The Biden Admin's 'Prank-O-Rama'...

Authored by James Howard Kunstler,

"They found a cure for gluttony. Now do narcissism."

- Peachy Keenan

Poor “Joe Biden” can’t help himself as the suns sets on his ignominious career.

He ordered the American flag to fly at half-staff into January 20, inauguration day, to signal grief and distress at Donald Trump’s swearing-in - not realizing, apparently, that Mr. Trump’s first act in office will be to order the flags raised back up, signaling symbolically the end to America’s grief and distress under “Joe Biden.”

You might wonder: what other sort of vicious mischief the Party of Chaos has in store in the final ramp-up to a momentous change of government? Well, no sooner had ol’ “JB” draped the Wegovy-slenderized neck of Hillary Clinton with the Presidential Medal of Freedom, than Bill Clinton went on ABC’s The View to declare he was “open to talking with [‘President Biden’]” about a preemptive pardon for Hillary.

Say, whu. . . ? What crimes did Bill have in mind that such a pardon might avail? Skolkovo? Uranium One? The Clinton Foundation’s sketchy activities in Haiti after the earthquake there? Bill preemptively mentioned the old emails bidness as a ruse. Nothing to see there, folks, he protested. (Just don’t look anywhere else!)

You must imagine that the incoming Solicitor General, John Sauer’s, first act in office will be to ask SCOTUS for a ruling on the legitimacy of preemptive pardons - blanket pardons for crimes alive perhaps in guilty consciences but nowhere extant as yet in the legal system. The justices might detect a certain logical incoherence in that proposition. “Joe Biden” should have just draped wreaths of garlic around the necks of Mrs. Clinton, Liz Cheney, and Alex Soros (standing in for ol’ George).

Judge Juan Merchan did not get a medal. He’s warming up for his January 10 stunt of sentencing of Mr. Trump for the “felony” of recording a payment to lawyer Michael Cohen as a “legal expense” (times thirty-four) so Democrats can holler “nyah nyah, felon!” as Mr. Trump re-enters the Oval Office. Judge Merchan himself has racked-up an impressive list of federal offenses around deprivation of Mr. Trump’s civil rights and due process issues as well as judicial misconduct, obstruction of justice, and abuse of power. Justice may await the judge.

Today, January 6, of course, is electoral vote certification day in a joint session of Congress. Rep. Jamie Raskin (D-MD) has been making noises about contesting certification on the grounds that Mr. Trump is an “insurrectionist” under the disqualification clause in Section 3 of the 14th Amendment. Don’t be surprised if Jamie makes a show of it to justify all his loose talk, but it will only be a performance. He might as well bring a chicken into the chamber and bite its head off.

The shadowy claque behind “Joe Biden” has been super-busy cooking up documents for the demented old bird to sign before leaving office, anything that supposedly might discommode the incoming Mr. Trump. “JB” is like a bandit fleeing the scene of a crime, throwing his stolen booty into the road off the back of his truck to trip up the police closing in. Close down offshore oil drilling off the Atlantic and Pacific coasts for evermore. . . ban gas-powered water heaters. . . any old thing to make life more uncomfortable for the people of this land. The shadowy claque seems oblivious to the fact that the people won’t appreciate these pranks, that they just give more reasons for them to drive a wooden stake through the heart of the Democratic Party — as if it even had one.

Prank-of-the-week, though, goes to Tony Blinken’s State Department. No sooner had Congress defunded his agency’s Global Engagement Center (GEC) — that is, its censorship coordination hub — than the muppets at State redistributed GEC’s personnel to other corners of the agency and scared up new funding for their censorship activities from some dark hidey-hole of sequestered money. Do they suppose no one will find out where these employees went? All that’s necessary is to look up who was on the GEC’s payroll in 2024, and earlier in the hub’s heyday, and see if they remain on the State Department’s payroll now — and then fire the whole lot of them for cause: abrogating Americans’ First Amendment rights. Buh-bye. . . .

You are not out-of-order worrying, of course, that the political Left and the deep state blob behind them might look, in desperation, for other ways to prevent Donald Trump from getting sworn in. There’s the president-elect’s rally in DC the night before the inauguration. Not a few MAGAs are wondering if that’s really a good idea. And the recent garish drone swarms around the USA have put folks ill at ease about a swearing-in on the west front of the US Capitol, out in the open air. I’d even be a little concerned about the mechanicals of Mr. Trump’s airplane as he flies north from Mar-a-Lago to the big event in Washington.

Nobody will surprised if “Joe Biden” does not show up on the dais at the Capitol that fateful day. He at least has one final snub left for Mr. Trump as “JB” departs office with the pardon he will preemptively lay on himself in the wee hours of January 19 — in case anyone might inquire into all those shadow companies that First Son Hunter was running over the years to receive money from China, Ukraine, Russia, Romania, and Gawd knows who else, to be redistributed (i.e., laundered) through the innumerable bank accounts of Biden family members. There is that to consider.

Tyler Durden Mon, 01/06/2025 - 16:20

Trump Border Czar: Mass Deportations Of Illegals Starts Day One

Authored by Steve Watson via Modernity.news,

President Trump’s incoming border czar Tom Homan unequivocally outlined that mass arrests and deportations of illegal immigrants inside the US will begin on day one of Trump’s second term and will not be delayed under any circumstances.

In an interview with CBS News, Homan asserted “We know where a lot of the criminals are. ICE is great at this work, we know where some are, but they simply haven’t been able to go arrest them because Secretary Mayorkas’s priorities have handcuffed ICE.”

“We know where a lot of the criminals are, they have been prevented from arresting. We are gonna arrest starting day one,” Homan reiterated.

Homan further noted that sanctuary cities refuse to work with ICE, stating ”We would love to work in local jails, but sanctuary cities won’t allow us into those jails. It’s much easier to arrest a public safety threat in the safety and security in the public jail than out in the street.”

Tom Homan, who will be President-elect Donald Trump's "border czar," says the administration will concentrate on "public safety threats and national security threats" in its plans for mass deportations starting on "day one."

He adds, "We would love to work in local jails, but… pic.twitter.com/o19UHvZeMq

— Face The Nation (@FaceTheNation) January 5, 2025

Anchor Margaret Brennan then asked Homan what will happen if the illegals are not accepted back by their home countries.

“Where do you send people because some of these countries, like Venezuela, don’t accept deportations right now?” Brennan asked.

“First of all, we got President Trump coming into the Oval Office, and he has proven during his first administration his leadership,” Homan responded adding “It took President Trump 48 hours to get El Salvador to take back their criminal aliens into their prisons.”

“Mexico didn’t want to do the ‘Remain in Mexico’ program, but President Trump was able to get ‘Remain in Mexico’ established in Mexico. He was able to get Mexico [to] put military in the southern and northern border,” Homan added.

He continued, “This administration has not forced these countries to take them back and we have what we call a third safe country. We already have countries talking about taking back people from other countries. For instance Venezuela doesn’t take their people back. There’s other ways we can do it. There’s other countries [who’d] be willing to accept them.”

“We’re hoping that President Trump will work with Venezuela like he did with Mexico and El Salvador and get these countries to take them back. If they don’t, they’re still gonna be deported, they’re just gonna be deported to a different country,” Homan further asserted.

“We’re not gonna be held up on removing public safety threats in this country. We have to put the safety of the American people first,” Homan emphasised, adding “We’ve had too many young women murdered and raped and burned alive by members of Venezuelan gangs. They need to be a priority under this administration. It’s [going to] be a priority starting day one and they will be deported.”

Incoming "border czar" Tom Homan says he hopes President-elect Donald Trump will work with Venezuela on an agreement to take back citizens who are being deported from the U.S., as Trump previously did for El Salvador and Mexico.

If Venezuela doesn't cooperate, Homan says their… pic.twitter.com/mWGUXmDhvE

— Face The Nation (@FaceTheNation) January 5, 2025

As we have previously highlighted, insiders say Trump already has deals in place to send illegals to Turks and Caicos, the Bahamas, Grenada, Panama or possibly elsewhere should their home countries refuse to take them back.

At one point during the interview, Brennan suggested Trump isn’t as strong on deportations as Homan indicates by suggesting that Biden had more deportations than during Trump’s first term.

Homan noted that 80 percent of the Biden administration’s ‘deportation’ numbers are from Border Patrol arrests that were moved back across the southern border.

“They weren’t interior enforcement arrests,” he said, adding the Biden administration is “playing a numbers game.”

“You can compare the number of deportations under Trump versus Biden. When you consider a 45-year low in crossings, the number of deportations [is] going to be lower because we don’t have that population to process and deport,” Homan also pointed out.

The full interview is below:

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 01/06/2025 - 15:40

4 Years Later: Americans Still Divided Over January 6

When a large mob of Trump supporters stormed the U.S. Capitol on January 6, 2021, in an alleged attempt to stop the certification of the 2020 presidential election, the images of the chaos unfolding at the historic building sent shockwaves around the world. After all, this was the United States, once a shining light of democracy, on what the media described as the precipice of political collapse.

Fast forward four years and Donald Trump, the man who was widely condemned (even by members of his own party) and later indicted for his role in the proceedings, is about to return to the White House.

Trump’s political comeback, which seemed impossible in the immediate aftermath of the attack on the Capitol, was accompanied by a gradual shift in the narrative of the events of January 6.

Back in 2021, Trump himself described the events as a “heinous attack on the United States Capitol”, promising that the protesters who had “defiled the seat of American democracy” would pay for their actions.

And pay they did.

As of December 6, 2024, the U.S. Justice Department had charged more than 1,500 individuals for federal crimes associated with the Capitol breach, of which almost 1,000 plead guilty to at least some of the charges and another 255 were found guilty in trial.

And yet, in October 2024, Trump – now the Republican nominee for the 2024 presidential election – no longer condemned the events of January 6, instead calling it “a day of love”, much to the outrage of the 138 police officers injured during the attack.

