over in Europe, there were further dramatic developments on the energy side, with German economy minister Habeck raising the country’s gas risk level to the second stage of the emergency plan. That takes them from the early warning phase to the alarm phase, with Habeck going as far as to warn about “a Lehman effect in the energy system” if the market collapsed. Our research colleagues in Frankfurt have written more about what this means (link here), but natural gas futures in Europe rose a further +3.33% yesterday to a fresh 3-month high of €131/MWh. The third and final stage of the plan would be the emergency phase, which occurs when there isn’t enough gas to meet general demand. The fears of recession and the threat of energy shortages meant that European equities took a tumble again yesterday, with the STOXX 600 (-0.82%) closing at its lowest level in 16 months with banks (-3.17%) leading the way as cyclicals also got hit hard in Europe. The DAX (-1.76%) was a regional under-performer with all the focus on the German government gas alert. Sovereign bond yields also plummeted, with those on 10yr bunds (-20.6bps) seeing their largest daily move lower in over a decade, whilst those on 10yr OATs (-20.7bps), gilts (-18.2bps) and BTPs (-15.9bps) witnessed a significant pullback as well. Our European economists don’t think that growth uncertainties will derail the near-term exit path for the ECB, but they write in a blog post yesterday (link here) that the release is another catalyst for a shift in the debate from a question of how quickly they need to catch up, to how far they will be able to go. Moving on to Asia, equity markets in the region are seeing decent gains overnight, with the Kospi (+1.66%) leading the pack followed by the Hang Seng (+1.23%), the Nikkei (+0.76%), the CSI (+0.74%) and the Shanghai Composite (+0.54%). Looking forward as well, US stock futures has risen overnight with contracts on the S&P 500 (+0.43%) and NASDAQ 100 (+0.70%) trading higher amidst the decline in bond yields. In economic data, inflation in Japan is likely to remain closely watched after the core consumer prices climbed +2.1% y/y in May as expected, following a similar rise in April, a level not seen in seven years mainly because of higher energy prices. Excluding energy, prices were up +0.8% in May, also in line with market consensus, following a 0.8% increase in the preceding month. Moving on to some political news, the Conservative party lost two parliamentary seats in yesterday’s by-elections, which will be unwelcome news for Prime Minister Johnson, who’s already seen 41% of his own MPs vote no confidence in his leadership at the start of the month. One of the losses was to Labour in the “red wall” seat of Wakefield, which had been Labour for the entire post-war period until it was won by the Conservatives in 2019, and the Conservative vote share was down from 47% at the last general election to 30% yesterday. Elsewhere, they also lost the usually safe Conservative seat of Tiverton and Honiton to the Liberal Democrats, with the Conservative vote share down from 60% in 2019 to 38% yesterday. Meanwhile, there was some bad news overnight on the economic front from the UK, with GfK’s consumer confidence reading dropping to a record low of -41 in June (vs. -40 expected), something not seen since the survey began 48 years ago. To the day ahead now, and data releases include Germany’s Ifo business climate indicator for June, Italian consumer confidence for June, and UK retail sales for May. Over in the US, there’s also the University of Michigan’s final consumer sentiment index for June, and new home sales for May. From central banks, we’ll hear from the ECB’s Centeno and de Cos, the Fed’s Bullard and Daly, the BoE’s Pill and Haskel, and BoJ Deputy Governor Amamiya. Tyler Durden Fri, 06/24/2022 - 07:53.....»»

Category: smallbizSource: nytJun 24th, 2022

The Bill Gurley Chronicles: Part 2

The Bill Gurley Chronicles: Part 2 By Alex of the Macro Ops Substack What if there was a way to distill all the knowledge that someone’s written over the last 25 years into one, easy-to-read document? And what if that person was a famous venture capital investor known for betting big on companies like Uber, Snapchat, Twitter, Discord, Dropbox, Instagram, and Zillow (to name a few)?  Well, that’s what I’ve done with Bill Gurley’s blog Above The Crowd.  Gurley is a legendary venture capital investor and partner at Benchmark Capital. His blog oozes valuable insights on VC investing, valuations, growth, and marketplace businesses.  This document is past two to the one-stop-shop summary of every blog post Gurley’s ever written, part 1 can be found here. February 2, 2004: The Rise Of Open-Standard Radio: Why 802.11 Is Under-Hyped (Link) Summary: WiFi will dominate wireless communications for the same reason Ethernet dominated networking and x86 dominated computing: high switching costs. This wide-scale adoption causes capital to flow into the standard as companies look to differentiate on top of the existing platform. In doing so, it further entrenches the “open-standard” incumbent.  Favorite Quote: “Open standards obtain a high “stickiness” factor with customers as a result of compatibility. Once customers invest in a standard, they are likely to purchase more and more supporting infrastructure. As their supporting infrastructure grows, their switching costs rise dramatically with respect to competitive alternate architectures. Customers are no longer tied simply to the core technology, but also to the numerous peripherals and applications on which they are now dependent. All of these things make challenging an accepted open standard a very difficult exercise.” March 24, 2004: All Things IP: The Future Of Communications In America (Link) Summary: South Korea and Japan are leading the world in broadband speed and connectivity. South Korea, for example, sports 80% broadband adoption. The US on the other hand, less than 50%. Different players battle for the future of US communication. Free services like Skype offer high-quality VoIP calls. But it’s the cable companies, with their mega-cable infrastructure, that lead the way. At the end of the day follow the money. Comcast went after Disney not because of distribution, but because of content. Favorite Quote: “Now, while voice should be free, that doesn’t mean that it will be free. The two conditions outlined above are nontrivial. First and foremost, it is not at all clear that we have enough competition in the U.S. broadband market. Innovations in the wireless market, particularly recent innovations around mesh architectures, have the opportunity to change this. As of right now, however, many users simply lack choice. Additionally, the many state municipalities around the country are eager to place their hands on VoIP. A poorly executed policy could in fact “increase” the long term pricing on voice services for all users (for example, would you really tax a free service?).” May 6, 2004: Entrepreneurialism And Protectionism Don’t Mix (Link)  Summary: Protectionism and entrepreneurialism don’t work together. One prides itself on open dissemination of ideas, talent and problems (entrepreneurialism). The other (protectionism) desires to keep what’s theirs and turn a blind eye to competition. There are seven reasons why these two ideologies don’t mix: it hurts the economy (comparative advantage), start-ups don’t receive government subsidies (that encourage protectionism), disincentivizes diversity, more start-ups start with a global presence, the hot markets are ex-US, it goes against our global open standards (WiFi, etc.) and its inconsistent with the entrepreneurial mindset.  Favorite Quote: “It is hard to imagine a successful entrepreneur arguing that he or she deserves a job over someone else that is equally skilled and willing to work for a lower wage. The entire spirit of entrepreneurialism is based on finding ways to do something better, faster, and cheaper. It is the whole nature of the game. If someone can do something better somewhere else, it simply means it’s time to innovate again – with intellect and technology, not politics.” October 19, 2004: The Revolutionary Business Of Multiplayer Gaming (Link)  Summary: Multiplayer gaming is an incredible business featuring five “Buffett-Like” business characteristics: recurring revenue (subscription pricing), competitive moats (switching costs), network effects/increasing returns, real competition with others and high brand engagement. Those that fail to realize the importance (and power) of the video game business model (40%+ operating margins) will miss a huge investment opportunity.  Favorite Quote: “Some skeptics argue that MMOG is still a “niche” business and that the same half-million users are migrating from Everquest to Ultima Online to City of Heroes. Under this theory, MMOGs will never be mass market and will never really “matter” in the $20 billion interactive entertainment business. However, with billion dollar businesses now dotting the NASDAQ, it becomes harder and harder to invoke such skepticism. And if new paradigms, architectures, and broadband speeds allow for titles that meet the needs of a wider demographic, ignoring MMOGs may be equivalent to ignoring the successor to television.” March 11, 2005: Believe It Or Not: Your State Leaders May Be Acting To Slow The Proliferation Of Broadband (Link) Summary: In 2005, rumors circulated that laws would pass eliminating a city’s right to offer telecommunications services to its citizens. Gurley suggested states should say “no way” to this offering, and opined six reasons why (straight from the post):  The primary reason for the proposition is to reduce or eliminate competition for incumbent telcos An oligopoly doesn’t make a marketplace Taking rights from municipalities will have negative overall impact on American innovation  Even if a city has no intention of deploying wireless services, it is still in that city’s best interest to retain the right to do so In 2005, isn’t it reasonable for a city to choose to offer broadband as a community service?  A founding American principle — localized government whenever possible Favorite Quote: “In what is ostensibly the cornerstone “democracy” on the planet, one would think that the citizens in each of America’s cities could simply “vote” on the services they believe make sense for their city to provide.  Running a wireless network in a city like Topeka, Kansas simply has no overriding impact on the state as a whole.  As Thomas Jefferson aptly wrote in a letter to William Jarvis in 1820, “I know of no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform them.”” March 21, 2005: The State Of Texas Refuses To Block Municipal Broadband (Link) Summary: Gurley’s post before this one did its job and Texas removed the harsh language around cities offering broadband access to its citizens. According to Gurley, the battle moved to Colorado.  Favorite Quote: “This proposed bill, in its original form, would prohibit a city from helping any new carrier whatsoever get started.  It’s a pure and blatant anti-competitive move.  It’s been modified slightly, but it is still one of the harshest proposals of any state, and once again created only to help the incumbent carriers by removing competition.  Consumers do not benefit from this language.” March 24, 2005: Texas Two Step – Backwards (Link) Summary: After celebrating the removal of restrictive broadband language three days prior, Texas reinserted the notion. What’s crazy is that the member who reinserted the language, Robert Puente, serves in a district where a large telco company has its headquarters. Hmm …  Favorite Quote: “It is shocking that these local reps really don’t care if broadband deployment in America continues to fall further and further behind the rest of the world.  Just shocking.” June 2, 2005: Texas Sets Key Precedent For Other States In Refusing To Ban Municipal Wireless (Link) Summary: It’s interesting that fixed broadband incumbents in Texas are so opposed to wireless broadband. The incumbents claim wireless is a weaker form of their product. But if it’s so weak, why do they want it banned from their state? Why won’t they let natural competition run its course? If it is indeed weak, there shouldn’t be a reason to impose sanctions and restrictions.  Favorite Quote: “The reason the pro-broadband movement was successful is because they organized, they gathered the real data on the success of municipal wireless deployments, and they were able to inform the citizens about this effort by the incumbents and their key legislators to use regulation to restrict competition.  They leveraged the Internet, blogs, and mailing lists, and made a huge difference.  The tech community also played a role with the AEA, the Broadband Coalition, and TechNet all speaking out against this effort to intentional slow technical progress.  These lessons and resources are now focusing on other states to ensure the Texas outcome.” July 12, 2005: DVD Glut (Link) Summary: Gurley saw the rise of TiVo and its effect on the DVD industry. Why would people pay for DVDs when they can record their favorite movies on TV and watch them whenever they want? There is no practical use for DVDs outside nostalgia and collection.  Favorite Quote: “Could it be that people are watching Shrek 2 on Tivo and saving that on Tivo for future viewing?  Could it be that other activities, such as Internet usage, is infringing on DVD time?” July 19, 2005: Do VCs Help In Building A Technology Platform? (Link) Summary: There are two important implications for venture capital’s lack of investment in Microsoft’s .NET platform. First, VCs are investing on the Open Platform. This is likely due to (what Gurley calls) “a more benign” platform. Such a platform allows for more creativity and application. Second, VCs aren’t investing in .NET applications because Microsoft’s simply going up the software vertical (owning each spot). There is a lack of opportunity within the existing .NET framework.  Favorite Quote: “Venture Capitalists look to the public markets for clues on where to go next.  There is no point in investing in technologies that don’t lead to liquidity events.  What the article stresses is that the majority of VC money these days is being spent on top of the Open Source platform rather than the Microsoft’s .Net platform.” July 22, 2005: Wifi Nation… (Link) Summary: This article gives us an excuse to talk about Innovator’s Dilemma. Clayton Christensen coined the term in his book with the same title. Wikipedia defines the term as, “the new entrant is deep into the S-curve and providing significant value to the new product. By the time the new product becomes interesting to the incumbent’s customers it is too late for the incumbent to react to the new product.” In short, WiFi is disrupting the incumbent broadband and their end consumers. Also, WiFi isn’t built for the incumbents. It’s built for the next generation.  Favorite Quote: “What you will see, and what many continue to deny, is that Metro-scale Wifi isn’t a theory, its a reality.  The networks are live.  They perform way better than EVDO or any cellular alternative. They are cheaper to deploy.  AND, there is huge momentum around more and more networks.” Years: 2006 – 2008 April 5, 2006: Why SOX Will Lead To The Demise Of U.S. Markets (Link) Summary: Sarbanes-Oxley (SOX) killed the small and micro-cap public market spirit. Like most regulations, the creators of SOX thought their stipulations would preserve the growth of public markets. Instead it stunted growth. SOX is an expensive requirement for smaller public companies. The costs disincentivize companies from going public. In return, US capital markets offer less opportunities than global companions. Will this lead to more money flowing overseas? Favorite Quote: “Ironically, the two gentlemen that created SOX did it with the intention of “preserving” U.S. capital market leadership. Their fear was that people viewed our markets as too risky, and so they created SOX to ensure that investors would “trust” our markets.” April, 2006: As Wifi Grows, So Do The PR Attacks (Link) Summary: There will always be haters when new technology replaces old, resentful incumbents. Can you blame them? WiFi completely destroyed their business model. Of course they’re going to run sham campaigns. But that’s the beauty of the Innovator’s Dilemma. WiFi doesn’t care about fixed broadband and incumbents. It’s serving its new wave of customers who want something incumbents can’t offer. Look for this in other up-and-coming technologies.  Favorite Quote: “Better performance than EVDO at a much lower cost.  You won’t stop this with an AP article.  Are their issues?  Sure, but I drop 5 cell calls a day in Silicon Valley and that technology (cellular voice) is over 25 years old.”  April 27, 2006: MMOs (MMORPGs) Continue To Rock (Link) Summary: Gurley again emphasizes the importance of MMO video games — particularly out of Asia. In fact, he mentions that Nexon (Japanese gaming company) plans to file on the JSE. Gurley believes the JSE filing is directly correlated with Sarbanes Oxley (from the article above). Regardless, the real winners in the video game industry are coming from Asia. Winning games will be based on community and entertainment, rather than pure competition. It’s no wonder Fortnite is so popular today. Gurley gave us clues almost 20 years ago.  Favorite Quote: “Many of the rising stars of multi-player interactive entertainment are more social than interactive. They also target much broader demographics than gaming ever dreamed of hitting. Consider three sites targeted at younger children and teens that are all doing extremely well — NeoPets, HabboHotel, and GaiaOnline (Benchmark is an investor in HabboHotel).” June 19, 2008: Back To Blogging (Maybe)… (Link) Summary: Gurley returned from his writing break to mention a few of his favorite reading sources. Gurley notes that he reads each of these websites every morning:  TechCrunch GigaOm Marc Andressen’s Blog Favorite Quote: “The bottom line is I have been really busy. Busy with our investments here at Benchmark, and busy with three growing kids at home.  But in the end, I am quite fond of writing, and I have been inspired by some of the great writing of others.” June 30, 2008: Bleak VC Quarter? Why? (Link) Summary: June 2008 marked another dreary quarter for venture capital. Not one single VC-backed company went public. At first glance, this seems bad for venture capital. But looking deeper, it’s not venture capital that’s the issue. It’s the public market. Between regulations and SOX costs, small companies are opting to remain private at record numbers. As Gurley notes, fund managers want high growth and capital appreciation. But these small growth companies don’t want the issues of being a public company.  Favorite Quote: “This passionate desire to be public is completely gone in Silicon Valley. For reasons you could easily list – Sarbanes Oxley; 12b1 trading rules; shareholder litigation; option pricing scandals; personal liability on 10-Q filing signatures – it is simply not much fun being a public executive.” July 22, 2008: BAILOUT What? (Link) Summary: Fascinating how relevant this quote is for 2020. What we’ve seen from the US government during the COVID pandemic is a double-downed effort on its bailout precautions. Even going so far as to buy bond ETFs on the open market! Capitalism requires failure. It requires weak businesses to fall by the wayside in exchange for stronger competitors.  Favorite Quote: “Is our government really going to bail out equity investors in a failed business enterprise? I totally get keeping America afloat, but it is critical that failed businesses FAIL. They must FAIL. You can’t provide band-aids to equity failure. The whole system will come to a halt. Risk that pans out must result in failure. it is a crucial part of the system.” December 1, 2008: Benchmark Capital: Open For Business (Link) Summary: Gurley and the Benchmark team continued investing while the rest of their VC peers cowered in fear during the bowels of the Great Recession. Investing when others are fearful is not only a sign of a great VC firm, but any great company.  Favorite Quote: “I can’t speak for other firms, but make no mistake about…Benchmark Capital is wide open for business and we are eager to invest new capital behind great entrepreneurs.  Right now.  In this environment.  Today. You may wonder why I feel the need to make this pronouncement, and you may even consider this a stunt.  It is not.   We have made fourteen new investments this year, and are actively considering new investments each and every day.” December 5, 2008: Do VCs Help In Building A Technology Platform; Part 2 (Link) Summary: Microsoft offers three years of free software/service to startups. This is a clear signal that Microsoft understands the power of platforms and where companies choose to build their products. Otherwise, as Gurley notes, why offer it for free? This comes on the heels of three new cloud platform technologies entering the space: Facebook, Salesforce and Amazon AWS. VCs may not choose which platform wins, but they choose which platform gets capital. And to some, that’s the same thing.  Favorite Quote: “It obviously would be overstating it to suggest that VCs help “choose” the platform that wins. That said, it is a powerfully positive indicator if VCs show confidence in a new platform by shifting where they deploy their capital.” Years: 2009 – 2011 February 1, 2009: Google Stock Option Repricing: Get Over It (Link) Summary: Retail investors, bloggers, and financial pundits argued that Google’s Stock Options Repricing hurt the “common” shareholder. Gurley thinks stock options shouldn’t matter because common shareholders gave up their rights (more or less) when investing in Google shares. The fact is, Google’s founder and original shareholder shares carry 9/10ths voting power. That means minority (aka second-class citizen) shareholders get 1/10th. In other words, deal with it.  Favorite Quote: “So my reaction to anyone who owns Google stock and is sore over this decision — Get Over It.  You bought a stock where you gave up the ability to vote on such things, and if you don’t like it, sell the stock.  But you have no right to complain, as the rules were laid out from the beginning.” February 11, 2009: Picture Proof Of The Innovator’s Dilemma: SlideRocket (Link) Summary: With a team of 3 engineers and a fraction of Microsoft’s budget, SlideRocket created (arguably) a better version of PowerPoint. According to Gurley, SlideRocket is a perfect example of the Innovator’s Dilemma. PowerPoint took (probably) billions of dollars in R&D and thousands of engineers to create. SlideRocket did it with 4 orders of magnitude less resources.  Favorite Quote: “One subtlety of this is that it allows others to catch up and basically recreate the same thing for a fraction of the cost.   In SlideRocket’s case, it appears that a team of 3 engineers with primary work done by the founder, have recreated PowerPoint (leveraging Flex of course).”  February 18, 2009: Just Say No To A VC Bailout: A Green Government Venture Fund Is A Flawed Idea (Link) Summary: Some VC investors wanted a bailout from the government during the GFC. Gurley originally thought this was a far-cry from a lone complainer. Then he read an article by Thomas Friedman suggesting the same thing: a bailout for VC targeted at green-tech companies. According to Gurley, VC bailouts are flawed for six reasons: There are no lack of capital in VC VCs don’t deserve a bailout Those that need bailout are (likely) bad ideas Excess capital hurts markets Good companies don’t lack for capital Use customer subsidies instead of government-backed VC investment Favorite Quote: “Great ideas have never suffered from a lack of capital availability.  Bringing extra government dollars to the investment side will only ensure that marginal and sub-par companies get more funding dollars, which historically has had a perverse and negative effect on the overall market.” February 22, 2009: Just Say No To A VC Bailout – Part 2 (Link) Summary: Continuing the rant from the previous blog post, Gurley hits on three main criticisms with Friedman’s cry for a VC bailout. First, Friedman suggested that the US Treasury give the Top 20 VC firms up to $1B to “invest in the best VC ideas”. When you consider the 2% annual fee each year that VC’s take, you’re effectively giving these firms an additional $4B in partners’ fees. Finally, Gurley hammers home the idea that to win in green-tech you need to incentivize the customer on the demand side. Create a positive ROI proposition for the customer to use the product or service.  Favorite Quote: “The key is to create an ROI positive investment for the end customer through subsidies.  Ethanol isn’t falling to succeed because of a lack of capital — it’s a problem with customer ROI.  Invest through subsidies in making the market huge and ROI positive.  Capital alone will not solve the problem as the ethanol case proves.” February 27, 2009: Perfect Online Video Advertising Model: Choose Your Advertiser (Link) Summary: Gurley reveals his “perfect online video advertising model” in which consumers can choose their advertiser. It works like this. Before an online premium or VOD show starts, the content creators present the consumer with a list of 4-9 sponsors for the programming. Then, the consumer picks which sponsor they’d like to see when the inevitable ad runs during their program. The benefit to this is that content creators would know their customers’ interests to the tee, which would allow them to raise prices on advertising channels (read: higher revenue).  Favorite Quote: “Just because I am a male between 18-24 and watching “Lost” doesn’t mean I want an XBOX.  You are more likely to guess that i might want it, but you would be 10X better off if I chose XBOX as my sponsor at the start of the show.  Then you would KNOW I have an interest — no more guessing. Making predictions is always a dangerous game, but I am fairly certain that this will be the video ad model of the future.  It makes way too much sense not to work.” March 2, 2009: Looking For Work: Are You An Insurance Agent? (Link) Summary: One of Gurley’s investments had an unusual circumstance during the GFC: they had excess demand for work. LiveOps, a virtual SaaS call center on the cloud, leverages a network of work-from-home call center operators. At the time of writing, LiveOps had 20,000+ live call-center agents working from home assisting companies like Aegon, Colonial Penn, and American Idol.  Favorite Quote: “Their core technology is a SAAS “contact center in cloud.” Just like anyone’s call center, it is a four-9’s operation that is highly resilient. What’s different, and very unique, is that the agents on the other end don’t actually work for LiveOps – they work for themselves. So far, over 20,000 “crowd-sourced” agents are now working from home on behalf of LiveOps customers – companies like Aegon, Colonial Penn, etc. One really cool customer example is American Idol. For Idol Gives Back, AI’s charity campaign, over 4000 LiveOps agents handled over 200,000 calls in less than five hours. Only a crowd-sourced play could handle such a ramp.” March 9, 2009: How To Monetize A Social Network: MySpace And Facebook Should Follow TenCent (Link) Summary: Social networks had trouble monetizing their websites. MySpace and Facebook failed to generate revenue like Yahoo, which did $7B at the time of writing. The problem wasn’t growing the userbase (both sites had tremendous user growth). It was the dependence on advertising to generate the lion’s share of their revenues. Gurley compares MySpace and Facebook to Tencent (700.HK). The two primary drivers of revenue for Tencent are digital items and casual game packages and upgrades. These are significantly higher-margin businesses than advertising. At the end of the day, social networks are social status symbols. This means if you want to leverage your business, you need to provide users with ways to improve their social status. Favorite Quote: “If you removed the Chanel logo from them, and offered them for $50 cheaper, you could not sell a pair.  Not one.  Why?  People are buying an image that they want to project about themselves.  Without the logo, they fail to make that statement.  The same is true for watches, clothes, cars, sodas, beers, cell phones, and many more items.  People care greatly about how they are perceived and are willing to part with big bucks to achieve it.  Digital items are merely the same phenomenon online.” March 26, 2009: Note To Timothy Geithner: Do Startups & Venture Capitalists Really Need More Regulation? (Link) Summary: The US government levied Sarbanes-Oxley on all public companies after the whole Enron, WorldCom saga. The purpose? Protect investors from future frauds. While the efficacy of “Sarbox” remains in question, one thing doesn’t: the cost on small public companies. Sarbox costs ~$2-$3M to implement. This makes it nearly impossible for small companies to go public because the Sarbox costs eat away all potential operating profits. Overburdening small companies could restrict the pipeline of new public IPOs.  Favorite Quote: “And remember that the largest companies in America that were created in the last 35 years (MSFT, GOOG, AAPL, CSCO, INTC) were all small venture-backed companies at one point in time.  Do we really want to inappropriately restrain or throttle the future pipeline of such companies in America?” May 2, 2009: Swine Flu: Overreaction More Costly Than The Virus Itself? (Link) Summary: It’s amazing how relevant this blog post became during the COVID-19 pandemic. Gurley suggests that in some cases, overreacting to news (like swine flu) can have far worse consequences than the natural course of the virus itself. For example, Mexico’s economy teetering on the brink of insolvency as tourism represents a third of their economy. The argument for overreacting is that it prepares people for the worst-case scenario. Yet that decision has consequences. Consequences we can’t see, and might not see for a long time.  Favorite Quote: “Some people rationalize that this hysteria serves a noble purpose, in that it prepares us for the worse.  This, however, ignores the fact that there are tremendous real economic costs to overreaction, and that sometimes overreaction has far-reaching negative impacts which can be many times greater than that of the original problem.” May 8, 2009: Second Life: Second Most Played PC Title, #1 In Minutes/User (Link) Summary: Gurley’s investment in Linden Lab paid off big time in May 2009 when Linden’s hit game Second Life ranked as the #2 most-played PC title. The game trailed World of Warcraft in number of users, but ranked first in number of minutes played per user. Data like this further reiterates Gurley’s earlier claims that selling goods online (digital signs of social status) can make for a great business. It also shows people love distracting themselves from their everyday lives.  Favorite Quote: “The truth of the matter is that the company is quite large, it’s growing, it’s profitable,  it has hired a number of great people over this time frame, and as the data shows it’s kicking butt. Note that the data also shows SecondLife actually leads WOW in terms of minutes played per user.”   May 10, 2009: Bill Gurley’s Online Video Market Snapshot (Link) Summary: Gurley did an on Hollywood talk about the massive changes in the Online Video Market. The link has an 18-minute video where Gurley outlines five things that matter in the coming online video market battle:  Great content is super expensive Affiliate fees are a “huge fucking deal”  The Netflix Business model is widely misunderstood HBO and the NFL are incredibly well-positioned companies Wireless will not save the day  Favorite Quote: I didn’t have a favorite quote from this post as it was mainly a link to the video and slide deck. I highly recommend watching the video and scanning through the deck. It’s 18 minutes long but you can watch at 1.5-2x speed without issue.  Tyler Durden Sun, 06/19/2022 - 17:30.....»»

