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Fauci says its likely there will be tens of million of vaccine doses by the end of this year

US infectious diseases expert Fauci speaking in an interview with Reuters

Expects a safe and effective vaccine will have received approval by the end of 2020
  • says there is a middle ground where the country can prudently open amid the coronavirus
  • says some sections of the country have done well but other parts are on fire
  • says he does expect a safe and effective vaccine to receive approval by year end
  • says manufacturers say a billion doses of vaccine will be available by the end of 2021
  • we will likely have tens of millions of doses of vaccine by the end of this year
  • he would be satisfied by a trial that included thousands of people and showed no signs of unexpected severe adverse events
  • he has not seen any indication of pressure from white house on vaccine
  •  says regulatory authorities have promised that safety and efficacy of vaccine will be paramount concern

US infectious diseases expert Fauci speaking in an interview with Reuters 

US 5 year yield falls below the 0.20% to a new low record

Gold and so are off low levels

the US 5 yield has fallen below the 0.20% level to a low yield of 0.1949%. That is a new all time low.  The high yield today reached 0.2232%.

Gold and so are off low levels_

The fall yield has helped to send gold back up toward unchanged and trades above and below the unchanged level. Silver is also higher.
Technically, the 5 year yield has been moving steadily to the downside since last Wednesday. On that day, the price tested its 200 hour moving average (green line in the chart above). The low yield on Friday reached 0.2044% and bounced. Today, the move to the down side has resumed.
The 10 year yield is also lower on the day but remains still above its March 9 all-time low yield level of 0.3137%. The yield is currently at 0.5118%

German Minister of State for Europe Roth says there will be “no business as usual” between EU & China

Michael Roth, German Minister of State for Europe in an pinion article in German news magazine Der Spiegel

  • will be “no business as usual” between the European Union and China following the assertive political moves on Hong Kong
  • urged fellow EU nations not to “be afraid to lock horns” with Beijing.
    referred to China by its autocratic political structure, casting it as a systemic rival that has “unfortunately” challenged Europe’s “foundation of values”
Via South China Morning Post, link here for more (may be gated).
china Germany

China’s Global Times says “New cold war will not stop US decline”

An opinion piece in state news organ Global Times

  • What is deeply worrying is the unpredictability, volatility and desperation of Trump. Driven by his fear of losing the presidential election in November, Trump sees nothing is off the table as far as he is concerned. Anything is possible. 
Of course, there is plenty more, link here
Over the weekend Pompeo spoke of further action against Chinese firms:
  • US to widen action against Chinese tech groups beyond TikTok

An opinion piece in state news organ Global TimesI think I am going to have find a cartoon of Xi and Trump engaged in a more violent sport rather than this tame effort.

China infrastructure stimulus – 3 times as many pile drivers are sold as are sold in all of US & Europe

A piece in the New York Times that makes for an interesting read.

  • The scope of China’s latest building boom is enormous
  • Thirty-seven Chinese cities are in the process of building a total of 150 new subway lines
  • The country’s high-speed rail system, which already connects more than 700 towns and cities, is expanding so fast that it annually buys three times as many pile drivers as the European and American markets combined. 
Here is the link for more (may be gated)
china infrastuctre thumbs

Not a good look as USD/JPY nears 100 pip loss

USD/JPY wilts even as risk trades rise

The old correlation between the S&P 500 and USD/JPY is dead. Stocks have climbed in the past 20 minutes and the pair is at the lows of the day.
More importantly, the technical pictures is melting as the pair falls below the May low once again. It would take a miracle turnaround to finish back above 106.00 today. With the break lower, there isn’t much to halt a decline to the 2020 lows.
USD/JPY wilts even as risk trades rise

The euro is off and running. Levels to watch

EUR/USD up 92 pips today

The euro cracked 1.17 in Asia and has continued to run higher, hitting 1.1764 as New York arrived before pulling back to 1.1747 at the moment. Today’s durable goods orders report hasn’t been a factor.
The impetus for the seven-day run in the euro was a successful European recovery fund negotiation. At the same time, the US is struggling with COVID-19 and European economies are closer to normalcy with virus counts low (although some hotspots are appearing).
Overbought indicators are obviously flashing warning signs for the euro but there is still a lot to like. 1.17 isn’t particularly high and assets in Europe are still relatively cheap. Carry is dead almost everywhere so that’s not going to be a big drag.
I’ll keep it simple on the technicals and highlight the June and Sept 2018 highs at 1.1852 and 1.1815 as resistance. I like the euro against the US dollar but the risk-reward at the moment is mediocre.
EUR/USD up 92 pips today

Baker Hughes oil rig counts come in at 181 vs. 179 estimate

Baker Hughes rig count for the week of July 24

Baker Hughes rig count
  • Oil rigs 181 vs. 179 estimate and 180 last week
  • Gas rigs 68 vs. 74 estimate and 71 last week
  • Total rig count 251 vs. 255 estimate, and 253 last week
The rise in the oil rigs was the 1st since March 13. That represents the 1st fall in 18 consecutive weeks.

Japan PM Abe: Current situation does not call for state of emergency declaration

Comments by Japanese prime minister, Shinzo Abe

  • Coronavirus cases are rising, government is watching closely
It is clear that the virus situation across the country is not getting any better as the curve is steepening as the days go by. Japan reported a single day record of 980 new virus cases yesterday, with infections also picking up outside of Tokyo.
Japan
Osaka is reported to find 149 new cases today and that would be the daily record for the prefecture, with Tokyo having found another 260 new cases as reported earlier.
As much as the government insists that things are “under control”, you have to wonder where will they draw the line and say that they have made a mess of the situation.
Eventually, the fear of the virus spread in itself will take a toll on the economy – as much as the government wants to keep business activity running for as long as they can afford to. Unfortunately, that comes at the costs of people’s health and well being, and at worst lives.

FT report “US stimulus delays as Republican talks fall into disarray”

The ongoing bickering and war of words in the Republican senate has delayed any action on further stimulus.

This earlier – they won’t even get a rough outline until next week let alone any action:
  • US Senate leader McConnell says will introduce ‘framework’ for recovery bill “early next week”

Financial Times have a report up on the delays, link is here (may be gated)

  • Mitch McConnell, the Republican Senate majority leader, had been expected to announce the party’s stimulus proposal on Thursday morning, only to reverse course later in the day and announce the plan would not come until next week.
Getting the stimulus done is in Republican interest, any support for the economy will be welcomed by Trump’s re-election campaign.
The ongoing bickering and war of words in the Republican senate has delayed any action on further stimulus.