And like Trump’s stance on the January rioters has softened – he even promised to pardon the “peaceful protesters” last May – so has the public view of what happened that day, at least among Republican voters. According to a recent poll conducted by YouGov and The Economist, 56 percent of Republicans would describe the January 6 events as “people participating in legitimate political discourse”, while just 19 percent would describe the scenes as a violent insurrection.

You will find more infographics at Statista

Unsurprisingly, Democrats have opposing views of what happened, with 79 percent describing the events as a violent insurrection and just 9 percent seeing it as legitimate political protest.

Propaganda works eh?

Tyler Durden Mon, 01/06/2025 - 15:20

More Details Emerge Of Plan To Kill Supreme Court Justice

Authored by Zachary Stieber via The Epoch Times,

A California man allegedly told authorities that he flew to the East Coast to kill Supreme Court Justice Brett Kavanaugh, according to newly filed court documents.

Nicholas Roske flew across the country from California to Virginia on June 7, 2022, landing just before midnight.

He got into a taxi and instructed the driver to take him to a house in Maryland where Kavanaugh and his family resided.

Roske, who had allegedly brought weapons with him, was close to Kavanaugh’s home on June 8, 2022, but received a call from his sister, whom he had texted, “I love you.”

“I told her what I was doing, I was up to, and she told me that that wasn’t the way to go about trying to make the world a better place and, you know, that she didn’t want to, you know, she wanted to have me as a sibling for the rest of her life and not, you know, with that ending,” Roske said in the interview room inside a Montgomery County Police Department station.

Roske told police officers that he planned to break into the house, shoot Kavanaugh, and then shoot himself, according to a newly filed transcript

He chose to call 911 instead of going through with his plan.

“I need psychiatric help,” he told the dispatcher, in a call that was previously made public.

Officers rushed to the scene and arrested Roske. He is scheduled to go on trial later this year and faces up to 20 years in prison if convicted.

Roske’s lawyers filed the interrogation transcript, along with other documents, as part of motions seeking to suppress statements he made to law enforcement, as well as any mention of the items officers allegedly found in his suitcase and bag.

Officers illegally searched Roske’s belongings and failed to properly obtain a waiver of his rights before interviewing him, the lawyers said.

Federal agents who questioned Roske did obtain his signature on a form waiving his rights, but that waiver “was not made voluntarily and intelligently,” the lawyers wrote in one of the motions.

“At the time, Mr. Roske was acutely suicidal, visibly exhausted, and had repeatedly expressed his need for psychiatric care,” the motion states. “Because these latter statements were not preceded by valid Miranda waivers, they too must be suppressed.”

Prosecutors have not yet responded to the motions.

Motivation

Elsewhere in the newly released interview transcript, Roske detailed his motivation for allegedly plotting to murder Kavanaugh, including the publication of a leaked draft of a Supreme Court ruling that would overturn Roe v. Wade, giving states the ability to more closely regulate abortion.

“I’ve been suicidal for a long time, and when I saw that the leaked draft, it made me upset and then it made me want to, I don’t know,” Roske said. “I was under the delusion that I could make the world a better place by killing him.”

Nicholas Roske, center, is interrogated in Montgomery County, Md., on June 8, 2022. Nicholas Roske via The Epoch Times

Roske said another motivating factor was that he heard the Supreme Court was going to loosen gun restrictions, which would make it easier for people to acquire guns.

Roske agreed that it was ironic he was able to obtain a gun before he traveled to the Washington area.

He had several psychiatric holds placed on him in the past. However, since more than five years had passed since the last one, this did not prevent him from buying a firearm.

Tyler Durden Mon, 01/06/2025 - 15:00

Houthis Claim "Winged Missile & Drone" Attack On USS Harry S. Truman In Red Sea

During a Monday evening press conference, Houthi military spokesman Yahya Saree claimed that the Yemeni Armed Forces targeted the USS Harry S. Truman (CVN-75) aircraft carrier with missiles and drones in the Red Sea area. 

Saree claimed that the Yemeni Armed Forces targeted US warships to thwart an imminent US-led "attack against our country." 

Here's the complete statement: 

Triumphing for the oppression of the Palestinian people and their Mujahideen and in response to the massacres against our people in Gaza, and within the fifth phase of the supportive stages in the battle of the Promised Conquest and the Holy Jihad.

The missile and UAVs forces of the Yemeni Armed Forces carried out a specific and joint military operation targeting the American aircraft carrier USS Harry S. Truman using two winged missiles and four drones north of the Red Sea, while the American enemy was preparing to launch a major attack against our country, and the operation led to the failure of the attack.

The UAVs forces carried out two military operations this afternoon, the first of which targeted a military target linked to the Israeli enemy in the occupied area of Yaffa with two drones.

The other operation targeted a vital target linked to the Israeli enemy in occupied Ashkelon with a drone.

In another context, the UAVs force carried out a third military operation this evening targeting a military target linked to the Israeli enemy in the occupied Yaffa with a drone. The operations of the Armed Forces have successfully achieved their objectives.

The Yemeni Armed Forces will continue their operations in support of the Palestinian resistance, and these operations will not stop until the aggression on Gaza stops and the siege is lifted.

#معركة_الفتح_الموعود_والجهاد_المقدس pic.twitter.com/1hxrj4EI0y

— العميد يحيى سريع (@army21ye) January 6, 2025

US Carrier Strike Group locations as of Dec. 31. 

US Central Command (CENTCOM) has not released a statement regarding the incident.

Tyler Durden Mon, 01/06/2025 - 14:40

Conspiracies Too Awful To Imagine?

Authored by Victor Davis Hanson via American Greatness,

Over the decade of Donald Trump’s political career, the left - as exemplified by Democratic politicos, the media, academics, the Washington military hierarchy, and the permeant bureaucratic state - illustrated a level of furor, venom, and near madness unprecedented in modern American history.

Yet stranger still about such visceral, indeed lunatic hatred, despite Trump’s eccentricities and lack of a traditional political resume, his administration between 2017-21 was successful by traditional economic, military, security, and diplomatic standards. It was certainly not characterized by weaponizing the DOJ, Pentagon, CIA, or FBI, get-even vendettas, the use of lawfare, corruption, optional wars, open borders, hyperinflation, or a war on the environment—as predicted and alleged. Nevertheless, the idea of Trump as president justified to the left the greatest assault on our civil liberties, justice system, and free expression in modern history.

Indeed, at times the frenzy has ranged the gamut of an unprecedented two impeachments, a first Senate impeachment trial of a private citizen ex-president, and a coordinated effort to deplatform the major Republican presidential candidate from state ballots.

But at other times, the efforts were more sinister—and conspiratorial—to the point that the attempt to destroy the purported threat of candidate, president, and two-time candidate Trump apparently justified any means necessary.

In retrospect, what is the legacy of these unmatched efforts? They have established precedents, if ever again followed, will destroy the republic as we have known it.

1. “Russian collusion.”

There was never any evidence that a 2016 Trump candidacy sought to “steal” the election through the intervention of the Putin Russian government. But a paranoid Clinton campaign, through the deliberate paywalls and agency of the DNC, Perkins Coie law firm, and Fusion GPS consulting firm, hired a retread ex-British spy, Christopher Steele—who was also FBI Director James Comey’s paid informant—to fabricate a “dossier” of invented scandals and salacious sex detail to smear Trump and ensure his defeat.

That effort required sowing the dossier throughout the government, partnering with traditional and social media, warping the FISA courts, forging an FBI-submitted document, and ambushing and destroying the National Security Advisor designate Gen. Michael Flynn.

Two years later, the self-congratulatory Robert Mueller’s “dream team” and “all-stars” of liberal beltway lawyers evaporated after finding no such Trump-Russian collusion—after a wasted nearly two years and $40 million. Meanwhile, revelations emerged of all sorts of covert FBI skullduggery—from erasing incriminating cell phone records, the revelations of the Strzok-Page text exchanges indicating an apparent FBI “insurance policy” effort to preclude a winning Trump candidacy, to the meltdown of Director Comey himself, who lied to the president that he was not a target of an investigation and then leaked confidential records of a private one-on-one presidential conversation to the media.

2. Indeed, during the Trump administration, we witnessed once more undreamed-of efforts to sabotage a presidency:

a) A former Pentagon lawyer publishing a call for either immediate Trump impeachment, 25th Amendment removal, or a military coup.

b) A planning session of the Deputy Attorney General and Interim FBI Director to discuss stealthily recording the President of the United States in hopes of finding enough off-the-record embarrassing conversations to justify a 25th Amendment removal.

c) A later 2020 campaign effort jumpstarted by the current Biden Secretary of State Antony Blinken and the former interim CIA Director Mike Morrell, with help from former CIA Directors John Brennan and Leon Panetta, along with former Director of National Intelligence James Clapper, to round up 51 “former” (but actually many enjoying then-current CIA contractor status) “intelligence authorities” to publicly mislead the public by signing a letter that the incriminating Hunter Biden laptop (then in the hands of and authenticated as genuine by the FBI) was once again a Russian effort to throw the election to Trump. It was an obvious scripted lie, but timely scheduled before the last debate to arm Biden with plausible denials and thus to help swing the election to him. And it likely did.

d) There was, in addition, an effort by the heads of the NIH, Francis Collins, and NIAID, Anthony Fauci, deliberately to obfuscate, and allegedly in the case of Fauci, to lie under oath, about the efforts of American health authorities 1) to evade U.S. prohibitions on gain-in-function viral research, by funding the third-party EcoHealth Alliance to facilitate the transference of American money, instrumentation, and consulting to partner with the Chinese communist Wuhan virology lab; 2) to obfuscate the truth that the lab had somehow leaked the lethal, manmade virus—birthed with the help of U.S. expertise—that was killing millions worldwide; 3) to promulgate a false scenario of a bat/pangolin origin; 4) to deny under oath the American government’s role in the birth of the virus; 5) to suppress dissident scientific voices; and 6) to advise radical quarantine policies that would virtually destroy the U.S. economy along with the Trump 2020 reelection effort, and then shift blame from their own culpability to a false narrative that Trump was the chief driver of a disastrous national shutdown that had ruined the economy and yet was supposedly nearly criminally lax in controlling the outbreak.

e) The Chairman of the Joint Chiefs of Staff, Mark Milley, took it upon himself to 1) violate his own legal prerogatives as an advisory military official by unlawfully interrupting the chain of command when ordering theater commanders to report directly to him rather than as legally required to the Secretary of Defense in times of national crises, and 2) without presidential or Pentagon written authority, contacted his Chinese communist counterpart, Gen. Li Zuocheng of the People’s Liberation Army. His stated aim apparently was to reassure the Chinese military that in Milley’s own view, if he should diagnose Trump, his own commander-in-chief, as unbalanced and intending to escalate tensions to the threshold of a possible nuclear war, Milley again would first contact General Zuocheng to reassure him that an erratic Trump would then be not in full command of American strategic forces. Then he, Milley, with others, would seek to de-escalate tensions and preclude a conflict.