Category: blogSource: zerohedgeJun 19th, 2022

Costco is barring non-members from buying its discounted gas in New Jersey, report says

In most Costco gas stations across the country, drivers must prove their membership by scanning their Costco cards. Cars line up at a Costco gas station in Clifton, New Jersey in 2004.Chris Hondros/Getty Images Costco will bar non-members from buying its gas in New Jersey starting July 5, NJ Advance Media reports. Costco gas is a popular option for drivers looking to save on fuel. It's unclear whether Costco was ever legally prohibited from enforcing its members-only rule. Costco reportedly is getting ready to bar non-members from purchasing its discounted gas in New Jersey. NJ Advance Media reported that drivers in the state were alerted of this development through signs posted at Costco gas stations, which announced the change will take place on July 5. After that, only Costco members will be able to purchase gas at the warehouse chain's stations. The retailer has an exemption nationwide for Costco Shop Card holders. Nearly two decades ago, Costco reportedly caved to New Jersey's demands that it open up its pumps to all members of the public. The Associated Press wrote in 2004 that, "Costco's membership requirement violated New Jersey laws regarding fuel sales, according to state consumer officials." But insiders say New Jersey may have overstated its case 18 years ago."The rules have not changed," Sal Risalvato, executive director of the New Jersey Gasoline, C-Store, Automotive Association, told Insider in a statement. "NJ law never had anything in it that prohibited Costco from selling gas to 'Members Only.'"Risalvato said he believes that in 2004, New Jersey's Department of Consumer Affairs "balked at the notion of Costco only selling gas to their members" and that the chain "acquiesced and permitted the gas pumps to serve all motorists" to avoid a controversy."Apparently, officials at consumer affairs then made comments at that time to the media to the effect that they were enforcing state law," Risalvato said. Risalvato said that news reports about Costco's decision have prompted "current consumer affairs officials" to scramble to figure out what happened in 2004."Obviously I am very familiar with the NJ statutes that govern motor fuels, and I know of nothing that prohibits Costco from selling to their members only," he said. "Since I am as prone to mistakes as any other person, I reviewed the laws again and had several of my staff double check me. The result is the same.  I find nothing in NJ law that prohibits Costco from selling gas to their members only."Risalvato said that it's possible that certain Costco locations made specific agreements with local governments, as a quid pro quo for building permits.Costco and New Jersey's Department of Transportation did not immediately respond to Insider's request for comment.Cheap gas has long drawn consumers to Costco. With prices at the pump exploding in 2022, long lines have become commonplace at gas stations run by Costco and its Walmart-owned competitor, Sam's Club. Costsco gas stations require customers to insert a membership card in the card reader to confirm their membership is active before they can pump gas. This isn't the first recent shift in the New Jersey gas-station landscape. The Garden State has weighed removing its long-standing ban on self-service at gas stations. New Jersey and Oregon were previously the only two states in the United States where self-service is barred.In January of 2018, Oregon dropped the rule. The state then reinstated it in 2020 due to COVID-19 concerns, although self-service remains available in certain rural areas. Now some lawmakers in New Jersey are also considering their state's ban on self-service at gas stations, which has been in place since 1949. The new gas industry-backed "Motorist Fueling Choice and Convenience Act" has been touted as a response to the labor crunch and rising fuel costs.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 9th, 2022

Futures Drop As Yields Push Higher, Hawkish ECB Looms

Futures Drop As Yields Push Higher, Hawkish ECB Looms After yesterday's bizarro rally, US futures and European bourses dipped ending two days of gains, as yields reversed Tuesday's slide and climbed ahead of highly anticipated CPI data on Friday and a hawkish ECB meeting tomorrow, as traders try to predict the Federal Reserve’s policy path. Nasdaq 100 futures were flat at 7:30 a.m. in New York, with contracts on the S&P 500 and Dow Jones also modestly lower. European markets also dipped, with Credit Suisse shares tumbling after the Swiss bank announced that it expects a loss in the 2Q and is weighing a fresh round of job cuts. Meanwhile, Asian stocks rose as Beijing’s move to approve a slew of new video games bolstered bets that the outlook is improving for the Chinese technology sector. The yield on the 10-year US Treasury resumed its advance, climbing to 3%, while the dollar rose as the yen cratered to fresh 20 year lows, flat and bitcoin traded around $30K again. Among notable premarket movers, energy companies’ extended their Tuesday gains with Imperial Petroleum rising 8.3% and Energy Focus adding 20%. Western Digital shares climbed 4.1% in US premarket trading after the chipmaker said that it’ll consider splitting its main units as part of a review of “strategic alternatives” following talks with activist investor Elliott. US-listed Chinese stocks jump in premarket trading, on track for a third day of gains, after China approved a second batch of video games this year, providing a signal of policy support to the the country’s internet sector; Alibaba (BABA US) gained 5.8%, JD.com (JD US) +4.4%, Pinduoduo (PDD US) +5.9%, Baidu (BIDU US) +2.7%. Other notable premarket movers: Intel (INTC US) shares fell 1.9% in premarket trading as Citi lowered its estimates on the chipmaker after the company’s management mentioned at a conference that circumstances are worse than expected during the quarter. Altria Group (MO US) stock slid 2.4% in premarket trading as Morgan Stanley downgraded it to underweight, citing increasing macro pressures and competitive risks. Western Digital (WDC US) shares rise 4.1% in premarket trading, after the chipmaker said that it will consider splitting its main units as part of a review of “strategic alternatives”. Smartsheet (SMAR US) stock fell about 7% in premarket trading as analysts said the software company delivered a mixed set of results with billings growth decelerating to top estimates by a slimmer margin than in previous quarters. Novavax (NVAX US) shares jump as much as 22% in US premarket trading after the company’s coronavirus vaccine won support from an FDA advisory panel. DBV Technologies ADRs (DBVT US) gain as much as 22% in US premarket trading after a trial for the biotech firm’s peanut allergy treatment met its primary endpoint. Sentiment remains fragile on concerns rising rates will spark a recession as corporate earnings are set to slide. Thursday the ECB is set to wind down trillions of euros of asset purchases in a prelude to a rate hike expected in July that will mark the end of eight years of negative interest rates. "Higher yields will inevitably resume the pressure on valuations,” said Roger Lee, head of UK equity strategy at Investec Bank. Inflation now exceeds 8% in the euro area, and is expected to stay above that level in the US when May data comes out on Friday, increasing pressure on central banks to stick to aggressive rate hikes. “Recent bouts of optimism can only be short-lived for now, as they were based on the wrong assumptions, that lower growth would push central bankers to ease their aggressive path,” Olivier Marciot, a portfolio manager at Unigestion SA, wrote in a report. Yet some argue that central banks will be forced back into dovish mode, among them hedge fund founder Ray Dalio. The billionaire said central banks across the globe will be required to cut interest rates in 2024 after a period of stagflation. On Friday, focus will turn to the US CPI reading for hints on the Fed's tightening path following the central bank’s outsized hike on May 4. The data is expected to show inflation picked up from a month ago, but slightly slowed from a year earlier. Complicating the task of policy makers trying to arrest runaway inflation without choking off growth, the war in Ukraine shows no signs of ending. That’s ignited higher food and energy prices across the world, despite the best efforts of central banks to use higher rates to cool economies. In Europe, the Stoxx 600 Index was down 0.4%, with shares of basic resources companies and financial sector stocks leading the drop,  while the region’s bonds fell as traders braced for a crucial European Central Bank meeting. Credit Suisse shares tumbled as much as 7.6% after the Swiss bank announced that it expects a loss in the 2Q. In addition, people familiar with the matter said that the lender is weighing a fresh round of job cuts. European mining stocks also underperformed the Stoxx 600 benchmark as copper declines, while iron ore fluctuates with investors weighing signs of demand recovery against caution that China may seek to stabilize commodity prices. The Stoxx Europe 600 Basic Resources sub-index slid 1.1% as of 9:45 a.m. in London after rising to the highest since April on Tuesday. Here are the most notable European movers: Prosus’s shares jump as much as 8.6% in Amsterdam trading after China approved its second batch of video games this year, with a total of 60 titles. Naspers, which holds a 29% stake in Tencent through Prosus, up as much as 9.8%. Inditex shares gain as much as 5.3% after the Zara owner reported 1Q results. Analysts were impressed by the sales beat, with Bryan Garnier calling the company a “safe-haven choice” in the retail sector. UK and European retail stocks rise after Inditex’s results helped boost sentiment, with the retail segment the biggest gainer in the Stoxx 600 Index. Asos gained as much as +3.9%, Boohoo +3.1%, JD Sports +2.5%. Voestalpine shares rise as much as 4.5% after the company reported strong results for the business year, even as its guidance for FY23 points at a lack of visibility for fiscal 2H, according to analysts. Haldex shares rise as much as 45% after SAF-Holland offers SEK66 in cash per share for the Swedish brake and air suspension products maker, representing a 46.5% premium to its closing price on Tuesday. Wizz Air shares fall as much as 8.6% after the company reported results that were in line with expectations but flagged an operating loss for the 1Q of fiscal year 2023. European mining stocks underperform the Stoxx 600 benchmark as copper declines, while iron ore fluctuates. Anglo American shares fell as much as 1.7%, Rio Tinto -1.8%, Glencore -1.7%, Antofagasta -3.3%. Orpea shares declined as much as 5.9% as the company said that French police investigators began an evidence-gathering raid on Wednesday at its headquarters. Asian stocks rose as Beijing’s move to approve a slew of new video games bolstered bets that the outlook is improving for the Chinese technology sector.  The MSCI Asia Pacific Index advanced as much as 1.1%, with Alibaba and Tencent providing the biggest boosts. Benchmarks in Hong Kong outperformed on the approvals news, while Japanese equities climbed as the yen continued to weaken. Stocks in India fell after the country’s central bank raised interest rates as expected while Thai shares inched up after the Bank of Thailand kept its benchmark rate unchanged.  China approved more games in a step toward normalization after a months-long freeze amid the government’s crackdowns on the tech sector. The news follows a report earlier this week that regulators are preparing to conclude an investigation of ride-hailing giant Didi. “We think the significant dangers have passed” in Chinese equities markets, said Eric Schiffer, chief executive officer at California-based private equity firm Patriarch Organization, which holds positions in Alibaba and JD. “The approval on the game titles signals that policymakers are following through on their intention to back off tech regulation and reverse the pain that caused investors to leave the sector."  Optimism toward a less-harsh regulatory environment and China’s post-Covid economic reopening has helped Hong Kong’s tech stocks outperform US peers recently. The Hang Seng Tech Index is up more than 17% the past month compared with little change in the Nasdaq 100. The rebound in Chinese equities also helped the MSCI Asia Pacific Index stage a bigger recovery than the S&P 500 in the same period. Japanese equities advanced for a fourth straight day, as the yen’s weakness provided support for the nation’s exporters.   The Topix rose 1.2% to 1,969.98 as of market close, while the Nikkei advanced 1% to 28,234.29. Toyota Motor Corp. contributed the most to the Topix gain, increasing 1.8%. Out of 2,170 shares in the index, 1,646 rose and 435 fell, while 89 were unchanged. Stocks in India declined as the Reserve Bank of India said it would withdraw pandemic-era accommodation to quell inflation after raising borrowing costs for a second straight month.  The S&P BSE Sensex dropped 0.4% to 54,893.84, as of 2:46 p.m. in Mumbai, while the NSE Nifty 50 Index fell 0.6%. Both gauges erased gains of as much as 0.8% reached during the central bank’s briefing and are heading for a fourth day of declines. Of 30 shares in the Sensex, 13 rose and 17 fell. Sustained high prices could unhinge inflationary expectations and trigger second-round effects, central bank Governor Shaktikanta Das said in an online briefing, emphasizing that preserving price stability is key to ensuring lasting economic growth. Reliance Industries was the biggest drag on the Sensex, while State Bank of India gave the biggest boost. All except two of BSE’s 19 sector sub-gauges declined, with telecom and energy groups the worst performers as realty and metals gained In FX, Yen weakness extends in European trade, with JPY hitting the weakest level since 2002 at 133.77/USD after BOJ’s Kuroda reiterated easing stance. The dollar strengthened against all its group-of-10 peers with the yen and Australian and New Zealand dollars as the worst performers. The euro fluctuated around the $1.07 handle while bunds and Italian bonds fell alongside Treasuries, paring some of Tuesday’s gains. Australian and New Zealand dollars both weakened amid greenback strength and falling US stock futures. Aussie further was weighed by local yields giving up Tuesday’s RBA-driven gains. In rates, Treasuries drifted lower, giving back a portion of Tuesday’s gains and following bigger losses for bunds, which underperformed ahead of Thursday’s ECB policy meeting.  Yields are cheaper by 2bp-3bp across the curve with front-end marginally outperforming, steepening 2s10s spread by ~1.5bp and building curve concession for the auction; bunds underperform by 1.5bp in 10-year sector.  Focal points of US session include 10-year auction, following soft results for Tuesday’s 3-year. $33b 10-year reopening at 1pm ET is second of this week’s three auctions; $19b 30-year reopening is ahead Thursday. WI 10-year yield ~3.015% is above auction stops since 2011 and ~7bp cheaper than May’s, which tailed by 1.4bp. JGBs little changed, with benchmark 10-year bonds trading again after no transactions on Tuesday. Peripheral spreads widen to Germany; Italy lags, widening ~3bps to core at the 10y points ahead of the ECB on Thursday. In commodities, WTI drifts 0.6% higher to trade at around $120. Most base metals are in the green; LME tin rises 2.8%, outperforming peers. Spot gold falls roughly $5 to trade at $1,848/oz. Looking at To the day ahead now, and it’s a fairly quiet one on the calendar, but data releases include German industrial production and Italian retail sales for April, as well as the UK construction PMI for May and the final reading of US wholesale inventories for April. Market Snapshot S&P 500 futures down 0.4% to 4,144.00 STOXX Europe 600 down 0.3% to 441.39 MXAP up 0.8% to 169.14 MXAPJ up 1.1% to 559.98 Nikkei up 1.0% to 28,234.29 Topix up 1.2% to 1,969.98 Hang Seng Index up 2.2% to 22,014.59 Shanghai Composite up 0.7% to 3,263.79 Sensex down 0.4% to 54,907.55 Australia S&P/ASX 200 up 0.4% to 7,121.10 Kospi little changed at 2,626.15 Brent Futures up 0.3% to $120.92/bbl Gold spot down 0.3% to $1,847.71 U.S. Dollar Index up 0.34% to 102.67 German 10Y yield little changed at 1.33% Euro down 0.2% to $1.0686 Top Overnight News from Bloomberg Boris Johnson plans to press ahead with legislation giving him the power to override parts of the Brexit deal, three people familiar with the matter said, a move likely to anger some of his MPs and the EU The yen’s historic weakness is spreading from the dollar into other currency crosses as the Bank of Japan’s policy isolation grows. Bloomberg’s Correlation-Weighted Currency Index for the yen -- a gauge of its relative strength against a broad basket of Group-of-10 peers -- slumped to a seven-year low Wednesday Japanese investors sold US Treasuries for the sixth consecutive month in April, underscoring waning appetite for the securities as the Federal Reserve sticks to its aggressive monetary tightening path Inflation in Hungary exceeded 10% for the first time in more than 20 years, putting pressure on the central bank to tighten monetary policy further and prop up the forint Australian inflation is likely to breach 6% and potentially could go “well above” that level and remain there for the rest of the year, Secretary to the Treasury Steven Kennedy said Wednesday Economists and investors criticized Australia’s central bank for confusing communications after it raised interest rates by twice as much as expected, having previously signaled a preference for quarter-point moves The RBI delivered a 50 basis-point rate hike as predicted by 17 of 41 economists in a Bloomberg survey A slew of China video game approvals is giving stock bulls renewed hope that a nascent rebound in tech shares could become a sustainable rally. The Hang Seng Tech Index jumped more than 4% Wednesday after the government approved 60 licenses A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly higher following the gains on Wall St and optimism of China easing its tech crackdown. ASX 200 recovered from the prior day’s RBA-induced selling with nearly all sectors in the green, although financials underperformed. Nikkei 225 extended further above the 28k level on currency weakness and with Q1 GDP data revised upwards to a narrower contraction. Hang Seng and Shanghai Comp. traded mixed with tech fuelling the gains in Hong Kong after China’s NPPA approved the publishing licences for 60 games this month, while sentiment in the mainland gradually soured despite support efforts as an official also warned that China's foreign trade stabilisation faces uncertainties and large pressure. Top Asian News China Vice Commerce Minister Wang said China's foreign trade stabilisation faces uncertainties and a large pressure from domestic and external factors. Furthermore, he sees global demand growth as low, while he added that China will accelerate export tax rebates and MOFCOM will assist foreign trade companies in securing orders, according to Reuters. Chinese Retail Passenger Car Sales (May) +30% M/M, according to PCA's Prelim data cited by Bloomberg. Japan's CDP has, as expected, submitted a no-confidence motion against the governing administration within the Lower House, motion will be put to a vote on June 9th, via Asahi; Asahi adds that the move is not expected to go anywhere European bourses have trimmed initial upside, Euro Stoxx 50 -0.2%, with macro newsflow limited and the initial strength primarily a continuation of APAC/Wall St. leads. In specifics, Credit Suisse (-5%) issued a Q2 profit warning for the group and its Investment Bank division while noted Retail name Inditex (+4%) provided a positive update. Stateside, futures are modestly pressured overall but well within overnight ranges ahead of a slim docket; ES -0.4%. DiDi (DIDI) is in advanced discussions to own a one-third stake of Sinomach Zhijun, a China state-backed EV maker, according to Reuters sources. Top European News Euro-Zone Economy Grew More Than Estimated at Start of Year Even the ECB’s Most Dire Forecast May Have Been Too Optimistic Euro Options Point to Most-Pivotal ECB Meeting Since 2019 Ireland Accuses Johnson of Acting in ‘Bad Faith’ on Brexit Deal Saudi Wealth Fund Makes Second $1 Billion Bet on Swedish Gaming Central banks RBI hiked the Repurchase Rate by 50bps to 4.90% (exp. 40bps hike) via unanimous decision and dropped mention of "staying accommodative", while RBI Governor Das noted that inflation has increased above upper tolerance levels and they remain focused on bringing down inflation. Das added they will control inflation without losing sight of growth and that further monetary policy measures are necessary to anchor inflation, as well as noted that upside risk to inflation had intensified and materialised sooner than expected. RBI Governor says they dropped the word "accommodative" from their stance, but they remain accommodative; liquidity withdrawal going forward will be calibrated and gradual. BoJ's Kuroda says rapid weakening of JPY as seen recently is undesirable; various macroeconomic models show that a weak JPY is positive. I It is important for FX to move stably, reflecting fundamentals. BoJ is expected to maintain its view that the domestic economy is picking up as a trend and will likely continue improving, according to Reuters sources. PBoC international department official Zhou said the PBoC will keep guiding financing costs lower, while the PBoC also announced that China will extend the trading hours of the interbank FX market, according to Reuters. FX Buck bounces as Yen rout continues after soft verbal intervention from BoJ Governor and Japanese Economy Minister; DXY back around 102.500 axis, USD.JPY climbs to circa 133.86 at one stage. More Lira depreciation on multiple negative factors including unconventional easing policy stance aimed at returning inflation to target, USD/TRY touches 17.1500. Aussie and Kiwi undermined by Greenback rebound and fade in general risk sentiment; AUD/USD loses 0.7200+ status again, NZD/USD sub-0.6450. Franc and Pound down, but Euro and Loonie resilient as former awaits ECB and latter leans on strong crude prices; USD/CHF just shy of 0.9790, Cable under 1.2550, EUR/USD probing 1.0700 and USD/CAD pivoting 1.2550. Forint and Zloty underpinned post-strong Hungarian CPI metrics and pre-NBP that is expected to hike 75bp; EUR/HUF & EUR/PLN around 389.60 and 4.5700 respectively. Fixed Income Bunds and Gilts pare some losses after testing round and half round number levels at 149.00 and 114.50 respectively, with added incentive after solid demand for 10 year German and UK supply. US Treasuries await 2032 issuance with caution given a lukewarm reception at 3 year auction. 10 year note just off base of 118-03/13 overnight range. Commodities WTI and Brent have been moving in-line with broader risk; however, following the UAE Minister the benchmarks have extended to the upside and post gains in excess of USD 1.50/bbl. US Energy Inventory Data (bbls): Crude +1.8mln (exp. -1.9mln), Cushing -1.8mln, Gasoline +1.8mln (exp. +1.1mln), Distillates +3.4mln (exp. +1.1mln) Brazilian government is considering measures to monitor fuel prices at distributors, according to Reuters sources. UAE Energy Minister says situation is not encouraging when it comes to the amounts of crude OPEC+ can bring to the market, via Reuters; Notes conformity with the OPEC+ deal is more than 200%, are risks when China is back, in talks with Germany and other nations to see if they are interested in UAE natgas. Spot gold is essentially unchanged, and continues to pivot its 10-DMA, while base metals are primarily tracking broader risk sentiment. US Event Calendar 07:00: June MBA Mortgage Applications -6.5%, prior -2.3% 10:00: April Wholesale Trade Sales MoM, prior 1.7% 10:00: April Wholesale Inventories MoM, est. 2.1%, prior 2.1% DB's Henry Allen concludes the overnight wrap A reminder that Jim’s annual default study was released yesterday. His view is that while nothing much will change for the remainder of 2022, we might be coming to the end of the ultra-low default world discussed in previous editions. First, there’ll likely be a cyclical US recession to address in 2023, and after that, a risk that various trends reverse that have made the last 20 years so subdued for defaults. See the report here for more details. It’s been another topsy-turvy session for markets over the last 24 hours as investors look forward to the big macro events later in the week, namely the ECB tomorrow and then the US CPI print the day after. Initially it had looked like we were set for another day of higher rates, not least after the hawkish surprise from the RBA we mentioned in yesterday’s edition as they hiked by a larger-than-expected 50bps. But more negative developments subsequently dampened the mood, including an unexpected contraction in German factory orders, and then an announcement by Target (-2.31%) that they were cutting their profit outlook for the second time in three weeks. But then sentiment turned once again later in the US session, with equities seeing a late rally that put the major indices back in positive territory for the day. Against that backdrop, equities swung between gains and losses, but the S&P 500 rallied to a broad-based gain after the European close, finishing the day +0.95% higher after being as much as -1% lower following the open, with only the consumer discretionary (-0.37%) sector finishing in the red after Target updated their guidance again to now expect Q2’s operating margin to be around 2% amid price reductions to reduce inventory. For the index as a whole, it was also the first back-to-back positive start the week since in a month, that’s also seen it recover all of last week’s declines. Energy (+3.14%) was the biggest outperformer in the S&P amidst a further rise in oil prices, with Brent Crude (+0.89%) moving back above the $120/bbl mark. However, Europe’s STOXX 600 (-0.28%) missed the late rally and eventually settled in negative territory. Whilst equities had a mixed session, sovereign bonds put in a more consistent performance ahead of tomorrow’s ECB decision, with decent gains posted on both sides of the Atlantic. Yields on 10yr Treasuries were down -6.6bps to 2.97%, moving back beneath 3% again, although this morning’s +2.8bps rise has taken them just back above that point to 3.001% at time of writing. Yesterday’s moves lower in yields were more pronounced at the long end of the curve, with the 2yr yield essentially flat as investors’ expectations of the near-term path of Fed rate hikes remained fairly steady. Indeed, the futures-implied rate by the December meeting was also down just -1.5bps to 2.84%. It was much the same story in Europe too of lower yields and flatter curves, as the amount of ECB tightening priced in for the rest of the year fell a modest -1.4bps from its high of 125bps the previous day. Yields on 10yr bunds (-2.9bps), OATs (-3.6bps) and gilts (-3.3bps) all fell back, and there was a noticeable decline in peripheral spreads thanks to even larger reductions in the Italian (-12.1bps) and Spanish (-7.4bps) 10yr yields. Interestingly, another trend over recent days that continued was the fall in European natural gas prices (-3.57%), which fell for a 5th consecutive session to hit its lowest level since Russia’s invasion of Ukraine, at €79.61/MWh. Those late gains for US equities have carried over into Asia overnight, with the Hang Seng (+1.70%) the Nikkei (+0.85%) both advancing strongly. The main exception to that has been in mainland China however, where the CSI 300 (-0.41%) and the Shanghai Composite (-0.70%) have just taken a tumble this morning. We’ve also seen that in US equity futures too, with those on the S&P 500 down -0.335 this morning. On the data side, the final estimate of Japan’s GDP for Q1 showed a smaller contraction than initially thought, with GDP only falling by an annualised -0.5%, which is half the -1% decline initially thought. However, the Japanese Yen has continued to weaken overnight, and is currently trading at a fresh 20-year low against the US Dollar of 133.13 per dollar. It’s also at a 7-year low against the Euro of 142.19 per euro. Here in the UK, Brexit could be back in the headlines shortly as it’s been reported by multiple outlets including Bloomberg that legislation will be introduced that would enable the UK government to override the Northern Ireland Protocol. That’s the part of the Brexit deal that avoids the need for a hard border between Northern Ireland and the Republic of Ireland, but has been a persistent source of tension between the two sides since the deal was signed, since it creates an economic border between Northern Ireland and Great Britain that Northern Irish unionists are opposed to. Irish PM Martin said yesterday that Europe would respond in a “calm and firm” way, and Bloomberg’s report suggested the draft bill could be presented to the House of Commons tomorrow. Looking at yesterday’s data releases, German factory orders for April unexpectedly saw a -2.7% contraction (vs. +0.4% expansion expected). That was the third consecutive monthly decline, and was driven by a -4.0% decline in foreign orders. On the other hand, the final PMIs from the UK for May were revised up relative to the flash readings, with the composite PMI at 53.1 (vs. flash 51.8), helping sterling to strengthen +0.48% against the US Dollar. Finally, the World Bank yesterday became the latest body to downgrade their global growth forecast, now projecting a +2.9% rise in GDP for 2022 compared to their 4.1% estimate put out in January, and openly warned about the risk of stagflation. To the day ahead now, and it’s a fairly quiet one on the calendar, but data releases include German industrial production and Italian retail sales for April, as well as the UK construction PMI for May and the final reading of US wholesale inventories for April. Tyler Durden Wed, 06/08/2022 - 08:09.....»»

