Russia In "Goodwill" Withdrawal From Ukraine's Snake Island To Free Up Grain Exports Russia has taken a major step in trying to demonstrate to Western powers that it's serious about freeing up grain passage off Ukraine's coast and in the Black Sea, with on Thursday its military announcing the complete withdrawal of forces from Ukraine's Snake Island. The Russian Defense Ministry (MoD) said in a statement that the purpose is to free the passage of Ukraine's grain exports in a "goodwill" measure. "On June 30, as a step of goodwill, the Armed Forces of the Russian Federation completed their tasks on the Snake Island and withdrew from the garrison stationed there," the MoD said. Snake Island file, via Ukrinform "Thus, it was demonstrated to the world community that the Russian Federation does not hinder the efforts of the UN to organize a humanitarian corridor for the export of agricultural products from the territory of Ukraine," it stated further. The statement then called on Ukraine's government to clear its mines earlier placed on the sea coast and in ports which the Kremlin says is the major impediment blocking sea transit. The northwest Black Sea island has been under control of the Russian military since the start of the conflict, making the retreat of Russian forces a rare and significant battlefield de-escalation there. However, Ukraine disputed Russia's version of events, rejecting that it was a voluntary "goodwill" withdrawal initiated by the Russian side, instead claiming that it was Ukraine's military that drove the Russians from the island. The head of Ukraine’s army, Valeriy Zaluzhny, stressed his forces had liberated the island. "I thank the defenders of Odessa region who took maximum measures to liberate a strategically important part of our territory," he said on Telegram. Kiev has said its forces mounted a major series of strikes. And a representative of Ukrainian President Volodymyr Zelensky’s office, Andriy Yermak, confirmed that Russian forces have indeed exited the island, writing on Twitter: "KABOOM! No Russian troops on the Snake Island anymore. Our Armed Forces did a great job." Image source: Bloomberg News, June 8, 2022. Bloomberg noted that upon the announcement Chicago wheat futures fell as much as 1.3%, and then pared the loss to trade higher on the day. Russia has consistently claimed it's not responsible for establishing 'safe passage' corridors on Ukraine's coast due to the presence of thousands of Ukrainian sea mines. The crisis has stoked global prices for vital food products from grains to cooking oils, and fertilizer and fuel. As hundreds of millions of people come under threat of near future famine conditions due to Ukraine not exporting its grains, particularly in the Middle East and Africa, the United Nations has scrambled to broker a deal with the help of Turkey, which controls access to Black Sea waters through its straits. Ukraine says that it forced Russia to withdraw from Snake Island on two speedboats Clashes between Ukrainian and Russian forces continue even though Russia claims it left voluntarily to facilitate grain exports — Samuel Ramani (@SamRamani2) June 30, 2022 Meanwhile, hours after the Russian withdrawal announcement, there are emerging conflicting reports that there could still be clashes on Snake Island. Tyler Durden Thu, 06/30/2022 - 09:40.....»»

Jim Chanos' Next "Big Short Right Now" Is REIT-Owned Data Centers One of the world's most well-known short-sellers, Jim Chanos, is betting against "legacy" data centers facing increasing competition from technology giants that have been their biggest customers.  Chanos and his firm Kynikos Associates are raising several hundred million dollars for a fund that will place bearish bets on data center REITs.  "This is our big short right now," Chanos said in a Financial Times interview. "The story is that although the cloud is growing, the cloud is their enemy, not their business. Value is accruing to the cloud companies, not the bricks-and-mortar legacy data centers."  Chanos's thesis is that the largest cloud providers, Amazon Web Services, Google Cloud, and Microsoft Azure, are building their own data centers instead of leasing from REIT-owned data centers. He believes many of these REITs are overvalued and are on the cusp of experiencing a slump in revenue and faltering earnings growth.   "The real problem for data center REITs is technical obsolescence ... Their three biggest customers are becoming their biggest competitors. And when your biggest competitors are three of the most vicious competitors in the world, then you have a problem," Chanos continued.  Watch Digital Realty and Equinix, as well as data center operators Cyxtera Technologies and Iron Mountain, are ones to watch after Chanos announced his new short thesis. American Tower Corporation is another after it recently acquired CoreSite Realty Corp.  Chanos also spoke about equity valuations. He said, "One thing that amazes me is how sanguine inventors are ... People just shrug their shoulders and don't seem to notice where equity valuations are today versus historically and that there are so many flawed business models. It's a little bit baffling that no one seems to think they need financial insurance because it's pretty cheap. It's another reason to be more cautious — no one is beating down the door of short-sellers these days."  He said today's turmoil in stocks could be described as "the dot-com era on steroids" amid the implosion of profitless companies.  Chanos expects more downside in stocks as the market cycle trends lower, noting it will be a rewarding environment for short-sellers: "We'll be feasting on the returns of these stock ideas for years — very similar to the post-dotcom era." Tyler Durden Wed, 06/29/2022 - 10:20.....»»