Milley denied any impropriety. But he could not negate that he had no such authority to act on the part of the executive branch and was doing so in direct opposition to the President of the United States. Milley was also de facto creating a dangerous precedent for any future ambitious, freelancing chairmen of the Joint Chiefs, both to interrupt the chain of command and to self-diagnose their commander-in-chief to justify excluding him from exercising his responsibilities entailed in his oath of office.

f) In the 2020 election cycle, left-wing-funded legal teams systematically and under the guise of the COVID lockdown sued in favorable courts to overturn or modify state balloting laws to ensure the most radical and abrupt changes in U.S. voting procedures in history.

The net result was that in many key states, traditional Election Day balloting that had accounted for 60-80 percent of the cast votes was made a mere construct. Instead, some 60-70 percent of voters in many key states cast early- or mail-in ballots, even as the traditional rejection rate of such ballots drastically fell—again, as the numbers to be counted soared.

g) During this same 2020 election, according to liberal journalist Molly Ball, writing triumphantly post facto in Time magazine, a named “cabal” and “conspiracy” of billionaire leftist grandees, Silicon Valley monopolists, Chamber of Commerce, corporate entities, labor, and street activists sought to change balloting laws, street modulate demonstrations, enlist social media to censor and shape the news, partner with the FBI, and provide hundreds of millions of dollars to absorb the work of state registrars by supplying their own adjutant employees and voting materials. This was a holistic effort, Ball proudly wrote, that helped guarantee a Biden victory.

h) During 2021-2024, there were 91 local, state, and federal felony indictments launched against the ex-president and then-current front-running Republican candidate and opponent of the sitting president Biden. The charges were so blatantly political, and the principals in direct or indirect contact with either the White House counsel, the Department of Justice, or each other, that the multifaceted effort could be rightly termed a conspiracy to warp the legal system by destroying a political opponent. The charges would never have been brought against any other political candidate or against Trump himself—had he not publicly announced his intention to run a third time for president.

3. Never in recent election history had a presidential candidate in the midst of the final stretch of the campaign been the target of two assassination attempts - in part enabled by a climate of widespread and acceptable vituperation that equated Trump with a vile Hitler, fascist, Nazi, and dictator and thus encouraged unhinged would-be killers to delude themselves into believing they would forever be enshrined as heroes.

And never would social media influencers, columnists, and celebrities voice near approval of such attempts on the leading presidential candidate’s life.

The first would-be assassin was an amateur shooter, who easily evaded Secret Service scrutiny to post himself in sight of bystanders, as he enjoyed a direct line of fire at Trump. Meanwhile, local law enforcement was desperately trying, in vain, to warn the lax Secret Service of the immediate danger to the president. The second wannabe assassin approached with impunity the most recognizably vulnerable spot on a local golf course, staked out a shooting position, and would have, if not spotted, been within minutes of having an uninterrupted shot at the president.

4. Finally, not since the Woodrow Wilson scandal of 1919-1920, have the media and the Democratic left conspired to hide the morbidities of a president that left him unfit mentally and physically to carry out the duties of the office.

That current and still ongoing covert effort put the nation at great risk, as evidenced by the catastrophic humiliation in Kabul, the successful Russian gamble that the U.S. would not or could not deter Putin from invading Ukraine, the unsteady and anemic reaction to the theater-wide wars in the Middle East, the hyperinflation of 2021-2, the erasure of the southern border, the deliberate greenlighting of some 12 million illegal aliens into the United States, and the weaponization of the FBI, CIA, and DOJ.

The final irony?

Those who were perpetrators of these illicit, unethical, and unprecedented efforts were themselves the first and most prominent to project Trump as the promulgator of conspiracies to debilitate the very institutions that they had already undermined and disgraced.

Tyler Durden Mon, 01/06/2025 - 14:20

First Bond Auction Of 2025 Tails As Foreign Buyers Slide

The first bond auction of 2025 is in the books, and it was about as pretty as the selloff in bonds has been in recent weeks.

Moments ago the Treasury sold $58 billion in 3 year paper in a soggy auction which suggested that, today's modest bounce notwithstanding, there is more pain in stock for the rates complex.

The auction priced at a high yield of 4.332%, tailing the When Issued 4.320% by 1.2bps. This was the fourth consecutive tail and the largest once since April.

The bid to cover held up, rising to 2.616 from 2.577 in December, and above the six auction average of 2.585.

Internals, however, were nowhere near as solid with Indirects taking down 61.0%, down from 64.2% and the lowest since October (as well as below the recent average of 66.4%).  And with Directs taking down 19.4%, down from 20.7% last month, Dealers were left with 19.7%, up from 15.11% and above the six-auction average of 15.8%.

Not surprisingly, the news of the ugly auction did not help already shaky sentiment, and yields on the benchmark 10Y rose 2bps to 4.63%, just shy of session highs at 4.64%, even as the dollar still remains soggy and down on the session after today's fake news report by the WaPo which hammered the greenback just as the WaPo's "anonymous sources", who may or may not have been axed in various USD pairs, intended.

Tyler Durden Mon, 01/06/2025 - 14:12

Round Two: "Confidence Increasing" For Next Winter Storm In Eastern Half Of US

Over 50 million people across the eastern half of the United States remain under winter weather alerts to start the week. Snow is falling across the Washington, DC, and Baltimore metro areas (potentially ending a multi-year 'snow drought'). Meanwhile, meteorologists are already monitoring another round of potential winter storm threats by late week.

The National Weather Service's Weather Prediction Center shows the "major winter storm" pounding the Mid-Atlantic region today will be followed by dangerously cold temperatures across the central and eastern US. 

With the cold air in place, several meteorologists are already seeing increasing confidence in models that show a winter storm potentially developing around the Texas area by Thursday into Friday. 

"Confidence is increasing in a potential Winter storm for the Thursday into Friday time frame, as it appears all of the ingredients are coming together," Oklahoma/Texas local TV station KXII News 12's Brian Briggs wrote on X. 

PART 1: Confidence is increasing in a potential Winter storm for the Thursday into Friday time frame, as it appears all of the ingredients are coming together. In part 2 we'll look at precipitation type & potential impacts #TexomaWX pic.twitter.com/gj2IZXuUVw

— KXII News 12 (@KXIITV) January 6, 2025

North Carolina's WFMY News 2 Chief Meteorologist Tim Buckley also expects a late-week storm to impact the East Coast, with cold air locked in place, including the Mid-Atlantic and Northeast. 

Late this week, a new winter storm system will be sliding across the Southeast.
We don't know who will get snow, ice, or rain at this point.
For our area, a track closer to the coast is better for snow.
More inland, better chance for ice or rain.
Timing is Friday PM - Saturday. pic.twitter.com/ePv9dC0UWA

— Tim Buckley (@TimBuckleyWX) January 6, 2025

Atlanta News First meteorologist Ella Dorsey expects, "A wintry mix will move through Georgia on Friday." 

FIRST ALERT WEATHER DAY FRIDAY: A wintry mix will move through Georgia on Friday.
- Travel will be impacted with ice accumulations likely north of Atlanta
- Do not expect a winter wonderland. Only a few inches of snow at most in the mountains
- Higher snow totals in Tennessee. pic.twitter.com/00Y7jXEsTL

— Ella Dorsey (@Ella__Dorsey) January 6, 2025

More Arctic is inbound in the second half of the month. 

Another Alaska high pressure ridge spike setting stage for additional U.S. cold outbreak for week of Mon Jan 20th (per both regular and AI models). pic.twitter.com/R000ZOdoKA

— Commodity Wx Group (@commoditywx) January 6, 2025

On YouTube, a private weather forecaster named Max Velocity provided extended coverage of "A Significant Winter Storm Is Coming..." 

Old Man Winter has awakened across the eastern half of the Lower 48.

Tyler Durden Mon, 01/06/2025 - 14:00

Trump Urges GOP To Pass "One Powerful Bill" To Advance His Agenda

Authored by Aldgra Fredly via The Epoch Times,

President-elect Donald Trump has called on Republican lawmakers to pass “one powerful bill” to advance his policies on border security and tax cuts as he prepares to return for a second term.

In a social media post on Sunday, Trump said members of Congress will work on a single bill that is packed with policy items aimed at making America “greater than ever before.”

“We must Secure our Border, Unleash American Energy, and Renew the Trump Tax Cuts, which were the largest in History, but we will make it even better - NO TAX ON TIPS,” the president-elect stated.

Trump suggested that he plans to offset the taxes by imposing tariffs on imports from countries that “have taken advantage of the U.S. for years.”

“Republicans must unite, and quickly deliver these Historic Victories for the American People. Get smart, tough, and send the Bill to my desk to sign as soon as possible,” he stated.

His remarks came after House Speaker Mike Johnson (R-La.) unveiled a plan to pass Trump’s legislative policies through a reconciliation bill, which would enable the policies to be passed with a simple majority, bypassing the Senate’s 60-vote threshold.