Category: dealsSource: nytJun 8th, 2022

Futures Rise As Dip Buyers Emerge To Cap Best Week Since Mid-March

Futures Rise As Dip Buyers Emerge To Cap Best Week Since Mid-March Unless stocks crater today, and the S&P tumbles by 4.3%, the streak of seven consecutive weekly declines in the S&P is about to end... ... as US stock futures rose again on Friday, their third consecutive gain, setting up the underlying indexes for the first strong weekly finish since late March on signs consumers remain resilient despite inflationary pressures, as upbeat earnings from Alibaba and Baidu eased some fears on the economic impact of China’s Covid lockdowns, and as investors (mostly retail) have staged a cautious return to the market hoping that the selloff earlier this month left valuations at bargain levels. Nasdaq 100 contracts rose 0.5% by 7:15 a.m. in New York, while S&P 500 futures were up 0.4%. Still, even after the recent rout, upside may be limited as the S&P 500’s 12-month fwd P/E ratio is now near its 10-year average. Among notable moves in premarket trading, Gap Inc. shares sank as much as 17% as analysts after analysts said that the retailer’s guidance cut was worse than expected, prompting brokers to lower their targets and downgrade the stock given a worsening macroeconomic environment could trigger further bad news. China's Uber, Didi Chuxing, jumped after a Bloomberg News report that state-owned automaker China FAW Group is considering acquiring a significant stake in the ride-hailing company. Zscaler Inc. rose after the security software company reported results above expectations.  Here are some other notable premarket movers: Gap (GPS US) shares dropped as much as 17% in US premarket trading with analysts saying that the retailer’s guidance cut was more than expected, prompting brokers to lower their targets and downgrade the stock given a worsening macroeconomic environment could trigger further bad news. Costco (COST US) shares dropped 2.1% in US after-hours trading on Thursday. While Costco’s margins disappointed analysts, brokers were generally positive on how the wholesale retailer is navigating an environment with rising inflation by controlling expenses. Zscaler (ZS US) shares rose 2% in extended trading on Thursday, after the security software company reported third- quarter results that beat expectations and raised its full-year forecast. Analysts lauded strength in multi-product deals. Marvell Technology (MRVL US) shares climbed 3.4% in US postmarket trading after results. Analysts highlighted that the semiconductor maker is seeing strength across key markets, in particular across data center and carrier infrastructure. 23andMe Holding Co. (ME US) dropped 8.3% in postmarket trading Thursday. It is in a “tough spot,” Citi says in note after the consumer genetics firm gave a fiscal 2023 revenue forecast that missed expectations. Workday (WDAY US) shares fell 9% in extended trading on Thursday, after the software company reported adjusted first-quarter earnings that missed expectations. Analysts noted that software deals were pushed out of the quarter and cut their price targets as they factored in the increased global uncertainty. The latest round of retail earnings have restored some confidence in consumer demand, lifting appetite for risk assets, while speculation is growing that the Federal Reserve will pause its rate hikes later this year as inflation shows signs of peaking. Still, Citigroup strategists on Friday cut their recommendation on US stocks to neutral on the risk of a recession, joining an increasing number of banks in warning of a growth slowdown. The path for the Federal Reserve to successfully bring inflation down while keeping the rate of economic growth above zero is narrow, according to Mark Haefele, chief investment officer at UBS Global Wealth Management. “If Fed policymakers underestimate the strength of the US economy, we face an extended period of above-target inflation. If they overestimate it, we face a recession. And we can’t know with great conviction which path we’re on,” he wrote in a note. Global stock funds saw their biggest inflows in 10 weeks, led by US stocks, according to EPFR data, as cheaper valuations lured buyers after a steep selloff on recession fears. The selloff made valuations attractive and enticed investors back into a market still shadowed by worries about inflation and higher interest rates, China’s downbeat economic outlook and the war in Ukraine. “We may see a little bit more stability here because we have repriced the stocks so much already,” Anastasia Amoroso, iCapital chief investment strategist, said on Bloomberg Television. “In the next three to six months it’s still going to be a constrained market environment.” Meanwhile, China-US tensions are once again being played out after direct comments from Secretary of State Antony Blinken aimed at Chinese President Xi Jinping. And in a fresh challenge to Beijing, the US and Taiwan are planning to announce negotiations to deepen economic ties. And elseshwere, as the Russins war in Ukraine approaches 100 days, the US may announce a new package of aid for Kyiv as soon as next week that would include long-range rocket systems and other advanced weapons. Boris Johnson urged further military support for Ukraine, including sending it more offensive weapons such as Multiple Launch Rocket Systems that can strike targets from much further away. Russia’s efforts to avoid its first foreign default in a century are back in focus on Friday, when investors are supposed to receive about $100 million in interest on Russian debt. Turning back to markets, consumer and technology sectors led gains in Europe’s Stoxx 600 which rose 0.9%, and was headed for its best weekly advance since mid-March, while utilities and energy shared lagged after the UK government announced windfall tax plans on oil and gas companies on Thursday. BP Plc said it will look again at its plans in the country. Here are some of the more notable movers in Europe: Cantargia gains as much as 23%, the largest intraday rise since December, after releasing three research updates late Thursday. The interim readout for the company’s nadunolimab (CAN04), used in combination with gemcitabine and nab-paclitaxel as a first line treatment of PDAC, a type of pancreatic cancer, was the most interesting of the data releases, according Kempen. FirstGroup shares jump as much as 9.8%, extending the gains from yesterday’s confirmation that the public transport operator received an unsolicited takeover approach from I Squared. Richemont shares rise as much as 8.3%, heading for their best weekly advance since November, pushing the Swiss Market Index higher as dip buyers returned more broadly this week. European miners advance for a third day, outperforming all other sectors on the Stoxx 600 on Friday as iron ore futures climb and metals posted broad gains. Hapag-Lloyd falls as much as 7.1% after Citi cut the recommendation to neutral from buy due to valuation versus peers. In note on European shipping, broker says it expects the supply and demand dynamics to remain favorable in the near term. Rieter Holding falls as much as 5.4% as Baader Helvea downgrades its recommendation to reduce from add after the manufacturer of chemical fiber systems said that it’s seeing a challenging first half. Earlier in the session, Asian stocks also advanced as upbeat earnings from Alibaba and Baidu eased some fears on the economic impact of China’s Covid lockdowns and fueled risk-on sentiment. The MSCI Asia Pacific Index rose 1.6%, poised for its first gain in four sessions, led by consumer discretionary and technology shares. Most markets in the region were up, led by Hong Kong.  Alibaba and Baidu both delivered better-than-expected quarterly sales growth, providing investors with some relief after Tencent’s recent lackluster report and amid concerns over China’s virus measure and regulatory crackdowns. The Hang Seng Tech Index, which tracks the nation’s tech giants listed in Hong Kong, surged 3.8%. Asian equities have gained about 0.7% this week, set for a back-to-back weekly advance as dip buyers emerged. The regional MSCI benchmark is still down about 14% this year amid ongoing market concerns over global inflation and higher US interest rates, China’s economic outlook and the war in Ukraine. “The risk of a bull trap cannot be dismissed,” Vishnu Varathan, the head of economics and strategy at Mizuho Bank, wrote in a note. “Bear markets are famous for the pockets of relief rallies,” and increasing strains on liquidity in the coming quarters “may not pass without pain.” Japan’s stocks likewise advanced as the nation prepared to reopen to foreign tourists and China’s tech shares jumped.    The Topix rose 0.5% to 1,887.30 as of the 3pm close in Tokyo, while the Nikkei 225 advanced 0.7% to 26,781.68. Tokyo Electron Ltd. contributed the most to the Topix’s gain, increasing 3.2%. Out of 2,171 shares in the index, 1,480 rose and 615 fell, while 76 were unchanged In Australia, the S&P/ASX 200 index rose 1.1% to close at 7,182.70, the highest level since May 6, led by energy and consumer discretionary shares. Woodside Energy Group was among the biggest gainers as US crude and gasoline stockpiles showed signs of continuing decline ahead of the summer driving season. Appen was the top decliner after saying that Telus revoked its indicative proposal for a takeover. In New Zealand, the S&P/NZX 50 index fell 0.3% to 11,065.15 In FX, the Bloomberg Dollar Spot Index slumped as the dollar was steady to weaker against all of its Group-of-10 peers. Treasuries were steady across the curve. The euro inched up to touch a fresh one- month high of 1.0765 before paring. The bund yield curve bull- flattened slightly, drawing the 10-year yield away from 1%. Risk- sensitive Antipodean and Scandinavian currencies led gains. The Australian dollar climbed as a decent retail sales print brightened the outlook and a drop in the greenback triggered buy-stops. Benchmark bonds slipped. Australian retail sales rose 0.9% m/m in April vs estimate +1% and prior +1.6%. The pound ticked higher, touching its highest level in a month against the dollar, while gilts advanced. Chancellor of the Exchequer Rishi Sunak said that his package of support for the UK economy will have a “minimal” impact on inflation. The yen advanced for a second day as lower Treasury yields weighed on the dollar. Japanese bonds rise after being sold off on Thursday In rates, Treasuries were steady, following gains in European markets where bull-flattening was observed across bunds and gilts. Yields were richer by 1bp-3bp across the curve, the 10-year yield dropped by ~2bp to 2.72%, underperforming bunds by 1.5bp, gilts by ~3bp. IG dollar issuance slate still blank in what has so far been the slowest week of the year for new deals; next week’s calendar is expected to total $25b- $30b. Focal points for US session include several economic data releases including April personal income/spending with PCE deflator. Sifma recommended 2pm close of trading for dollar-denominated fixed income ahead of US holiday weekend.    In commodities, WTI drifts 0.7% higher to trade below $115. Spot gold rises roughly $7 to trade at $1,858/oz. Most base metals are in the green; LME nickel rises 6.6%, outperforming peers. Looking to the day ahead, and data releases include US personal income and personal spending for April, as well as the preliminary wholesale inventories for that month, and the final University of Michigan consumer sentiment index for May. In the Euro Area, there’s also the M3 money supply for April. Otherwise, central bank speakers include ECB Chief Economist Lane. Market Snapshot S&P 500 futures up 0.3% to 4,068.25 STOXX Europe 600 up 0.7% to 440.64 MXAP up 1.6% to 165.89 MXAPJ up 2.1% to 542.44 Nikkei up 0.7% to 26,781.68 Topix up 0.5% to 1,887.30 Hang Seng Index up 2.9% to 20,697.36 Shanghai Composite up 0.2% to 3,130.24 Sensex up 1.2% to 54,919.92 Australia S&P/ASX 200 up 1.1% to 7,182.71 Kospi up 1.0% to 2,638.05 German 10Y yield little changed at 0.99% Euro up 0.1% to $1.0737 Brent Futures up 0.4% to $117.91/bbl Gold spot up 0.5% to $1,859.48 U.S. Dollar Index down 0.16% to 101.67 Top Overnight News from Bloomberg The path for Russia to keep sidestepping its first foreign default in a century is turning more onerous as another coupon comes due on the warring nation’s debt. Investors are supposed to receive about $100 million of interest on Russian foreign debt in their accounts by Friday, payments President Vladimir Putin’s government says it has already made China’s oil trading giant Unipec has significantly increased the number of hired tankers to ship a key crude from eastern Russia A central bank legal proposal envisages Russian eurobond issuers placing “substitute” bonds in order to ensure debt payments come through to local investors, Interfax reported The US and Taiwan are planning to announce negotiations to deepen economic ties, people familiar with the matter said, in a fresh challenge to Beijing, which has cautioned Washington on its relationship with the island. Profits at Chinese industrial firms shrank last month for the first time in two years as Covid outbreaks and lockdowns disrupted factory production, transport logistics and sales “The process of increasing interest rates should be gradual,” ECB Governing Council member Pablo Hernandez de Cos comments in op- ed in Expansion. “The aim is to avoid abrupt movements, which could be particularly damaging in a context of high uncertainty such as the current one” The RBA is poised for its first review in a generation as new Treasurer Jim Chalmers makes good on a pledge to ensure the nation’s monetary and fiscal regimes are fit for purpose The UK signed its first trade agreement with a US state, amid warnings that Prime Minister Boris Johnson’s stance on Brexit is hindering progress on a broader deal with Joe Biden’s administration A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks took impetus from the risk-on mood on Wall St where all major indices were lifted amid month-end flows and encouraging retailer earnings.  ASX 200 was led higher by outperformance in the commodity and resources industries, while consumer stocks were mixed after Retail Sales printed in line with expectations, albeit at a slowdown from the prior month. Nikkei 225 traded positively but with upside capped by a mixed currency and weakness in energy and power names after increases in international prices and with the government looking to address the tight energy market. Hang Seng and Shanghai Comp were firmer with notable outperformance in Hong Kong amid a euphoric tech sector after earnings from Alibaba and Baidu topped estimates which also inspired the NASDAQ Golden Dragon China Index during the prior US session, while advances in the mainland were moderated by the contraction in April Industrial Profits and after Premier Li’s unpublished comments from Wednesday’s emergency meeting came to light in which he warned of dire consequences for the economy. Top Asian News China’s State Council will seek specific implementation rules by May 31st regarding necessary measures at all levels of government and will dispatch inspection teams to all 31 provinces, municipalities and autonomous regions to oversee the rollout amid an urgent need for national economic mobilisation, according to SGH Macro Advisors. US is seeking to hold economic discussions with Taiwan in the latest test with China, while supply chains and agriculture are said to be among the topics, according to Bloomberg. Furthermore, reports noted that bilateral economic talks will be announced in the upcoming weeks. Evergrande (3333 HK) is reportedly considering repaying offshore bondholders in instalments, according to Reuters sources; discussing giving the option of converting part of debt into equity of property management and EV units. China's Health Official says some areas along the Jilin border report local infections without a clear source, close attention should be paid to the risk of importing the virus; COVID infections show a trend of gradual spread from border to inland areas, via Reuters European bourses are firmer, Euro Stoxx 50 +0.9%, drawing impetus from APAC strength into month-end with catalysts thin thus far. Stateside, futures are supported across the board with familiar themes in play pre-PCE Price Index for insight into the 'peak' inflation narrative; ES +0.3%. Note, the FTSE 100 Unch. is the mornings underperformer amid pressure in energy names after Chancellor Sunak's windfall tax announcement on Thursday. DiDi (DIDI) has reportedly drawn interest from FAW Group, regarding a stake purchase, according to Bloomberg. +7.5% in the pre-market Top European News UK Oil Windfall Tax Prompts BP to Review Investment Plans; UK Energy Stocks Extend Windfall Declines as Retailers Gain Richemont Leads Swiss Stocks Higher as Dip Buyers Return Hapag-Lloyd Drops; Cut to Neutral at Citi on Valuation Big Dividend Payers May Be Next After UK Windfall Tax on Energy FX Greenback grinds higher ahead of PCE inflation metrics with month end rebalancing flows providing impetus, DXY bounces from fresh WTD base just under 101.500 to 101.800. Kiwi and Aussie propped by bounce in commodities and Loonie protected by further gains in crude; NZD/USD tests Fib retracement at 0.7129, AUD/USD eyes 0.7150 and USD/CAD probes 1.2750. Big option expiries in the mix and potentially supportive for the Dollar into long US holiday weekend, +1bln rolling off at NY cut not far from spot in EUR/USD, USD/JPY, AUD/USD and USD/CAD. Rand firmer as Gold touches Usd 1860/oz after 200 DMA breach, USD/ZAR below 15.7000. Fixed Income Debt futures on a firmer footing ahead of US PCE price metrics, but some way below weekly peaks. Bunds sub-154.00, Gilts under 119.00 and 10 year T-note below 121-00. Curves a tad flatter following hot reception for 7 year US issuance. Commodities Crude benchmarks are underpinned, but off best levels, by broader sentiment and initial USD weakness going into a long US weekend with Memorial Day touted as the driving seasons commencement. WTI July and Brent August, at best, were in proximity to USD 115/bbl vs troughs of USD 113.61/bbl and USD 113.77/bbl respectively. US Treasury is reportedly expected to renew Chevron’s (CVX) license to operate in Venezuela as soon as Friday, according to Reuters citing sources. China's State Planner has approved a coal mine in the Shanxi area to bolster annual output to 12mln tonnes per annum from 8mln; investment of CNY 5.35bln, via Reuters. Spot gold is steady and holding onto the bulk of overnight upside after breaching the 21-DMA at USD 1850.80/oz; USD 1860.19/oz peak, thus far. US Event Calendar 08:30: April Advance Goods Trade Balance, est. -$114.8b, prior -$125.3b, revised -$127.1b 08:30: April Retail Inventories MoM, est. 2.0%, prior 2.0% April Wholesale Inventories MoM, est. 2.0%, prior 2.3% 08:30: April Personal Income, est. 0.5%, prior 0.5%; April Personal Spending, est. 0.8%, prior 1.1% 08:30: April PCE Deflator MoM, est. 0.2%, prior 0.9%; PCE Deflator YoY, est. 6.2%, prior 6.6% April PCE Core Deflator MoM, est. 0.3%, prior 0.3%; PCE Core Deflator YoY, est. 4.9%, prior 5.2% April Real Personal Spending, est. 0.7%, prior 0.2% 10:00: May U. of Mich. Current Conditions, est. 63.6, prior 63.6; Expectations, est. 56.3, prior 56.3; Sentiment, est. 59.1, prior 59.1 10:00: May U. of Mich. 1 Yr Inflation, est. 5.4%, prior 5.4%; 5-10 Yr Inflation, prior 3.0% DB's Jim Reid concludes the overnight wrap A reminder that it’s your last chance to answer our latest monthly survey, where we try to ask questions that aren’t easy to derive from market pricing. This time we ask if you think the Fed would be willing to push the economy into recession in order to get inflation back to target. We also ask whether you think there are still bubbles in markets and whether equities have bottomed out yet. And there’s another on which is the best asset class to hedge against inflation. The more people that fill it in the more useful so all help from readers is very welcome. The link is here. I did have tickets available for tomorrow night's Champions League final but there is a big 36 hole golf tournament at my club so I decided that at my age you never know when your body will fail next so playing sport now pips watching it live. So I'll be playing golf all day, trying to rescue my marriage for an hour when I get home, and then blaring out the final on the TV at home with a couple of glasses of wine for good measure. I can't honestly think of a better day. However I may come last and Liverpool may lose so let's see what happens! The market comeback this week is on a par with some of Madrid's remarkable ones this year and indeed it’s been another strong performance over the last 24 hours, with better-than-expected outlooks from US retailers helping to bolster sentiment, coupled with growing hopes that the Fed won’t take policy much into restrictive territory, if at all. Those developments helped the S&P 500 to post a +1.99% advance yesterday, bringing its gains for the week to +4.01%, and means we should finally be on the verge of ending a run of 7 consecutive weekly losses. Obviously it’s not impossible things could end up in negative territory given recent volatility, and it was only last week the index posted a one-day decline of more than -4%, but it would still take a massive slump today to get an 8th consecutive week in the red for only the third time since the Great Depression. That advance grew stronger as the day went on, with S&P futures having actually been negative when we went to press yesterday. But sentiment was aided by a number of positive earnings developments, with Macy’s (+19.31%) boosting its adjusted EPS guidance before the US open, whilst the discount retailers Dollar Tree (+21.87%) and Dollar General (+13.72%) both surged as well thanks to decent reports of their own. That helped consumer discretionary (+4.78%) to be the top performing sector in the S&P, and in fact Dollar Tree was the top performing company in the entire index. Cyclicals were the outperformers, but defensives also shared in the advance that saw around 90% of the index’s members move higher on the day. As well as that news on the retail side, risk appetite has been further supported by growing speculation that the Fed won’t be as aggressive in hiking rates as had been speculated just a few weeks ago. I'm not sure I agree with that conclusion but if you look at the futures-implied rate by the December 2022 meeting of 2.64%, that is some way down from its peak of 2.88% back on May 3rd, and in fact means that markets have now taken out just shy of one 25bp hike from the rate implied by year end, which makes a change from that pretty consistent move higher we’ve seen over recent months. Yesterday also brought fresh signs that this re-pricing is beginning to filter its way through to the real economy, with data from Freddie Mac showing that the average rate for a 30-year mortgage fell to 5.10% last week, down from 5.25% the week before. For reference that’s the biggest weekly decline since April 2020, and comes on the back of recent housing data that’s underwhelmed against the backdrop of higher rates. There was another report fitting that pattern yesterday too, with pending home sales for April dropping by a larger than expected -3.9% (vs. -2.1% expected). But as with the retail outlooks, the more timely data was much more positive, with the weekly initial jobless claims falling to 210k (vs. 215k expected) in the week ending May 21, whilst the Kansas City Fed’s manufacturing index for May came in at 23 (vs. 15 expected). Treasuries swung back and forth against this backdrop, but ultimately the more bullish outlook led to a small steepening in the curve, with the 2yr yield down -1.6bps as 10yr yields were essentially flat at 2.75%. In a change from recent weeks, breakevens marched higher despite the little changed headline, with the 10yr breakeven up +7.0bps to come off its two-month low the previous day. But to be fair, that came amidst a big surge in oil prices after US data showed gasoline stockpiles fell to their lowest seasonal level since 2014, with Brent Crude (+2.96%) up to a 2-month high of $117.40/bbl, whilst WTI (+3.41%) rose to $114.09/bbl. European markets followed a pretty similar pattern to the US, with the STOXX 600 advancing +0.78% on the day. However, utilities (-1.12%) were the worst-performing after the UK government moved to impose a temporary windfall tax on oil and gas firms’ profits at a rate of 25%. That came as part of a wider package of measures to help with the cost of living, adding up to £15bn in total. They included a one-off payment of £650 to 8mn households in receipt of state benefits, with separate payments of £300 to pensioner households and £150 to those receiving disability benefits. There was also a doubling in the energy bills discount from £200 to £400, whilst the requirement to pay it back over five years has been removed as well. See Sanjay Raja’s blog on it here and where he also compares the measures to similar ones seen in the big 4 EuroArea economies. With more fiscal spending in the pipeline, UK gilts underperformed their counterparts elsewhere in Europe, with 10yr yields ending the day up +5.9bps. Those on bunds (+4.6bps) and OATs (+3.2bps) also rose too, but the broader risk-on tone led to a tightening in peripheral spreads, with the gap between 10yr BTPs over bunds falling -10.4bps yesterday to 189bps. There was a similar pattern on the credit side, with iTraxx crossover coming down -23.9bps to 439bps, which was its biggest daily decline in nearly 2 months. Asian equity markets are joining in the rally this morning with the Hang Seng rising +2.93% as Chinese listed tech stocks are witnessing big gains after Alibaba (+12.21%) posted better than expected Q4 earnings yesterday. Mainland Chinese stocks are also trading higher with the Shanghai Composite (+0.52%) and CSI (+0.63%) up. Elsewhere, the Nikkei (+0.63%) and Kospi (+0.89%) are also in the green. Outside of Asia, futures contracts on the S&P 500 (-0.11%) and NASDAQ 100 (-0.14%) are seeing mild losses. Data released earlier showed that Tokyo’s core CPI rose +1.9% y/y in May versus +2.0% expected. Core core was +0.9% y/y as expected with nothing here at the moment to change the BoJ's stance. Elsewhere, China’s industrial profits (-8.5% y/y) shrank at the fastest pace in two years in April, swinging from a +12.2% gain in March. On the geopolitical front, we heard from US Secretary of State Blinken yesterday, who gave a significant speech on the Biden Administration’s China policy. Blinken zoomed out to give a view of the forest from the trees, noting that the Russia-Ukraine conflict was not as strategically important as America’s relationship with China over the long-run. He offered a three pillar strategy for managing the relationship with China that involved investing in US competitiveness, aligning strategy with allies to enhance effectiveness, and to compete with China across economic, military, and technological frontiers. He noted the countries’ two different political systems need not impair connection between its peoples, or inhibit dialogue. Staying on the US-China front but switching gears, a bi-partisan group of US senators sent a letter to President Biden urging him to keep tariffs on China, to improve the US’s negotiating position in future deals, pouring cold water on the prospects for tariff relief to provide a temporary salve to raging price pressures. To the day ahead, and data releases include US personal income and personal spending for April, as well as the preliminary wholesale inventories for that month, and the final University of Michigan consumer sentiment index for May. In the Euro Area, there’s also the M3 money supply for April. Otherwise, central bank speakers include ECB Chief Economist Lane.   Tyler Durden Fri, 05/27/2022 - 07:54.....»»

Category: blogSource: zerohedgeMay 27th, 2022

Futures Slide Ahead Of Payrolls And Six Fed Speakers

Futures Slide Ahead Of Payrolls And Six Fed Speakers The market crash will continue until Biden's approval rating improves. US futures extended their slide on Friday, signaling continuation of a drop in tech stocks following the Nasdaq 100’s biggest selloff since September 2020, ahead of today's jobs report (which bulls pray comes in at around minus 1 million to put a premature end to Powell's market-crashing tightening) and ahead of no less than six Fed speakers, as investors grappled with fears of a stagflationary recession against tightening monetary policy. Nasdaq 100 futures were 0.9% lower and S&P 500 futures traded at session lows, down 0.7% as of 7:30 a.m. EDT as panicked traders sell first and don't even bother to ask questions. Ten-year U.S. Treasury yield continued to climb, trading at 3.1%, near the highest since November 2018. The dollar continued its relentless ascent, while cryptos continued to tumble. Perhaps even more concerning to traders than the jobs report is that six Fed speakers are lined up including Williams, Kashkari, Bostic, Bullard, Waller and Daly. Stocks plunged on Thursday, completely erasing their gains from the prior session amid a broad-based selloff in risk assets. The S&P 500 Index sank 3.6% on Thursday, while the tech-heavy Nasdaq 100 Index plunged 5.1%, its biggest decline since September 2020.  Still, some investors say that concerns may be overblown. “Looking back at just the past two days, it’s not really all that dramatic,” said Mattias Isakson, head of strategy and allocation at Swedbank, adding that indexes were roughly back to where they were compared to before the Fed press conference. “The overall market outlook hasn’t changed at all: interest rates and inflation worries will continue to create volatility in the short term,” Isakson said. On Friday, shares of US-listed Chinese firms extended losses in premarket trading amid growing concerns about the country’s economic growth prospects and continued weakness in tech shares. Peloton shares dropped premarket after the company was said to be considering selling a stake of around 20%. Meanwhile, DoorDash jumped after earnings and Tesla gained after planning to boost car production at its Shanghai plant. Here are some more details on the biggest premarket movers today: Tesla (TSLA US) shares gain as much as 1.1% in U.S. premarket trading, leaving them set to bounce back following Thursday’s losses, after the electric-vehicle maker was said to be making plans to boost car production at its Shanghai plant as soon as mid-May. Shares of U.S.-listed Chinese firms extend losses in premarket trading amid growing concerns about the country’s economic growth prospects and continued weakness in tech shares. Alibaba (BABA US) -1.9%, Baidu (BIDU US) -2.4%, JD.com (JD US) -2%. Peloton (PTON US) shares fall as much as 1.7% in U.S. premarket trading after the maker of indoor exercise bikes was said to be considering selling a stake of around 20% as part of a turnaround. Cloudflare (NET US) shares drop 9.3% in U.S. premarket despite a boosted full-year revenue guidance; analysts say the outlook implies a significant deceleration for lead metrics. At least 3 analysts cut their price targets on the stock. Digital Brands Group (DBGI US) shares decline 50% in U.S. premarket trading after pricing an offering of 37.4m shares at $0.25 apiece, representing a discount of ~50% to Thursday’s close. DoorDash (DASH US) shares jump as much as 6.9% in U.S. premarket trading, with analysts positive on the food-delivery firm’s first-quarter update given tough pandemic comparisons and a difficult macroeconomic environment, though some trimmed price targets amid higher investments. Block Inc. (SQ US) shares rise 7% after 1Q results, with analysts upbeat on demand for the company’s Square and Cash App payment services as the fintech company displays resilience amid a challenging market. Live Nation (LYV US) shares gained 4% in postmarket trading. Its leading indicators like ticket sales, show counts and committed sponsorships remain robust, according to Guggenheim analyst Curry Baker. Opendoor (OPEN US) jumps as much as 16% in U.S. premarket trading after the real estate platform provider forecast revenue for the second quarter that beat the average analyst estimate. Zillow (ZG US) shares decline 6.7% in U.S. premarket trading after underwhelming guidance disappoints analysts, who believe that rising mortgage rates will cool the U.S. housing market. At least 3 analysts cut their price targets with one saying he doubts the real-estate technology firm’s ability to achieve its 2025 targets. According to BofA, the global market selloff has further to run, as every asset class saw outflows in the week prior to the Federal Reserve’s meeting this week, with real estate posting its biggest outflow on record - $2.2 billion - and investors piling into safe havens like Treasuries although one wouldn't know it judging by where yields are trading. “The Fed is attempting to land a B52 bomber on a piece of string and most risk markets still have their fingers in their ears and their hands over their eyes,” said James Athey, a London-based investment director at abrdn. “Hope is not a strategy.” The next key event for markets is Friday’s U.S. jobs report (full preview here), which will be closely watched for signs that rising wage costs are adding to the inflationary pressures rattling investors. Estimates by economists are looking for payrolls to expand by 380,000 in April, and the unemployment rate to fall to 3.5%, although whisper numbers are lower. A print higher than 500,000 in non-farm payrolls will provoke U.S. dollar buying as equities and bonds sell-off, while less than 300,000 should see the reverse, says Jeffrey Halley at OANDA. “A sharp divergence, up or down, from the median forecast, should produce a very binary outcome,” he says. “It’s that sort of market.” “Any upward pressure on the average hourly earnings could lead to another spike of U.S. yields and therefore add negative pressure on equities and especially tech stocks,” said Christophe Barraud, chief economist at Market Securities LLP in Paris. In Europe, the Stoxx 600 Index followed the Wall Street rout and was set for its worst weekly drop in two months, with consumer, retail and travel and leisure among the biggest decliners. FTSE MIB posts the smallest decline. Retailers, consumer products and media are the worst performing sectors. Traders will be watching job data, while Cigna, Dish, NRG Energy and Under Armour are among companies reporting earnings. Here are the biggest European movers today: Grifols rose as much as 9.3%, to the highest since November, after the Spanish maker of pharmaceutical products derived from blood plasma gave a business update that Citi said supports its buy rating on the stock. Leonardo rose as much as 4.4% after reporting earnings. Deutsche Bank said 1Q numbers were solid, while Intesa Sanpaolo said the company delivered “a sound start” to 2022. S4 Capital shares gained as much as 9.9% after the digital advertising agency released delayed FY results that showed limited audit adjustments. Revenue was ahead of analyst expectations. SKF shares advanced, breaking a seven-session declining streak, after Danske Bank upgraded the shares to buy, saying they “could generate good return in the coming 3-12 months.” Krones shares surged as much as 11%, the most since October 2019, after the machinery company reported 1Q Ebitda that beat estimate, with analysts noting scope for upgrades. Ambu shares dropped as much as 17% after the Danish health care equipment firm cut its outlook. Handelsbanken says the new guidance may lead to a 30% drop in FY Ebit estimates. Adidas shares fell more than 6% after the German sportswear maker cut its margin outlook for the year. Analysts noted the impact of lockdowns in China. Peer Puma also fell. IAG fell as much as 12%, the most intraday since November. The British Airways parent posted a 1Q operating loss that Citi analysts said was worse than consensus and their own expectations. JCDecaux shares slumped as much as 12% after its 2Q organic revenue growth target of more than 15% fell short of analyst expectations amid lockdowns in China. Earlier in the session, Asian stocks were on track for five straight days of losses, as traders questioned whether the Federal Reserve’s interest rate hike was enough to tackle inflation and Chinese leaders warned against doubting their Covid-Zero stance. The MSCI Asia Pacific Index declined by as much as 1.8%, poised for its longest losing streak since January and lowest closing level since July 2020. The broad-based selloff followed steep declines in U.S. shares overnight, with benchmarks in Australia, Taiwan and Vietnam each declining more than 1.7%. “Volatility comes from doubts whether the 50 basis-point hike can be enough to curb inflation,” said Lee Han-Young, chief fund manager at DS Asset Management, a Seoul-based hedge fund.  For market volatility to ease, CPI or other inflation-related data needs to peak or slow down, he said. “Before that, volatility seems inevitable.” Stock indexes in Hong Kong and mainland China were the worst performers in the region after the Politburo’s supreme Standing Committee reaffirmed its support for a lockdown-dependent approach on Thursday. Still, declines in Asia were less than the rout in U.S. shares, with generally smaller-sized market reactions to the Fed’s policy statement Wednesday. China’s economic slowdown and regulation of its tech industry are also playing on investors’ minds, with the Hang Seng Tech Index sliding amid a lack of concrete steps to support the industry.  Overall, tech and financial stocks were among the biggest drags on the MSCI Asia Pacific Index. The measure is on track to fall about 2.6% this week, the largest weekly slide since mid-March. Bucking the regional trend, Japanese equities rose after a three-day holiday. India’s benchmark stocks index registered its worst weekly decline in more than five months as growing concerns over higher borrowing costs to curb inflation dented risk sentiment.  The S&P BSE Sensex declined 1.6% to 54,835.58 in Mumbai on Friday, taking its loss this week to 3.9%, the biggest five-day drop since the period ended Nov. 26. The NSE Nifty 50 Index slipped 1.6% to 16,411.25.  HDFC Bank Ltd. fell 2.6% and was the biggest drag on the Sensex, which had 24 of the 30 member stocks trading lower. All but two of 19 sectoral sub-indexes compiled by BSE Ltd. fell, led by a gauge of realty companies.  The Reserve Bank of India raised its policy rate by 40 basis points in an out-of-cycle move this week after keeping it at a record-low level of 4% for the past two years.  “This suggests that the scales of growth versus inflation is tilted towards inflation and can be leading indicator of further rate hikes in FY23,” Shibani Kurian, head of equity research at Kotak Mahindra Asset Management Co. wrote in a note. She expects market participants to focus on earnings and commentary on demand and margins from companies.  The U.S. Federal Reserve and Bank of England also raised rates to tackle rising inflation.     In earnings, of the 24 Nifty 50 firms that have announced results so far, 17 either met or exceeded analysts’ estimates, while seven missed forecasts. Reliance Industries Ltd., the nation’s largest company, is scheduled to announce its results Friday.  In rates, Treasuries extended Thursday’s bear-steepening move, with yields cheaper by 2bp to 4bp across the curve, amid bigger losses for German bonds after ECB’s Villeroy said above-zero rates are “reasonable” by year-end, and that there are signs inflation expectations are less anchored. US 10-year yields around 3.09%, cheaper by ~3bp on the day with 2s10s steeper by ~2.5bp; front-end yields outperform, higher by ~2bp at around 2.72%. Dollar issuance slate empty so far and expected to be muted because of jobs report; four names priced $7.6b Thursday taking weekly total above $16b, shy of $20b-$25b expected range. Peripheral spreads eventually tighten slightly to core after 10y BTP/Bund briefly widening through 200bps In FX, a gauge of the dollar’s strength was little changed as traders awaited a U.S. jobs report on Friday. Bloomberg Dollar Spot Index gained 0.2% as traders awaited the U.S. jobs report due on Friday. Ten-year Treasury yields rose 2 basis points to 3.05%. The yen underperformed most G-10 currencies as Japan’s markets reopened following a three-day holiday. Leveraged funds initiated long dollar-yen positions heading into U.S. payrolls data, according to an Asia-based FX trader Long gamma exposure in the major currencies meets a fresh round of demand following the Bank of England’s policy decision, which is contributing to continued erratic moves in the options space into the U.S. report. Real money and hedge funds both net USD buyers, according to three Europe-based traders, with demand for USD calls in the likes of EUR, AUD and MXN. In commodities, WTI trades within Thursday’s range, adding 1.6% to trade near $110. Spot gold rises roughly $5 to trade above $1,880/oz. Most base metals trade in the red. Bitcoin continues to slide, and was last trading below $36,000, after cracking to key support levels yesterday. Looking at the day ahead now, the main highlight will be the aforementioned US jobs report for April. Other data releases include German industrial production and Italian retail sales for March. From central banks, we’ll hear from the ECB’s Villeroy, Nagel, Elderson and Rehn, the Fed’s Williams, Kashkari and Bostic, and the BoE’s Pill and Tenreyro. Market Snapshot S&P 500 futures little changed at 4,140.00 STOXX Europe 600 down 0.9% to 434.26 MXAP down 1.6% to 164.46 MXAPJ down 2.7% to 538.32 Nikkei up 0.7% to 27,003.56 Topix up 0.9% to 1,915.91 Hang Seng Index down 3.8% to 20,001.96 Shanghai Composite down 2.2% to 3,001.56 Sensex down 1.4% to 54,941.03 Australia S&P/ASX 200 down 2.2% to 7,205.64 Kospi down 1.2% to 2,644.51 German 10Y yield little changed at 1.07% Euro up 0.3% to $1.0570 Brent Futures up 1.3% to $112.39/bbl Gold spot up 0.1% to $1,879.09 U.S. Dollar Index down 0.31% to 103.43 Top Overnight News from Bloomberg European Central Bank Governing Council member Francois Villeroy de Galhau said interest rates may be raised back above zero this year if the euro-zone economy doesn’t suffer another setback. The European Union has proposed a revision to its Russia oil sanctions ban that would give Hungary and Slovakia an extra year, until the end of 2024, to comply, according to people familiar with the matter. China has ordered central government agencies and state-backed corporations to replace foreign- branded personal computers with domestic alternatives within two years, marking one of Beijing’s most aggressive efforts so far to eradicate key overseas technology from within its most sensitive organs. Germany is ready to support eastern European nations in their efforts to wean themselves off Russian energy to secure broader support for sanctions targeting the country’s oil and gas sector, Chancellor Olaf Scholz said Thursday The cost of living in Tokyo rose at the fastest pace in almost three decades in April, as the impact of soaring energy prices became clearer, an outcome that complicates the Bank of Japan’s messaging on inflation and the need for continued stimulus China’s top leaders warned against questioning Xi Jinping’s Covid Zero strategy, as pressure builds to relax virus curbs and protect the economic growth that has long been a source of Communist Party strength An escalating selloff in long-end Treasuries pushed yields to fresh multi-year highs Thursday, with the benchmark 10-year rate closing above 3% for the first time since 2018 as concern over inflation rattled the bond market Having plunged by the most on record in offshore trade last month, China’s yuan is now facing the threat of selling pressure from the nation’s companies The Federal Reserve will need to raise short-term interest rates to at least 3.5% to bring surging inflation under control, former Vice Chairman Richard Clarida said South Korea needs to act preemptively on risk factors while monitoring situations in the economy and markets, as there are concerns local financial and FX markets will react sensitively according to various factors, Vice Finance Minister Lee Eog-weon says A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly lower amid spillover selling from the sharp declines on Wall Street. ASX 200 was heavily pressured in which the losses in tech led the broad declines across all sectors. Nikkei 225 initially declined on return from the Golden Week holidays but then pared all its losses as currency weakness persisted with Japan also planning to introduce tax incentives, as well as ease border measures in June. Hang Seng and Shanghai Comp conformed to the downbeat mood with tech and property names dragging the Hong Kong benchmark lower, while China also remained steadfast in its "dynamic COVID clearance" policy. Top Asian News Adidas Shares Drop Amid ‘Dialed-Down’ Outlook: Street Wrap JAL Sees Return to Profit as Japan Moves to Reopen Borders Food Prices Hold Near Record as Ukraine War Upends Global Trade Nine in 10 Central Banks Exploring Own Digital Money, BIS Says European bourses are subdued across the board, Euro Stoxx 50 -1.1%, reacting to the late-doors pressure in Wall Street. Currently, US futures are modestly softer but relatively tentative overall going into the NFP release and subsequent Fed speak. US regulatory officials have arrived in China for "late-stage" audit deal talks, according to Reuters sources. China's auto sales in April are estimated to have plunged 48.1% y-o-y to 1.17 million units, data from CAAM revealed. The recent Omicron outbreak has disrupted the auto sector, in particular in the Yangtze River Delta region, according to Global Times. Top European News EU Plan to Ban Russian Oil Means Windfall for Hungarian Refiner BNP Paribas Offers Up to EU400m Non-Dilutive Convertible Bonds ECB’s Villeroy Says Above-Zero Rates ‘Reasonable’ This Year Sorrell Pledges Changes After S4’s ‘Embarassing’ Results Lag In FX ECB officials ramp up hawkish rhetoric to boost Euro; EUR/USD makes round trip to high 1.0580 area from sub-1.0500. Pound continues to flounder as UK election results spell trouble for already under pressure PM Johnson and Tory Party, Cable under 1.2300 at one stage and EUR/GBP cross over 0.8550. Buck reverses all and more post-Fed losses pre-payrolls before Euro rebound knocks DXY back below 104.000, index down to new 103.340 low vs 104.070 peak. Aussie slumps despite hawkish RBA SOMP, Yen weak regardless of firmer than forecast Tokyo inflation data and return of Japanese markets from Golden Week; AUD/USD under 0.7100 and USD/JPY over 130.00. Loonie cushioned by strong crude prices ahead of Canadian LFS, USD/CAD within 1.2814-67 range and close to 1.29bln option expiries between 1.2835-40. Swedish Krona rangy after Riksbank minutes highlighting divergent views; EUR/SEK straddling 10.5000. Fixed Income EZ debt downed by latest hawkish ECB guidance, Bunds below 152.00 and periphery underperforming. Gilts hold up better on the 118-00 handle awaiting BoE commentary after super Thursday. US Treasuries dragged down by Eurozone bonds to an extent, as 10 year T-note pivots 118-00 ahead of NFP. Commodities WTI and Brent are bid in an exacerbation of APAC price action although, specific bullish-drivers have been somewhat sparse. Much of the focus has been on the potential EU Russian oil import embargo, particularly Hungary's ongoing opposition and the EU's attempts to appease them. Brazilian President Bolsonaro said a fresh hike in fuel prices by Petrobras could bankrupt Brazil and urged Petrobras not to increase fuel prices again, according to Reuters. PetroChina (0857 HK) says they have no plans to buy discounted Russian oil or gas, according to an executive. China is to sell 341k tonnes of imported soybeans from state reserve on May 13, according to the trade centre. Spot gold is bid but has failed to derive much traction above the 100- and 10-DMAs at USD 1883.08/oz and USD 1885.1/oz respectively. Central Banks ECB's Villeroy says too weak EUR would go against ECB inflation target; inflation is not only higher but broader; core inflation is firmly above target. Case for APP beyond June is not obvious. Adds, it is possible to raise rates into positive territory (i.e. above zero) by year-end. ECB's Nagel says current inflation too high, confident it can get back to 2% target in the medium-term; adds, window to act is closing. Is optimistic re. a 2022 move. Does not buy the argument that policy should hold back because of the economy right now, via FAZ. ECB's Holzmann said the ECB is planning to raise rates which they will discuss and probably do at the June meeting, while he added that rates will rise this year, by how much and when, will be discussed intensively in June, according to Reuters. ECB's Vasle says appropriate timing to start ECB hikes is "before summer"; inflation is becoming broad-based, cannot claim that monetary policy cannot curb inflation. BoE's Pill: says the BoE does not have a forex target or objective; when questioned on what would cause them to pause (re. hikes), says more evidence of factors becoming more consistent with target(s). If we don't see this, will have to act further. Market Snapshot 08:30: April Change in Nonfarm Payrolls, est. 380,000, prior 431,000 April Change in Private Payrolls, est. 378,000, prior 426,000 April Change in Manufact. Payrolls, est. 35,000, prior 38,000 April Unemployment Rate, est. 3.5%, prior 3.6% April Underemployment Rate, prior 6.9% April Labor Force Participation Rate, est. 62.5%, prior 62.4% April Average Hourly Earnings YoY, est. 5.5%, prior 5.6% April Average Weekly Hours All Emplo, est. 34.7, prior 34.6 April Average Hourly Earnings MoM, est. 0.4%, prior 0.4% 15:00: March Consumer Credit, est. $25b, prior $41.8b Fed Speakers 09:15: Fed’s Williams Gives Opening Remarks 11:00: Fed’s Kashkari Takes Part in Moderated Discussion 15:00: Fed’s Bostic Gives Commencement Address at Georgia Tech 19:15: Fed’s Bullard and Waller Speak on Hoover Institute Panel 20:00: Fed’s Daly Gives Commencement Speech DB's Jim Reid concludes the overnight wrap What’s dangerous about yesterday’s huge market slump is that there must be an element of doubting the ability of there to be an effective "Fed Put" in this cycle following a 30-40 year period where the central bank has almost always been able to come to the market's rescue. As we know, Wednesday saw a strong post-FOMC rally (S&P 500 +2.99%) on a belief that the Fed would be relatively measured in their tightening cycle after Chair Powell pushed back against 75bp hikes. However in a remarkable turnaround yesterday (S&P 500 -3.56%) the only conclusion you can draw is that the market quickly realised that the Fed really aren't going to be able to control this cycle very easily. As you know our view is that the Fed won't be able to achieve a soft landing and that a recession is coming. This was something we dwelt on in our recent “What’s in the Tails?” piece (link here), where we expressed surprise that our call for a US recession in late-2023 was the outlier rather than the consensus given how far inflation is from target and the tightness of the US labour market right now (more today on this in the payrolls report). I can't help but think that a great deal of the reaction yesterday was the appreciation that whilst the Fed can make soothing pronouncements, they are starting from an extraordinary difficult starting point, and with limited flexibility to respond to market or economy concerns whilst they fight inflation. The Bank of England couldn't have helped either, as they became the first major central bank to forecast a contraction in 2023 alongside double-digit inflation later this year. In terms of the moves themselves, US Treasury yields soared to fresh highs for this cycle at the long end, with those on 10yr Treasuries up +10.2bps at 3.04%, after a volatile day that saw 10yr yields increase as much as +17.2bps to 3.11% intra-day, meaning the 10yr range since the FOMC has been +21bps wide. Yesterday’s increase was driven entirely by real yields, which snapped back up by +12.2bps to 0.18%, thus closing at their highest levels since the Covid-related tumult in March 2020. Real yields were also as much as +17.2bps higher intraday, showing they were a large component of yesterday’s volatility. The rise in yields came as investors retraced some of their expectations from the previous day about a shallower pace of monetary tightening, raising the expected rate at the Fed’s December meeting by +5.0bps. And there was further evidence that the Fed’s tightening cycle is already having an effect on the real economy, with Freddie Mac reporting that the average rate for a 30-year mortgage had risen to 5.27%, which is the highest its been since 2009. It also marks a +231bp increase over the last year, which is the largest annual increase in mortgage rates since 1982. Those trends have continued this morning, with yields on 10yr USTs up +1.9bps to 3.06%, and the policy rate priced for December’s meeting up a further +1.3bps. With yields bouncing higher, US equities were hammered once again with the more interest-sensitive tech stocks leading the way. As mentioned at the top, the S&P 500 fell back by -3.56%, which would be more newsworthy were it not for the fact that Friday’s -3.63% decline was even larger! Tech and mega-cap stocks really bore the brunt of the sell-off, as the NASDAQ slumped -4.99%, the largest since June 2020, and the FANG+ index fell -6.43%, the largest since September 2020, with all those indices ending a run of 3 consecutive advances. The sharp turnaround sent the VIX +6.07pts higher, and back above 30 at 31.49. It was a somewhat better picture in Europe, but that reflected the fact they hadn’t participated in the massive US rally after the Fed. However the major indices lost ground continuously through the day, with the STOXX 600 erasing an initial gain of +1.84% immediately after the open to end the day -0.70% lower. Yesterday’s volatility came alongside a fresh round of central bank news, with the Bank of England continuing its recent series of rate hikes. In terms of the main headlines, they hiked by 25bps as expected to take Bank Rate up to 1%, and 3 of the 9 members on the Committee were even in favour of a larger 50bps move. Nevertheless, the decision was interpreted in a very dovish light, as two members did not find it appropriate to provide guidance for more rate hikes going forward, so potentially a three-way split on the committee. Adding to the dovish interpretation, the growth forecasts produced by the BoE were significantly downgraded, and now see an annual economic contraction occurring in 2023. Furthermore, they upgraded their inflation forecasts once again, seeing CPI rising further over the rest of 2022, and averaging “slightly over 10% at its peak” in Q4. For more info on the BoE, see our economist’s full reaction note (link here). The more downbeat news on the economy led investors to reappraise the likely path of future hikes from the BoE, and overnight index swaps took out -17bps worth of tightening by the December meeting in response. In turn, sterling was the worst-performing G10 currency yesterday, with a -2.13% move against the US Dollar, which came as investors took stock of the potential for a more gradual tightening, as well as the prospect of a UK recession. The developments also meant that gilts outperformed their counterparts elsewhere in Europe, with the 10yr yield coming down -0.3bps on the day, a big contrast to those on bunds (+7.3bps), OATs (+7.2bps) and BTPs (+8.3bps) which all moved higher. These losses were witnessed over on the credit side as well, where the iTraxx Crossover index moved up +19.3bps to 453bps, the highest its been since May 2020. Those moves higher in Euro Area yields came as the drum beat for an ECB rate hike as soon as July continued, with Bank of Finland’s Governor Rehn endorsing a hike in July. This is a world away from the situation just after Russia’s invasion of Ukraine, when there was serious scepticism among many that the ECB would be able to hike at all this year given the growth shock. But the inflation developments have outweighed that, and overnight index swaps are still pricing in 89bps worth of hikes this year, enough to take the current -0.5% deposit rate firmly into positive territory. Remember DB is forecasting +100bps of hikes before year end. Overnight in Asia, equities have similarly begun the day deep in negative territory, tracking those sharp overnight losses on Wall Street. Across the region, the Hang Seng (-3.67%) is the largest underperformer with tech firms among the worst hit. In mainland China, the Shanghai Composite (-2.31%) and CSI 300 (-2.59%) have also seen a large slide as COVID-19 lockdowns continue to darken the economic outlook and weigh on investor sentiment. There’ve been further signs they’ll be continuing their zero Covid strategy overnight, with state broadcaster CCTV reporting that the Politburo’s seven-member Standing Committee reaffirmed their support for the approach. The only place not seeing large slides overnight are Japanese markets, where the Nikkei is up +0.92%, but that reflects the fact they’ve come back to trade today after 3 days of holidays. Looking forward, US stock futures are pointing to a stabilization today, with contracts on the S&P 500 (-0.02%) and NASDAQ 100 (-0.02%) marginally lower. From the perspective of the major central banks, another negative development over the last 24 hours has been the continued rise in oil prices, with Brent Crude up another +0.69% yesterday to reach $110.90/bbl. The move was driven by the news that the US Energy Department would begin the process of replenishing its oil reserves, with a process to buy 60m barrels in the autumn. That said, prices pared back their gains in the European afternoon as the more negative risk-off move took hold, with prices declining from an intraday high of $114/bbl at one point. This morning in Asian trading hours, Brent crude (+0.50%) is extending its gains again, now at $111.46/bbl. Looking forward now, the main highlight today will likely be the US jobs report for April, which along with next Wednesday’s CPI reading will help frame the policy debate over the 6 weeks ahead of the next FOMC meeting in mid-June. In terms of what to expect, our economists think that nonfarm payrolls will have risen by +465k, which in turn will lower the unemployment rate by a tenth to 3.5%. That would be a significant milestone, since 3.5% was the pre-pandemic low in the unemployment rate. On the data side, the US weekly initial jobless claims came in at 200k in the week through April 30 (vs. 180k expected). Elsewhere, German factory orders fell by a larger-than-expected -4.7% in March (vs. -1.1% expected). To the day ahead now, and the main highlight will be the aforementioned US jobs report for April. Other data releases include German industrial production and Italian retail sales for March. From central banks, we’ll hear from the ECB’s Villeroy, Nagel, Elderson and Rehn, the Fed’s Williams, Kashkari and Bostic, and the BoE’s Pill and Tenreyro. Tyler Durden Fri, 05/06/2022 - 08:01.....»»