WTI Extends Gains After 'Delayed' DoE Data Show Cushing Stocks Near 'Operational Low' Limits After "systems issues" 'delayed' last week's inventory, supply, and demand data from the EIA, the admin will report this week's data as well as last week's combined following API reported a notable build the prior week and a surprise draw last week. API (last week) Crude +5.607mm Cushing -390k Gasoline +1.216mm - first build since March Distillates -1.656mm API (this week) Crude -3.799mm Cushing -650k Gasoline +2.852mm Distillates +2.613mm So over the last two weeks, API reports (net) a small crude build, notable Cushing draw, large gasoline build and small distillates build. Oil prices are notably higher again today following reports that Iran-deal-talks have failed and news that Libya has halted oil exports. Additionally, OPEC's pre-meeting reportedly concluded with no discussion of oil policy, focusing instead on administrative affairs, including an update to the group’s manifesto of guiding principles known as its Long-Term Strategy. Meanwhile, a deluge of ugly macro data provides some fodder for the oil bears (though it is being dominated by supply fears for now)... “Recession fears are just that -- fears,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd.  “In the meantime, oil fundamentals remain solid.” So all eyes are back on the official inventory and demand data... DOE (net of the two weeks) Crude -2.762mm Cushing -782k Gasoline +2.645mm Distillates +2.559mm The official data shows a small crude draw (API showed a small crude build), Cushing a 6th weekly draw of the last 7 (confirming API's net draw). On the product side both gasoline and distillates showed unexpectedly large inventory builds (also confirming API's data)... Source: Bloomberg The headline draw in crude stockpiles of 2.76 million barrels was boosted by the withdrawal of another 6.95 million barrels of crude from the SPR last week. However, as Bloomberg's Javier Blas noted in a tweet: "Over the last 2 weeks, the US gov has injected 13.7 million barrels from the SPR into the market. And yet, commercial oil stockpiles still fell 3 million barrels over the period. Just imagine if the SPR wasn't there. Or what would happen post-Oct when sales end" Cushing inventories are getting very close to operational-low-limits again... Source: Bloomberg Cushing storage tanks require a minimum level of oil to maintain normal operations, which traders estimate at ~20M barrels. Gasoline demand finally appears to be succumbing in a more substantial way to record high gasoline prices. As Bloomberg reports, the past two weeks show the four-week moving average of product supplied falling back below 9 million barrels a day, meaning demand is now more than 600 thousand barrels a day below typical seasonal levels. Source: Bloomberg US Crude Production rose to its highest since April 2020... Source: Bloomberg WTI was hovering around $113.50 ahead of the EIA data and extended gains modestly after the data... Finally, we note that the tight supply situation in oil (especially European) is revealing itself in the WTI-Brent spread, grew to $6.19, the widest in almost three months. Source: Bloomberg “European demand will remain robust, especially as natural gas supplies run out, while the North American demand for crude is weakening,” said Ed Moya, senior market analyst at Oanda. This is not good news for President Biden as prices are rising... Source: Bloomberg And his ratings are hitting record lows. Tyler Durden Wed, 06/29/2022 - 10:37.....»»