Johnson told Fox News that the vote on the reconciliation bill could happen as early as April 3, and then move to the Senate. He said the bill could be delivered to Trump’s desk for signature by the end of April.

“We’re 15 days out from the inauguration of President Donald J. Trump for his second term. And we want to make sure that we’re jump-starting the agenda now over the next two weeks, so that he’s prepared and ready on day one,” Johnson told the news outlet.

“At the end of the day, President Trump is going to prefer, as he likes to say, one big, beautiful bill. And there’s a lot of merit to that, because we can put it all together, one big up-or-down vote, which can save the country, quite literally, because there are so many elements to it. And it’ll give us a little bit more time to negotiate that and get it right.”

Johnson said that the reconciliation bill would address Trump’s priorities, such as the economy, border security, tax cuts, energy, and incentivizing U.S. companies to manufacture domestically.

GOP Senate Majority Leader John Thune said on the Senate floor in December that a reconciliation package “with a once-in-a-generation investment in border security and immigration enforcement” would be passed within the first 100 days of the Trump administration.

Thune said the GOP also planned to use the Congressional Review Act to “undo some of the Biden administration regulations that are weighing down our economy” and pass another reconciliation package to expand the tax relief provided to Americans during Trump’s first administration.

Tyler Durden Mon, 01/06/2025 - 13:40

US Gov't Places Tencent On Military Blacklist, Sending Shares Tumbling

Tencent Holdings Ltd. tumbled in the early afternoon trading in New York after a Bloomberg report revealed that the US Defense Department had designated the company as a Chinese military entity operating within the US. 

WeChat parent Tencent was among several companies, including Contemporary Amperex Technology Co., chipmaker Changxin Memory Technologies Inc., Quectel Wireless, and drone maker Autel Robotics, which were designated as Chinese military entities in a Federal Register filing.

This disclosure, made through an annually updated "Section 1260H list," now features 134 companies, according to the filing.

Section 1260H refers to a provision in the National Defense Authorization Act for Fiscal Year 2021. This section is part of the US Gov't aimed at addressing China's economic and military activities in the US. 

Bloomberg quoted a Tencent spokesperson as saying the DoD's move was "clearly a mistake." A Quectel spokesperson told Reuters the company "does not work with the military in any country and will ask the Pentagon to reconsider its designation, which clearly has been made in error." 

Tencent shares in New York slumped 6.5% on the news. 

The iShares China Large-Cap ETF (FXI), which has about 9.2% of its holdings in Tencent shares (the largest holdings), fell about 1%.

The KraneShares CSI China Internet ETF (KWEB), which has an even higher exposure to Tencent at around 10.8% of its holdings, fell over 1%.

"Some Chinese firms have successfully fought to be removed from the US list, such as Chinese smartphone giant Xiaomi Corp. managed to reach an agreement with the US government that set aside its designation as a Chinese military company," according to Bloomberg. 

Tyler Durden Mon, 01/06/2025 - 13:20

Lavrov Elaborated On Russia's Approach To The Global Systemic Transition

Authored by Andrew Korybko via Substack,

Russian Foreign Minister Sergey Lavrov elaborated on his country’s approach to the global systemic transition in an interview with Rossiyskiaya Gazeta in late November, which followed him elaborating on its Afro-Eurasian grand strategy in a separate interview earlier that month that was analyzed here. His latest one concerned the need to rebalance the developing countries’ economic relations with the West and cautioned against them being misled by the ‘green agenda’.

Regarding the first, he reminded his interlocutor about how a lot of Western wealth is derived from lopsided deals with the Global South, which is being exploited through neocolonialism. For example, only 2.6% of the US’ $2.5 billion worth of aid to Haiti after its 2010 earthquake reached companies and organizations there while the rest went into the pockets of American contractors. Another damning statistic that he cited is how African countries only get 10% of the global coffee industry’s profits.

The IMF and WTO have been politicized by the West in order to keep developing countries at a disadvantage. Despite high-sounding rhetoric on occasion, the West has yet to meaningfully reform these institutions and won’t ever do so willingly. “Therefore, both we and our like-minded people from the countries of the World Majority believe that it is high time to bring the principles and management system of the Bretton Woods institutions into line with the real situation in the world economy”, he said.

Lavrov added that “the ‘seven’ (referring to the G7) account for less than a third of the world GDP, and the BRICS member states - 36 percent”, thus illustrating how unfair everything has become. It’s therefore strongly implied that BRICS, including its new partner countries, should collectively pool their capabilities and coordinate their efforts in order to bring about long-overdue institutional reforms. This imperative adds context to why Russia wanted to resume relations with the IMF in September as explained here.

As for the second part of Russia’s approach to the global systemic transition, Lavrov explained how the global trend towards green energy shouldn’t come at the expense of investments in traditional energy, which could lead to “shocks in energy markets and aggravation of the problem of energy poverty.” He also strongly implied that the prevailing view on climate change is inaccurate and therefore possibly being politicized. Here are his exact words:

“It is implied that CO2 emissions create a greenhouse effect, which in turn leads to global warming. It is concluded that if CO2 emissions are limited, there will be no increase in temperature or it will not happen as quickly. At the same time, we as professionals must take into account that not all scientists adhere to such assessments.

There is also a ‘school of thought’ whose representatives, using specific facts and very convincingly, show that climate change is a cyclical process, and, therefore, the significance of the anthropogenic factor in the calculations of supporters of the ‘fight against climate change’, to put it mildly, is greatly exaggerated.”

He didn’t directly say so, but the innuendo is that the West is weaponizing the ‘green agenda’, both as part of a ploy to “aggravate the problem of energy poverty” in the Global South via higher costs for traditional energy like he earlier warned and also as an instrument of control at home and abroad. Cynics might assume that Lavrov has ulterior motives in lending credence to these concerns since Russia is an energy superpower, which might be partially true, but he also wants to foil his Western rivals’ plots.

Circling back to the first part of his interview about the need for developing countries to rebalance their economic relations with the West, his attack against the ‘green agenda’ advances that goal by getting such countries to think twice about blindly comply with their neocolonizers’ demands on this issue. Those that prioritize green energy over traditional energy abandon more reliable energy sources, make themselves dependent on unreliable ones, and might thus be setting themselves up for disaster.

If unpredictable environmental changes cause problems with wind, solar, and hydroelectric power generation after developing countries become dependent on these sources, then the West can exploit the situation through emergency financial and other forms of relief with neocolonial strings attached. That would bring those developing countries back to square one by instantly reversing whatever prior progress they’d made on liberating themselves from the West.

It's therefore much better for them to only gradually transition to green energy by relying more on natural gas in the interim, which Russia also has in spades and Lavrov correctly described as “the cleanest of all hydrocarbons”, instead of radically shifting gears like the West wants. Moreover, it would also be wise to diversify their energy production through nuclear power generation, which Russia can also help them with as explained here. This portfolio would most effectively hedge against strategic risks.

Putting everything together, Russia’s approach to the global systemic transition as elaborated by Lavrov envisages developing countries collectively reforming existing financial institutions while avoiding the neocolonial trap that the West is setting for them through its ‘green energy agenda’. The first will deprive the West of the wealth that it extracts from the latter, thus speeding up their long-overdue rebalancing, while the second will prevent any serious reversal on the progress that they make in this respect.

Any reduction in the West’s overall influence and power brought about by the aforementioned rebalancing will work to Russia’s advantage by weakening its rivals. They’ll correspondingly find it more difficult to destabilize Russia, wage proxy wars against it, and obstruct its Afro-Eurasian grand strategy. What’s good for the Global South is therefore naturally good for Russia, thus making them equally important for one another, and wider awareness of this should serve to further expand their ties.

Tyler Durden Mon, 01/06/2025 - 13:00

Porsche Applies Large Markdown For Taycan EV As Demand Runs Out Of Juice

Germany's largest automaker has recorded sliding profitability, with its China unit under pressure as demand for luxury automobiles wanes. Specifically, demand for its Porsche Taycan has run out of juice, leading to significant markdowns. 

Bloomberg Intelligence's Joel Levington published a note on Monday highlighting the bleak demand story for the Porsche Taycan, which has forced the struggling German automaker to offer markdowns of $22,500. Additionally, the vehicle's used value plummeted in 2024, while data from iSeeCars research finds the Taycan the most expensive alternative fuel vehicle to drive on miles used per year.

More from Levington's report: 

Porsche Taycan $22,500 Markdown, Yet It's the Most Expensive EV

Porsche is offering a $15,000 match on top of $7,500 in lease incentives to clear out 2024 Taycan models, yet iSeeCars research finds the model the most expensive alternative fuel vehicle to drive based on miles used per year. Porsche's increased use of discounting and rapid deterioration in its core China market has slashed more than $30 billion from its market cap since April, and has reduced risk views below luxury rivals Ferrari, BMW and Mercedes for the first time since its IPO in 2022.

China Swoon Accelerates Risk

Porsche's one-year default risk has nearly tripled since cutting its revenue outlook last July, supporting our view of a strong, albeit weaker, risk profile. Porsche's default risk screens similar to low-A peers like Anheuser-Busch, Adidas and Reckitt Benckiser as well as higher-rated but more volatile issuer Alibaba. The outcome from Bloomberg's DRSK matches Credit Benchmark's view of the unrated company. Porsche screens as between Honda (A3/A-/A) and Mercedes (A2/A/Au) in our fundamental analysis utilizing Moody's global automotive methodology.

Taycan Value Plummets in 2024

Financial Services Poised to Fall for Third Consecutive Year

Porsche's captive finance unit's profit may bottom in 2024 at approximately $300 million, a decline of 20% from peak 2021 levels, yet is a modest profit driver, with the automotive unit expected to generate $5.3 billion in operating profit this year. The finance unit has taken price increases to offset higher funding costs, yet margin compression, lower penetration in China and a higher credit risk are impairing profitability, which is below Mercedes and BMW from a margin standpoint. The unit is supported by ample liquidity of €6.2 billion and a €4 billion master loan agreement with Volkswagen.