Category: smallbizSource: nytMay 6th, 2022

Futures Recover Losses After Netflix Disaster; 10Y Real Yields Turn Positive

Futures Recover Losses After Netflix Disaster; 10Y Real Yields Turn Positive US index futures were little changed, trading in a narrow, 20-point range, and erasing earlier declines as a selloff in bonds reversed with investors also focusing on the catastrophic Q1 earnings report from Netflix. Nasdaq 100 Index futures slipped 0.2% by 7:15 a.m. in New York, recovering from an earlier drop of as much as 1.2%; the Nasdaq 100 has erased $1.3 trillion in market value since April 4 as bond yields have been surging on fears of rate hikes. S&P 500 futures also recouped losses to trade little changed around 4,460. Treasuries rallied and 10Y yields dropped to 2.86% after hitting 2.98% yesterday. The dollar dropped for the first time in 4 days after hitting the highest level since July 2020, and gold was flat while bitcoin rose again, hitting $42K. In perhaps the most notable move overnight, US 10-year real yields turned positive for the first time since March 2020, signaling a potential return to the pre-pandemic normal. But that was quickly followed by a global drop in bond yields as investors assessed growth challenges from the Ukraine war and the potential for a peak in inflation. “Real yields matter for equities,” Esty Dwek, chief investment officer at Flowbank SA, said in an interview with Bloomberg Television. “It’s another aspect for the valuation picture that isn’t helping. It shouldn’t be that much of a surprise to see real yields are back closer to zero again. We’re pricing in so much bad news already between inflation and the hikes and war and supply chains.” 10-year Treasurys yield shed 7 basis points in choppy session after as money managers from Bank of America to Nomura indicated the panic over inflation has gone too far: “Our forecasts point to inflation peaking this quarter and falling steadily into 2023,” BofA analysts including Ralph Axel wrote in a note. “We believe this will reduce the panic level around inflation and allow rates to decline.”  Bank of America also said it has turned long on 10-year Treasuries. Elsewhere, Japan's 10-year yield holds at 0.25%, the top of Bank of Japan’s trading band as the central bank resumes massive intervention. Despite the BOJ's dovish commitment to keep rates low, the Japanese yen rebounded from a 13-day slump and gold extended its decline. Going back to stocks, Netflix shares which have a 1.2% weighting in the Nasdaq, sank 27% in premarket trading after the streaming service said it lost customers for the first time in a decade and forecast that the decline will continue. The shares were downgraded at many firms including UBS Group AG, KGI Securities and Piper Sandler. Other streaming stocks including Walt Disney and Roku also slipped. IBM, on the other hand, rose 2.5% after reporting revenue that beat the average analyst estimate on demand for its hybrid-cloud offerings. Analysts acknowledged the strong quarter of revenue performance. A dimmer outlook for corporate earnings as well as the rise in yields have dented demand for risk assets, with investors preferring defensive stocks such as healthcare to growth-linked stocks, which come under greater pressure from higher interest rates. Some other notable premarket movers: Interactive Brokers (IBKR US) shares fell 1.1% in after-market trading as net income missed analysts’ consensus estimates. Still, analysts at Piper Sandler and Jefferies are positive. Omnicom (OMC US) shares jumped 3.7% in postmarket. Its cautious outlook for the rest of the year could bring some positive surprises, according to analysts, after the company’s 1Q revenue beat estimates In Europe, the Stoxx 600 rose 0.8%, led by banking and technology shares while miners underperformed as metals fell, as investors assessed a mixed bag of corporate results and the outlook for France’s presidential-election runoff on Sunday.  There’s a divergence in performance of European stocks; Euro Stoxx 50 rallies 1.2%. FTSE 100 lags, adding 0.4%. Danone SA rose after reporting its fastest sales growth in seven years, and Heineken NV advanced after sales climbed. Here are some of the biggest European movers today: ASML shares rise as much as 8% with analysts saying the semiconductor-equipment group’s earnings show demand remains strong, even if a timing issue meant its outlook missed expectations. Danone shares gain as much as 9% following a French financial newsletter report that rival Lactalis may be interested in buying its businesses and after the producer of Evian reported a surge in bottled water revenue. Just Eat Takeaway shares rise as much as 7.7% after the company gave mixed guidance and said it is considering selling Grubhub. While analysts note the growth looks weak, they highlight the focus on profitability and the strategic review of Grubhub are positives. Vopak shares rise as much as 7.2%, most since March 2020, after the tank terminal operator reported higher revenues and Ebitda for the first quarter. Heineken shares rise as much as 5% after the Dutch brewer reported 1Q organic beer volume that beat analyst expectations and said net revenue (beia) per hectolitre grew 18.3%. Analysts were impressed by the company’s price-mix during the period. Rio Tinto shares fall as much as 3.9%. A production miss for 1Q could prevent the miner’s shares from recovering after recent underperformance, RBC Capital Markets says. Credit Suisse declines as much as 2.8% after the bank said it anticipates a first-quarter loss owing to a hit to revenue from Russia invading Ukraine and an increase in legal provisions. Oxford Biomedica drops as much as 10% after reporting full-year revenue that was below consensus. RBC Capital said reasons for the revenue miss were “unclear,” adding that there was no new business development news. Asian stocks rose as Japanese equities rallied on the back of a weaker yen, which will support exports. Shares in China fell as investors were disappointed by the decision among banks to keep borrowing rates there unchanged. The MSCI Asia Pacific Index gained as much as 0.9% and was poised to snap a three-day losing streak. Japanese exporters including Toyota and Sony helped lead the way, with shares also stronger in Singapore, Malaysia and the Philippines.  “It looks like the cheap yen may continue for a longer period than originally expected,” said Bloomberg Intelligence auto analyst Tatsuo Yoshida. “The weaker yen is good for all Japanese automakers.” China’s benchmarks bucked the uptrend and dipped more than 1%, as lenders maintained their loan rates for a third month despite the central bank’s call for lower borrowing costs to help an economy hurt by Covid-19 and geopolitical headwinds.  China’s rate stall, together with last week’s smaller-than-expected cut in the reserve requirement, has led some investors to believe broad and significant policy easing is unlikely. “Doubts about access to easier funding remain a bugbear despite headline easing,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note. “Inadvertent restraints on actual lending may mute intended stimulus, revealing risks of ‘too little too late’ stimulus.” In positive news, daily covid cases in Shanghai were in downtrend in recent days and number of communities with more than 100 daily infections fell for three consecutive days, Wu Qianyu, an official with Shanghai’s health commission, says at a briefing. Financial stocks outside of China gained after U.S. 10-year Treasury real yields turned positive for the first time since 2020 as traders continue to bet on a series of aggressive Federal Reserve rate hikes. This may pose more headwinds for Asian tech stocks, which have dragged the broader market lower this year. Japanese equities rose for a second day after the yen weakened against the dollar for a record 13 straight days. Automakers were the biggest boost to the Topix, which climbed 1%. Financials advanced as yields gained. Fast Retailing and SoftBank Group were the largest contributors to a 0.9% gain in the Nikkei 225. The yen strengthened slightly after shedding nearly 6% against the dollar since the start of the month. “It looks like the cheap yen may continue for a longer period than originally expected,” said Bloomberg Intelligence auto analyst Tatsuo Yoshida. “The weaker yen is good for all Japaneseautomakers, “no one loses,” he added. Indian equities snapped their five-day drop as energy companies advanced on expectations of blockbuster earnings, driven by wider refining margins. Software exporters Infosys, Tata Consultancy and lender HDFC Bank bounced back from a slump, triggered by weaker results.  The S&P BSE Sensex gained 1% to 57,037.50 in Mumbai, while the NSE Nifty 50 Index rose 1.1%. The two gauges posted their biggest surge since April 4. Thirteen of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of automobile companies. “A series of sharp negative reactions to minor misses in earnings from large caps points to a precarious state of positioning among investors,” according to S. Hariharan, head of sales trading at Emkay Global Financial. He expects corporate commentary on the margin outlook for FY23 to be key to investors’ reaction to other quarterly results, which will be released over the next couple of weeks. The benchmark Sensex lost about 5% in the five sessions through Tuesday, dragged lower by a selloff in software makers, a slump in HDFC Bank and its parent Housing Development Finance Corp. Foreign investors, who have been net sellers of Indian stocks since the start of October, have withdrawn $1.7 billion from local equities this month through April 18. The IMF slashed its world growth forecast by the most since the early months of the Covid-19 pandemic and projected even faster inflation. It expects India’s economy to grow by 8.2% in fiscal 2023 compared with an earlier estimate of 9%. Reliance Industries contributed the most to the Sensex’s gain, increasing 3%. Out of 30 shares in the Sensex index, 20 rose, while 10 fell. In FX, the Bloomberg Dollar Spot Index fell 0.4%, its first drop in four days, after yesterday reaching its highest level since July 2020, as the greenback weakened against all Group-of-10 peers. Scandinavian and Antipodean currencies led gains followed by the yen, which halted a 13-day rout. The euro advanced a second day and bunds extended gains, underperforming euro-area peers as money markets pared ECB tightening wagers. The yen snapped a historic declining streak amid short covering after the currency approached a key level of 130 per dollar. The Bank of Japan stepped in to cap 10-year yields for the first time since late March as it reiterated its ultra loose monetary policy with four days of unscheduled bond buying. The Australian and New Zealand dollars gained as risk sentiment improved after a selloff in Treasuries paused. The Aussie was supported by offshore funds buying into contracting yield spreads with the U.S. and on demand from exporters for hedging at the week’s low, according to FX traders. The pound edged higher against a broadly weaker dollar, but lagged behind the rest of its Group-of-10 peers, with focus on the risks to the U.K. economy. In rates, Treasuries advanced, reversing a portion of Tuesday’s sharp selloff which pushed the 10Y as high as 2.98%, with gains led by belly of the curve amid bull-flattening in core Focal points of U.S. session include Fed speakers and $16b 20-year bond reopening. US yields were richer by ~7bp across belly of the curve, 10-year yields around 2.87% keeping pace with gilts while outperforming bunds, Fed-dated OIS contracts price in around 222bp of rate hikes for the December FOMC meeting vs 213bp priced at Monday’s close; 49bp of hikes remain priced in for the May policy meeting. Japan 10-year yields held at 0.25%, the top of Bank of Japan’s trading band as the central bank resumes massive intervention. Australian and New Zealand bonds post back-to-back declines. Coupon issuance resumes with $16b 20-year bond sale at 1pm New York time; WI yield at around 3.10% sits ~45bp cheaper than March result, which stopped 1.4bp through.  IG dollar issuance slate includes Development Bank of Japan 5Y SOFR, Canada 3Y and ADB 3Y/10Y SOFR; six deals priced almost $19b Tuesday, headlined by financials including JPMorgan and Bank. In commodities, crude futures advance. WTI trades within Tuesday’s range, adding 1.1% to around $103. Brent rises 0.9% to around $108. Most base metals trade in the red; LME lead falls 1.6%, underperforming peers. Spot gold falls roughly $4 to trade near $1,946/oz. Looking at the day ahead now, and data releases include German PPI for March, Euro Area industrial production for February, US existing home sales for march, and Canadian CPI for March. From central banks, we’ll hear from the Fed’s Bostic, Evans and Daly, as well as the ECB’s Rehn and Nagel, whilst the Federal Reserve will be releasing their Beige Book. Earnings releases include Tesla, Procter & Gamble, and Abbott Laboratories. Finally, French President Macron and Marine Le Pen will debate tonight ahead of Sunday’s presidential election. Market Snapshot S&P 500 futures down 0.4% to 4,443.50 STOXX Europe 600 up 0.4% to 458.21 MXAP up 0.5% to 171.88 MXAPJ up 0.2% to 570.00 Nikkei up 0.9% to 27,217.85 Topix up 1.0% to 1,915.15 Hang Seng Index down 0.4% to 20,944.67 Shanghai Composite down 1.3% to 3,151.05 Sensex up 0.9% to 56,945.14 Australia S&P/ASX 200 little changed at 7,569.23 Kospi little changed at 2,718.69 German 10Y yield little changed at 0.88% Euro up 0.3% to $1.0823 Brent Futures up 1.0% to $108.27/bbl Brent Futures up 1.0% to $108.27/bbl Gold spot down 0.3% to $1,943.30 U.S. Dollar Index down 0.28% to 100.67 Top Overnight News from Bloomberg On the surface the yen looks like the perfect well for carry traders to dip into, under pressure from a Bank of Japan determined to keep local yields anchored to the floor even as interest rates around the world push higher. But despite consensus building for further losses -- peers look like better funding options on certain key metrics Almost eight weeks after Vladimir Putin sent troops into Ukraine, with military losses mounting and Russia facing unprecedented international isolation, a small but growing number of senior Kremlin insiders are quietly questioning his decision to go to war French President Emmanuel Macron and nationalist leader Marine le Pen are gearing up for their only live TV debate on Wednesday evening, a high-stakes event just days before the final ballot of the presidential election this weekend China will continue strengthening strategic ties with Russia, a senior diplomat said, showing the relationship remains solid despite growing concerns over war crimes in Vladimir Putin’s war in Ukraine A more detailed look at global markets courtesy of Newsquawk APAC stocks eventually traded mostly positive after the firm handover from the US despite continued upside in yields. ASX 200 was led by the healthcare sector as shares in Ramsay Health Care surged due to a takeover proposal from a KKR-led consortium, but with gains capped by miners after Rio Tinto's lower quarterly iron ore production and shipments. Nikkei 225 was underpinned by the initial currency depreciation and with the BoJ defending its yield cap. Hang Seng and Shanghai Comp were mixed with the mainland subdued after the PBoC defied expectations for a cut to its benchmark lending rates and instead maintained the 1yr and 5yr Loan Prime Rates at 3.70% and 4.60%, respectively. Top Asian News Fed’s Aggressive Rate Hike Plans Jolt Policy in China and Japan BOJ Further Boosts Bond Buying as Yields Advance to Policy Limit Sunac Bondholders Say They Haven’t Received Interest Due Tuesday Regulators Under Pressure to Ease Loan Curbs: Evergrande Update China Buys Cheap Russian Coal as World Shuns Moscow European bourses and US futures were choppy at the commencement of the European session, but, have since derived impetus in relatively quiet newsflow amid multiple earnings and as yields continue to ease; ES Unch. Currently, Euro Stoxx 50 +1.8%, while US futures are little changed on the session but rapidly approaching positive territory ahead of key earnings incl. TSLA. Netflix Inc (NFLX) - Q1 2022 (USD): EPS 3.53 (exp. 2.89), Revenue 7.87bln (exp. 7.93bln), Net Subscriber Additions: -0.2mln (exp. +2.5mln). Q1 UCAN streaming paid net change -640k (exp.+87.5k). Co. lost 640k subscribers in US/Canada, 300k in EMEA, and 350k in LatAm. Co. Said macro factors, including sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact, via PR Newswire. Click here for the full breakdown. -26% in the pre-market. Chinese Civil Aviation publishes prelim report looking into the China Eastern Airline crash; still recovering and analysing damaged black boxes from the plane: there was no abnormal communication between air crew and air controllers before the aircraft deviated from cruising altitude; no dangerous weather, goods or overdue maintenance. Top European News Le Pen Upset Would Be as Big a Shock to Markets as Brexit Macron and Le Pen Set for High Stakes French Debate Riksbank Governor Leaves Door Open for String of Rate Hikes Danone Gains on Lactalis Takeover Speculation, Evian Rebound Heineken Rises; MS Says Results Were Widely Expected FX: Buck concedes ground to recovering Yen as US Treasury yields recede, USD/JPY over 150 pips below new 20 year high circa 129.42. Yuan on the rocks after PBoC set a soft onshore reference rate and regardless of unchanged LPRs, USD/CNH eyes 6.4500 after breach of 200 DMA. Aussie back in pole position as high betas benefit from Greenback retreat and Kiwi in second spot ahead of NZ CPI data; AUD/USD rebounds through 0.7400 and NZD/USD from under 0.6750. Loonie also bouncing before Canadian inflation metrics, with Usd/Cad closer to 1.2550 than 1.2625, while Euro and Pound are both firmer on 1.0800 and 1.3000 handles respectively as DXY dips below 100.500. Rand shrugs aside mixed SA CPI prints as correction from bull run continues and Gold slips under Usd 1950/oz, USD/ZAR holds above 15.0000. ECB's Kazaks says a rate hike is possible as soon as July this year; ending APP early in Q3 is possible and appropriate; zero is not an a cap for the deposit rate, via Bloomberg. Adds, a gradual approach does not mean a slow approach, do not need to wait for stronger wage growth. Fixed Income: Debt redemption, as futures retrace following tests/probes of cycle lows. Lack of concession not really evident at longer-dated German and UK bond sales, but 20 year US supply may be a separate issue. BoJ ramps up intervention and aims to anchor rather than cap 10 year JGB yield around zero percent, while BoA suggests contra-trend position in 10 year UST to target 2.25% from current levels close to 3.0%. Commodities: Crude benchmarks are firmer on the session in what is more of a consolidation from yesterday's pressured settlement than a concerted effort to move higher, also benefitting from broader equity action. Currently, WTI and Brent reside at the top-end of USD 2/bbl parameters; focus very much on China-COVID, Iran, Libyan supply and Ukraine-Russia developments. US Private Energy Inventory Data (bbls): Crude -4.5mln (exp. +2.5mln), Cushing +0.1mln, Gasoline +2.9mln (exp. -1.0mln), Distillate -1.7mln (exp. -0.8mln). Spot gold/silver are contained at present but have seen bouts of modest pressure, including the loss of the USD 1946.45/oz 21-DMA at worst. US Event Calendar 07:00: April MBA Mortgage Applications, prior -1.3% 10:00: March Existing Home Sales MoM, est. -4.1%, prior -7.2% 10:00: March Home Resales with Condos, est. 5.77m, prior 6.02m 14:00: U.S. Federal Reserve Releases Beige Book Central Bank Speakers 11:25: Fed’s Daly Discusses the Outlook 11:30: Fed’s Evans Discusses the Economic and Policy Outlook 13:00: Fed’s Bostic Discusses Equity in Urban Development DB's Jim Reid concludes the overnight wrap It took me a while to adjust to being back to the office yesterday after two and a half weeks off. No screaming kids, no stealing half their food as I made their meals, and no stepping on endless lego and screaming myself. My team at work are much better behaved, protect their food, and clear up after playing with their toys. Talking of lego, the first day of the holiday was spent in a snow blizzard at LEGOLAND and the last day in shorts and t-shirt on a family bike ride on the Thames. No I haven't been off for that long just a typical April in the UK. When I left you, I was in constant agony due to sciatica in my back and a knee that was very fragile post surgery. On my last day I had a back injection that I wasn't that hopeful about as three previous ones hadn't done anything. However after a second opinion and a new consultant, this injection hit the spot and my sciatica has completely gone and I'm just back to the long-standing normal wear and tear related back stiffness. The consultant can't tell me how long it'll last so Reformer Pilates starts next week. My knee is slowly getting better via some overuse flare ups. So until the next time, I'm in as good a shape as I have been for quite some time! It's hard to guage how good a shape the market is in at the moment as there are lots of conflicting forces. Since I've been off global yields have exploded higher, the US yield curve has resteepened notably and risk is a bit softer. As regular readers know I think a late 2023/early 2024 US recession is likely in this first proper boom and bust cycle for over 40 years. However we're still in some kind of boom phase and I've been trying not to get too bearish too early. While I was off, I published our latest credit spread forecasts and having met our earlier year widening targets, we've moved more neutral for the rest of the year. However into year end 2023, we now have a very big widening of spreads in the forecasts to reflect the likely recession. See the report here. Also while I've been off, the House View is now also that we'll get a US recession at a similar point which as far as I can see is the first Wall Street bank to officially predict this. See the World Outlook here for more. On the steepening I don't have a strong view but ultimately I think 2 year yields will probably have to rise again at some point after a recent pause as the risks are skewed to the Fed having to move faster than the market expects. The long end is complicated by QT but generally I suspect the curve will be fairly flat or inverted for most of the next few months. Coming back after my holidays and the long Easter weekend, the bond market sell-off resumed yesterday with yields climbing to fresh highs. In fact, the losses for Treasuries so far in April now stand at -2.95% on a total return basis, just outperforming the -3.04% decline in March that itself was the worst monthly performance since January 2009, back when the US economy started emerging from the worst phase of the GFC. Elsewhere the US yield curve flattened for the first time in six sessions, with 2yr yields climbing +14.4bps to 2.59%, their highest level since early 2019. Yields on 10yr Treasuries rose +8.3bps to 2.94%, a level unseen since late 2018, on another day marked by heightened rates volatility. Meanwhile 30yr yields breached 3.00% intraday for the first time since early 2019, climbing +5.4bps. And what was also noticeable was the continued rise in real yields, with the 10yr real yield closing at -0.009% yesterday, and briefly trading in positive territory for the first time since March 2020 in early trading this morning. Bear in mind that the 10yr real yield has surged roughly 110bps in around 6 weeks, and since we’ve been able to calculate real yields using TIPS, the only faster moves over such a short time period have been during the GFC and a remarkable 2-week period in March 2020 around the initial Covid-19 wave. On the other hand, as I pointed out in my CoTD yesterday (link here), the 10yr real yield based on spot inflation is currently around -5.6%, so still incredibly negative. The latest moves come ahead of the Fed’s next decision two weeks from now, where futures are placing the odds of a 50bp hike at over 100% now. We’ve been talking about 50bps for some time, and we’d probably have had one last month had it not been for Russia’s invasion of Ukraine, but it would still be a historic moment if it happens, since the last 50bp hike was all the way back in 2000. Nevertheless, we could be about to see a whole run of them, with our economists pencilling in 50bp hikes at the next 3 meetings, whilst St Louis Fed President Bullard (the only dissenting vote at the last meeting who wanted 50bps) said on Monday night that he wouldn’t even rule out a 75bps hike, which probably gave some fuel to the subsequent front end selloff. The bond selloff also took hold in Europe yesterday, where yields on 10yr bunds (+6.9ps), 10yr OATs (+5.0bps) and BTPs (+6.2bps) all hit fresh multi-year highs. Indeed, those on 10yr bunds (0.91%) were at their highest level since 2015, having staged an astonishing turnaround since they closed in negative territory as recently as March 7. Rising inflation expectations have been a driving theme behind this, and yesterday we saw the 5y5y forward inflation swap for the Euro Area close above 2.4%, which is the first time that’s happened in almost a decade, and just shows how investor confidence in the idea of “transitory” inflation is becoming increasingly subdued given that metric is looking at the 5-10 year horizon. Those moves higher in inflation expectations came in spite of the fact that European natural gas prices fell to their lowest level since Russia’s invasion of Ukraine began yesterday. By the close, they’d fallen -1.94% to €93.77/MWh, whilst Brent crude oil prices were down -5.22% to $107.25/bbl. In Asia, oil prices are a touch higher, with Brent futures +0.82% higher as we go to press. Whilst bonds sold off significantly on both sides of the Atlantic, equities put in a much more divergent performance, with the US seeing significant advances just as Europe sold off. By the close of trade, the S&P 500 (+1.61%) had posted its best day in more than a month, as part of a broad-based advance that left 446 companies in the index higher on the day, the most gainers in a month. Tech stocks outperformed in spite of the rise in yields, with the NASDAQ (+2.15%) and the FANG+ index (+1.81%) posting solid advances, and the small-cap Russell 2000 (+2.04%) also outperformed. In Europe however, the STOXX 600 shed -0.77%, with others including the DAX (-0.07%), the CAC 40 (-0.83%) and the FTSE 100 (-0.20%) also losing ground. The S&P was higher despite a day of mixed earnings. Of the ten companies reporting during trading yesterday, only 4 beat both sales and earnings expectations. After hours, Netflix was the main story, losing subscribers for the first quarter in over a decade and forecasting further declines this quarter, which sent the stock as much as -24% lower in after hours trading. It’s 2 bad earnings releases in a row for the world’s largest streaming service, who saw their stock dip -21.79% the day after their fourth quarter earnings in January. Asian equity markets are mixed this morning as the People’s Bank of China (PBOC) defied market expectations by keeping its benchmark lending rates steady. In mainland China, the Shanghai Composite (-0.21%) and the CSI (-0.43%) are lagging on the news. Bucking the trend is the Nikkei (+0.57%) and the Hang Seng (+0.66%). Outside of Asia, stock futures are indicating a negative start in the US with contracts on the S&P 500 (-0.35%) and Nasdaq (-0.75%) both trading in the red partly due to the Netflix earnings miss. Separately, the Bank of Japan (BOJ) reiterated its commitment to purchase an unlimited amount of 10-yr Japanese Government Bonds (JGBs) at 0.25% to contain yields, underscoring its desire for ultra-loose monetary settings, in contrast to the global move in a more hawkish direction. The yen has moved slightly higher (+0.3%) after depreciating for 13 straight days, a streak which hasn’t been matched since the US left the gold standard in the early 70s and effectively brought the global free floating exchange rate regime into being. The pace and magnitude of the depreciation has brought some expressions of consternation from Japanese officials, but no official intervention. The reality is, it would be extraordinarily difficult to credibly support the currency at the same time as maintaining strict control of the yield curve. 10yr JGBs continue to trade just beneath the important 0.25% level. Over in France, we’re now just 4 days away from the French presidential election run-off on Sunday, and tonight will see President Macron face off against Marine Le Pen in a live TV debate. Whilst that will be an important moment, recent days have seen a slight widening in Macron’s poll lead that has also coincided with signs of an easing in market stress, with the spread of French 10yr yields over bunds coming down to its lowest level since the start of the month yesterday, at 46.7bps. In terms of yesterday’s polls, Macron was ahead of Le Pen by 56-44 (Opinionway), 56.5-43.5 (Ipsos), and 55-54 (Ifop), putting his lead beyond the margin of error in all of them. Elsewhere, the IMF released their latest World Economic Outlook yesterday, in which they downgraded their estimates for global growth in light of Russia’s invasion of Ukraine. They now see global growth in both 2022 and 2023 at +3.6%, down from estimates in January of +4.4% in 2022 and +3.8% in 2023. Unsurprisingly it was Russia that saw the biggest downgrades, but they were broadly shared across the advanced and emerging market economies, whilst inflation was revised up at the same time. Otherwise on the data side, US housing starts grew at an annualised rate of 1.793m in March (vs. 1.74m expected), which is their highest level since 2006. Building permits also rose to an annualised rate of 1.873m (vs. 1.82m expected), albeit this was still beneath its post-GFC high reached in January. To the day ahead now, and data releases include German PPI for March, Euro Area industrial production for February, US existing home sales for march, and Canadian CPI for March. From central banks, we’ll hear from the Fed’s Bostic, Evans and Daly, as well as the ECB’s Rehn and Nagel, whilst the Federal Reserve will be releasing their Beige Book. Earnings releases include Tesla, Procter & Gamble, and Abbott Laboratories. Finally, French President Macron and Marine Le Pen will debate tonight ahead of Sunday’s presidential election. Tyler Durden Wed, 04/20/2022 - 08:02.....»»