"It Is Possible - Even Probable - That The World System Will Shatter" By Michael Every of Rabobank "and such small portions" Another messy market day with bond yields down slightly, stocks by more, and oil up a lot. That was on the back of ugly US data, in particular consumer confidence expectations tumbling to 66.4, the lowest in years, and China reducing quarantine times from two to one week, which despite suggestions that Zero Covid will stay for five years(!), is a possible sign of opening up. The irony is that if China does, or stimulates, growth will pick up, commodity prices will go up, and the Fed will have to act more aggressively. The dollar had an up day, perhaps smelling that too. The news-flow was of utopian plans that can’t be enacted. Like the Woody Allen joke about the Catskills hotel with terrible food “and such small portions”, is this a good or bad thing? The ECB said it will roll out its anti-fragmentation toolkit from Friday, the same day it stops doing QE. How will it work? Don’t know. Will it work? Don’t know. What is the true price of assets against a backdrop of the ECB both removing and injecting bond market liquidity? Don’t know. The G7 was all about Russia. The major policies announced were: a “pursuit” of discussions about ideas about a price cap on Russian oil imports (so no actual action); a short-term push for LNG from anyone but Russia; the formation of ‘climate clubs’; and a pledge of $4.5bn to help fight the global food crisis, taking the headline total for that to $14bn. The ‘oil cap’ is simple in theory: the G7 will refuse to provide insurance to any vessel that carries Russian oil unless the cargo is sold with an agreed price cap. Yet it won’t work and will just push oil prices higher. Russia will never agree. China and India will never agree either. Russia and China may offer their own underwriting services, which would force the West into physically blocking cargoes and confronting China - as a Russian-oil carrying ship is stopped in the US, says the Wall Street Journal. Plus, the G7 are already not taking Russian oil: they are taking Russian oil from India and China that is being on-sold. In this economic war, the G7 continue to tell their opponents that they will invade in exactly six months, and where, and with which forces, and in the interim demand they are allowed to use that country’s beaches: Russia just counterattacks unannounced (but not unexpectedly). Russian gas flows to the EU will remain low enough for long enough to teach the West a lesson. On LNG, the G7 says investment is "appropriate as a temporary response” but warns against locking in fossil-fuel use because that would make climate goals unachievable. In short, we need lots of investment and supply - which will then be abandoned. This stance upsets both the environmental lobby and potential LNG exporters and investors. The G7 also says DM polluters and EM economies should join 'climate clubs' to create global markets for green products through carbon pricing or other climate-mitigation strategies. Just what we need during an economic war – market mechanisms! What this likely means is carbon border adjustment tariffs or quotas on imports from ‘non-green’ countries. These are actually protectionist measures that will separate EM like China from the DM like the US, EU, and Japan, something I have flagged for a long time. Today sees FT’s Martin Wolf’s promised answer to our global structural dilemmas in his op-ed ‘In an era of disorder, open trade is at risk’. It is, as feared, ‘42’. He admits we are in an epoch of world disorder, and we can only save the neoliberal trade order with “great difficulty”. Yet his proposed solutions, besides giving small countries a voice on trade --how? By them going on strike?-- are: Sustainability. Which means ‘climate clubs’, which means DM vs. China green tariffs. It also needs huge DM capital flows to EM to finance green transitions during a food and energy crisis, and when the global system breaking down involves EM capital flows to DM via trade surpluses. Security. Which means diversifying Western supply chains, which China will fight tooth and nail. It also means allowing governments to set up negative national security lists. Isn’t this happening, and part of the problem, not the solution? Blocs. Don’t allow them. Friend-shoring is not to be embraced. Neither is regionalisation, because it might mean North America and Europe are locked out of Asia. In short, ‘don’t do anything’. Global problem solved! Standards. We need them. But not on labour, perhaps, just the environment and digital services. Who gets to set them, to what end? Isn’t this part of China’s and Russia’s gripe? Domestic policy. We need to “[educate] the public on the cost of protection” and help “all those adversely affected by economic changes.” 40+ years into neoliberalism, and 14 years after the Global Financial Crisis, this is the best we can do?! We just saw ‘Build Back Better’ turn into high inflation, food and energy crises, higher rates, and a looming recession. Somehow bleating “Free trade gooood; tariffs baaaad!” and spending public money on those left behind *without producing any inflation* will solve our problems. If it doesn’t, Wolf warns “an ill-informed nationalism is bound to sever the bonds of commerce.” Indeed, Wolf is honest at the end: “It is possible --perhaps even probable-- that the world system will shatter.” Colour me unsurprised. If this wasn’t the pattern of history, many readers would be Romans. However, he still begs for someone, if not the US, to save global free trade. Which country wants to import from everyone else and deindustrialize in the process? This then takes us back to a more realpolitik great power world. (As has been argued here for many years.) Yet even in that territory, utopian plans are the order of the day. It appears Türkiye will now let Sweden and Finland join NATO. However, NATO has announced its armies will be carbon neutral by 2050. Nice: but how about being capable of winning dirty wars first? As National Defence Magazine was saying a year ago, ‘Electric Vehicles for the Military Still a Pipedream’. You can’t wait 8 hours to recharge a tank in combat in the middle of a muddy field. You can’t power long-range electric fighter jets. And I don’t think bombs are carbon neutral. UK PM Johnson has had to abandon his ‘CPI +0.5% until 2028’ defense spending pledge after CPI rose to 9.1%. Welcome to the real world of real economic power and realpolitik. (As Scotland announces an unofficial independence referendum for October 19, 2023, promising even greater economic uncertainty.) Meanwhile, China has 2.1% CPI and is growing its military spending very rapidly. “Freedom has to be better armed than tyranny,” said UK Foreign Secretary Truss recently. Well, freedom needs a new economic plan then, pronto. Indeed, we all do. We rightly focus on the Fed and the ifs and buts and maybes of its pivots and divots, as another 75bps for the next meeting is waved as a prospect. But if it’s “perhaps even probable” that “the world system shatters”, perhaps markets should start thinking about what it implies for rates and FX? That thinking is currently served up in such small portions. Tyler Durden Wed, 06/29/2022 - 10:45.....»»