Declines in used pricing can impair Porsche residuals, potentially a headwind to financial services earnings

Porsche Falls Behind Mercedes on Ratings Track

Porsche AG's standalone creditworthiness screens at A2, slightly behind Mercedes (A2/A/Au) and a notch below BMW (A2/A) and unrated Ferrari. Our views are largely unchanged from our June analysis, but the company's weaker 2024 outlook has reduced flexibility. The analysis incorporates 2024-25 profit and cash flow expectations under Moody's global automotive methodology. Our analysis is also fairly consistent with Credit Benchmark, which screens to a low A rating on a positive trend. The complexity of the Volkswagen organization structure, including the sharing of the chairman, could weigh on raters' views of Porsche's ESG profile. The lack of a well-defined leverage target and goal of a 50% dividend payout may also be a constraint.

Iconic Luxury Brand Viewed as Metal Bender

Porsche AG would likely be rated by an automotive team instead of a luxury goods group at the agencies, based on our conversations with them for Porsche and Ferrari. Yet, our checks against these peers suggest an A tier rating might also be warranted under the different methodology. Porsche's scale, geographic diversity and modestly leveraged balance sheet generally screen well against issuers such as Richemont (A+), Diageo (A3/A-/A-u) and Estee Lauder (A2/A). While robust for the auto sector, Porsche's margins and cash generation are somewhat of a shortcoming relative to the luxury peer group and Ferrari.

The Volkswagen Group, which owns 10 brands, including Porsche and Audi, has faced significant challenges in the EV demand game amid a price war with Tesla and Chinese EV companies running circles around the Germans. Meanwhile, Germany's manufacturing recession highlights the broader economic troubles across the continent.

Tyler Durden Mon, 01/06/2025 - 12:40

Mayorkas Says US Facing Complex Threat Landscape Following New Orleans Attack

Authored by Aldgra Fredly via The Epoch Times,

The United States is facing a “heightened threat environment” following the deadly New Orleans attack on New Year’s Day, Homeland Security Secretary Alejandro Mayorkas said on Jan. 5.

The attack left 14 people dead and dozens injured after a man drove a truck into crowds on Bourbon Street in the historic French Quarter of the city. The suspect, identified as Shamsud-Din Jabbar of Texas, was later killed in a shoot-out with police.

In an interview on ABC’s “This Week,” Mayorkas said that his office has worked with law enforcement in New Orleans and implemented sweeping precautionary measures for the Sugar Bowl college football game and other upcoming events in the wake of the incident.

Mayorkas stated that over the past 10 years, his office has observed “a significant increase in what we term homegrown violent extremism” in the United States.

“It is a very difficult threat landscape, and it is why that we as a community, not just the federal government, but state and local officials and residents, need to be alert to it and take the precautions necessary to avoid violence from occurring,” he told the news outlet.

Mayorkas said that the New Orleans attack was unrelated to border issues, citing the suspect’s U.S. citizenship.

Jabbar was a 42-year-old former U.S. Army soldier from Texas.

“The assailant who perpetrated the terrorist attack in New Orleans was born in the United States, raised in the United States, and served in our Armed Forces. It is not an issue of the border,” Mayorkas said.

“With respect to the border, our highest responsibility and one that we work to fulfill each and every day throughout the Department of Homeland Security, throughout the federal government, is the safety and security of the American people.”

Authorities said they found an ISIS flag on the hitch of the truck used by the suspect. The FBI also said that Jabbar posted videos on Facebook in the hours before the attack in which he proclaimed his support for the terrorist group.

President-elect Donald Trump had previously condemned the New Orleans attack as an “act of pure evil” and suggested that it was connected to the country’s border issues.

“When I said that the criminals coming in are far worse than the criminals we have in our country, that statement was constantly refuted by Democrats and the Fake News Media, but it turned out to be true. The crime rate in our country is at a level that nobody has ever seen before,” Trump stated on Truth Social.

President Joe Biden and First Lady Jill Biden will travel to New Orleans on Monday to “grieve with the families and community members impacted by the tragic attack,” according to a White House statement.

Tyler Durden Mon, 01/06/2025 - 11:40

Dollar Reverses Losses After Trump Blasts WaPo's "Fake News" Tariff Report

Update (0930ET):

On Truth Social, President-elect Donald Trump blasted the Washington Post for "quoting so-called anonymous sources, which don't exist, incorrectly states that my tariff policy will be pared back."

"That is wrong. The Washington Post knows it's wrong. It's just another example of Fake News," the former president said.

Right away, we called out this malarkey.

2 hours

From Trump: "The story in the Washington Post, quoting so-called anonymous sources, which don't exist, incorrectly states that my tariff policy will be pared back. That is wrong. The Washington Post knows it's wrong. It's just another example of Fake News." https://t.co/QWdusUhnkD

— zerohedge (@zerohedge) January 6, 2025

WaPo's fake news reporting sent the Bloomberg Spot Dollar Index tumbling by over 1%, one of the biggest intra-day drops since 2023.

Thanks WaPo for the 300 pips,
you fake news garbage https://t.co/4yp0fG7lY0

— zerohedge (@zerohedge) January 6, 2025

There is nothing like fake news from legacy corporate media to start the week.

Investigate WaPo for market manipulation on behalf of hedge fund "anonymous sources" https://t.co/UnzYzfb7O9

— zerohedge (@zerohedge) January 6, 2025

*   *   * 

The US dollar slid on Monday after reports emerged that President-elect Donald Trump's aides are considering a revised, less strict tariff plan. While Trump's 2024 campaign promised a universal tariff on most imports, the new proposal would focus instead on imposing tariffs specifically on critical imports, according to the Washington Post, citing three people familiar with the plan. 

Trump repeatedly claimed during the campaign that he would implement a "universal" 10% to 20% import tariff on all foreign-made goods into the United States. He also spoke about a 60% import tariff on Chinese goods and a 100% tariff on all imported cars.

According to WaPo:

Two weeks before Trump takes office, his aides are still discussing plans to impose import duties on goods from every country, the people said.

But rather than apply tariffs to all imports, the current discussions center on imposing them only on certain sectors deemed critical to national or economic security — a shift that would jettison a key aspect of Trump's campaign pledge, at least for now, said the people, who cautioned that no decisions have been finalized and that planning remains in flux.

While the Biden administration has not rescinded most of the existing tariffs enacted under Trump 1.0, a universal blanket of tariffs on all imports would have been part of the 'America First' trade policies. However, it seems unlikely that Trump would abandon such a key policy initiative right out of the gate.

The sources familiar with the potential tariff change were unclear about which imports would be affected. 

More from WaPo... 

Preliminary discussions have largely focused on several key sectors that the Trump team wants to bring back to the United States, the people said. Those include the defense industrial supply chain (through tariffs on steel, iron, aluminum and copper); critical medical supplies (syringes, needles, vials and pharmaceutical materials); and energy production (batteries, rare earth minerals and even solar panels), two of the people said.

WaPo's report sent the Bloomberg Dollar Index tumbling early Monday, breaking below $108. This marked a sharp reversal following the multi-month 9% rally that started at the beginning of October.

Here's Bloomberg's Markets Live desk's take:

The dollar’s reaction to the Washington Post’s report that the incoming US administration might consider targeting import taxes at certain industries, rather than across the board, shows how much of the currency’s strength is based on anticipation of broad, and early, tariffs. It also suggests that the dollar’s recent strength is more dependent on fiscal rather than monetary policy. Bloomberg’s gauge of the dollar is falling the most since November.

Lots of currencies are benefiting from the dollar slump, which makes sense given the Washington Post report was vague as to which industries might be exempt. The euro, pound and Mexican peso are all at their strongest levels of the year.

That so much of the dollar’s strength should be reliant on tariff policy has implications for inflation and rates as well. All things being equal, adding taxes to imports pushes up consumer prices. But how much of that increase feeds through into living costs depends on lots of factors, notably how much pain companies are prepared to absorb (lots, if you cut their taxes elsewhere, presumably) and how much the currency rises. Today’s moves will shed light on how much of the tariff pain would be softened by a stronger dollar.

There is no confirmation from the incoming Trump administration regarding the validity of WaPo's report.

How long until Trump denies all of this?

*TRUMP MULLS 'UNIVERSAL' TARIFF PLANS FOR CRITICAL IMPORTS: WAPO

— zerohedge (@zerohedge) January 6, 2025

For all we know, this could be a case of a dollar trader leveraging the media outlet.

Tyler Durden Mon, 01/06/2025 - 11:30

Key Events This Week: Payrolls, ISM And FOMC Minutes

As we look forward to the first full week of 2025, DB's Jim Reid writes that a key question for the Fed’s outlook will be how strong the US jobs report for December is, which is out this Friday. In terms of what to expect, DB's economists are looking for nonfarm payrolls to grow by +150k in December. That would be beneath the +227k print in November, but that gain was boosted by a bounce back from previous weather disruption and the end of strikes. Indeed, a +150k print would basically be in line with the 6-month average, which is currently running at +143k. Economists also see the unemployment rate ticking up a tenth to 4.3%.

Turning to Europe, the main focus this week will be the Euro Area flash CPI print for December, which is out tomorrow. This is an important one, as it comes amidst growing concern about European inflation, particularly with the recent rise in natural gas prices, along with the recent depreciation of the euro. On top of that, the December flash print from Spain last week was stronger than expected, so the backdrop hasn’t been too favorable, and both headline and core inflation for the Euro Area are widely expected to remain above the ECB’s 2% target. We’ve seen that have an impact in markets too, and last week saw the 10yr bund yield move higher for a 5th consecutive week.