Category: blogSource: zerohedgeApr 20th, 2022

Futures Rebound From Two-Day Plunge As Yield And Oil Rise

Futures Rebound From Two-Day Plunge As Yield And Oil Rise U.S. index futures edged higher, along with European shares, after the sharpest two-day drop in almost a month, as investors digested Federal Reserve’s hawkish path and were jerked higher by a fleeting moment of Ukraine ceasefire hope when Emini futures initially spiked to session highs on the following Reuters headline: RUSSIAN FOREIGN MINISTER SAYS UKRAINE PRESENTED A NEW DRAFT AGREEMENT TO RUSSIA ON WEDNESDAY - IFX ... only to reverse the entire move two minutes later when the following headline hit: LAVROV: UKRAINE PROPOSALS ON CRIMEA, DONBAS UNACCEPTABLE: IFX Mini hiccup aside, S&P futures were about 0.1% higher at 4,481 while Nasdaq futures gained 0.5% to 14,574, signaling an end to a selloff in the underlying index that erased $850 billion in market value over two days.  Ten-year Treasury yields were flat around 2.61%, the dollar extended its rally to a sixth day, the longest streak in almost 10 months, and oil rebounded from yestereday's IEA reserve release-driven plunge. Markets are showing signs of recovery after a selloff brought on by hawkish Fed minutes in which the central bank laid out a long-awaited plan to shrink their balance sheet by about $95BN per month or more than $1 trillion a year while raising interest rates “expeditiously” to counter the hottest inflation in four decades. “The FOMC minutes gave the clarity that every investors was looking for,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “The US 2-10 year spread is back in the positive after having slipped below zero, but the recession threat is real, keeping the investor mood sour as the Fed pulls back support.” “The Fed delivered what most market watchers were looking for, with details around the pace and composition of the balance sheet runoff,” said Janus Henderson global bond PM Jason England. Along with recent hawkish comments from Fed officials, the minutes showed “the Fed has pivoted from a gradual approach to tightening monetary policy to now moving more rapidly toward a neutral stance,” he said. In premarket trading, HP shares were up 13% after Warren Buffett’s Berkshire Hathaway bought an 11% stake worth $4.2 billion in the laptop maker valued at more than $4.2 billion. SoFi shares declined 5.1% in premarket after the fintech firm gave new guidance as the U.S. government extended the pause on student-loan payments. Other notable premarket overs include: Levi Strauss & Co. (LEVI US) gains 5.5% in premarket trading after it said revenue during the most recent quarter increased 22% to $1.6 billion. Wells Fargo said comments about a strong first quarter and good momentum in March should help dispel investor concerns, at least in the near term. Wayfair (W US) falls 4.4% in premarket trading after Wells Fargo downgrades to underweight from equal weight in sector note turning more cautious on housing-impacted retailers. SoFi (SOFI US) drops 5.1% in premarket trading as Morgan Stanley cuts its 2022 Ebitda estimate by $42m to $100m after the fintech firm gave new guidance as the U.S. government extended the pause on student-loan payments. Sprinklr’s fourth- quarter results were a positive, though the most impressive point was the software company’s guidance, Barclays analysts led by Raimo Lenschow write in a note. The shares rose 4.7% in postmarket trading on Wednesday. Vapotherm (VAPO US) falls 23% in premarket trading after the respiratory-device company reported preliminary quarterly revenue that fell short of analysts’ estimates and withdrew its annual guidance. In Europe, the Stoxx 600 added 0.7%, boosted by a rally in shares of Atlantia SpA, the billionaire Benettons’ highway and airport group. Atlantia added 10% in Italian trading after a non-binding bid from Global Infrastructure Partners and Brookfield Asset Management Inc. European healthcare and chemical stocks outperformed, while energy and miners declined. IBEX outperformed, adding 1.5%, FTSE 100 lags, dropping 0.1%. Health care, chemicals and travel are the strongest performing sectors. The energy sector was in the red, dragging the U.K.’s benchmark FTSE 100 down, as Shell’s $4-$5BN hit from its withdrawal from Russia weighed on oil producers. The statement from the London-based giant shows that, despite a surge in oil and gas prices, Russia’s invasion of Ukraine has upended the supermajors’ plans and left them scrambling to adapt to historic shifts in energy markets. Here are the most notable European premarket movers: Atlantia shares rise as much as 12%, extending yesterday’s gains, after a Bloomberg report that the motorway and airport company could become the target of a bidding war. Electrolux advances as much as 5.8% after announcing a positive non- recurring item of $70.5m in 1Q. Euronav shares gain as much as 12% on news of a potential stock-for-stock combination with Frontline to create a tanker company with a market capitalization of more than $4.2b. Daetwyler shares jump as much as 6% after it announced the acquisition of U.S. electrical connector seals company QSR, with Baader saying the deal may benefit earnings from day one. 888 shares surge as much as 31% after the gambling company announced a share placement to pay for its now-cheaper acquisition of William Hill’s international assets, with analysts reacting positively. Verbio shares surge to a record high after Hauck & Aufhauser lifts its PT on the biodiesel manufacturer by almost 33% ahead of what the broker expects to be “another outstanding quarter.” European basic resources and energy shares decline, lagging all other sectors, as commodity prices start to pull back, with Anglo American, Rio Tinto and Glencore all posting declines. PageGroup and other staffing companies fall after Jefferies lowers EPS estimates across the sector and takes a “more risk-off approach” in note, downgrading PageGroup in the process. Countryside shares sank as the home developer forecast a decline in profit after conducting a review of its business following a dispute with an activist investor. TI Fluid Systems falls as much as 12% after Jefferies downgraded the automotive parts maker to hold from buy, saying conditions faced by the company are among the most difficult in its coverage. Earlier in the session, Asian stocks slid to a three-week low as traders feared a rapid rise in U.S. interest rates and aggressive scale-back of the Federal Reserve’s bond holdings could stymie growth and hurt earnings. The MSCI Asia Pacific Index lost as much as 1.4% on Thursday, with tech shares leading the losses in many countries, after minutes of the Fed’s March meeting showed plans to shrink its balance sheet by more than $1 trillion a year. The fall came after the Asian benchmark slumped 1.5% on Wednesday following similarly hawkish comments from Fed Governor Lael Brainard. Worries that hawkish policy tightening by the Fed may cool the world’s largest economy or even tip it into a recession are hitting equities broadly across Asia. Stocks in China also buckled, even as the state council renewed its pledge to use monetary policy tools at an “appropriate time” and consider other measures to boost consumption, according to the readout from a meeting of the State Council chaired by Premier Li Keqiang on Wednesday. “The Fed is telling us that the party is over. It is saying it will take away the punch bowl,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “This will have a serious impact on all risk assets.” Fujito saw tech shares with rich valuations as the most vulnerable, adding that investors will be trying to seek shelter in utilities and defensive stocks. The MSCI Asia Pacific Information Technology Index fell about 2%.  Benchmarks in Japan and South Korea underperformed other Asian peers, while gauges in Australia and India posted smaller declines on Thursday.   For April, the MSCI Asia is now down more than 2% on top of a slump of almost 7% last quarter -- the most since the first three months of 2020 -- amid concern about the war in Ukraine, higher rates and inflation.  Japanese equities fell by the most in almost four weeks, deepening declines in tandem with U.S. peers amid concerns over the Federal Reserve’s plans to tighten monetary policy. Electronics makers and service providers were the biggest drags the Topix, which dropped 1.6%, in its third day of decline. Tokyo Electron and Fast Retailing were the largest contributors to a 1.7% loss in the Nikkei 225.  Minutes from the latest Federal Reserve meeting showed the U.S. central bank is prepared to raise rates sharply and reduce its balance sheet to cool the economy. Indian stocks dropped with peers across Asia as the weekly expiry of derivative contracts weighed on the market.  The S&P BSE Sensex slipped for a third session, dropping 1% to 59,034.95, its biggest fall since March 21. The NSE Nifty 50 Index slipped 0.9%. HDFC Bank retreated 2.2%, while Reliance Industries declined 1.8%. Seventeen of 30 shares on the Sensex traded lower.  Fifteen of 19 sectoral sub-indexes compiled by BSE Ltd. declined, led by a gauge of oil & gas stocks. The Fed’s plan to prune its near $9 trillion balance sheet, which was swollen by pandemic-era bond purchases, points to more volatility in global markets. Locally, the nation’s central bank will likely raise its inflation outlook to reflect costlier oil while leaving borrowing costs steady in its policy decision on Friday. “U.S. Fed’s hawkish stance has raised concerns of steeper interest rate hikes going ahead,” Kotak Securities analyst Shrikant Chouhan said. He sees volatility in global crude oil prices leading to profit taking in Reliance Industries and other energy stocks. The S&P/ASX 200 index fell 0.6% to close at 7,442.80, retreating alongside global peers after the Federal Reserve outlined plans to trim its balance sheet by more than $1 trillion a year while raising interest rates. Life360 was the biggest laggard as tech stocks dropped. Magellan Financial was the top performer after its funds under management update showed a slowdown in net outflows. In New Zealand, the S&P/NZX 50 index was little changed at 12,075.91 In FX, the Bloomberg dollar spot index is near flat, handing back earlier gains that saw it at a three-week high. RUB leads gains in EMFX. In rates, the treasuries curve extends steepening counter-trend as front-end and belly yields retreat further from Wednesday’s YTD highs while long-end cheapens slightly. Yields richer by up to 3bp across front-end of the curve, steepening 2s10s by ~3bp with 10-year little changed near 2.60%; bunds and gilts keep pace. Bund, Treasury and gilt curves all bull steepen. Meanwhile commodity markets continue to be whipsawed by disruptions sparked by Russia’s war in Ukraine and efforts to curb raw-material costs. WTI crude climbed toward $98 a barrel, paring a slump that was triggered by the International Energy Agency’s decision to deploy 60 million barrels from emergency stockpiles. WTI added 1.4% to trade near $98. Brent rises 1.5% to over $102. Most base metals trade in the red; LME nickel falls 2.3%, underperforming peers. Spot gold is little changed at $1,926/oz. Raw materials could surge by as much 40% -- taking them far into record territory -- should investors boost their allocation to commodities at a time of rising inflation, according to JPMorgan. In crypto, bitcoin is pressured and towards the low-end of a range that continues to drift from the USD 45k mark. Meta (FB) is exploring a virtual currency for the metaverse, according to the FT. U.S. economic data slate includes initial jobless claims (8:30am) and February consumer credit (3pm). Fed speakers scheduled include Bullard (9am) and Bostic (2pm). U.S. session highlights include speech and Q&A by St. Louis Fed’s Bullard --who dissented from March FOMC decision in favor of a bigger rate increase -- at 9am ET.  Other central bank speakers include Bostic and Evans, as well as the BoE’s Pill. We’ll also get the minutes from the ECB’s March meeting, along with remarks from the Fed’s Bullard, Market Snapshot S&P 500 futures little changed at 4,476.75 MXAP down 1.4% to 176.33 MXAPJ down 1.4% to 584.33 Nikkei down 1.7% to 26,888.57 Topix down 1.6% to 1,892.90 Hang Seng Index down 1.2% to 21,808.98 Shanghai Composite down 1.4% to 3,236.70 Sensex down 0.7% to 59,191.33 Australia S&P/ASX 200 down 0.6% to 7,442.83 Kospi down 1.4% to 2,695.86 Brent Futures little changed at $101.14/bbl Gold spot up 0.1% to $1,928.10 U.S. Dollar Index little changed at 99.69     Top Overnight News from Bloomberg ECB President Christine Lagarde said she tested positive for Covid-19, adding that her symptoms are “reasonably mild” and that there won’t be any impact on the operations of her institution Surging U.S. real yields suggest bond traders believe the Federal Reserve can get a grip on inflation, but are likely to put further pressure on stocks and precious metals German Economy Minister Robert Habeck said the nation has already cut its reliance on Russian coal by at least half in the past month and won’t stand in the way of a European Union ban on imports of the fuel from the country In the days after the Ukraine war began, the ruble’s collapse was a potent symbol of Russia’s newfound financial isolation. Now, the ruble has surged all the way back to where it was before Putin invaded Ukraine Hungary kept its effective key interest rate unchanged at the highest level in the European Union after the forint plunged on the bloc’s announcement that it is triggering a process that may block the country’s aid funds China signaled it will step up monetary stimulus for the economy, acknowledging that domestic and global risks are now bigger than previously expected Bank of Japan board member Asahi Noguchi says it’s vital to continue with monetary easing as it will take some time before the possibility of shrinking stimulus comes into sight. A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded lower throughout most of the session as the downbeat mood reverberated from Wall Street. ASX 200 was dragged lower by its tech sector following a similar sectoral performance in the West. Nikkei 225 was hit by losses across its energy, mining and manufacturing names. KOSPI conformed to the global losses whilst Samsung Electronics (-0.3%) failed to benefit from better-thanexpected prelim earnings. Hang Seng and Shanghai Comp were choppy and initially swung between gains and losses before stabilising in the red. Samsung Electronics (005930 KS) - Prelim Q1 (KRW) Revenue 77tln (exp. 75.7tln), Operating Profit 14.1tln (exp. 13.3tln), via Reuters Top Asian News Suspected Chinese Hackers Collect Intel From India’s Grid SoftBank Tripled Share Buybacks to $1 Billion in March Thailand Mulls Easing Covid Test Rules for Overseas Visitors Japan to Release 15m Barrels From Oil Reserves: Kyodo European bourses are firmer across the board and back in proximity to post-cash open levels after initial strength waned in choppy price action, Euro Stoxx 50 +0.7%. US futures have been relatively in-fitting with European peers, though the NQ, +0.5%, is the modest outperformer as yields take a breather from their recent surge. China's Shanghai City is to cap the load factor of international flights by foreign airlines at 40% (prev. 75%), according to Reuters sources; effective from April 11th until month-end. Top European News Turkey Transfers Khashoggi Case to Saudi Arabia to Improve Ties Shunned Oil Piling Up Off China as Virus Outbreak Worsens EU Full Ban on Russia Coal to Be Delayed Until Mid-August: Rtrs Yellen Says U.S. Would Use Sanctions If China Invaded Taiwan FX: Greenback sets marginal new YTD best after hawkish FOMC minutes reveal tight call between 25 bp and 50 bp lift-off plus large cap balance sheet reduction, DXY up to 99.823, thus far. Albeit, the DXY has waned from best levels and turns flat ahead of the arrival of US participants as yields continue to pare Euro eyeing option expiries for support ahead of ECB minutes following loss of 1.0900 handle vs Dollar; EUR/USD down below Fib at 1.0895. Aussie unwinds more RBA inspired upside as trade surplus narrows on zero export balance; AUD/USD around 0.7475 vs circa 0.7661 only yesterday. Yen benefits from retreat in yields rather than BoJ rhetoric reaffirming ultra easy policy and merits of a weaker currency, USD/JPY capped below 124.00. Commodities: Crude benchmarks consolidate near WTD lows after reserve release pressure; specifically, near lows of USD 95.43/bbl and USD 100.13/bbl for WTI and Brent. Updates elsewhere have been slim, and focused on China's Shanghai City from a demand-side perspective amidst ongoing Ukraine-Russia developments; albeit, nothing fundamentally new in terms of negotiations. China is to strictly control new production capacity in the oil refining industry, according to the industry ministry Gas flows via Yamal-Europe pipeline resume westward, according to Gascade data. Spot gold/silver are contained and the yellow metal is once again capped by USD 1930/oz and LME Copper has failed to benefit from the equity pickup. US Event Calendar 08:30: April Initial Jobless Claims, est. 200,000, prior 202,000; Continuing Claims, est. 1.3m, prior 1.31m 15:00: Feb. Consumer Credit, est. $18.1b, prior $6.84b Central Bank Speakers 09:00: Fed’s Bullard Discusses the Economy and Monetary Policy 14:00: Fed’s Bostic and Evans Discuss Inclusive Employment 16:05: cancelled: Fed’s Williams Makes Closing Remarks DB's Henry Allen concludes the overnight wrap We might be less than a week into Q2, but based on how markets are performing it’s shaping up to be very similar to Q1 thus far, with yesterday seeing another bond selloff and significant declines for global equities as markets gear up for the fastest monetary tightening we’ve seen in decades. Indeed, it seems to be progressively dawning on investors that this cycle of hikes is going to be very different to the one we saw from 2015, when even at its fastest in 2018, the Fed still only hiked rates by 100bps in a single year. As Jim has written, if we could erase the post-GFC cycle from people’s memory banks, there’s a case that markets would be pricing 300-400bps this year given where inflation is right now, not least given we saw hikes on that scale in the late-80s and from 1994 with inflation at much lower levels than it is at the minute. Given the rapid expected tightening (as well as the negative shock of Russia’s invasion of Ukraine), it’s worth noting that DB Research’s new World Outlook came out on Tuesday, (link here), where we downgraded our global growth forecasts and are now forecasting a US recession by the end of next year as our baseline. We also got a look into the Fed’s outlook yesterday with the release of the March FOMC minutes, where it looks like they would have hiked by 50bps in March were it not for the Russian invasion, and they are ready to entertain 50bps hikes going forward. The markets got the message, and upgraded the probability of a 50bp hike at the next meeting in early May to 85%. The other big takeaway from the minutes were details around QT, which they signalled would start in May, in line with recent Fed speakers. The FOMC noted the balance sheet would rundown at a pace of $60bn Treasuries and $35bn MBS a month once QT hits terminal velocity, which should be by July if the minutes are to be believed. Markets digested the news, with Treasury yields more or less in line with their pre-minute levels into the close after declining modestly in the New York afternoon. With the pace of the runoff now set, the focus will turn to who buys the securities with the Fed stepping away and when the Fed has to stop QT. Alongside the minutes, remarks from a number of officials yesterday helped to reiterate the point that policy will become tighter this year. Philadelphia Fed President Harker said that he expected “a series of deliberate, methodical hikes as the year continues”, whilst on the question of whether to move by 50bps, Richmond Fed President Barkin said that the FOMC “could certainly do that again if it is necessary to prevent inflation expectations from unanchoring”. With all said and done, sovereign bond yields moved up to fresh highs on both sides of the Atlantic, with those on 10yr Treasuries up +5.1bps to 2.598%, which was its highest closing level since 2019, albeit some way beneath its intraday high of 2.656% shortly before noon in London, and this morning they have fallen a further -1.5bps to 2.583%. That increase yesterday was entirely driven by a rise in real yields, which rose +7.3bps to -0.24%, their highest level since March 2020, whilst a rally at the short end of the curve meant the 2s10s slope steepened for a 3rd day running, heading up to 12.2bps by the close. Those declines in shorter-dated yields came as futures actually took out a bit of Fed tightening from 2022, modestly reducing the expected number of additional hikes this year from 220bps in the previous session to 217bps by the close. Over in Europe there were similar moves, with sovereign bond yields reaching fresh highs before paring back some of that increase towards the close. Yields on 10yr bunds (+3.3bps), OATs (+3.1bps) and BTPs (+3.8ps) all closed at multi-year records, although a key difference with US Treasuries were that the rise in European yields yesterday were driven by higher inflation expectations rather than real rates. In fact the 10yr German breakeven hit 2.81%, its highest in the data series that starts back in 2009, whilst the Italian 10yr breakeven hit 2.63%, its highest since 2008. As on Tuesday, the selloff in bonds went hand in hand with further declines in equities, and by the close the S&P 500 (-0.97%) and Europe’s STOXX 600 (-1.53%) had both lost ground as well, with cyclical sectors leading the declines. Tech stocks in particular were an underperformer once again, and the NASDAQ (-2.22%) and the FANG+ index (-3.46%) both struggled again, bringing their declines over the last 2 sessions to -4.43% and -6.63% respectively. Amidst the equity declines, the VIX index of volatility rose +1.1pts yesterday to 22.1pts, taking it up to its highest level in 2 weeks. Overnight in Asia, equities have very much followed that retreat on Wall Street as monetary tightening remained in focus. Among the main indices, the Nikkei (-2.00%) is leading the moves lower, whilst the Kospi (-1.42%), Hang Seng (-1.04%), Shanghai Composite (-0.99%), and the CSI (-0.78%) are also trading in negative territory. Separately, we heard from China’s State Council yesterday that they would use monetary policy at an “appropriate time”, as they acknowledged downward pressures on the economy. Looking forward, stock futures in the US are pointing to further declines today, with contracts on the S&P 500 (-0.37%) and Nasdaq 100 (-0.33%) both lower following those Fed minutes. In terms of the latest on Ukraine, the EU continued to edge towards a fresh sanctions package, although that wasn’t finalised yesterday as had initially been suggested, with Reuters reporting that technical issues needed to be addressed like whether the ban on Russian coal would affect existing contracts. The report said that diplomats were optimistic about achieving a compromise today, so we could potentially see some news on that later, whilst in his speech to the European Parliament yesterday, European Council President Charles Michel also said that “I believe that measures on oil and even on gas will also be needed sooner or later.” Otherwise on sanctions, the US imposed further measures, including full blocking sanctions on Sberbank and Alfa Bank, along with a prohibition on new investment in Russia. The various decisions came amidst a further decline in oil prices yesterday, with Brent crude down -5.22% to $101.07/bbl, its lowest closing level in 3 weeks. That was supported by confirmation that the International Energy Agency would release 60m barrels of crude, on top of the Biden Administration’s release from the Strategic Petroleum Reserve. Brent has recovered somewhat this morning however, up +1.85% to $102.94/bbl. Turning to the French presidential election, we’re now just 3 days away from the first round on Sunday, and the polls have continued to tighten between President Macron and his main challenger Marine Le Pen. Yesterday’s polls for the second round runoff put Macron ahead of Le Pen by 54%-46% (Ipsos), 53-47% (Opinionway), and 52.5%-47.5% (Ifop), which are all much tighter than the 66%-34% margin in the 2017 election. French assets have continued to underperform against this backdrop, with the CAC 40 equity index (-2.21%) seeing a weaker performance than the broader STOXX 600 (-1.53%) for a 6th consecutive session. On yesterday’s data, the Euro Area PPI reading for February came in at a year-on-year rate of +31.4% (vs. 31.6% expected), which is the fastest pace since the formation of the single currency. Separately, German factory orders contracted by a larger than expected -2.2% in February (vs. -0.3% expected). To the day ahead now, and data releases include German industrial production and Euro Area retail sales for February, along with the weekly initial jobless claims from the US. Meanwhile from central banks, we’ll get the minutes from the ECB’s March meeting, along with remarks from the Fed’s Bullard, Bostic and Evans, as well as the BoE’s Pill. Tyler Durden Thu, 04/07/2022 - 07:49.....»»