Putin Travels To Friendly Central Asian Countries In 1st Trip Abroad Since War Began.....»»

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.....»»

"We"ve Been Here Before": Bitcoin Breaks Below $20,000 As FundStrat Suggests "Final Washout".....»»

Tesla Lays Off 200 Autopilot Workers, Shutters Its San Mateo Office It looks as though not quite everything may be copacetic in the world of Tesla's Autopilot feature.  That's because yesterday, in the midst of a now weeks-long period of silence for Elon Musk on Twitter, it was reported that Tesla was laying off about 200 jobs related to Autopilot and closing its San Mateo office, where Autopilot was the focus.  Two employees told CNBC that they knew the company's lease was heading toward its end on the office.  The CNBC report said that the jobs were likely "data annotation" jobs, which "involves identifying and describing objects in short clips that were captured by cameras and sensors on Tesla vehicles", in addition to labeling data. Data labelers are also responsible for logging overlapping objects and their effectiveness as employees is rated on how many clips they can annotate over short periods of time.  An employee told CNBC they expected to be moved to Palo Alto, but not to lose their job. In a audio recording of a Tesla meeting, a manager tells employees “You knew our lease was ending here in San Mateo,” before telling them the company has put a "restructure in place" and that their "positions were impacted".  Employees were told that June 28 would be their last day.  Meanwhile, the loss of employees in the Autopilot division comes just days after we reported that Teslas on Autopilot were found to crash more than competitors. The National Highway Traffic Safety Administration has been gathering the data for about a year. It said two weeks ago that it had documented more than 200 crashes involving Teslas on some form of automated driving system. The data will "single out" Tesla for a "disproportionately high number" of crashes, AP wrote last week.   The data showed that Tesla's crash rate per 1,000 vehicles was "substantially higher" than other automakers. The data was being collected as part of a NHTSA investigation looking into Tesla vehicles' mysterious penchants for crashing into stopped vehicles and emergency vehicles on roadways - a disturbing trend we have been documenting for the better part of the last several years.  Remember, we wrote back in February that the NHTSA was looking at over 416,000 Teslas over "phantom braking".  The agency had opened a formal investigation into 416,000 Model 3 and Model Y vehicles over reports of unexpected brake activation at high speeds when driver-assistance system Autopilot is engaged.  NHTSA said the investigation was being opened after it received 354 complaints about "rapid deceleration can occur without warning, at random, and often repeatedly in a single drive cycle." No crashes or injuries have stemmed from the braking issue.  Tyler Durden Wed, 06/29/2022 - 08:25.....»»

US Q1 GDP Revisions Scream Stagflation The third look at Q1 GDP appears to confirm the worsening picture of the US economy that is now evident in sentiment surveys nationwide. Growth was revised even lower to -1.6% Annualized QoQ (from -1.5%)... Personal Consumption growth collapsed from +3.1% to just +1.8% - weakest since the COVID lockdown collapse... And finally, inflation - GDP Price Index - rose from +8.1% to +8.2% - the highest since June 1981... So - stagflation it is... not exactly what The Fed wants to see. Tyler Durden Wed, 06/29/2022 - 08:38.....»»

The Best Early Recession Indicator As we approach the end of the first half, it’s safe to say that how the second progresses will likely be determined by whether the US moves into recession or not (and how soon). In regards to this key question, Deutsche Bank's Jim Reid writes that those readers looking for lead indicators, the bank's economists have long believed that continuing claims are the best signal for an imminent slide into recession. In a recent piece, they show how an +11.5% rise above the minimum level over the previous year provides the most accurate and timely signal of recession risks since the data becomes available in the 1960s. It works for each recession and normally leads by around 2 months. In this cycle, the current low was 1306k hit on May 20th 2022. So far it’s up less than 1% to 1315k and would need to hit 1456k for the 2-month recessionary countdown clock to start ticking. However, as one can can see from the chart below, this isn’t a big pick-up in historical terms so although we’re not trending there at the moment, it wouldn’t take too much to change the picture. Indeed one concern is that initial jobless claims are up from a trough of 166k in March to 229k last week. Over time, Reid writes, these two series are very well correlated so this is a big enough move to confirm an imminent recession if continuing claims catch up. However this series is seasonally adjusted and non-seasonally adjusted claims are still bumping along the bottom and DB economist Matt Luzzetti thinks there may be some issues with seasonally adjusting so he wouldn’t yet read anything too significant into the pick-up in SA claims. In any case, Thursday 8:30am EST when the weekly claims data is released, is "showtime" each week for the foreseeable future according to Reid. Separately, DB's asset allocation team put out an excellent piece last week (available to professional subscribers) looking at what all the short, medium and long-range US recession indicators are currently telling us. In brief, most that turn down early (6-14 months before a recession) are flashing red, most that warn 1-5 months out are mixed, whereas those that turn late are still mostly showing no signs of recession, however these can often turn only in real time. More in the full note available to pro subs. Tyler Durden Wed, 06/29/2022 - 08:44.....»»