Elsewhere in Europe, another thing to look out for will be the ongoing political situation in France and efforts to put together a new budget. That comes as last week saw the Franco-German 10yr spread widen by +4.8bps to 86.3bps, which is the widest it’s been since early December, back when the National Rally confirmed they would vote against Michel Barnier’s government. That underperformance was evident among other French assets last week, with the CAC 40 down -0.99%, in contrast to the +0.20% gain for the Europe-wide STOXX 600.

Staying on politics, Canada Prime Minister Justin Trudeau is expected to resign as Liberal Party leader this week. Canada has to hold a federal election by October at the latest, and Trudeau’s Liberals are polling well behind the opposition Conservatives, with CBC’s poll tracker currently putting the Conservatives on 44%, and the Liberals on 21%. Trudeau has already faced calls from some Liberal MPs to resign, and his position came under further pressure last month after finance minister and Deputy PM Chrystia Freeland resigned from the cabinet.

Also as a reminder, US stock markets will be closed on Thursday for the funeral of former President Jimmy Carter, whilst bond markets will close early that day.

Courtesy of DB, here is a day-by-day calendar of events

Monday January 6

• Data: US November factory orders, China December Caixin services PMI, UK December official reserves changes, new car registrations, Japan December monetary base, Germany December CPI, Italy December services PMI, Canada December services PMI
• Central banks: Fed's Cook speaks
• Auctions: US 3-yr Notes ($58bn)

Tuesday January 7

• Data: US November JOLTS report, trade balance, December ISM services, China December foreign reserves, UK December construction PMI, France December CPI, Italy December CPI, November unemployment rate, Eurozone December CPI, November unemployment rate, Canada November international merchandise trade, Switzerland December CPI
• Central banks: Fed's Barkin speaks, ECB's consumer expectations survey
• Auctions: US 10-yr Notes (reopening, $39bn)

Wednesday January 8

• Data: US December ADP report, November consumer credit, Japan December consumer confidence index, November labor cash earnings, Germany November retail sales, factory orders, France December consumer confidence, November trade balance, current account balance, Eurozone December services, industrial and economic confidence, November PPI, Australia November CPI, Sweden December CPI
• Central banks: FOMC minutes, Fed's Waller speaks, ECB's Villeroy speaks
• Earnings: Samsung, Albertsons
• Auctions: US 30-yr Bond (reopening, $22bn)

Thursday January 9

• Data: US November wholesale trade sales, initial jobless claims, China December CPI, PPI, Japan November household spending, Germany November industrial production, trade balance, Eurozone November retail sales
• Central banks: Fed's Harker, Barkin, Schmid and Bowman speak, BoE's Breeden speaks, ECB's economic bulletin, BoE's DMP survey
• Earnings: Seven & i

Friday January 10

• Data: US December jobs report, January University of Michigan survey, Japan November leading index, coincident index, Germany November current account balance, France November consumer spending, industrial production, Italy November retail sales, Canada December jobs report, November building permits, Denmark and Norway December CPI, Sweden November GDP indicator
• Earnings: Constellation Brands, Walgreens Boots Alliance

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the ISM services index on Tuesday and the employment report on Friday. The minutes from the December FOMC meeting will be released on Wednesday. There are several speaking engagements from Fed officials this week.

Source: BofA, Goldman

Tyler Durden Mon, 01/06/2025 - 11:25

Dollar's Share Of Global Reserves Hits 30-Year-Low As Central Banks Pile Into Gold, Alternates

Authored by Wolf Richter via WolfStreet.com,

The US dollar lost further ground as global reserve currency among many reserve currencies held by central banks. Its share has been zigzagging lower for many years as central banks have been diversifying their holdings to assets denominated in currencies other than the dollar. And they’ve also been diversifying into gold. But the dollar remains by far the dominant global reserve currency.

The share of USD-denominated foreign exchange reserves fell to 57.4% of total exchange reserves the lowest since 1994, according to the IMF’s COFER data for Q3 2024. USD-denominated foreign exchange reserves include US Treasury securities, US agency securities, US MBS, US corporate bonds, US stocks, and other USD-denominated assets held by central banks other than the Fed.

In Q1 2015, the USD’s share was still 66%. Over these 10 years, the dollar’s share of global reserve currencies has dropped by 8.6 percentage points. If this pace of decline continues, the dollar’s share will fall below 50% in less than 10 years, by the end of 2034.

The dollar’s share had already been below 50% in 1990 and 1991, at the final leg of its long plunge from a share of 85% in 1977 to 46% in 1991, after inflation had exploded in the US in the 1970s, and eventually the world lost confidence in the Fed’s ability or willingness to get this inflation under control.

But by the 1990s, central banks loaded up on dollar-assets again, until the euro came along. This chart shows the dollar’s share at the end of each year (2024 = Q3).

But they’re not dumping US Treasury securities.

Holdings of US Treasury securities by foreign central banks and other foreign holders have surged from record to record. Over the past 12 months, foreign holders added $880 billion, bringing their stash to a record $8.67 trillion, according to the Treasury Department’s TIC data earlier (we discussed the details here).

Total foreign exchange reserves.

Central banks holdings of foreign exchange reserves denominated in all currencies, including in USD, rose to $12.7 trillion.

Excluded from the total are any central bank’s holdings of assets denominated in its own currency, such as the Fed’s holdings of Treasury securities and MBS, the ECB’s holdings of euro-denominated bonds, and the Bank of Japan’s holdings of yen-denominated assets.

Top holdings, expressed in USD:

• USD-denominated assets: $6.77 trillion

• EUR-denominated assets: $2.37 trillion

• YEN-denominated assets: $0.69 trillion

• GBP-denominated assets: $0.59 trillion

The other major reserve currencies.

The euro’s share, #2, ticked up to 20.0%, the highest since 2022. But the movements have been small. The euro’s share has been around 20% for years (blue in the chart below).

The other currencies are the colorful tangle at the bottom of the chart. More on those in a moment.

The rise of the “nontraditional reserve currencies.”

We will now hold a magnifying glass over the colorful tangle at the bottom of the chart above.

These other currencies, except for the Chinese renminbi, have all been gaining share, at the expense of the dollar, while the euro’s share has remained roughly stable.

This includes the basket of “nontraditional reserve currencies,” as the IMF calls them, that are combined into “All others” (yellow in the chart below), whose combined share has been surging since 2020.

China is the second largest economy in the world, but its currency plays only a small role as a reserve currency. And it has lost ground against the USD and other currencies since 2022.

In 2016, the IMF had added the RMB to its basket of currencies backing the Special Drawing Rights (SDR). That was a big step, and lots of folks thought that the RMB would quickly become a threat to the dominance of the USD as global reserve currency.

But central banks have not been enamored with RMB-denominated assets for a variety of reasons, including capital controls, convertibility issues, and other issues. Last year, the RMB was surpassed by the Australian dollar (AUD).

Far behind the USD and the EUR, the largest currencies by share:

1. Japanese yen, 5.8% (YEN, purple).

2. British pound, 5.0% (GBP, blue).

3. “All other currencies” combined, 4.5% (yellow).

4. Canadian dollar, 2.7% (green).

5. Australian dollar, 2.3% (brown).

6. Chinese renminbi, 2.2% (red).

7. Swiss franc, 0.2% (blue).

Central banks diversify from the USD to other currencies.

The IMF found that there were 46 “active diversifiers” among central banks, including central banks in most of the G20 economies, according to a paper it published in 2022. It defined them as central banks that had at least 5% of their foreign exchange reserves in “nontraditional reserve currencies.”

Two factors contributed to the rise of the “nontraditional reserve currencies,” the IMF found:

• The growing liquidity of assets denominated in “nontraditional reserve currencies,” which makes them easier for central banks to trade in the quantities they deal with.
• Chasing higher-yielding assets elsewhere during the 0%-era in the US and Europe.

USD exchange rates impact foreign exchange reserves.

The USD has risen sharply against a basket of other currencies in recent months, as tracked by the Dollar Index [DXY], but remains below the 2022 high, well below the 2001 high, and hugely below the 1985 high. So we see these huge peaks and valleys, but now the dollar is about where it had been in 1977.

The DXY is dominated by the euro and the yen, the two largest trade currencies behind the USD. When euro arrived on the scene, the DXY’s local currencies that became part of the euro were replaced by the euro. At the DXY was started in 1973. Today it’s at 108.9 about where it had been during the high moments in 1973-1975 (data via YCharts):

Why this matters: The IMF reports foreign exchange reserves in USD. USD holdings are obviously reported in USD. But the holdings in EUR, YEN, GBP, CAD, RMB, etc. are translated into USD at the exchange rate at the time. So the exchange rates between the USD and other reserve currencies impact the magnitude of the non-USD assets – but not of the USD-assets.

For example, the Bank of Japan’s holdings of USD-denominated assets, expressed in USD, don’t change with the YEN-USD exchange rate. But its holdings of EUR-denominated assets are translated into USD at the EUR-USD exchange rate at the time. So the magnitude of Japan’s holdings of EUR-assets, expressed in USD, fluctuates with the EUR-USD exchange rate.

The other diversification: gold.

Gold bullion is not a “foreign exchange reserve” asset of central banks, and is not included in the data above. Instead, it’s a “reserve asset,” not involving foreign currency.

Central banks had spent decades unloading their gold holdings. But about 10 years ago, they started rebuilding their stash.

According to the IMF, central banks’ gold holdings have surged over this decade to 1.16 billion troy ounces – roughly $3.08 trillion, compared to $12.3 trillion in foreign exchange reserves (chart via the IMF):

*  *  *

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely.

Tyler Durden Mon, 01/06/2025 - 11:05

The January 6 "Insurrection" that Wasn't

Authored by Thomas Buckley via The Mises Institute,

Typically, coup attempts do not wrap up in time for dinner...

But over the next few days, with the anniversary of the 2021 January 6 Capitol riot having become a progressive political holiday worthy of obsessive memorialization, the nation will be deluged with tales of attempted government overthrow, Trumpian lunacy, and the FBI desperately trying to explain why it has yet to catch a person who—on video—placed two pipe bombs in DC that day but has somehow gloriously managed to track down and prosecute 1,000 trespassers.