Category: blogSource: zerohedgeApr 7th, 2022

Meanwhile In China, All Hell Is Breaking Loose

Meanwhile In China, All Hell Is Breaking Loose With war raging across the world's bread basket, risk of World War 3 the highest it has been since the Cuban missile crisis, commodities hitting new all time highs every single day, inflation (even the watered down CPI version) set to hit 10% in a few months, and the Fed rushing to hike rates so high it slams the US into a pre-scripted recession (as it somehow hopes to make a "soft landing" even as fed funds futures signal a hard landing and at least 50 bps of rate cuts after the burst of hiking is over later this year), it is easy to forget that China is still around. So here is a vivid remind that not only has nothing been fixed in the country that single-handedly pulled the world out of depression during the GFC, but that things are going from bad to much worse. 1.  China on brink of biggest Covid-19 crisis since Wuhan as cases surge China is scrambling to address its most severe Covid-19 outbreak in two years, reporting soaring cases in a fresh wave that has seen the country tweak its zero-Covid policy by allowing rapid antigen tests for public use. After topping 1,000 for two days in a row, new locally transmitted cases surged to more than 3,100, this time driven by a spike in symptomatic infections, the National Health Commission reported on Sunday. It came as 16 provinces reported new coronavirus infections, as did the four megacities of Beijing, Tianjin, Shanghai and Chongqing. As a result of the latest covid breakout, China’s government has shut down the city of Shenzhen, a city of 17.5 million people known as China's Silicon Valley, and is restricting access to Shanghai by suspending bus services. All businesses except those that supply food, fuel and other necessities were ordered to close or work from home. That includes Foxconn, Apple's Chinese slaves: FOXCONN SUSPENDS OUTPUT AT CHINA HQ, IPHONE SITE IN SHENZHEN And since the port of Shenzhen - one of the world's busiest container post is now also locked down, expect a fresh round of cascading chaos in Transpacific supply chains, just in time to join the snarled Transatlantic supply chains as the Ukraine war cripples all global seaborne traffic. Port of Shenzhen 2. Chinese stocks are crashing The Hang Seng tech index has plunged 61% from its peak last year. The Nasdaq Golden Dragon China Index of U.S.-traded stocks has fared even worse, down 68%, and with another bad day or two, the peak-to-trough decline could surpass its 72% crash in the 2008 global financial crisis. Meanwhile, in the US, Chinese ADRs collapsed 10% in a single day on Friday, the worst selloff since 2008, after the SEC listed 5 Chinese companies at risk of delisting should they refuse to show their books to American auditors, stoking panic every ADR will eventually be booted out. “The market is very panicky,” Paul Pang at Pegasus Fund Managers Ltd., who has sold almost all his stake in Alibaba Group, told Bloomberg. “Sanctions against China are not impossible, if China refuses to take sides on the war in Ukraine. Tech shares are among those risky names exposed in the crossfires in the rising Sino-U.S. tensions.” Fear of a fresh regulatory crackdown by Beijing has escalated lately as policy makers proposed more curbs on online games. Earnings results so far have been unable to ease any worry about the growth outlook amid weakening consumer demand in China. The Hang Seng Tech Index is the one of the world’s worst-performing tech gauges since the war in Ukraine broke out and has dropped 17% in March, on course for its biggest monthly drop ever. “We can’t see any rebound signals at the present,” said Yan Kaiwen, analyst at China Fortune Securities. The market is concerned about inflation because of the higher prices for oil and other commodities, which will have a negative impact on the global economy, he said. 3. Chinese bonds are crashing While nothing new to those who have been following the collapse in the Chinese junk bond market - closely linked to China's property sector - China credit stress reached new extremes in the offshore, USD market, where average junk yields rose above 25% meaning the primary market won't function properly anytime soon. Contagion has transformed stronger property developers into risky bets. Luxury property developer Shimao Group, which was once considered a bellwether for China’s safer builders, has been slashed deep into junk from investment grade in a matter of months. The firm has been cut to triple C territory by Moody’s Investors Service and Fitch Ratings. Logan Group has also been downgraded on undisclosed debt and governance worries. Cracks are also showing up in China’s government bond market. Yields on the 10-year sovereign note rose to 2.86%, the highest this year, as investors pointed to capital outflows. 4. China's property sector is (still) crashing China’s property industry has been rocked by at least 14 defaults by developers since authorities began cracking down on excessive borrowing and speculation in the housing market in 2020 which led to a historic default by China Evergrande. While policy makers are now signaling greater tolerance for selective relief by encouraging home buying in lower-tier cities, cutting mortgage rates and allowing more bank loans for developers, there are few signs this is helping boost sales. Unfortunately, these new measures have yet to bear fruit, as China's biggest developers are seeing home sales crater this year amid a market that is effectively frozen. Home sales tumbled during the first two months of this year. China Vanke, the nation’s second-biggest developer by sales, saw a decline of 44%. At Country Garden Holdings Co., whose dollar bonds are at close to record lows, sales fell 24%. Even state-run China Overseas Land & Investment Ltd. saw them slump 48%. While more adjustments are expected after the National People’s Congress taking place through this week, there are concerns of an “unstoppable downward spiral” according to Nomura International HK analysts. “We become increasingly worried whether the policy changes will be effective and timely enough to prevent property sales from a further correction” in the first half of this year, analysts Jizhou Dong and Stella Guo wrote in a note late February.  5. China Credit Collapses February credit data was weaker thank expected after mortgage lending fell for the first time in 15 years. After a record January, China’s credit expansion slowed in February as a long holiday and the slumping housing market meant people and companies borrowed less. Banks lent 1.2 trillion yuan ($194 billion) in the month, down from 4 trillion yuan in January and less than in February last year. A key indicator of home mortgages declined for the first time in at least 15 years despite efforts by the central bank and other financial institutions to boost borrowing by cutting rates and lowering down payments. Newly increased medium and long-term loans to non-financial companies fell to 505 billion from 1.1 trillion yuan a year ago, indicating companies were also reluctant to borrow and invest.  The weak data came despite provinces selling special bonds, a key source of infrastructure funding, at a faster pace in February than in previous years. “It’s a pretty bad set of data,” said Zhou Hao, senior emerging markets economist at Commerzbank AG. “There’s a lack of growth driver, and the real economy’s demand is weak,” he said, arguing that “the PBOC will have to cut rates early if it wants to do so” as inflation and capital outflow pressures will start to limit its space later in the year, he said. 6. Didi crashes Didi halts plans for a HK IPO. Chinese regulators aren't yet satisfied with the security of its sensitive user data. The stock plunged 44% in US trading on Friday, its biggest one-day drop ever. 7. ESG blues Norway's $1.3 Trillion sovereign wealth fund, the world's biggest, snubs Chinese sportswear stock Li Ning due to concerns over its ties to Xinjiang. Will other "green" funds follow in ditching their Chinese investments? “Norway sovereign fund’s offloading Li Ning is triggering some worries about the attitude over Chinese and Hong Kong stocks in the future,” said Castor Pang, head of research at Core Pacific Yamaichi. The news on Wednesday sent China's CSI 300 Index tumbling for its sixth day of declines -- the longest losing run since March 2020, and the Hang Seng Index finished at its lowest since July 2016 - and only a late day intervention by the National Team avoided an even worse rout.  The CSI 300 has lost 27% from a peak about a year ago, fueled by a slump in China’s property market and Covid-zero policy. Sentiment soured further on Wednesday as Norway’s $1.3 trillion sovereign wealth fund announced its exclusion of Li Ning Co. due to the risk that the sportswear maker contributes to serious human rights violations in Xinjiang. The move stoked worries about a potential retreat of other long-term investors. Li Ning plunged 9%.   8. China Doubles Yuan Trading Band for Ruble The PBOC will double the yuan trading band for the ruble amid signs of distressed liquidity as banks back away from making markets. According to Bloomberg, the currency pair will be allowed to trade 10% around the fixing rate to meet demand for market development from March 11, the China Foreign Exchange Trade System said in a statement. That compares with a previous limit of 5%. The change shows how global financial institutions are attempting to cope with the ruble’s volatility, as Russia is increasingly cut off from markets after it invaded Ukraine. The yuan hit a record high against the ruble last week, with some Chinese banks suspending trading of the currency pair. The 10% limit compares with 5% for most of the onshore yuan’s foreign exchange pairs. The last time China widened the trading band for a foreign currency was in 2014, when it doubled the permitted range for dollar-yuan to 2%. “It is the policy measure in response to volatile RUB trading,” said Ken Cheung, Asia FX strategist at Mizuho Bank Ltd. “The measure is to give market markers the ability to set the price and improve the RUB/CNY trading liquidity.” The volatility has led to waning interest to trade the currency pair, with the gap between the bid-ask price hitting a record 197 pips Wednesday. The gap narrowed to 106 pips after the latest announcement. The yuan bought 13.6 ruble on Feb. 25 in China’s onshore spot market. Total bilateral trade between the two countries was valued at $112 billion in 2020. Presidents Xi Jinping and Vladimir Putin only last month signed a series of deals to boost Russian supply of gas, oil and wheat. 9. Foreigners dump Chinese bonds in record amounts Foreign investors reduced their holdings of Chinese government bonds by the most ever last month. Overseas investors sold a net 35 billion yuan ($5.5 billion) of Chinese government bonds in February, marking the largest monthly cut on record and the first reduction since March 2021, according to data compiled by Bloomberg. Their holdings fell to 2.48 trillion yuan from a record 2.52 trillion in January. The bond liquidation spurred talk that some may have come from Russia as sanctions from the U.S. and European Union cut off the Russian central bank’s access to much of its $643 billion in foreign reserves. As of June, China’s yuan accounted for 13% of those reserves, according to the central bank data. Analysts at Australia & New Zealand Banking Group estimated that Russia’s central bank and sovereign wealth fund probably own a combined $140 billion of Chinese bonds. China’s narrowing yield premium over U.S. bonds, a result of diverging monetary policies, has also eroded the allure of the Chinese securities. At about 2.8%, yields on 10-year Chinese bonds are about 105 basis points higher than Treasuries, compared with a gap of more than 220 basis points at the end of 2020. 10. GDP on verge of contraction In response to weaker consumption and an adverse impact on supply chains, as China doubles down on Covid-zero amid Omicron, Morgan Stanley has cut China's Q1 GDP by 60bps, to zero growth QoQ, and cut full-year GDP by 20bps, to 5.1%. It will cut more. 11. China to easing aggressively As a result of all this relentless pain, the China Securities Journal, a mouthpiece for the PBOC and the place where Beijing leaks trial balloons on what is to come, says PBOC may cut RRR and interest rates to stabilize growth. A loose monetary policy is currently required to support growth, the report said echoing what we have been predicting since mid-2021. China is still expected to cut banks’ reserve requirement ratio and interest rates further to stabilize economic growth despite looming U.S. Fed rate hike, China Securities Journal said in the the front-page report Monday, citing analysts. A further cut in RRR and interest rates may have already been placed on the agenda of China’s central bank. This begs the question: how long can US and China monetary policy diverge, with the former hiking and the latter cutting, before something terminally breaks. One thing is certain: for China to achieve its target of around 5.5% growth this year, with the property market slumping, coronavirus infections rapidly increasing, inflation still high and export demand threatened by the effects of the war in Europe, only a massive monetary stimulus will prevent China from falling into a catastrophic recession. It's why Premier Li Keqiang told reporters Friday that achieving the growth goal won’t be easy. He also told them he is quitting this year; the two are linked... h/t Bloomberg's Sofia Horta e Costa Tyler Durden Sun, 03/13/2022 - 22:07.....»»

Category: worldSource: nytMar 13th, 2022

Black Friday Turns Red On "Terrible News" - Global Markets Crater On "Nu Variant" Panic

Black Friday Turns Red On "Terrible News" - Global Markets Crater On "Nu Variant" Panic The Friday after thanksgiving is called black Friday because that's when retailers finally turn profitable for the year. Not so much for market, however, because this morning it's red as far as the eye can see. The culprit: the same one we discussed late last night - the emergence of a new coronavirus strain detected in South Africa, known as B.1.1.529, which reportedly carries an "extremely high number" of mutations and is “clearly very different” from previous incarnations, which may drive further waves of disease by evading the body’s defenses according to South African scientists, and soon, Anthony Fauci. British authorities think it is the most significant variant to date and have hurried to impose travel restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. The European Union also said it aimed to halt air travel from the region. "Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be ramifications for the price of oil," said Chris Scicluna, head of economic research at Daiwa. As a result, what was initially just a 1% drop in US index futures, has since escalated to a plunge of as much as 2% with eminis dropping the most since September, at one point dropping below 4,600 after closing on Wednesday above 4,700 as a post-Thanksgiving selloff spread across global markets amid mounting concerns the new B.1.1.529 coronavirus variant - which today will be officially called by the Greek lettter Nu - could derail the global economic recovery.  Russell 2000 contracts sank as much as 5.4%. Technology shares may be caught in the net too as Nasdaq 100 futures slid. The VIX increased as much as 9.4 vols to 28, it's biggest jump since January. It was last seen up 7.4 points, or the biggest increase since February. Adding to the pain, there is nothing on today's macro calendar and the US market closes early which will reduce already dismal liquidity even more, exacerbating some of the moves throughout the session. Headlines are likely to center on various nations preventing travel from South Africa whilst potentially imposing more stringent COVID measures domestically, as well as which countries "find" the Nu variant. Amid the panicked flight to safety, 10Y TSY yields tumbled as traders slashed bets on monetary tightening by the Federal Reserve (just hours after Goldman predicted that the Fed would double the pace of its taper and hike 3 times in 2022, oops) ... ... as did oil amid fears new covid lockdowns will lead to a collapse in crude demand (they will also certainly force OPEC+ to put on pause their plans to keep hiking output by 400K every month). Paradoxically, even cryptos are tumbling, which is surprising since even the dumbest algos should realize by now that a new covid outbreak means more dovish central banks, no tightening, and if nothing else, more QE and more liquidity which is precisely what cryptos need to break out to new all time highs. Cruise ship operator Carnival slumped 9.1% in premarket trading and Boeing slid 5.8% as travel companies tumbled worldwide. Stay-at-home stocks such as Zoom Video rallied.  Didi Global shares fell after Chinese regulators reportedly asked the ride-hailing giant to delist from U.S. bourses. Here are some of the other big premarket movers: Airlines and other travel stocks slumped in premarket trading on growing concern about a new Covid-19 variant identified in southern Africa. The European Union is proposing to halt air travel from several countries in the area and the U.K. will temporarily ban flights from the region. United Airlines (UAL US) fell 8.9%, Delta Air (DAL US) -7.9%, American Airlines (AAL US) -6.7%; cruiseline-operator Carnival (CCL US) -12%; hotelier Marriott (MAR US) -6.1%; lodging company Airbnb (ABNB US) -6.9%. Stay-at-home stocks that benefit from higher demand in lockdowns rose in premarket, with Zoom Video (ZM US) gaining 8.5% and fitness equipment group Peloton (PTON US) +4.7%. Vaccine stocks surged in premarket, while Pfizer and BioNTech got an added boost after their coronavirus shot won European Union backing for expanded use in children. Moderna (MRNA US) rose 8.8%, Novavax (NVAX US) +6.2%, Pfizer (PFE US) +5.1%, BioNTech (BNTX US) +6.4%. Small biotech stocks gained in premarket as investors sought havens. Ocugen (OCGN US) added 22%, Vir Biotechnology (VIR US) +7.8%, Sorrento Therapeutics (SRNE US) +5%. Cryptocurrency-exposed stocks fell as Bitcoin dropped as investors dumped risk assets. Marathon Digital (MARA US) declined 9%, Riot Blockchain (RIOT US) -8.8%, Coinbase (COIN US) -4.6%. Didi Global (DIDI US) declined 6% in premarket after Chinese regulators were said to have asked the ride-hailing giant to delist from U.S. bourses. Selecta Biosciences (SELB US) dropped 13% in Wednesday’s postmarket ahead of Thursday’s Thanksgiving closure, after saying the U.S. FDA placed a clinical hold on a trial. Quotient Technology (QUOT US) gained 3.9% in Wednesday’s postmarket on news that a board member bought $150,000 of shares. What happens next will matter and so, all eyes are on the opening bell for the U.S. markets, set to return from the holiday for a shortened trading session. Tumbling futures and a soaring VIX signaled that the rout in Asia and Europe won’t spare New York equities, while lack of liquidity will only make the pain worse. The Japanese yen emerged as the main haven currency of the day, with the dollar languishing. “Every trader in New York will be rushing to the office now,” said Salm-Salm & Partner portfolio manager Frederik Hildner, adding that news of the new variant could mean the end of the inflation and tapering debate. The worsening pandemic poses a dilemma for central banks that are preparing to tighten monetary policy to curb elevated price pressures, according to Ipek Ozkardeskaya, senior analyst at Swissquote. “It’s terrible news,” Ipek Ozkardeskaya, a senior analyst at Swissquote, said in emailed comments. “The new Covid variant could hit the economic recovery, but this time, the central banks won’t have enough margin to act. They can’t fight inflation and boost growth at the same time. They have to choose.” “We now have a new Covid variant that’s ‘very’ different from the ones we knew so far, a rising inflation, and a market bubble,” she said.  “The only encouraging news is the easing oil prices, which could tame the inflationary pressures and give more time to the central banks before pulling back support.” In the meantime, the World Health Organization and scientists in South Africa were said to be working “at lightning speed” to ascertain how quickly the B.1.1.529 variant can spread and whether it’s resistant to vaccines. The new threat adds to the wall of worry investors are already contending with in the form of elevated inflation, monetary tightening and slowing growth. In Europe, the Stoxx 600 index headed for the biggest drop in 13 months plunging 2.7%; travel and banking industries led the Stoxx Europe 600 Index down as much as 3.7%, the biggest intraday drop since June 2020. Airbus slumped 8.6% in Paris and British Airways owner IAG tumbled 12% in London, while food-delivery stocks gained.  Here are some of the biggest European movers today: Stay-at-home stocks and Covid testing firms such as TeamViewer and DiaSorin are among the biggest gainers as worries over a new Covid variant send the Stoxx 600 tumbling on lockdown fears TeamViewer and DiaSorin rise as much as 6% and 7%, respectively On the down side, travel and leisure stocks plunge, with the likes of IAG, Lufthansa and Carnival posting double- digit falls IAG drops as much as 21% Software AG shares rise as much as 9.5% after Bloomberg reported that the firm is exploring strategic options, including a potential sale, with Morgan Stanley saying the company’s biggest headwinds are behind it. Evolution gains as much as 4.6%, recouping part of Thursday’s 16% plunge, with Bank of America saying the share price’s “crazy time” amounts to a good buying opportunity. Skistar rises as much as 3.7%, bucking steep declines for travel and leisure stocks, after Handelsbanken upgraded the stock, saying bookings for the Scandinavian ski resort operator are “set to surge.” Telecom Italia climbs as much as 2.8% following a Bloomberg report that private equity firms KKR and CVC are considering teaming up on a bid for the company. ING Groep falls as much as 11% after Goldman Sachs analyst Jean-Francois Neuez cut his recommendation to neutral from buy. Getlink drops as much as 6% as French fishermen start protests aimed at stepping up pressure on the U.K. in a post-Brexit fishing dispute. Earlier in the session, MSCI's index of Asian shares outside Japan fell 2.2%, its sharpest drop since August. Casino and beverage shares were hammered in Hong Kong, while travel stocks dropped in Sydney and Tokyo. Japan's Nikkei skidded 2.5% and S&P 500 futures were last down 1.8%. Giles Coghlan, chief currency analyst at HYCM, a brokerage, said the closure of the U.S. market for the Thanksgiving holiday on Thursday had exacerbated moves. "We need to see how transmissible this variant is, is it able to evade the vaccines - this is crucial," Coghlan said. "I expect this story to drag on for a few days until scientists have a better understanding of it." Indian stocks plunged as the detection of a new coronavirus strain rattled investor sentiment globally, raising concerns over a likely setback to the nascent economic recovery.  The S&P BSE Sensex lost 2.9%, the most since mid-April, to 57,107.15 in Mumbai, taking its loss this week to 4.2%, the biggest weekly drop since January. The NSE Nifty 50 Index declined by a similar magnitude on Friday. Reliance Industries was the biggest drag on both measures and declined 3.2%.  “There is fear of this new variant spreading to other countries which might again derail the global economy,” said Hemang Jani, head of equity strategy at Motilal Oswal Financial Services Ltd.   Of the 30 shares in the Sensex index, 26 fell and 4 gained. All but one of 19 sub-indexes compiled by BSE Ltd. retreated, led by a index of realty companies. The S&P BSE Healthcare index was the only sub-index to gain, surging 1.2%. While researchers are yet to determine whether the new virus variant is more transmissible or lethal than previous ones, authorities around the world have been quick to act. The European Union, U.K., Israel, and Singapore placed emergency curbs on passengers from South Africa and the surrounding region. Travel stocks were among the hardest hit. InterGlobe Aviation Ltd. fell 8.9%, Spicejet Ltd. slipped 6.7% and Indian Hotels Co. Ltd. plunged 11.2%, the most since March 2020.  “Nervousness on the new variant of coronavirus and expectations of the U.S. Fed increasing the pace of tapering have led to recent market weakness,” Amit Gupta, fund manager for portfolio management services at ICICI Securities Ltd. said. “This trend may take some time to recover as the WHO meeting on the new mutant variant impact and hospitalization rates in US and Europe will be watched by the market very closely.” Crude oil to emerging markets completed this picture of mayhem. In rates, fixed income was firmly bid as Treasuries extended their advance led by the belly of the curve, outperforming bunds, while money markets pared rate-hike bets amid fears that a new coronavirus strain may spread globally, slowing economic growth. Cash Treasuries outperformed, richening 12-14bps across the short end, with Thursday’s closure exacerbating the optics. As shown above, 10Y Treasury yields shed as much as 10 basis points while the Japanese yen jumped the most since investors’ March 2020 rush for safety. Yields across the curve are lower by more than 8bp at long end, 13bp-15bp out to the 7-year point, moves that if sustained would be the largest since at least March 2020 and in some cases since 2009. Short-term interest rate futures downgraded the odds of Fed rate increases. Gilts richened 10-11bps across the curve, outperforming bunds by 4-5bps. Peripheral and semi-core spreads widen. In FX, JPY and CHF top the G-10 scoreboard with havens typically bid. In FX, the Bloomberg Dollar Spot Index was little changed after earlier touching a fresh cycle high, and the greenback was mixed versus its Group-of-10 peers as the yen and the Swiss franc led gains while the Canadian dollar and Norwegian krone were the worst performers as commodity prices plunged. Traders pushed back the timing of a 25-basis-point rate increase by the Federal Reserve to July from June, with only one further hike expected for the remainder of 2022. It’s a similar story in the U.K. where the Bank of England is now expected to tighten policy in February instead of next month. Wagers that the ECB will raise its deposit rate by the end of next year have also been slashed, with only a six basis-point increase priced in, half of that seen earlier this week. The European Union is proposing to follow the U.K. in halting air travel from southern Africa after the new Covid-19 variant was identified there. The yen is at the epicenter of skyrocketing currency volatility as the new virus variant shakes markets. The cost of hedging against swings in the Japanese currency over the next week, which captures the release of the next U.S. payrolls report, is the most expensive in more than a year. In commodities, crude futures are hit hard. WTI drops over 7% before finding support near $73, Brent drops over 5% before recovering near $78. Spot gold grinds higher, adding $21 to trade near $1,809/oz. Base metals are sharply offered with much of the complex off as much as 3%. Looking at the otherwise quiet day ahead, data releases include French and Italian consumer confidence for November, as well as the Euro Area M3 money supply for October. Otherwise, central bank speakers include ECB President Lagarde, Vice President de Guindos, and the ECB’s Visco, Schnabel, Centeno, Panetta and Lane, and BoE chief economist Pill. Market Snapshot S&P 500 futures down 1.9% to 4,607.50 STOXX Europe 600 down 2.8% to 468.04 MXAP down 1.8% to 193.33 MXAPJ down 2.2% to 628.97 Nikkei down 2.5% to 28,751.62 Topix down 2.0% to 1,984.98 Hang Seng Index down 2.7% to 24,080.52 Shanghai Composite down 0.6% to 3,564.09 Sensex down 2.7% to 57,234.83 Australia S&P/ASX 200 down 1.7% to 7,279.35 Kospi down 1.5% to 2,936.44 Brent Futures down 5.8% to $77.46/bbl Gold spot up 0.9% to $1,805.13 U.S. Dollar Index down 0.33% to 96.46 German 10Y yield little changed at -0.31% Euro up 0.4% to $1.1259 Top Overnight News from Bloomberg The European Union is proposing to halt air travel from southern Africa over growing concern about a new Covid-19 variant that’s spreading there, as the U.K. said it will also temporarily ban flights from the region Those close to the Kremlin say the Russian president doesn’t want to start another war in Ukraine. Still, he must show he’s ready to fight if necessary in order to stop what he sees as an existential security threat: the creeping expansion of the North Atlantic Treaty Organization in a country that for centuries had been part of Russia Bitcoin tumbled 20% from record highs notched earlier this month as a new variant of the coronavirus spurred traders to dump risk assets across the globe Germany’s Greens tapped their two co- leaders to run the foreign ministry and take charge of an influential portfolio overseeing economy and climate protection in the country’s next government under Social Democrat Olaf Scholz A more detailed breakdown of global markets courtesy of Newsquawk Asian equity markets declined and US equity futures were also on the backfoot on reopen from the prior day’s Thanksgiving lull with markets spooked by new COVID variant concerns related to the B.1.1.529 variant in South Africa that was first detected in Botswana. The new variant showed a high number of mutations and was said to be the most evolved strain ever which spurred fears it could be worse than Delta and is prompting both the UK and Israel to halt flights from several African nations. ASX 200 (-1.7%) was negative with heavy losses in energy and broad underperformance in cyclicals leading the downturn across all sectors, while the much better than expected Australian Retail Sales data was largely ignored. Nikkei 225 (-2.5%) underperformed and gave up the 29k status as selling was exacerbated by detrimental currency inflows and with SoftBank shares among the worst hit on reports that China is said to have asked Didi to delist from US exchanges on security fears, which doesn't bode well for SoftBank given that its Vision Fund is the top shareholder in the Chinese ride hailing group with a stake of more than 20%. Hang Seng (-2.5%) and Shanghai Comp. (-0.7%) conformed to the risk aversion with the mood not helped by ongoing geopolitical concerns after a Chinese Defense Ministry spokesperson noted they are ready to crush Taiwan independence bid "at any time”, while China also said it opposes US sanctions on its companies and will take all necessary measures to firmly defend the rights of Chinese companies. Beijing interference further contributed to the headwinds amid the request by China for Didi to delist from US which reports stated regulators could backtrack on and with Tencent subdued after some Chinese state-run companies restricted the use of Tencent's messaging app. Top Asian News Stocks in Asia Set for Worst Day Since March on Virus Woes Mizuho CEO Steps Down After Regulator Hit on System Issues Meituan 3Q Revenue Meets Estimates Japan’s Kishida Delivers $316 billion Extra Budget for Recovery European equities are trading markedly lower (Stoxx 600 -2.9%) with losses in the Stoxx 600 extending to 3.8% WTD. Sentiment throughout the week has been hampered by various lockdown measures imposed across the region with the latest leg lower accelerated by new COVID variant concerns related to the B.1.1.529 variant in South Africa. The new variant has shown a high number of mutations and is said to be the most evolved strain so far. This has spurred fears it could be worse than Delta and has prompted multiple nations to halt flights from several African nations.The handover from the overnight session was an equally downbeat one with the Nikkei 225 (-2.5%) dealt a hammer blow by the risk environment and unfavourable currency flows. Stateside, futures are lower across the board with the RTY the clear laggard with losses of 4.2% compared to the ES -1.8%, whilst the tech-heavy NQ is faring better than peers but ultimately still lower on the session to the tune of 1.6%. Note, early closures in the US and subsequent liquidity conditions could exacerbate some of the moves throughout the session. With the macro calendar light, focus for the session is likely to centre on various nations preventing travel from South Africa whilst potentially imposing more stringent COVID measures domestically. Any further clarity on the spread of the variant and its potential to evade vaccines will be of great interest to the market and likely be the main driving force of price action today. Sectors in Europe are lower across the board with the Stoxx 600 Banking (-5.1%) sector bottom of the pile amid the declines seen in global bond yields as markets scale back expectations of central bank tightening (e.g. pricing now assigns a 63% chance of a 15bps hike by the BoE next month vs. 93% a week ago). Oil & Gas names (-4.8%) are suffering on account of the declines in the crude space with WTI crude in freefall with losses of 6.7% given the potential impact of travel restrictions on demand. Travel restrictions on South Africa (from UK, Israel, EU et al) and the potential for further announcements has crushed the Travel & Leisure sector (-5.7%) with airline names dealt a hammer blow; IAG (-13.5%), easyJet (-11%), Deutsche Lufthansa (-12%), Air France (-9.5%). Elsewhere, there are a whole raft of other laggards which are very much in-fitting with the March 2020 playbook but there are simply too many to list for the purpose of this report. Defensives and Tech are faring better than peers but ultimately still lower on the session to the tune of 1% and 1.9% respectively. Finally, for anyone wanting some positivity from today’s session, the potential for further lockdowns has proved to be beneficial for the likes of HelloFresh (+3.2%), Ocado (+2.1%) and Delivery Hero (+1.9%). Top European News Airlines Skid on South Africa Travel Bans Tied to Variant German Coalition Proposes a Combustion-Car Ban Without Saying So Putin Pushes Confrontation With NATO as Hardliners Prevail Siemens Is Said to Kick Off Sale of Postal Logistics Business In FX, the index has been under pressure in the risk-averse environment amid a slump in yields and gains in its basket components – namely the JPY, CHF, EUR (see below) – and with liquidity also thinned by Thanksgiving. From a technical perspective, the index has declined from its 96.787 overnight high, through the 96.500 mark, to a low of 96.332 – with the weekly trough at 96.035. Ahead, the US calendar is once again light, with the US also poised for an early Thanksgiving closure; thus, impulses will likely be derived from the macro environment. JPY, CHF, EUR - Haven FX JPY and CHF are the clear outperformers as a function of risk-related inflows. USD/JPY has retreated from a 115.37 peak and fell through its 21 DMA (114.15) to a base around 113.66 - with the current weekly low around 113.64. USD/CHF retreated from 0.9360 to 0.9260 – with the 50 and 100 DMAs seen at 0.9234 and 0.9219, respectively, ahead of 0.9200. EUR/USD meanwhile gains on what is seemingly an unwind of the carry trade amid a spike in volatility. EUR/USD found support near 1.1200 before rebounding to a current 1.1288 peak. AUD, NZD, CAD, GBP - The non-US Dollar risk currencies bear the brunt of the latest market downturn, with losses across industrial commodities not helping. The Loonie has taken the spot as the biggest G10 loser as hefty COVID-induced losses in the oil complex keep the currency suppressed. USD/CAD trades towards the top of a current 1.2647-2774 range. AUD is also weighed on by softer base metal prices – AUD/USD fell from a 0.7200 overnight high to a current low at 0.7110. On that note, Westpac sees AUD/USD pushed down to 0.7000 by Jun 2022 (prev. 0.7700) amid rate differentials with the US; Westpac made significant changes to its FOMC policy forecast and now expect consecutive increases in the fed funds rate in Jun, Sept, and Dec 2022. NZD/USD is slightly more cushioned amid smaller exposure to commodities, and as the AUD/NZD cross takes aim at 1.0450 to the downside. GBP, meanwhile, was initially among the losers amid its high-beta status but thereafter nursed losses in a move that coincided with EUR/GBP rejecting an upside breach of its 21 DMA at 0.8475. EM - The ZAR is the standout laggard given the new South African COVID variant - B.1.1.529 COVID-19 variant (expected to be named Nu) – which is said to be the most evolved strain so far and thus prompted several countries to halt travel to the country of origin. USD/ZAR currently trades within a 15.9375-16.3630 intraday band. Meanwhile, the downturn oil sees USD/RUB north of 75.00 and closer to 76.00 from a 74.2690 base. The Lira also feels some contagion despite the lower oil prices (Turkey being a large net oil importer) – USD/TRY is back on a 12.00 handle and within 11.92-1226 parameters at the time of writing. In commodities, the crude complex has been hit by compounding COVID fears which in turn triggered various travel restrictions and subsequently took its toll on global crude demand prospects. The new and more evolved South African variant prompted the UK, Singapore, and Israel to expand their travel red lists to include some African nations (Israel reported its first case of the new COVID-19 variant known as B.1.1.529). Japan also imposed tighter border restrictions. China’s Shanghai city see flights impacted by its own outbreak. Europe also tackles its surge in daily cases - German Green Party's Baerbock (incoming Foreign Minister) does not rule out a German lockdown, according to Spiegel. EU Commission President von der Leyen is also to propose activation of the emergency air brake, to halt travel from southern Africa due to the B.1.1.529 COVID-19 variant. Losses in oil have exacerbated - with WTI Jan and Brent Feb now under USD 74/bbl (vs high 78.65/bbl) and USD 77/bbl (vs high 80.42/bbl), -6.0% and -5.0% respectively. This comes ahead of the OPEC+ confab next week, whereby OPEC watchers have suggested that oil prices will be a large contributor to the final decision. It is difficult to see how OPEC+ will increase output to the levels the US et al. will be content with, with the latest COVID downturn building the case for a pause in planned output hikes. Elsewhere, haven demand sees spot gold extend on gains above USD 1,800/oz after topping the 100 DMA (1,792.95/oz), 200 DMA (1,791.38/oz), 50 DMA (1,790.13/oz) overnight. Base metals are softer across the board amid the risk aversion. LME copper posts losses of around 3% at the time of writing, as prices threaten a more convincing downside breach of USD 9,500/t. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap Things have escalated on the covid front quite rapidly over the last 12 hours. Yesterday new covid variant B.1.1.529 was slowly starting to gather increasing attention but overnight it has begun to dominate markets and has caused a notable flight to quality with 10 year USTs -8bps lower. It was originally identified in Botswana and is starting to spread rapidly in Africa. The South African Health Minister has said it is "of serious concern". Almost 100 cases have already been identified in South Africa and the UK moved to put the country back (along with 5 other African nations) on a reinstated red travel list last night with others following this morning. The variant is said to be the most heavily mutated version yet and the WHO will meet today to decide if it is a variant of interest or a variant of concern. So a lot of eyes will be on how severe it is and whether it completely evades vaccines. At this stage very little is known. Mutations are often less severe so we shouldn’t jump to conclusions but there is clearly a lot of concern about this one. Also South Africa is one of the world leaders in sequencing so we are more likely to see this sort of news originate from there than many countries. Suffice to say at this stage no one in markets will have any idea which way this will go. Overnight in Asia all benchmarks are trading lower on the news with the Shanghai Composite (-0.50%), CSI (-0.64%), KOSPI (-1.27%), Hang Seng (-2.13%) and the Nikkei (-2.90%) all lower. Airlines and other travel stocks have obviously fallen heavily. Hong Kong has detected two confirmed cases of the new variant just as Hong Kong and China were considering quarantine-free travel. S&P 500 (-0.93%) and DAX (-1.82%) futures are also much weaker. Elsewhere, in Japan, CPI rose +0.5% year-on-year (+0.4% consensus and +0.1% previously), on the back of 16-month high fuel prices. With the US out on holiday for Thanksgiving, there wasn’t much going on yesterday after a very quiet day in markets. The variant news was only slowly creeping into the news flow so it hardly impacted trading. But in keeping with the theme of recent days, both inflation and the latest covid wave in Europe remained very much in the picture as jitters continue to increase that we could see further lockdowns as we move towards Christmas. Starting with the headline moves, European equities did actually show signs of stabilising yesterday, with the STOXX 600 up +0.42% thanks to a broad-based advance across the continent. In fact that’s actually the index’s best daily performance in over three weeks, although that’s not reflecting any particular strength, but instead the fact the index inched steadily but persistently towards a record high before selling off again a week ago. Other indices moved higher across the continent too, with the FTSE 100 (+0.33%), the CAC 40 (+0.48%) and the DAX (+0.25%) all posting similar advances. These will all likely reverse this morning. One piece of news we did get came from the ECB, who released the account of their monetary policy meeting for October. Something the minutes stressed was the importance that the Governing Council maintain optionality in their policy settings, with one part acknowledging the growing upside risks to inflation, but also saying “it was deemed important for the Governing Council to avoid an overreaction as well as unwarranted inaction, and to keep sufficient optionality in calibrating its monetary policy measures to address all inflation scenarios that might unfold.” Against this backdrop, 10yr bond yields moved lower across multiple countries, with those on bunds (-2.3ps), OATs (-2.3bps) and BTPs (-1.9bps) all declining. There was also a flattening in all 3 yield curves as well, with the 2s10s slope in Germany (-3.0bps), France (-3.7bps) and Italy (-2.8bps) shifting lower. And the moves also coincided with a continued widening in peripheral spreads, with both the Spanish and the Greek spreads over 10yr bund yields widening to their biggest levels in over a year. Of course, one of the biggest concerns in Europe right now remains the pandemic, and yesterday saw a number of fresh measures announced as policymakers seek to get a grip on the latest wave. In France, health minister Veran announced various measures, including the expansion of the booster rollout to all adults, and a reduction in the length of time between the initial vaccination and the booster shot to 5 months from 6. Meanwhile in the Czech Republic, the government declared a state of emergency and approved tighter social distancing measures, including the closure of restaurants and bars at 10pm. And in Finland, the government have said that bars and restaurants not using Covid certificates will not be able to serve alcohol after 5pm. All this came as the European Medicines Agency recommended that the Pfizer vaccine be approved for children aged 5-11, which follows the decision to approve the vaccine in the US. Their recommendation will now go to the European Commission for a final decision. There wasn’t much in the way of data at all yesterday, though German GDP growth in Q3 was revised down to show a +1.7% expansion (vs. +1.8% previous estimate). Looking at the details, private consumption was the only driver of growth (+6.2%), with government consumption (-2.2%), machinery and equipment (-3.7%) and construction (-2.3%) all declining over the quarter. To the day ahead now, and data releases include French and Italian consumer confidence for November, as well as the Euro Area M3 money supply for October. Otherwise, central bank speakers include ECB President Lagarde, Vice President de Guindos, and the ECB’s Visco, Schnabel, Centeno, Panetta and Lane, and BoE chief economist Pill. Tyler Durden Fri, 11/26/2021 - 08:12.....»»