Oil Extends Gains After Indirect US-Iran Nuclear Talks Fail In Qatar High hopes had been placed on the indirect talks set to be held in Qatar starting Tuesday between Iran and the United States, which involved the European Union mediating between the two; however after the second day the Iranian side is reporting that talks have already ended without an agreement or any breakthrough.  "Indirect talks between the United States and Iran to revive a 2015 nuclear agreement have ended in Qatar without a result, Iran's semi-official Tasnim news agency reported on Wednesday," Reuters reports. Underscoring the importance of the Qatar-hosted talks as a restored nuclear deal still hangs from a thread, and is looking more unlikely than ever at this point, EU foreign policy chief Josep Borrell traveled to Doha to help mediate, after days prior meeting with Iranian officials in Tehran. Most crucially from the viewpoint of the West, lack of progress in these last ditch efforts further means there's no full-scale return of Iranian oil to international markets on the horizon... Crude prices rose steadily throughout the morning, after edging higher since the start of the week and the G7 summit's pledge of 'tougher' action against Russia and Vladimir Putin, also as they continue mulling plans for imposing a price cap on Russian energy as part of exploring ways to ensure the Kremlin's war machine doesn't benefit from soaring energy prices. The Biden administration has been scrambling to tap heretofore inaccessible supplies of crude, including from Venezuela, also as the Saudis appear cool on Washington efforts to get them to pump more. Al Jazeera reviews of where things stand in the indefinitely stalled efforts at a restored JCPOA, which earlier centered on the Vienna process: After several rounds of talks interspersed with pauses, negotiators seemed to be on the verge of an agreement in March, but it never came about. Since then, Iran and the US have been exchanging messages, but have failed to clinch an agreement. How far the US will go in lifting the sanctions has been the major point of disagreement between the two – the status of Iran’s elite Islamic Revolutionary Guard Corps is a major stumbling block, with the US unwilling to remove the military branch from its foreign terrorist organisation list. Meanwhile, the Iranians have remained insistent that it is only the US side holding things up, and that essentially the ball is still in Washington's court, and it is for the Biden administration to act, perhaps also with an understanding that Russia-Ukraine events add pressure to the White House stance vis-a-vis Iran. Via Reuters Iranian Foreign Minister Hossein Amirabdollahian said Tueday: "I believe that if the American side is in possession of serious resolve and acts realistically, an agreement is within reach at this stage and at this round of the negotiations." He added: "We are serious and would, under no circumstances, cross our redlines," which have been drawn in line with the objective of "meeting the country’s national interests to the maximum," state media quoted him as saying. "The agenda is clear." Tyler Durden Wed, 06/29/2022 - 08:45.....»»

German Inflation Unexpectedly Eases In June, But... German inflation unexpectedly slowed in June, with harmonized CPI slowing from +8.7% YoY to +8.2% YoY, dramatically below expectations of a rise to +8.8% YoY. Notably, we have seen these 'dips' in inflation before on this surge, so let's not get too excited... Source: Bloomberg As Bloomberg reports, the easing of inflationary pressures is largely due to temporary government relief measures - lower fuel taxes and discounted public-transport costs. Germany’s slowdown could extend into next month, when a renewable-energy charge on electricity prices is abolished, but underlying price pressures are likely to stay elevated, according to Berenberg economist Salomon Fiedler. However, inflation-fighters and transitory-supporters should not celebrate yet as Bloomberg notes that Governing Council member Pierre Wunsch warned Wednesday in an interview that the ECB may need to raise rates by more than it wants if inflation prompts governments to spend ever-increasing amounts on shielding households. Additionally, The ECB is unlikely to back off its tightening plans as inflation pressure remains intense elsewhere in the 19-member euro zone: Spain earlier reported a surprise jump to an all-time high of 10%, defying politicians’ efforts to curb it. Of course, there is the question of whether The ECB is easing at all... *ECB PEPP REINVESTMENTS DON'T HAVE TARGETS, THRESHOLDS FOR NOW *ECB PEPP REINVESTMENTS WON'T ALLOW FRONT-LOADING PURCHASES Translation: ECB is praying it never has to define what its "QE during QT" means as market will crush it — zerohedge (@zerohedge) June 29, 2022 Smoke and Mirrors it is... Tyler Durden Wed, 06/29/2022 - 08:59.....»»