Despite what the endless and tedious and inaccurate anniversary media coverage—all delivered with a joyously smirking “kid in a candy store/evil Republicans” tenor—will be claiming, the January 6 riot had all (maybe really only some) of the hallmarks of, well, a riot, and none of the indicators of an actual “insurrection,” let alone an attempted coup d’état.

For an actual and successful coup, one need look no further than the inglorious defenestration of Joe Biden last summer.

A coup is an extremely tricky proposition, as Burt Lancaster’s character in the 1964 film “Seven Days in May,” discovered much to his chagrin. The film (and the book) note the level of detailed planning necessary, the prior co-option of various levers of power that needs to occur, the cruciality for speed of implementation, and—just as importantly—the requirement of a post-coup strategy.

January 6 had none of that—the intentional political censorship and elite scheming of the past few years and, of course, the bye-bye to Biden had all of that (except for his vicious vengeful installation of Kamala Harris, not at all being the choice of Pelosi-Obama plotters, as the heir.)

In a proper insurrection or coup, one of the key elements is control of the media. If January 6 were a legitimate attempt to overthrow the government, the planners, in theory, would have made sure that only evil Fox News was left on the air, that it had changed its logo to incorporate buffalo horns, and that all other media—including social—was broadcasting or re-tweeting or posting reruns of “Welcome Back, Kotter.”

This did not happen on January 6, unlike the instantaneous media rallying around, supporting, and explaining why it was perfectly okay for Biden to be put on an ice floe and that Harris was not at all the squishy, angry, incoherent portrait of pointlessness that it had been portraying her as for the previous four years. In fact, turns out, the media said, she was great and smart and definitely going to be met with universal acclaim by the public.

That did not exactly turn out very well.

The January 6 riot was a very odd combination of chaos and politeness, an attempt at a serious—if utterly misguided—political statement, a tragedy in the killing of Ashli Babbit, featured absurd humans doing absurd and scary things, and was politically almost unimaginably stupid.

But it was not a coup attempt.

People overthrowing a government do not wrap things up in time to get back to the hotel for dinner, they do not call the next day to check if anyone found the coat they left behind, and they do not stay within the stanchions:

In Edward Luttwak’s extremely interesting book—Coup D’état: A Practical Handbook—he outlines a series of practical necessities a successful overthrow entails. A neutralized opposition, media control, military support, dedicated and discrete supporters throughout government offices, speed of implementation, a detailed and logistically-feasible organizational action plan, and the immediate institutionalization of the new government are all among the key elements to prevailing. Since what occurred on January 6 not only lacked any of these elements but, by all accounts, had the exact opposite characteristics means, again, the premise that an actual government overthrow was in process is ludicrous.

To an extent, these simple facts are somewhat akin to the key event in the Sherlock Holmes story, “The Adventure of Silver Blaze.” Holmes focuses on a “curious incident”: the dog on the premises did not bark, leading the detective to the idea that the ne’er-do-well was known to the animal. This concept is also known as a “negative fact,” which involves the absence of one thing proving the truth of another.

A key negative fact is that only a handful of those participants the feds have rounded up and charged have not been charged with anything even remotely related to a treasonous, insurrectionist, coup attempt. Considering that some have received years-long sentences for trespassing, one would think there would be more, that is, unless they know it wouldn’t stand up in even the kangaroo courts in DC.

A second negative fact is that the riot, in fact, ended any consideration of and debate about the status of potentially questionable electors. Again, a proper coup would have let the effort move forward in the hope that it would succeed and only be triggered if there was a failure.

A final negative fact is that, despite the avalanche of anniversary coverage, little has been dedicated to the idea of what would have happened if the insurrection had been successful. If those still pushing the story now actually thought that it could have “worked,” they would be screaming about that horrifying potentiality from the rooftops. Since they haven’t, it means even they do not really take the notion seriously.

None of this is to defend the sheer obnoxiousness of the riot—not only was it wrong and illegal, it was supremely stupid from a political standpoint. With the fact that literally everything else went wrong for the administration and the Democrats in Congress in 2021, the riot provided them with the only even theoretically plausible lifeline to retain political legitimacy.

Congressional reports (St. Liz is getting a medal from Biden) and counter-reports (St. Liz may have committed felony witness tampering) have been issued and the FBI is still trying to explain the difference between informants—who were on scene—and agents, which it says (ludicrously) were not.

Friday, the FBI (presumably to have something to say during the anniversary) released “new” info on the person who put pipe bombs next to the headquarters of both the Republican and Democratic parties. The new info? He’s five foot seven. However, they declined to say why they let random people just stroll by the putative bombs even while they were on-site with robots investigating. All this apparently with a coup going on down the street.

Trump officially lost in 2020. Now whether that was due to a collaborationist media, vapor trails of zeroes worth of dark money, extremely dodgy election systems, the actual Big Lie regarding mental competence that was the Biden campaign, Trump’s personality (but probably not his policies), that there may have been 75,000 white men (the only demographic Trump saw a decline of support in, by the way) who were brainwashed into believing that to vote for him was a racist act, covid, generalized drama exhaustion, a belief that Biden would in fact be a good and decent President, or whatever other reason can be debated, but the fact is that Donald Trump left office.

But now he is back and—knowing Trump’s penchant for in-your-face troll drama—one can be certain that he, maybe half jokingly, asked if he could move the inauguration date up two weeks to January 6. Now that would be a memorable anniversary.

Tyler Durden Mon, 01/06/2025 - 10:20

US Factory Orders Tumbled In November

US Factory Orders tumbled 0.4% MoM in November (from an upwardly revised +0.5% MoM change in October), dragging orders down 1.9% YoY (the worst since June)...

Source: Bloomberg

Additionally, the final durable goods orders print tumbled 1.2% MoM (drastically worse than the 0.4% decline expected) with core Durables (ex-Transports) falling 0.2% MoM in November. The headline MoM drop dragged the YoY change in Durable Goods Orders down 6.4% YoY - the second worst since COVID lockdowns...

Source: Bloomberg

Finally, what the f**k is going on here? 'Hard' manufacturing orders data is completely decoupled from 'soft' manufacturing survey data...

Source: Bloomberg

Will wee see the 'hard' data "ADJUSTED" back from Biden's un-reality now that Trump is in office?

 

 

 

 

 

 

Tyler Durden Mon, 01/06/2025 - 10:07

First Baltic Sea "Sabotage," Now Chinese Ship Suspected Of Severing Major Undersea Cable Near Taiwan

A little more than a month after critical undersea telecommunications cables were severed in the Baltic Sea region, reportedly by a Chinese vessel, a similar incident has unfolded just days into the new year—this time off Taiwan's northern coast.

Taiwan English News reported that four core subsea telecom cables were damaged off the coast in Yehliu, New Taipei City, on Friday. 

Chunghwa Telecom operates the $500 million Trans-Pacific Express cable network via a joint venture between six telecom companies, including China Telecom, China Netcom, China Unicom, Chunghwa Telecom, Korea Telecom, and Verizon Communications. 

The cable connects East Asia to the US West Coast. 

According to Taiwan's National Coast Guard Administration, the Chinese vessel suspected of cutting the subsea cable just north of Taiwan is "Shunxin 39." It's a Cameroon-registered cargo ship. 

EurAsian Times noted that Shunxin 39 is registered in Cameroon and belongs to Jie Yang Trading Limited, a Hong Kong-based company headed by Guo Wenjie, a Chinese national. 

Taiwan is investigating a suspected Chinese link to the cutting of an undersea Telecom Cable. Authorities intercepted the Shunxin-39, a Cameroon-flagged Cargo Ship, but bad weather prevented boarding, and it continued to South Korea. The Ship is linked to a Hong Kong-based… pic.twitter.com/UO7LZxPmGg

— OSINTdefender (@sentdefender) January 5, 2025

Chunghwa Telecom has since reported that data disruptions were restored by rerouting traffic to other international subsea cables. 

As for the vessel, a Taiwan Coast Guard official told the Financial Times, "Since it was not possible for us to question the captain, we have asked the South Korean authorities to help with the investigation at the ship's next port of destination." 

The latest undersea cable-cutting incident further heightens concerns of potential sabotage by agents of China and or Russia, raising alarms about hybrid warfare tactics targeting Western telecommunication infrastructure worldwide. 

"This is another case of a very worrying global trend of sabotage against subsea cables," said a senior Taiwanese national security official, adding, "The ships that are involved in these incidents are typically rundown vessels that have little above-the-board business. This one, too, is in very bad shape. It is similar to the ships that are part of Russia's 'shadow fleet.'"

Tyler Durden Mon, 01/06/2025 - 08:35

Futures Jump As WaPo Sends Dollar Plunging

US stock futures gained, led by tech as news reports of Microsoft's spending plans underscored the sustained demand for AI infrastructure (even though the same and more has been said about Facebook and yet the company's massive capex spending plans have yet to materialize). S&P 500 futures were up 0.6%, set to rise for a second day after ending the longest losing streak since April on Friday; Nasdaq 100 futures advanced 1%, with chip giants Nvidia and AMD rising more than 2% in premarket trading. In Europe, the Stoxx 600 also edged higher, fueled by ASML’s biggest daily gain since October. The dollar, which recently traded at a more than two year high tumbled on a Wapo report that Trump aides are looking at targeting import taxes at certain industries, rather than across the board resulting in a less strict tariff regime (spoiler alert: not only is this fake news, if anything Trump will double down on tariffs and make them even stricter). The news sent both the dollar and treasuries higher, with the former slipping earlier ahead of a sale of three-year debt as well as auctions of 10- and 30-year notes later this week, with the 30-year yield climbing overnight to the highest since November 2023 before retracing the move. On today's calendar we get the S&P service PMI, as well as factory/durable orders report.