Category: blogSource: zerohedgeNov 26th, 2021

Futures Rise To 4,700 "Max Gamma" As Oil Slide Accelerates

Futures Rise To 4,700 "Max Gamma" As Oil Slide Accelerates U.S. index futures rose again, trading on top of the massive 4700 "max gamma" level despite downbeat data out of Chinese tech names, as investors awaited the latest batch of unemployment data and taking comfort from signals that central banks will stay far behind the curve and keep pledges to overlook faster inflation rather than rush into rate hikes. European stocks were steady and Asian equities fell as Chinese tech stocks tumbled after poor results from Baidu and Bilibili. Treasury yields edged higher, the dollar was little changed and gold declined. Bitcoin retreated for a fifth straight day. Oil prices skidded to a six-week low on concern about a supply overhang and the prospect of China, Japan and the United States dipping in to their fuel reserves, with Brent futures last at $79.77, more than 8% off last month's three-year high. Nasdaq futures rose 86.25 points or 0.53% outperforming S&P 500 futs which were up 11.50 points or 0.25% to 4697.75, after chip giant Nvidia jumped 7% after a sales forecast by the world’s largest chipmaker. Elsewhere in premarket trading, Cisco dropped 6.6% after the computer networking equipment group’s growth and earnings forecast fell short of expectations while Alibaba slid after reporting sales that missed analyst estimates for a second straight quarter. Some other notable premarket movers: EV makers are mixed in U.S. premarket trading, with Rivian Automotive (RIVN US), Lucid (LCID US) and Canoo (GOEV US) all declining and newly-listed Sono (SEV US) extending its bounce Nvidia (NVDA US) shares gain 7% in U.S. premarket trading, with analysts saying the chipmaker delivered a strong enough quarter to justify its punchy valuation Amtech (ASYS US) fell 22% in post-market trading after reporting fourth quarter revenue that missed estimates from two analysts. The semiconductor stock has risen 139% this year through Wednesday’s trading. Kraft Heinz (KHC US) fell 1.6% in postmarket trading on Wednesday after announcing one of its top holders was selling a portion of its stake. Victoria’s Secret (VSCO US) shares gain 13% in U.S. premarket trading as analysts highlight “better-than- feared” 3Q results for the lingerie retailer. JD.com (JD US) shares advanced 2.2% premarket after it reported net revenue for the third quarter that beat the average analyst estimate. “While companies are managing to report solid third-quarter numbers, the ability to do so is being tempered by concerns about slimmer margins,” said Michael Hewson, chief market analyst at CMC Markets in London. “One positive thing, aside from the concern over rising inflation, has been the resilience of labor markets, on both sides of the Atlantic.” The Stoxx Europe 600 Index was little changed with most cash indexes giving back early gains or losses to trade flat as travel and consumer companies gained while the energy and minings industries retreated. FTSE 100 underperformed slightly. Oil & gas was the weakest sector followed by mining stocks. European metals and mining stocks fall 0.8%, the second worst performing sub-index on the benchmark Stoxx 600, amid sinking iron ore futures and copper prices. Iron ore retreated as investors weighed a top producer’s forecasts of a balanced market next year and the impact on miners amid a price collapse in recent months. Diversified miners drop, Glencore -0.8%, Anglo American -1%, BHP -0.7%, Rio Tinto -1.1%; the four stocks account for more than 60% of the SXPP. Earlier in the session, Asian stocks fell, on track for a second day of losses, as Baidu helped lead a slump in Chinese technology giants.  The MSCI Asia Pacific Index dropped as much as 0.4%, extending its two-day slide to about 0.9%. The Hang Seng Tech Index lost about 3%, as search engine giant Baidu tumbled on worries over the advertising outlook and video-streaming firm Bilibili dropped after posting a larger-than-expected loss. Hong Kong’s Hang Seng Index and China’s CSI 300 benchmark were the worst performing national benchmarks Thursday, while Taiwan’s Taiex managed a small gain. Alibaba also fell, ahead of its highly awaited earnings report later today that may show the impact of Beijing’s regulatory curbs. Japan's Nikkei was down 0.6% in early trade. "We do seem to have stalled somewhat as we head into the year end," said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney. "Investors perhaps are just taking a bit of pause," she said, in the wake of a strong U.S. results season, but as inflation and China's slowdown loom as macroeconomic headwinds. “With a bout of earnings having been released and put behind the market, we’re in an environment where investors are inclined to take profits,” said Takashi Ito, an equity market strategist at Nomura Securities in Tokyo. “Investors are likely to cherry pick stocks that have high earnings and ROE and have strong momentum for growth.”  The region’s equities are now poised for a weekly drop after wiping out gains from earlier this week. Anxiety over global inflation has weighed on sentiment as investors search for clues on when central banks will start raising interest rates. Indonesia and the Philippines kept borrowing costs unchanged, as expected, to aid two economies that bore the brunt of Covid-19 outbreaks in Southeast Asia this year. In rates, treasuries were slightly cheaper across long-end of the curve after S&P 500 and Nasdaq 100 futures breached Wednesday’s highs. Yields are higher by ~1bp in 30-year sector, with 2s10s steeper by ~1bp, 5s30s by ~0.5bp; 10-year is ~1.60%, trailing bunds by ~2bp as traders push back on ECB rate-hike pricing. Focal points Thursday include several Fed speakers and a potentially historic 10-year TIPS auction at 1pm ET - at $14BN, the 10Y TIPS reopening is poised to draw a record low yield near -1.14%; breakeven inflation rate at ~2.71% is within 7bp of Monday’s YTD high. Elsewhere, Gilts outperformed richening ~2.5bps across the curve. Peripheral spreads tighten, semi-core widens marginally. In FX, the U.S. dollar erased an earlier modest loss and was flat, with majors mostly range-bound. Treasury yields stabilized from overnight declines; the greenback traded mixed versus its Group-of-10 peers, though most were confined to tight ranges, New Zealand’s dollar led G-10 gains after two-year ahead inflation expectations rose to 2.96% in the fourth quarter from 2.27% in the third, according to survey of businesses published by the Reserve Bank of New Zealand. Support in euro- Swiss franc at 1.0500 holds for now and consolidation for risk reversals this week suggests that a breach of the key level may not see a big follow through. The pound inched up and is on its longest winning streak in nearly seven months after this week’s jobs and inflation data fueled confidence that the Bank of England will hike rates. The Turkish lira plunged to a new all time low, with the USDTRY rising to 10.93 after the central bank cut rates by 100bps. Currency traders are also assessing a sharp downdraft in the Aussie/yen cross, often a barometer of market sentiment. It fell through its 200-day moving average on Tuesday and has lost almost 4% in a dozen sessions . "You've got the perfect storm there for bears," said Matt Simpson, senior analyst at brokerage City Index. "Fundamentally and technically Aussie/yen looks pretty good with lower oil prices." In commodities, crude futures remained in the red but bounce off worst levels as the potential for SPR releases remains center stage. WTI finds support near $77, recovering toward $78; Brent regains a $80-handle. Spot gold gives back Asia’s small gains, dropping ~$7 to trade near $1,860/oz. Base metals trade poorly, LME zinc and lead underperform. Looking at the day ahead now, and data releases from the US include the weekly initial jobless claims, the Philadelphia Fed’s business outlook for November, the Kansas City Fed’s manufacturing index for November, and the Conference Board’s leading index for October. Central bank speakers include PBoC Governor Yi Gang, the ECB’s Centeno, Panetta and Lane, and the Fed’s Bostic, Williams, Evans and Daly. There’ll also be a number of decisions from EM central banks, including Bank Indonesia, the Central Bank of Turkey and the South African Reserve Bank. Finally, earnings releases include Intuit, Applied Materials and TJX. Market Snapshot S&P 500 futures up 0.4% to 4,703.25 STOXX Europe 600 up 0.1% to 490.50 MXAP down 0.3% to 199.31 MXAPJ down 0.6% to 650.79 Nikkei down 0.3% to 29,598.66 Topix down 0.1% to 2,035.52 Hang Seng Index down 1.3% to 25,319.72 Shanghai Composite down 0.5% to 3,520.71 Sensex down 0.4% to 59,755.91 Australia S&P/ASX 200 up 0.1% to 7,379.20 Kospi down 0.5% to 2,947.38 Brent Futures down 0.1% to $80.18/bbl Gold spot down 0.2% to $1,863.45 U.S. Dollar Index little changed at 95.75 German 10Y yield little changed at -0.26% Euro little changed at $1.1327 Top Overnight News from Bloomberg More Wall Street banks are wagering that the Federal Reserve will hike rates at a faster-than-expected pace, with Citigroup Inc. joining Morgan Stanley in backing trades that will profit if the central bank does just that China is releasing some oil from its strategic reserves days after the U.S. invited it to participate in a joint sale, suggesting the world’s two biggest oil consumers are willing to work together to keep a lid on energy costs European countries are increasingly forcing reluctant companies to let employees work from home in an effort to break the rapidly spreading fourth wave of the coronavirus pandemic A more in depth look at global markets courtesy of Newsqauwk Asia-Pac stocks traded mostly negative with sentiment in the region subdued amid a lack of significant macro drivers and following the uninspired lead from the US - where the major indices finished a choppy session in the red and the DJIA gave up the 36k status. Nonetheless, the ASX 200 (+0.1%) remained afloat with notable strength in gold miners, as well as some consumer stocks, although advances in the index were limited by losses in the financial and energy sectors after similar underperformance stateside amid a decline in yields and oil prices. The Nikkei 225 (-0.3%) was initially dragged lower by unfavourable currency inflows which overshadowed reports that Japan wants to enhance tax breaks for corporations that raise wages, while shares in Eisai were hit after EU regulators placed doubts regarding the approval of Co. and Biogen’s co-developed Alzheimer’s drug and SoftBank also declined after the US regulator raised concerns regarding Nvidia’s acquisition of Arm. However, the index then briefly returned flat in late trade on reports that the Japanese stimulus package is to require JPY 55.7tln of fiscal spending which is higher than the previously speculated of around JPY 40tln. The Hang Seng (-1.3%) and Shanghai Comp. (-0.5%) weakened after another liquidity drain by the PBoC and with the declines in Hong Kong exacerbated by tech selling, while the losses in the mainland were to a lesser extent with China said to be mulling additional industrial policies aimed to support growth and SGH Macro sources suggested the US and China agreed there would be some substantial progress on trade such as the removal of some punitive tariffs by the US and increased purchases of US products by China, although the report highlighted that it was unclear if this would be from a high-profile announcement or a discrete relaxing of tariffs. Finally, 10yr JGBs were initially flat as prices failed to benefit from the subdued risk appetite in Japan and rebound in global peers, while firmer metrics at the 20yr JGB bond auction provided a mild tailwind in late trade although the support was only brief and prices were then pressured on news of the potentially larger than anticipated fiscal spending in PM Kishida's stimulus package. Top Asian News China Property Stocks Sink, $4.2 Billion Rush: Evergrande Update Japan’s Kishida Eyes Record Fiscal Firepower to Boost Recovery China Property Firm Shinsun’s Shares and Bonds Slump JD.com Sales Beat Estimates as Investments Start to Pay Off Major bourses in Europe are choppy, although sentiment picked up following a subdued APAC session but despite a distinct lack of fresh catalysts. US equity futures have also been grinding higher in early European hours, with the NQ (+0.6%) outpacing the ES (+0.3%), RTY (+0.2%) and YM (+0.2%). Back to European cash – broad-based gains are seen across the Euro bourses – which lifted the CAC, DAX and SMI to notch record intraday highs, whilst upside in the UK's FTSE 100 (-0.2%) has been hampered by hefty losses in today's lagging sectors– the Energy and Basic Resources - amid price action in the respective markets. Tech names also see a strong performance thus far as chip names cheer NVIDIA (+6% pre-market) earnings yesterday. Overall, sectors have maintained a similarly mixed picture vs the cash open, with no overarching theme. In terms of individual movers, Swatch (+2.8%) and Richemont (+0.6) piggyback on the increase in Swiss Watch Exports vs 2020 and 2019. Metro Bank (-20%) plumbed the depths after terminating takeover talks with Carlyle. Top European News Royal Mail Hands Investors $540 Million Amid Parcel Surge German Coalition Plans Stricter Rent Increase Regulation: Bild HSBC Sees ECB Sticking With Easy Stance Despite Record Inflation Astra Covid Antibody Data Shows Long-Lasting Protection In FX, the Kiwi has extended its recovery on heightened RBNZ tightening expectations prompted by significant increases in Q4 inflation projections, with some pundits now assigning a greater probability to the OCR rising 50 bp compared to the 25 bp more generally forecast and factored in. Nzd/Usd is eyeing 0.7050 and the 50 DMA just above (at 0.7054 today) having breached the 100 DMA (0.7026), while the Aud/Nzd cross is probing further below 1.0350 even though the Aussie has found some support into 0.7250 against its US rival and will be encouraged by news that COVID-19 restrictions in the state of Victoria are on the verge of being completely lifted. GBP/EUR/DXY - Notwithstanding Kiwi outperformance, the Dollar has lost a bit more of its bullish momentum to the benefit of most rivals, and several of those that compose the basket. Indeed, Cable has popped above 1.3500, while the Euro is looking more comfortable on the 1.1300 handle as the index retreats further from Wednesday’s new y-t-d peak and away from the psychological 96.000 level into a 95.840-642 range. Ahead, IJC and Philly Fed are due amidst another decent slate of Fed speakers, while Eur/Usd will also be eyeing the latest ECB orators for some direction and Eur/Gbp is back around 0.8400 where decent option expiry interest resides (1.1 bn), but perhaps more focused on latest talks between the UK and EU on the NI dispute. CHF/CAD/JPY - The Franc has pared more declines vs the Buck from sub-0.9300 and remains firm against the Euro near 1.0500 in wake of Swiss trade data showing a wider surplus and pick-up in key watch exports, but the Loonie looks a bit hampered by a more pronounced fall in the price of oil as the US calls on other countries for a concerted SPR tap and China is said to be working on the release of some crude stocks. Usd/Cad is tethered to 1.2600 and highly unlikely to threaten 1.1 bn option expiries at the 1.2500 strike in contrast to the Yen that stalled above 114.00 and could be restrained by 1.4 bn between 113.90 and the round number or 1.3 bn from 114.20-25, if not reports that Japan’s stimulus package may require Jpy 55.7 tn of fiscal spending compared to Jpy 40 tn previously speculated. In commodities, WTI and Brent front-month futures are off worst levels but still under pressure amid the prospect of looming crude reserves releases, with reports suggesting China is gearing up for its own release. There were also prior source reports that the US was said to have asked other countries to coordinate a release of strategic oil reserves and raised the oil reserve release request with Japan and China. Furthermore, the US tapping of the SPR could be either in the form of a sale and/or loan from the reserve, and the release from the reserve needs to be more than 20mln-30mln bbls to get the message to OPEC, while a source added that the US asked India, South Korea and large oil-consuming countries, but not European countries, to consider oil reserve releases after pleas to OPEC failed. This concoction of headlines guided Brent and WTI futures under USD 80/bbl and USD 78/bbl respectively with early selling also experienced as European players entered the fray. On the geopolitical front, US National security adviser Jake Sullivan raised with his Israeli counterpart the idea of an interim agreement with Iran to buy more time for nuclear negotiations, according to sources. However, two American sources familiar with the call said the officials were just "brainstorming" and that Sullivan passed along an idea put forward by a European ally. Next, participants should continue to expect jawboning from the larger economies that advocated OPEC+ to release more oil. OPEC+ is unlikely to react to prices ahead of next month's meeting (barring any shocks). Elsewhere, spot gold and silver have been choppy within a tight range. Spot gold trades under USD 1,875/oz - with technicians flagging a Fib around USD 1,876/oz. Spot silver trades on either side of USD 25/oz. Base metals are on a softer footing amid the broader performance across industrial commodities – LME copper remains subdued under the USD 9,500/t level, whilst some reports suggest companies are attempting to arbitrage the copper spread between Shanghai and London. US Event Calendar 8:30am: Nov. Initial Jobless Claims, est. 260,000, prior 267,000; Continuing Claims, est. 2.12m, prior 2.16m 8:30am: Nov. Philadelphia Fed Business Outl, est. 24.0, prior 23.8 9:45am: Nov. Langer Consumer Comfort, prior 50.3, revised 50.3 10am: Oct. Leading Index, est. 0.8%, prior 0.2% 11am: Nov. Kansas City Fed Manf. Activity, est. 28, prior 31 Central banks 8am: Fed’s Bostic Discusses Regional Outlook 9:30am: Fed’s Williams speaks on Transatlantic responses to pandemic 2pm: Fed’s Evans Takes Part in Moderated Q&A 3:30pm: Fed’s Daly takes part in Fed Listens event DB's Jim Reid concludes the overnight wrap After 9 weeks since surgery, yesterday I got the green light to play golf again from my consultant. Yippee. However he said that he’ll likely see me in 3-5 years to do a procedure called distal femoral osteotomy where he’ll break my femur and realign the leg over the good part of the knee. Basically I have a knee that is very good on the inside half and very bad on the outer lateral side. He’s patched the bad side up but it’s unlikely to last more than a few years before the arthritis becomes too painful. This operation would be aimed at delaying knee replacement for as long as possible! Sounds painful and a bit crazy! Meanwhile I also have a painful slipped disc in my back at the moment that I’m going to have an injection for to hopefully avoid surgery after years of managing it. As you might imagine from reading my posts last week I don’t get much sympathy at home at the moment for my various ailments. In terms of operations and golf I’m turning into a very very poor man’s Tiger Woods! Markets have been limping a bit over the last 24 hours too as the inflation realities seemed to be a bit more in focus. Those worries were given additional fuel from the UK CPI release for October, which followed the US and the Euro Area in delivering another upside surprise, just as a number of key agricultural prices continued to show significant strength. Oil was down notably though as we’ll discuss below. To add to the mix, the latest global Covid-19 wave has shown no sign of abating yet, even if some countries are better equipped for it than others. Starting with inflation, one of the main pieces of news arrived yesterday morning, when the UK reported that CPI came in at +4.2% year-on-year in October. That was above every economist’s estimate on Bloomberg, surpassing the +3.9% consensus expectation that was also the BoE’s staff projection in their November Monetary Policy Report. That’s the fastest UK inflation since 2011, and core inflation also surprised on the upside with a +3.4% reading (vs. +3.1% expected). In response to this, our UK economist (link here) is now expecting that CPI will peak at +5.4% in April, with the 2022 annual average CPI still at +4.2%, which is more than double the BoE’s 2% target. The release was also seen as strengthening the case for a December rate hike by the BoE, and sterling was the second best performing G10 currency after being top the day before in response, strengthening +0.45% against the US dollar. Even as inflation risks mounted however, the major equity indices demonstrated an impressive resilience, with the STOXX 600 (+0.14%) rising for the 17th time in the last 19 sessions. This is the best such streak since June this year, when the index managed to increase 18 of 20 days. We’ll see if that mark is matched today That was a better performance than the S&P 500 (-0.26%). 342 stocks were in the red today, the most in three weeks. Energy (-1.74%) and financials (-1.11%) each declined more than a percent, on lower oil prices and yields, respectively. Real estate (+0.65%) and consumer discretionary (+0.59%) led the way, driven by a +3.25% increase in Tesla. In line with the broad-based retreat, small-caps continued to put in a much weaker performance, with the Russell 2000 shedding -1.16% as it underperformed the S&P for a 4th consecutive session. Sovereign bonds also managed to advance yesterday, with yields on 10yr Treasuries (-4.5bps) posting their biggest decline in over a week, taking them to 1.59%. Declining inflation expectations drove that move, with the 10yr breakeven down -3.2bps to 2.71%, which was its biggest decline in over two weeks. For Europe it was a different story however, with yields on 10yr bunds only down -0.3bps, just as those on 10yr OATs (+0.1bps) and BTPs (+0.5bps) both moved higher. Most of the Treasury rally was after Europe closed though. Those moves came against the backdrop of a fairly divergent performance among commodities. On the one hand oil prices fell back, with WTI (-2.97%) closing beneath $80/bbl for only the second time in the last month as speculation continued that the US would tap its strategic reserves. On the other hand, there was no sign of any relenting in European natural gas prices, which rose a further +0.79% yesterday to bring their gains over the last 7 days to +31.57%. That follows the German regulator’s decision to temporarily suspend certification for Nord Stream 2, which has added to fears that Europe will face major supply issues over the winter. And while we’re discussing the factors fuelling inflation, there were some fresh moves higher in agricultural prices as well yesterday, with wheat futures (+1.48%) hitting an 8-year high, and coffee futures (+4.75%) climbing to their highest level in almost a decade. Central banks will be watching these trends closely. There’s still no word on who’s going to lead the Fed over the next 4 years, but yesterday’s news was that President Biden will make his pick by Thanksgiving. For those keeping track at home, on Tuesday the guidance was within the next four days. So, while it appears momentum toward an announcement is growing, take signaling of any particular day with a grain of salt. On the topic of the Fed, our US economists released their updated Fed outlook yesterday (link here) in which they brought forward their view of the expected liftoff to July 2022, with another rate increase following in Q4 2022. And although it’s not their base case, they acknowledge that incoming data could even push the Fed to speed up their taper and raise rates before June. They don’t see the choice of the next Fed Chair as having much impact on the broad policy trajectory, since inflation next year is likely to still be at high levels that makes most officials uncomfortable, plus the annual rotation of regional Fed presidents with an FOMC vote leans more hawkish next year. So that will constrain the extent to which a new chair could shift matters in a dovish direction, even if they wanted to. Overnight in Asia stocks are trading mostly in the red outside of a flat KOSPI (+0.01%). The Shanghai Composite (-0.13%), CSI (-0.64%), Nikkei (-0.77%) and Hang Seng (-1.35%) are being dragged down by tech after a bout of Chinese IT companies missed earnings continuing a theme of this earnings season. Elsewhere in Japan, the Nikkei reported that the new economic stimulus package could be around YEN 78.9 tn ($691 bn). Prime Minister Fumio Kishida will announce the package on Friday. Elsewhere S&P 500 (+0.08%) and DAX futures (+0.01%) both fairly flat. The House of Representatives is slated to begin debate on the Biden social and climate spending ‘build back better’ bill. Word from Congress suggested it could be tabled for a vote as soon as today, though the House has been as profligate missing self-imposed deadlines to vote on the bill as President Biden has been with the announcement of Fed Chair. In addition to the Build Back Better package, there’ll still be plenty of action in Congress over the next month, with another government shutdown looming on December 3, and then a debt ceiling deadline estimated on December 15. The House Budget Chair echoed Treasury Secretary Yellen’s exhortation, and urged Congress to raise the debt ceiling to avoid a government default. Treasury bills are pricing increasing debt ceiling uncertainty during December; yields on bills maturing from mid- to late-December are around double the yields of bills maturing in November and January. Turning to the pandemic, cases have continued to rise at the global level over recent days, as alarm grows in a number of countries about the potential extent of the winter wave. In Germany, Chancellor Merkel and Vice Chancellor Scholz are taking part in a video conference with state leaders today on the pandemic amidst a major surge in cases. And Sweden’s government said that they planned to bring in a requirement for vaccine passports at indoor events with more than 100 people. In better news however, the UK’s 7-day average of reported cases moved lower for the first time in a week yesterday. Moderna also joined Pfizer in seeking emergency use authorization from the FDA for booster jabs of its Covid vaccines for all adults. Looking at yesterday’s other data, US housing starts fell in October to an annualised rate of 1.520m (vs. 1.579m expected), whilst the previous months’ reading was also revised lower. Building permits rose by more than expected however, up to an annualised rate of 1.650m (vs. 1.630m expected). Finally, Canada’s CPI inflation reading rose to +4.7% in October as expected, marking the largest annual rise since February 2003. To the day ahead now, and data releases from the US include the weekly initial jobless claims, the Philadelphia Fed’s business outlook for November, the Kansas City Fed’s manufacturing index for November, and the Conference Board’s leading index for October. Central bank speakers include PBoC Governor Yi Gang, the ECB’s Centeno, Panetta and Lane, and the Fed’s Bostic, Williams, Evans and Daly. There’ll also be a number of decisions from EM central banks, including Bank Indonesia, the Central Bank of Turkey and the South African Reserve Bank. Finally, earnings releases include Intuit, Applied Materials and TJX. Tyler Durden Thu, 11/18/2021 - 08:05.....»»