Central Bankers Galore: Watch Powell, Lagarde, And Bailey Live From ECB Forum Today's main event, the ECB Forum panel featuring Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey as well as BIS head Agustin Carstens, has started in Sintra Portugal. As Academy Securites' strategist Peter Tchir writes, he will be looking closely at Powell "to see whether he reverts to super hawk, or lets his nervousness on the economy and dovishness out? Given the political rhetoric seemed to change last week, and he was front in center, I am taking his comments as far more seriously than any other Fed Speakers (for now)." Ahead of the meeting, the Fed's Loretta Mester weighed in, telling CNBC she'd advocate for a 75-basis point hike in July. Watch it live below. Tyler Durden Wed, 06/29/2022 - 09:11.....»»

Optimism Among US Business Leaders Drops To New Low Amid Rising Inflation, Supply Issues, Labor Shortages Authored by Katabella Roberts via The Epoch Times (emphasis ours) Optimism among business leaders regarding the outlook of the U.S. economy has drastically declined in the past year, according to JPMorgan’s 2022 Business Leaders Outlook Pulse, released Monday. A man shops at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022. (Jim Watson/AFP via Getty Images) More than 1,500 midsize business leaders participated in the survey (pdf), which was conducted between May 25 and June 10 across executives of midsize companies in the United States that have annual revenues from $20 million to $500 million. It found that just one in five business leaders, or 19 percent, said they were optimistic about the national economy for the year ahead, representing the lowest percentage recorded in the 12 years that the survey has been conducted by JPMorgan. That figure is also down significantly from 75 percent one year ago. Amid the decline in optimism, the survey showed that pessimism around the national economy jumped to 51 percent from 10 percent a year ago amid soaring inflation and interest rates and ongoing supply chain issues and labor shortages. Meanwhile, just 9 percent of business leaders expressed optimism over the global economy. Among those surveyed, 99 percent reported that their costs of doing business have increased in the past year, with 71 percent stating that their top challenge is rising costs, including inflation. Labor issues, including recruiting, hiring, and retaining employees and labor shortages, came in at 70 percent, while 86 percent of respondents said that they believe inflation is worse than it was six months ago, along with interest rates at 65 percent. Passing Costs Onto Customers Inflation is currently sitting at a 40-year high in the United States, which has forced many businesses to pass those higher costs onto customers. Of those surveyed by JPMorgan, more than three-quarters of businesses (76 percent) said they are raising prices, with 42 percent stating they have passed at least half of their increased costs to consumers via increased prices. That trend is unlikely to disappear any time soon, according to the survey, which found that 81 percent of respondents are likely to keep raising prices in an effort to offset higher costs. Despite the gloomy outlook, 73 percent of those surveyed said they expect increased revenue or sales for the year ahead, while 71 percent are optimistic about their company’s performance. The survey comes shortly after a poll by Morning Consult found that optimism about the future of the United States is waning among adults. Read the rest here... Tyler Durden Wed, 06/29/2022 - 09:21.....»»

Morning Wood: ARKK Founder Admits She Got Inflation Wrong, Says She'll Continue Her Strategy Anyway Cathie Wood finally offered up somewhat of a mea culpa - at least for her previous calls on inflation, though not quite so much for the underperformance of her flagship fund and her previous call that the market had bottomed back in January - on Tuesday of this week.  After being bludgeoned in the face with data that was perpetually proving her prognostications incorrect, Wood told CNBC on Tuesday: “We were wrong on one thing, and that was inflation being as sustained as it has been.” But what would that mea culpa be without immediately falling back on her greatest hits, including once again predicting deflation? According to Bloomberg, Wood then added: “Supply chain -- I can’t believe it’s taken more than two years, and Russia’s invasion of Ukraine, of course we couldn’t have seen that. So inflation has been a bigger problem. But I think that it has set us up for deflation.” Wood also did a decent job pointing out the state of both the high end and the low end consumer in the U.S., stating: “The consumer is railing against these price increases,” Wood said. “Many people think, ‘oh, the heavy spenders will keep this thing going.’ Consumer sentiment in the highest-income groups is lower than in the lowest-income groups, and the latter group is being tormented by food and energy prices, which are really a regressive tax increase.” Wood also continued to defend her strategy of picking "innovation" stocks, despite the fact that her ARKK fund has been decimated so far in 2022, falling about 53%. She said: “The most important thing we need to do is stick to our knitting. The worst thing that could happen is style drift." “When people invest in Ark, they know they’re getting truly disruptive transformative innovation. That’s what we offer, and we don’t pretend to offer anything else,” she continued. Because why let the facts change your investing outlook, right? As Bloomberg dryly noted on Tuesday, "Wood joins Treasury Secretary Janet Yellen in admitting incorrect inflation projections." If the two of them didn't make up 12 hours of a 13 hour day of financial news programming, it almost wouldn't be an issue, right? Tyler Durden Wed, 06/29/2022 - 09:40.....»»