Category: blogSource: zerohedgeNov 18th, 2021

UK Faces "Plan B" Peril: COVID Multiplies The Economic Threat

UK Faces 'Plan B' Peril: COVID Multiplies The Economic Threat Authored by Bill Blain via MorningPorridge.com, “T’was the best of times, t’was the worst of times …” The risks of Plan B and a further Covid Lockdown are multiplying. It will clearly impact markets, but the real economic effects of Covid combined with energy costs, supply chains and bleak company earnings forecasts may be pushing us towards stagflation anyway. "How to address the biggest economic shock in 300 years?” asked UK Chancellor Rishi Sunak while doing his pre-budget politicking last week. Whatever you believe or don’t believe about Covid, Sunak is quite right to consider it at the centre of the on-going economic crisis. Markets should factor that reality accordingly – which boils down to a very simple question: how much will Covid force Central Banks and Governments to act to stabilise the global economy? This week pay attention to the UK Budget on Wednesday on how Chancellor Sunak addresses the ongoing critical-care needs of the UK by stepping away from his previous “policy-mistake” sounding mention of austerity spending cuts and tax-rises to make noises about increased “levelling out” spending. Hanging over everything will be the question – how much more economic pain could Covid inflict? It’s a tough question.  A new lockdown would be economic suicide. The UK government plans to ride it out – but the history of the last 19 months says they won’t hesitate to make a U-Turn and institute Plan B if they think their credibility is on the line if the numbers of infections surge and the health service looks swamped. That’s a potential trade: should you sell UK stocks now on the likelihood the government will panic? (And buy-them back almost immediately as the Bank of England stops the noise about a rate cut and QE taper.) But… another question is how much will rising infection numbers cause the economy to contract anyway? How much has confidence already been dented? Here in Blighty, It’s a tale of two headlines: Daily Mirror: Fears of new lockdown Christmas as scientists warn tougher Covid measures needed NOW. Daily Telegraph: Coronavirus cases to slump this winter, say scientists. The papers looks like it boils down to a political split – which may reflect the UK’s national pride in our venerable National Health Service. How much we are prepared to sacrifice to protect the sacred cow of the NHS has become a badge. The left-leaning, Labour supporting Daily Mirror is peddling one set of scientific views, while the daily journal of the Conservative Party, the Torygraph, finds another set of white-coats to quote. What does the threat of Plan B or further lockdowns mean for the UK economy? A quick glance round the motorway service stations we stopped in yesterday shows many more people wearing masks, and I’ll be interested in how many people start working from again as the perceived threat level rises. I wonder how rationally people consider the pandemic. The vector for the rise in infections is schoolchildren being children – their interactions will diminish this week due to mid-term holidays. Back in September, a British Medical Journal report (How is vaccination affecting hospital admissions and deaths?) said 84% of hospital admissions before July had not been vaccinated, although rates of vaccinated infections were rising – their conclusion was simple: unvaccinated people are 3 times as likely to go to hospital and 3 times more likely to die. There is a broad consensus the efficacy of vaccines wanes after 5-6 months – hence booster shots. Maybe the best way to move forward is the Swedish solution of taking personal responsibility to rising infection numbers? However, research in the Guardian earlier this year suggests that strict-lockdown Denmark and easy-going Sweden experienced similar levels of economic dislocation, but Sweden suffered a death rate 5 times higher than Denmark! It’s down to behaviour – Sweden kept the schools, offices, shops and pubs open, but people got careful, stopped going out and kept the kids at home anyway. As the supply chain crisis continues, and energy prices go through the roof, we already know it’s going to be a tough holiday season – retailers warning of toy shortages and price hikes on scarce Turkeys. It impacts consumer behaviour – we all want to spend, but if we can’t because of rising prices and falling incomes, and it feels dangerous to do so – then what effect does that have on spending patterns? It’s got to be negative. We’re seeing the supply chain effects beginning to hit corporate results – an increasing number of firms have been giving lacklustre holiday earnings guidance. Intel took a spanking last week on the back of expectations of a downbeat outlook. Snap got pummelled on the back of a disappointing Q3 number. This week is big for Big Tech earnings – and names from Apple to Amazon could be pummelled by supply chain shortages and the problems these cause meeting holiday demand. Headlines about a downbeat Apple sales forecast have consequences – not just in making global consumers a little more depressed about the future. The very first thing junior economists learn about is multiplier effects – on consequences as lay-people call them. A company finds it can’t get it full allocation of Christmas units to sell so it cuts advertising, cuts stuff overtime and starts planning to cut investment in new plants, warehouses and future spending. Repeat over the whole economy, and with everyone with less in their pockets… as “transitory” inflation feels increasingly permanent, and you’ve got a perfect recipe for stagflation. I often get accused of being a misery-guts and far too negative about the state of the global economy. My own market mantras include the classic: “Things are never as bad as you fear, but never as good as you hope”. Think about that for a moment. Covid caused the greatest economic downspike in 300 years, but the actions of swift government interventions to prop up commerce and fuel consumer spending kept the global economy functional, but wobbly. The markets quickly began to anticipate recovery and upside – yet these remain vulnerable to the news and perceptions around this Coronavirus. Covid fears are multiplying again. Renewed Covid instability on the back of lockdown news from China, Europe, Australasia, wherever, will continue to roil markets. Supply chains remain fractured and the consequences of the virus effects on the global economy will continue. Get used to it… Tyler Durden Tue, 10/26/2021 - 03:30.....»»

Category: blogSource: zerohedgeOct 26th, 2021

Futures At All Time High On Evergrande Reprieve Despite Intel, Snapchat Collapse

Futures At All Time High On Evergrande Reprieve Despite Intel, Snapchat Collapse S&P 500 futures traded to within 2 points of their September all time high, rising 0.12% to 4547, just shy of their 4549.5 record after China's Evergrande unexpectedly made a last minute coupon payment, averting an imminent weekend default and boosting risk sentiment. But while spoos were up, Nasdaq futures edged -0.18% lower after Intel warned of lower profit margins, while Snap crashed 22%, leading declines among social media firms after flagging a hit to digital advertising from privacy changes by Apple. Intel plunged 10% in premarket trading as it missed third-quarter sales expectations, while its Chief Executive pointed to shortage of other chips holding back sales of the company's flagship processors. 10Y yields dropped 2bps, the dollar slumped and bitcoin traded above $63,000. Fed Chair Powell is scheduled to speak at 11am ET.  The Chinese property giant’s bond-coupon payment has boosted sentiment because it reduces risks to the broader financial system, according to Pierre Veyret, technical analyst at ActivTrades. “However, this optimistic trading mood may be short-lived as investors’ biggest concern remains inflation,” he said. “Traders will listen intently to Jerome Powell today as the Fed chairman is expected to give more clues about monetary policy.” Not everything was roses, however, and Facebook fell 3.7%, while Twitter lost 4.1% after Snap said privacy changes by Apple on iOS devices hurt the company's ability to target and measure its digital advertising Snap plunged 20.9% on the news and cast doubts over quarterly reports next week from Facebook and Twitter, social media firms that rely heavily on advertising revenue. Meanwhile supply chain worries, inflationary pressures and labor shortages have been at the center of third-quarter earnings season, with analysts expecting S&P 500 earnings to rise 33.7% year-on-year, according to Refinitiv data. Some analysts, however, said such worries will only have a temporary impact on earnings from mega-cap technology and communications companies this reporting season. "Intel also produced less than stellar results. Shorting big-tech has been a good way to lose money in the past two years, and I expect only a temporary aberration," wrote Jeffrey Halley, senior market analyst, Asia Pacific at OANDA in a client note. Elsewhere, Apple rose 0.2%. Other giga tech stocks including Tesla, Microsoft and Netflix also rose, limiting declines on Nasdaq 100 e-minis. Here are some more premarket movers: Mattel (MAT US) rose 6.7% after the firm known for its Barbie and Fisher-Price toys lifted its full-year guidance amid a sales rebound, even as it grapples with a global logistics crunch ahead of Christmas. Digital World Acquisition (DWAC US) jumped 67% after more than quadrupling on Thursday after news that the blank-check company would merge with former President Donald Trump’s media firm. Phunware (PHUN US) soared 288% as the company, which runs a mobile enterprise cloud platform, is plugged by retail traders on Reddit. Whirlpool (WHR US) fell 2% as the maker of refrigerators reported sales that fell short of Wall Street’s estimates, citing supply chain woes. Investors were more upbeat about Europe, where consumer and tech companies led a 0.6% gain for the Stoxx 600 Index which headed for a third week of gains with cosmetics maker L’Oreal SA jumping more than 6% after reporting sales that were significantly higher than analysts expected. Euro Stoxx 50 and CAC gain over 1%, FTSE 100 and IBEX lag but hold in the green. Tech, household & personal goods and auto names are the strongest sectors. On the downside, French carmaker Renault SA and London Stock Exchange Group Plc were the latest companies to report supply-chain challenges. Here are some of the biggest European movers today: L’Oreal shares rise as much as 6.8% after its 3Q sales beat impresses analysts, with Citi praising the French beauty-product maker’s capacity to re-balance growth between different geographies at a time of worry over China. The stock posted its biggest gain in almost a year. Essity shares are the biggest gainers in the OMX Stockholm 30 large cap index after 3Q EPS beat consensus by 10%, with Jefferies citing lower financing costs as among reasons for the improved earnings. Thule shares rise as much as 6.7%, most since July 21, after the company reported earnings for the third quarter. Klepierre shares gain as much as 4.8%, hitting the highest since Sept. 30, after the French mall owner boosted its net current cash flow per share view amid an ongoing recovery in its markets and stronger-than- expected rent collection. Wise shares fell as much as 5.4% after co-founder Taavet Hinrikus sold a stake worth GBP81.5m in the digital-payments provider to invest in early-stage businesses. Boliden shares declined as much as 6.1%, most since May 2020, after 3Q earnings missed estimates. London Stock Exchange declines as much as 4.2% following third-quarter earnings, with Citi (neutral) describing the revenue mix as “marginally disappointing” amid underperformance in the data and analytics division. Shares in holding company Lifco fell as much as 8% after reporting disappointing sales numbers in its dental business, missing Kepler Cheuvreux’s revenue estimates by 18%. European stocks ignored the latest warning print from the continent's PMIs, where the composite flash PMI declined by 1.9pt to 54.3 in October—well below consensus expectations—continuing the moderation from its July high. The area-wide softening was primarily led by Germany, although sequential momentum slowed elsewhere too. In the UK, on the heels of a succession of downside surprises, the composite PMI surprised significantly to the upside for the first time since May. Supply-side constraints continue to exert upward price pressures, with both input and output prices rising further and reaching new all-time highs across most of Europe. Euro Area Composite PMI (October, Flash): 54.3, GS 54.9, consensus 55.2, last 56.2. Euro Area Manufacturing PMI (October, Flash): 58.5, GS 57.1, consensus 57.1, last 58.6. Euro Area Services PMI (October, Flash): 54.7, GS 54.8, consensus 55.4, last 56.4. Germany Composite PMI (October, Flash): 52.0, GS 54.5, consensus 54.3, last 55.5. France Composite PMI (October, Flash): 54.7, GS 54.3, consensus 54.7, last 55.3. UK Composite PMI (October, Flash): 56.8, GS 53.6, consensus 54.0, last 54.9. Earlier in the session, Asian equities climbed, led by China, as signs that Beijing may be easing its property policies and a bond interest payment by Evergrande boosted sentiment. The MSCI Asia Pacific Index rose 0.2%, on track to take its weekly advance to almost 1%. Chinese real estate stocks, including Seazen Group and Sunac China, were among the top gainers Friday, after Beijing called for support for first-home purchases, adding to recent official rhetoric on property market stability. China Evergrande Group pulled back from the brink of default by paying a bond coupon before this weekend’s deadline. The payment “brings some near-term reprieve ahead of its official default deadline and presents a more positive scenario than what many will have expect,” said Jun Rong Yeap, a market strategist at IG Asia Pte. The Asian measure was also bolstered by tech shares, including Japan’s Tokyo Electron and Tencent, while the Hang Seng Tech Index capped a 6.9% rise for the week in its biggest climb since August. The gains in the sector offset declines for mining shares as coal futures in China extended a price collapse to more than 20% in three days. Unlike in the U.S., where stocks are trading at a record high, Asian shares have been mixed in recent weeks as traders try to assess the impact on earnings of inflation, supply chain constraints and China’s growth slowdown. Falling earnings growth forecasts, combined with rising inflation expectations, are continuing to cast “a stagnation shadow over markets,” Kerry Craig, a global markets strategist at JPMorgan Asset Management, said in a note. In rates, Treasuries resumed flattening with long-end yields richer by more than 2bp on the day, while 2-year yield breached 0.46% for the first time since March 2020, extending its third straight weekly increase. 2-year yields topped at 0.464% while 10-year retreated from Thursday’s five-month high 1.70% to ~1.685%, remaining higher on the week; 2s10s is flatter by 2.5bp, 5s30s by ~1bp. In 10-year sector bunds cheapen by 3.5bp vs Treasuries as German yield climbs to highest since May; EUR 5y5y inflation swap exceeds 2% for the first time since 2014. In Europe, yield curves were mixed: Germany bear-flattened with 10-year yields ~2bps cheaper near -0.07%. Meanwhile, measures of inflation expectations continue to print new highs with EUR 5y5y inflation swaps hitting 2%, the highest since 2014, and U.K. 10y breakevens printing at a 25-year high. In FX, AUD and NZD top the G-10 scoreboard. The Bloomberg dollar index Index fell and the greenback traded weaker against all its Group-of-10 peers apart from the pound; risk-sensitive Scandinavian and Antipodean currencies led gains. The pound inched lower after U.K retail sales fell unexpectedly for a fifth month as consumer confidence plunged, adding to evidence that the economic recovery is losing momentum. The cost of hedging against inflation in the U.K. over the next decade rose to the highest level in 25 years amid mounting concern over price pressures building in the economy. The Aussie dollar climbed as positive sentiment was boosted by the news about Evergrande Group’s bond payment; it had earlier fallen to a session low after the central bank announced an unscheduled bond-purchase operation to defend its yield target. The yen held steady following two days of gains as a rally in Treasuries narrows yield differentials between Japan and the U.S. In commodities, crude futures recover off Asia’s worst levels, settling around the middle of this week’s trading range. WTI is 0.5% higher near $82.90, Brent regains a $85-handle. Spot gold adds ~$10 to trade near $1,792/oz. Most base metals trade well with LME nickel and zinc outperforming. Looking at the day ahead, the main data highlight will be the aforementioned flash PMIs from around the world, on top of UK retail sales for September. From central banks, Fed Chair Powell will be speaking, in addition to the Fed’s Daly and the ECB’s Villeroy. Earnings releases will include Honeywell and American Express. Market Snapshot S&P 500 futures little changed at 4,538.75 STOXX Europe 600 up 0.4% to 471.82 MXAP up 0.2% to 200.16 MXAPJ up 0.2% to 661.40 Nikkei up 0.3% to 28,804.85 Topix little changed at 2,002.23 Hang Seng Index up 0.4% to 26,126.93 Shanghai Composite down 0.3% to 3,582.60 Sensex down 0.2% to 60,775.00 Australia S&P/ASX 200 little changed at 7,415.48 Kospi little changed at 3,006.16 Brent Futures up 0.2% to $84.81/bbl Gold spot up 0.5% to $1,792.58 U.S. Dollar Index down 0.18% to 93.60 Euro up 0.2% to $1.1645 Top Overnight News from Bloomberg The Bank of England will likely defy investors’ expectations of a sudden interest-rate increase next month because it rarely shifts policy in such dramatic fashion, according to three former senior officials. The ECB will supercharge its regular bond-buying program before pandemic purchases run out in March, according to economists surveyed by Bloomberg. Euro-area businesses are reporting a sharp slowdown in activity caused by an aggravating global supply squeeze that’s also producing record inflation. French manufacturing output declined at the steepest pace since coronavirus lockdowns were in place last year, while growth momentum deteriorated sharply in Germany, purchasing managers report. Private-sector activity in the euro area slowed to the weakest since April, though it remained above a pre-pandemic average. China continued to pull back on government spending in the third quarter even as the economy slowed, with the cautious fiscal policy reflecting the desire to deleverage and improve public finances. President Joe Biden said the U.S. was committed to defending Taiwan from a Chinese attack, in some of his strongest comments yet as the administration faces calls to clarify its stance on the democratically ruled island. A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded with a positive bias but with gains capped following the temperamental mood on Wall St amid mixed earnings results and although a late tailwind heading into the close lifted the S&P 500 to a record high and contributed to the outperformance of the NDX, futures were then pressured after hours as shares in Intel and Snap slumped post-earnings with the latter down as much as 25% on soft guidance which subsequently weighed on tech heavyweights including social media stocks such as Facebook and Twitter. ASX 200 (Unch.) was subdued amid weakness in mining names and financials but with downside cushioned after the recent reopening in Melbourne and with the RBA also conducting unscheduled purchases to defend the yield target for the first time since February. Nikkei 225 (+0.3%) recovered from opening losses with risk appetite at the whim of a choppy currency and with some encouragement heading into the easing of restrictions in Tokyo and Osaka from Monday. News headlines also provided a catalyst for individual stocks including Nissan which was subdued after it cut planned output by 30% through to November and with Toshiba pressured as merger talks between affiliate Kioxia and Western Digital stalled, while SoftBank enjoyed mild gains after a 13.5% increase in WeWork shares on its debut following a SPAC merger. Hang Seng (+0.4%) and Shanghai Comp. (-0.3%) traded, initially, with tentative gains after another respectable liquidity injection by the PBoC and news of Evergrande making the USD-bond interest payment to avert a default ahead of tomorrow’s grace period deadline. This lifted shares in Evergrande with attention now turning to another grace period deadline for next Friday, although regulatory concerns lingered after the PBoC stated that China will continue separating operations of banking, securities and insurance businesses, as well as signed an MOU with the HKMA on fintech supervision and cooperation in the Greater Bay area. Finally, 10yr JGBs were lower on spillover selling following a resumption a resumption of the curve flattening stateside where T-note futures tested the 130.00 level to the downside amid inflationary concerns and large supply from AerCap which launched the second largest IG dollar bond issuance so far this year. In addition, the gains in Japanese stocks and absence of BoJ purchases in the market today added to the lacklustre demand for JGBs, while today also saw the RBA announce unscheduled purchases valued at AUD 1bln to defend the yield target for the first time since February, although the impact on yields was only brief. Top Asian News Tencent Blames WeChat Access for Search Engines on Loophole JPM’s Yang Joins Primas Asset Management’s Credit Trading Team Gold Rises on Weaker Dollar to Head for Second Weekly Gain Interest Payment Made; Junk Bonds Rally: Evergrande Update A choppy start to the session has seen European equities extend on opening gains (Stoxx 600 +0.8%) with the Stoxx 600 on course to see the week out relatively unchanged. After a marginally positive lead from Asia, European stocks picked up after the cash open with little in the way of clear catalysts for the surge. Macro focus for the region has fallen on flash PMI readings for October which painted a mixed picture for the Eurozone economy as the EZ-wide services metric fell short of expectations whilst manufacturing exceeded forecasts. Despite printing north of the 50-mark, commentary from IHS Markit was relatively downbeat, noting that "After strong second and third quarter expansions, GDP growth is looking much weaker by comparison in the fourth quarter.” Stateside, futures are mixed with the ES relatively flat whilst the NQ (-0.3%) lags after shares in Intel and Snap slumped post-earnings with the latter down as much as 25% on soft guidance which subsequently weighed on tech heavyweights including social media stocks such as Facebook (-4% pre-market) and Twitter (-4.5% pre-market). Elsewhere in the US, traders are awaiting further updates in Capitol Hill, however, moderate Democrat Senator Manchin has already tempered expectations for a deal being reached by today’s goal set by Senate Majority Leader Schumer. Back to Europe, sectors are mostly firmer with outperformance in Personal & Household Goods following earnings from L’Oreal (+6.2%) who sit at the stop of the Stoxx 600 after Q3 earnings saw revenues exceed expectations. To the downside, Telecom names are lagging amid losses in Ericsson (-3.1%) after the DoJ stated that the Co. breached obligations under a Deferred Prosecution Agreement. Elsewhere, Vivendi (+3.1%) is another notable gainer in the region as Q3 earnings exceeded analyst estimates. LSE (-3.3%) sits at the foot of the FTSE 100 post-Q3 results, whilst IHG (-3.5%) is another laggard in the index post-earnings as the Co.’s fragile recovery continues. Top European News U.K.-France Power Cable Has Unplanned Halt: National Grid Banks Prepare to Fight Basel Over Carbon Derivatives Rule Wise Slumps After Founder Hinrikus Offloads $112 Million Stake London Stock Exchange Says Supply Chains to Delay Tech Spend In FX, the Greenback has topped out yet again, and partly in tandem with US Treasury yields following their latest ramp up, but also against the backdrop of improved risk appetite that emerged during APAC hours when reports that China’s Evergrande made an overdue interest payment helped to lift sentiment after a late tech-led downturn on Wall Street. The index may also have lost momentum on technical grounds following a minor extension to 93.792, but still not enough impetus to reach 94.000 or test a couple of resistance levels standing in the way of the nearest round number (Fib resistance at 93.884 and 21 DMA that comes in at 93.948 today compared to 93.917 on Thursday), and a fade just shy of yesterday’s best before the aforementioned drift back down to meander between a narrow 93.789-598 corridor. Ahead, Markit’s flash PMIs and a trio of Fed speakers including Williams, Daly and chair Powell feature on Friday’s agenda alongside today’s batch of earnings. AUD/NZD/CAD - Honours remain pretty even down under as the Aussie and Kiwi both take advantage of the constructive market tone that is weighing on their US counterpart, while assessing specifics such as RBA Governor Lowe reiterating no target rate for Aud/Usd, but the Bank having to intervene in defence of the 0.1% 3 year yield target for the first time in 8 months overnight in wake of upbeat preliminary PMIs. Meanwhile, NZ suffered another record number of new COVID-19 cases to justify PM Adern’s resolve to keep restrictions tight until 90% of the population have been vaccinated and keep Nzd/Usd capped under 0.7200 in mild contrast to Aud/Usd hovering just above 0.7500. Elsewhere, some traction for the Loonie in the run up to Canadian retail sales from a rebound in WTI to retest Usd 83/brl from recent sub-Usd 81 lows, as Usd/Cad retreats towards the bottom of a 1.2375-30 range. EUR/CHF/GBP/JPY - All marginally firmer or flat against the Dollar, but the Euro easing back into a lower band beneath 1.1650 and not really helped by conflicting flash PMIs or decent option expiry interest from 1.1610-00 (1.4 bn) that could exert a gravitational pull into the NY cut. The Franc is keeping afloat of 0.9300, but under 0.9250, the Pound has bounced to probe 1.3800 on the back of considerably stronger than expected UK prelim PMIs that have offset poor retail sales data and could persuade more of the BoE’s MPC to tilt hawkishly in November, especially after the new chief economist said the upcoming meeting is live and policy verdict finely balanced. Conversely, the BoJ is widely tipped to maintain accommodation next week and as forecast Japanese inflation readings will do little to change perceptions, putting greater emphasis on the Outlook Report for updated growth and core CPI projections and leaving the Yen tethered around 114.00 in the meantime. SCANDI/EM - The Sek and Nok are on a firm footing circa 9.9800 and 9.7000 against the Eur respectively, and the former may be acknowledging an upbeat Riksbank business survey, while the latter piggy-backs Brent’s recovery that is also underpinning the Rub in the run up to the CBR and anticipated 25 bp hike. The Cnh and Cny are back in the ascendency with extra PBoC liquidity and Evergrande evading a grace period deadline by one day to compensate for ongoing default risk at its main Hengda unit, but the Try is still trying in vain to stop the rot following Thursday’s shock 200 bp CBRT blanket rate cuts and has been down to almost 9.6600 vs the Usd. In commodities, WTI and Brent are marginally firmer this morning though reside within overnight ranges and have been grinding higher for the duration of the European session in-spite of the lack of newsflow generally and for the complex. Currently, the benchmarks are firmer by circa USD 0.40/bbl respectively and reside just off best levels which saw a brief recapture of the USD 83/bbl and USD 85/bbl handles. Given the lack of updates, the complex remains attentive to COVID-19 concerns where officials out of China reiterated language issues yesterday about curbing unnecessary travel around Beijing following cases being reported in the region. Elsewhere, yesterday’s remarks from Putin continue to draw focus around OPEC+ increasing output more than agreed and once again reiterating that Russia can lift gas supplies to Europe; but, as of yet, there is no update on the situation. Finally, the morning’s European earnings were devoid of energy names, but updated Renault guidance is noteworthy on the fuel-demand front as the Co. cut its market forecast to Europe and anticipates a FY21 global vehicle loss of circa 500k units due to component shortages. Moving to metals, spot gold and silver are firmer but have been fairly steady throughout the session perhaps aided by the softer dollar while elevated yields are perhaps capping any upside. Base metals remain buoyed though LME copper continues to wane off the closely watched 10k mark. US Event Calendar 9:45am: Oct. Markit US Composite PMI, prior 55.0 9:45am: Oct. Markit US Services PMI, est. 55.2, prior 54.9 9:45am: Oct. Markit US Manufacturing PMI, est. 60.5, prior 60.7 10am: Fed’s Daly Discusses the Fed and Climate Change Risk 11am: Powell Takes Part in a Policy Panel Discussion DB's Jim Reid concludes the overnight wrap Hopefully today is my last Friday ever on crutches but with two likely knee replacements to come in the next few years I suspect not! 6 days to go until the 6 weeks of no weight bearing is over. I’m counting down the hours. Tomorrow I’ll be hobbling to London to see “Frozen: The Musical”. I’ve almost had to remortgage the house for 5 tickets. There is no discount for children which is a great business model if you can get away with it. Actually given the target audience there should be a discount for adults as I can think of better ways of spending a Saturday afternoon. The weekends have recently been the place where the Bank of England shocks the market into pricing in imminent rate hikes. Well to give us all a break they’ve gone a couple of days early this week with new chief economist Huw Pill last night telling the FT that the November meeting was “live” and that with inflation was likely to rise “close to or even slightly above 5 per cent” early next year, which for a central bank with a 2% inflation target, is “a very uncomfortable place to be”. Having said that, he did add that "maybe there’s a bit too much excitement in the focus on rates right now" and also talked about how the transitory nature of inflation meant there was no need to go into a restrictive stance. So the market will probably firm up November hike probabilities today but may think 1-2 year pricing is a little aggressive for the moment. However, it’s been a volatile ride in short sterling contracts of late so we will see. Ultimately the BoE will be a hostage to events. If inflation remains stubbornly high they may have to become more hawkish as 2022 progresses. This interview capped the end of a day with another selloff in sovereign bond markets as investors continued to ratchet up their expectations of future price growth. In fact by the close of trade, the 5yr US inflation breakeven had risen +10.0bps to 2.91%, and this morning they’re up another +3.5bps to 2.95%, which takes them to their highest level in the 20 years that TIPS have traded. 10y breakevens closed up +4.7bps at 2.65%, their highest level since 2011. Bear in mind that at the depths of the initial Covid crisis back in 2020, the 5yr measure fell to an intraday low of just 0.11%, so in the space of just over 18 months investors have gone from expecting borderline deflation over the next 5 years to a rate some way above the Fed’s target. Those moves weren’t just confined to the US however, as longer-term inflation expectations moved higher in Europe too. The 10yr German breakeven rose +5.4bps to a post-2013 high of 1.87%, and its Italian counterpart hit a post-2011 high of 1.78%. And what’s noticeable as well is that these higher inflation expectations aren’t simply concentrated for the next few years of the time horizon, since the 5y5y inflation swaps that look at expectations for the five year period starting in five years’ time have also seen substantial increases. Most strikingly of all, the Euro Area 5y5y inflation swap is now at 1.95%, which puts it almost at the ECB’s 2% inflation target for the first time since 2014. The global increase in inflation compensation drove nominal yields higher, with the yield on 10yr US Treasuries up +4.4bps yesterday to a 6-month high of 1.70%, as investors are now pricing in an initial hike from the Fed by the time of their July 2022 meeting. And in Europe there was a similar selloff, with yields on 10yr bunds (+2.4bps), OATs (+2.1bps) and BTPs (+2.7bps) all moving higher too. Interestingly though, the slide in sovereign bonds thanks to higher inflation compensation came in spite of the fact that commodity prices slid across the board, with energy, metal and agricultural prices all shifting lower, albeit in many cases from multi-year highs. Both Brent Crude (-1.41%) and WTI (-1.63%) oil prices fell by more than -1% for the first time in over two weeks, whilst the industrial bellwether of copper (-3.72%) had its worst daily performance since June. Even with high inflation remaining on the agenda, US equities proved resilient with the S&P 500 (+0.30%) posting a 7th consecutive advance to hit an all-time high for the first time in 7 weeks. Consumer discretionary and retail stocks were the clear outperformer, in line with the broader reflationary sentiment. Other indices forged ahead too, with the NASDAQ (+0.62%) moving to just -1.04% beneath its own all-time record, whilst the FANG+ index (+1.11%) of megacap tech stocks climbed to a fresh record as well. In Europe the major indices were weaker with the STOXX 600 retreating ever so slightly, by -0.08%, but it still remains only -1.29% beneath its August record. Looking ahead, the main theme today will be the release of the flash PMIs from around the world, which will give us an initial indication of how various economies have fared through the start of Q4. Obviously one of the biggest themes has been supply-chain disruptions throughout the world, so it’ll be interesting to see how these surface, but the composite PMIs over recent months had already been indicating slowing growth momentum across the major economies. Our European economists are expecting there’ll be a further decline in the Euro Area composite PMI to 55.1. Overnight we've already had some of those numbers out of Asia, which have showed a recovery from their September levels. Indeed, the Japanese service PMI rose to 50.7 (vs. 47.8 in Sep), which is the first 50+ reading since January 2020 before the pandemic began, whilst the composite PMI also moved back into expansionary territory at 50.7 for the first time since April. In Australia there was also a move back into expansion, with their composite PMI rising to 52.2 (vs. 46.0 in Sep), the first 50+ reading since June. Elsewhere in Asia, equity markets have followed the US higher, with the Hang Seng (+0.92%), CSI (+0.87%), Hang Seng (+0.42%), KOSPI (+0.27%) and Shanghai Composite (+0.09%) all in the green. That also comes as Japan’s nationwide CPI reading moved up to +0.2% on a year-on-year basis, in line with expectations, which is the first time so far this year that annual price growth has been positive. In other news, we learnt from the state-backed Securities Times newspaper that Evergrande has avoided a default by making an $83.5m interest payment on a bond whose 30-day grace period was going to end this weekend. Separately, the state TV network CCTV said that 4 Covid cases had been reported in Beijing and an official said that they would be testing 34,700 people in a neighbourhood linked to those cases. Looking forward, equity futures are pointing to a somewhat slower start in the US, with those on the S&P 500 down -0.08%. Turning to the pandemic, global cases have continued to shift higher in recent days, and here in the UK we had over 50k new cases reported yesterday for the first time since mid-July. New areas are moving to toughen up restrictions, with Moscow moving beyond the nationwide measures in Russia to close most shops and businesses from October 28 to November 7. In better news however, we got confirmation from Pfizer and BioNTech that their booster shot was 95.6% effective against symptomatic Covid in a trial of over 10,000 people. Finally, there was some decent economic data on the US labour market, with the number of initial jobless claims in the week through October 16 coming in at 290k (vs. 297k expected). That’s the lowest they’ve been since the pandemic began and also sends the 4-week average down to a post-pandemic low of 319.75k. Alongside that, the continuing claims for the week through October 9 came down to 2.481m (vs. 2.548m expected). Otherwise, September’s existing home sales rose to an annualised rate of 6.29m (vs. 6.10m expected), and the Philadelphia Fed’s business outlook survey fell to 23.8 (vs. 25.0 expected). To the day ahead now, and the main data highlight will be the aforementioned flash PMIs from around the world, on top of UK retail sales for September. From central banks, Fed Chair Powell will be speaking, in addition to the Fed’s Daly and the ECB’s Villeroy. Earnings releases will include Honeywell and American Express. Tyler Durden Fri, 10/22/2021 - 08:07.....»»

Category: dealsSource: nytOct 22nd, 2021