US Officials Doubt Ukraine Can Take Back Territory, White House "Losing Confidence".....»»

How Representative Is The G7 Of The World It's Trying To Lead? The leaders of some of the world’s wealthiest democracies assembled in the Bavarian Alps on Sunday, where the 48th G7 Summit takes place from June 26 to June 28. The summit kicked off with a series of bilateral meetings on Sunday, before the bloc’s leaders will jointly discuss the most pressing global issues on Monday. That includes the Russian invasion of Ukraine, surging food and energy prices, Covid-19, the world economy as well as the climate crisis at a time not short on global challenges. While the Group of Seven, as the G7 is officially called, still claims a global leadership role, Statista's Felix Richter notes that some experts are questioning the bloc’s relevance against the backdrop of a rapidly evolving global economy. In 2018, Jim O’Neill and Alessio Terzi wrote that the G7, “in its current formulation, no longer has a reason to exist, and it should be replaced with a more representative group of countries.” They called for a revised G7 group, which would replace Germany, France and Italy with a common Eurozone representative, swap Canada for Brazil and most importantly add China and India, making it more representative economically and in population terms without adding more seats to the table. As the following chart shows, the G7 countries currently represent 43 percent of the world economy, down from nearly 70 percent three decades ago. You will find more infographics at Statista In terms of population, the bloc is even less representative with its member countries accounting for less than 10 percent of the world’s people, according to latest estimates from the UN Population Fund (UNFPA). Despite these numbers, proponents of the G7 think the group still has value. “It’s sort of a manageable steering group of the West,” Stewart M. Patrick, Senior Fellow in at the Council on Foreign Relations (CFR) says. “They’re a repository, an embodiment of common values and a similar rules-based approach to world order.” Tyler Durden Wed, 06/29/2022 - 06:55.....»»

"Bullsh*t": Claim Trump "Lunged" For Steering Wheel On Jan 6 Discredited By Secret Service.....»»

It's Not The End Of The World Authored by Jeff Thomas via InternationalMan.com, Periodically, I’ll encounter someone who has read one of my essays and has decided not to pursue them further, stating, “You’re one of those ‘End of the world’ guys. I can’t be bothered reading the writings of someone who thinks we’re all doomed. I have a more positive outlook than that.” In actual fact, I agree entirely with his latter two comments. I can’t be bothered reading the thoughts of a writer who says we’re all doomed, either. I, too, have a more positive outlook than that. My one discrepancy with such comments is that I don’t by any means think that the present state of events will lead to the end of the world, as he assumes. But then, neither am I naïve enough to think that if I just hope for the best, the powers that be will cease to be parasitical and predatory out of sympathy for me. They will not. For any serious student of history, one of the great realisations that occurs at some point is that governments are inherently controlling by nature. The more control they have, the more they desire and the more they pursue. After all, governments actually produce nothing. They exist solely upon what they can extract from the people they rule over. Therefore, their personal success is not measured by how well they serve their people, it’s measured by how much they can extract from the people. And so, it’s a given that all governments will pursue ever-greater levels of power over their minions up to and including the point of total dominance. It should be said that, on rare occasions, a people will rise up and create a governmental system in which the rights of the individual are paramount. This was true in the creation of the Athenian Republic and the American Constitution, and even the British Magna Carta. However, these events are quite rare in history and, worse, as soon as they take place, those who gain power do their best to diminish the newly-gained freedoms. Such freedoms can almost never be destroyed quickly, but, over time and “by slow operations,” as Thomas Jefferson was fond of saying, governments can be counted on to eventually destroy all freedoms. We’re passing through a period in history in which the process of removing freedoms is nearing completion in many of the world’s foremost jurisdictions. The EU and US, in particular, are leading the way in this effort. Consequently, it shouldn’t be surprising that some predict “the end of the world.” But, they couldn’t be more incorrect. Surely, in 1789, the more productive people of France may have felt that the developing French Revolution would culminate in Armageddon. Similarly, in 1917, those who created prosperity in Russia may well have wanted to throw up their hands as the Bolsheviks seized power from the Romanovs. Whenever a deterioration in rule is underway, as it is once again now, the observer has three choices: 1. Declare the End of the World There are many people, worldwide, but particularly in the centres of the present deterioration – the EU and US – who feel that, since the situation in their home country is nearing collapse, the entire world must also be falling apart. This is not only a very myopic viewpoint, it’s also quite inaccurate. At any point in civilization in the past 2000 years or more, there have always been empires that were collapsing due to intolerable governmental dominance and there have always concurrently been alternative jurisdictions where the level of freedom was greater. In ancient Rome, when Diocletian devalued the currency, raised taxes, increased warfare and set price controls, those people who actually created the economy on a daily basis found themselves in the same boat as Europeans and Americans are finding themselves in, in the 21st century. It may have seemed like the end of the world, but it was not. Enough producers left Rome and started over again in other locations. Those other locations eventually thrived as a result of the influx of productive people, while Rome atrophied. 2. Turn a Blind Eye This is less dreary than the above approach, but it is nevertheless just as fruitless. It is, in fact, the most common of reactions – to just “hope for the best.” It’s tempting to imagine that maybe the government will realise that they’re the only ones benefitting from the destruction of freedom and prosperity and they’ll feel bad and reverse the process. But this clearly will not happen. It’s also tempting to imagine that maybe it won’t get a whole lot worse and that life, although not all that good at present, might remain tolerable. Again, this is wishful thinking and the odds of it playing out in a positive way are slim indeed. 3. Accept the Truth, But Do Something About It This, of course, is the hard one. Begin by recognising the truth. If that truth is not palatable, study the situation carefully and, when a reasonably clear understanding has been reached, create an alternative. When governments enter the final decline stage, an alternative is not always easy to accept. It’s a bit like having a tooth pulled. You want to put it off, but the pain will only get worse if you delay. And so, you trundle off to the dentist unhappily, but, a few weeks after the extraction, you find yourself asking, “Why didn’t I do this sooner?” To be sure, those who investigate and analyze the present socio-economic-political deterioration do indeed espouse a great deal of gloom, but this should not be confused with doom. In actual fact, the whole point of shining a light into the gloom is to avoid having it end in doom. It should be said here that remaining in a country that is tumbling downhill socially, economically and politically is also not the end of the world. It is, however, true that the end result will not exactly be a happy one. If history repeats once again, it’s likely to be quite a miserable one. Those who undertake the study of the present deterioration must, admittedly, address some pretty depressing eventualities and it would be far easier to just curl up on the sofa with a six-pack and watch the game, but the fact remains: unless the coming problems are investigated and an alternative found, those who sit on the sofa will become the victims of their own lethargy. Sadly, we live in a period in history in which some of the nations that once held the greatest promise for the world are well on their way to becoming the most tyrannical. If by recognizing that fact, we can pursue better alternatives elsewhere on the globe, as people have done in previous eras. We may actually find that the field of daisies in the image above is still very much in existence, it’s just a bit further afield than it was in years gone by. And it is absolutely worthy of pursuit. *  *  * Unfortunately most people have no idea what really happens when a government goes out of control, let alone how to prepare… The coming economic and political crisis is going to be much worse, much longer, and very different than what we’ve seen in the past. That’s exactly why New York Times best-selling author Doug Casey and his team just released an urgent video. Click here to watch it now. Tyler Durden Wed, 06/29/2022 - 06:30.....»»

Naval Mine Found At Russia's CPC's Black Sea Terminal A naval mine was found near the second mooring area of the Caspian Pipeline Consortium's (CPC) Black Sea terminal, according to Bloomberg, citing the facility's press office and a statement from the port city of Novorossiysk, located on the Black Sea in southern Russia. The discovery of the sea mine near CPC's second mooring didn't shutter operations at the terminal. CPC's third mooring will continue to operate. Reuters said CPC accounts for "around 1% of global oil trade," and any disruption at the facility could impact crude oil prices.  Bloomberg vessel-tracking data shows crude oil tanker "Prometheus Energy" is moored at the terminal.  Following the discovery of the mine, Novorossiysk has declared a state of emergency in some areas of the Black Sea. It's believed the mine is from World War II and is expected to be disposed of in the coming days.  CPC said on June 15 that minesweeping operations at the terminal would begin -- there's no further information on the device's origins. Tyler Durden Wed, 06/29/2022 - 04:15.....»»