In premarket trading, semiconductor stocks gained after Nvidia’s server assembly partner Foxconn reported faster-than-expected revenue growth on continuing demand for AI infrastructure, lifting chip names (Micron Technology (MU US) +3.9%, Advanced Micro Devices (AMD US) +3.0%, Nvidia (NVDA US) +2.04%, Broadcom (AVGO US) +1.9%). The news also boosted the Mag7 universe (Apple +0.777%, Nvidia +2.04%, Microsoft +1%, Alphabet +1.0%, Amazon +1.2%, Meta Platforms +0.8% and Tesla +1.4% all up in premarket trading). Here are some other notable premarket movers:

• Asana (ASAN US) shares climb 8.2% after an upgrade at Piper Sandler, with analysts noting that AI demand is set to boost software revenue.
• Boeing (BA US) shares rise 2.4% as Barclays upgraded to overweight from equal-weight, turning positive on the stock for first time since 2019.
• Citigroup (C US) shares gain 1.8% after Barclays upgraded the lender to overweight from equal-weight, taking a constructive view on bank stocks for 2025 as earnings-per-share growth accelerates and price-to-equity multiples expand.
• CommScope (COMM US) slip 4.9% after Raymond James downgraded the communications equipment company to underperform from market perform.
• Kenvue (KVUE US) shares rise 1.4% after Piper Sandler upgraded the consumer health company to overweight from neutral, noting a healthier margin trajectory.
• Paycor HCM (PAYX US) shares rise 1.7% after larger payroll processing company Paychex is said to be in advanced talks to acquire the company.
• ServiceTitan (TTAN US) shares edge 0.7% higher as analysts initiate coverage on the residential and commercial repair software company after its blockbuster market debut last month
• Vertiv (VRT US) shares rise 5.0% after Morgan Stanley initiates the power equipment provider at overweight, predicting US industrials’ earnings revisions to return to positive territory this year.

In a blog post on Friday, Microsoft announced it expects to spend $80 billion in 2025 on the construction of data centers for AI workloads, while Nvidia’s Taiwanese partner FoxConn reported faster-than-expected revenue growth. The news helped kickstart another tech meltup. Tech’s rebound “is a technical move after the year-end correction,” said Fares Hendi, portfolio manager for global equities at SG Prevoir in Paris. “Microsoft’s decision to raise capex in 2025 is probably helping momentum.”

US Treasuries erased the session’s losses following the Washington Post report. The 30-year rate climbed as much as four basis points to 4.85% earlier in the day, the most since November 2023, ahead of a $58 billion sale of three-year notes on Monday. Morgan Stanley strategists warned Monday that rising yields could pose a headwind to US stocks in the first half, and that rates are “the most important variable to watch” in early 2025. Ten-year yields have now surged around 50 basis points since early December to 4.60% as traders price in the possible inflationary effect of Trump’s policies. Any resurgence of price pressures would likely slow the pace of interest-rate cuts by the Federal Reserve. The US central bank has dialed back its expectations for easing in 2025, and markets now fully price just one reduction this year.

RBC Capital Markets LLC strategist Lori Calvasina expects that markets will soon get better clarity on Trump’s policies. “One of my core beliefs about politics and markets, whatever it is, you have to go through some temporary pricings, and those can be painful,” Calvasina told Bloomberg TV. “It tends to be rather short-term and then you move on.”

Later today, Federal Reserve Governor Lisa Cook will speak at a conference on law and microeconomics at the University of Michigan. Her colleague Tom Barkin, the Richmond Fed President, suggested on Friday his preference was to keep rates restrictive for longer.

European stocks edged higher, led by technology shares as Microsoft’s plan to spend $80 billion on AI data centers this year boosted the sector. Hon Hai earnings also aided sentiment. The Stoxx 600 added 0.2%.  European semiconductor stocks posted broad-based gains on Monday, following a rally in US peers on Friday. Microsoft’s commitment to invest further in data centers also hands a potential boost to companies helping to build cutting-edge AI chips. Here are some other notable premarket movers:

• Hermes shares rise as much as 2.4% after Stifel upgrades the luxury goods maker to buy from hold, citing the firm’s pricing power and its wealthy and loyal client base
• Sartorius and its Paris-listed unit Sartorius Stedim Biotech each climb more than 5% after JPMorgan placed both shares on positive catalyst watch ahead of this month’s 4Q results
• Imerys shares rise as much as 6.9% after the French building materials firm said the vast majority of claimants have accepted the plan of reorganisation under the Chapter 11 process for its North American talc subsidiaries
• TomTom shares advance as much as 7.6% after the navigation technology firm announced a partnership with geographic information system company Esri
• Novo Nordisk shares drop as much as 2.2% after analysts at Jefferies and Berenberg lowered their price targets, following last month’s trial results for experimental obesity medicine CagriSema, which failed to meet expectations
• Rolls-Royce shares fall as much as 4.6% as Citi removes its buy recommendation on the jet-engine maker for the first time since 2016, noting the stock is now close to fair value
• Unilever declines as much as 2%, the most since July, after RBC downgraded the consumer goods company to underperform from sector perform, saying that it lacks the “wherewithal” to sufficiently boost volumes enough to reach its 2% growth goal
• Royal Unibrew shares fall as much as 4.7% after the beverage maker was cut to equal-weight from overweight at Barclays on PepsiCo Inc.’s consolidation of its bottling network

Earlier in the session, Asian stocks traded in a narrow range as technology shares got a boost from Microsoft’s $80 billion data center pledge, while Japanese benchmarks fell as the market reopened after holidays. The MSCI Asia Pacific Index swung between gains and losses of less than 0.3%, with chipmakers including TSMC, SK Hynix and Samsung Electronics among the biggest boosts after Microsoft announced its spending plan for the year. Taiwanese and South Korean benchmarks led advances in the region, while Japanese shares declined in the first day of trading this year. Stocks in India also fell. The global tech rally is expected to continue as major firms ramp up artificial intelligence-related investments. Beyond this, Asian stocks face headwinds from uncertainty over potential US tariffs, a stronger dollar and increased geopolitical risk. Goldman Sachs cut its target for the MSCI Asia Pacific ex-Japan Index, anticipating lower earnings amid a challenging macro environment.

Chinese equities closed marginally lower, with upbeat services activity data offering little respite. Investors may have to wait longer for more support for the economy as the government is unlikely to “come out with stronger stimulus policy just before the Chinese New Year,” Hao Hong, partner and chief economist at GROW Investment Group, said on Bloomberg TV. China maintained its support for the yuan with the daily reference rate after the currency slumped past a key level on Friday. Services sector activity in the world’s No. 2 economy expanded at the fastest pace since May, a private survey showed on Monday, signaling improving domestic demand after Beijing’s stimulus blitz.

In FX, the dollar tumbled, underperforming all G-10 peers with the exception of the Japanese yen, on a report that Donald Trump’s aides are exploring targeting import taxes at certain industries, rather than across the board, suggesting that the dollar’s recent strength is more dependent on fiscal rather than monetary policy. Bloomberg’s gauge of the dollar fell the most since November. Japan's yen also slumped after comments out of Japan overnight indicated that the central bank is nowhere close to hiking rates. The Canadian dollar got a lift from a Globe and Mail report that Prime Minister Justin Trudeau is likely to announce his resignation as leader of the Liberal Party this week. However, the gains in the loonie may be short-lived given the “bearish macro backdrop” for the currency, according to RBC Capital Markets.

In rates, early losses in Treasuries were quickly erased after Washington Post report detailing potential for Trump tariff plan to cover only “critical imports.” The dollar dropped sharply while Treasuries rose more gradually, leaving yields richer across maturities after an early cheapening move that sent long-end yields to a 14-month high. Supply is in focus as three-day coupon auction cycle begins Monday and around $50 billion of corporate bond offerings is expected this week, front-loaded by Thursday’s early close and December jobs data on Friday. Front-end Treasury yields remain lower by ~2bp with long-end yields little changed, leaving 2s10s and 5s30s spreads wider; 10-year, near flat at 4.60%, outperforms bunds and gilts by 2.5bp and 1bp on the day. A gusher of corporate bond issuance is anticipated this week, totaling around $50 billion and front-loaded ahead of Carter’s state funeral Thursday and the December jobs report

In commodities, gold slipped as Goldman said it no longer sees the metal reaching $3,000 an ounce by the end of the year, pushing the forecast to mid-2026 on expectations the Fed will make fewer rate cuts. Oil steadied near its highest level in almost three months as Saudi Arabia raised its official prices on signs of tightness in Middle Eastern crude markets.

The US economic data calendar includes December final S&P Global services PMI (9:45am) and November factory orders (10am); JOLTS job openings, ISM services and ADP employment change also are ahead this week. Fed speakers scheduled for the session include Cook at 9:15am; Barkin, Waller, Harker, Schmid and Bowman also due this week

Market Snapshot

• S&P 500 futures up 0.4% to 6,012.75
• STOXX Europe 600 up 0.2% to 509.33
• MXAP little changed at 181.33
• MXAPJ up 0.5% to 571.66
• Nikkei down 1.5% to 39,307.05
• Topix down 1.0% to 2,756.38
• Hang Seng Index down 0.4% to 19,688.29
• Shanghai Composite down 0.1% to 3,206.92
• Sensex down 1.5% to 78,019.22
• Australia S&P/ASX 200 little changed at 8,257.45
• Kospi up 1.9% to 2,488.64
• German 10Y yield up 2.5 bps at 2.45%
• Euro up 0.5% to $1.0356
• Brent Futures down 0.2% to $76.39/bbl
• Gold spot down 0.3% to $2,633.29
• US Dollar Index down 0.38% to 108.54

Top Overnight News

• Canadian PM Trudeau is likely to resign prior to the national caucus meeting on Wednesday, according to Canadian press. There were separate comments from a source familiar with Trudeau's that the PM is increasingly likely to announce he intends to step down but has not made a final decision. Furthermore, Polymarket’s odds for Trudeau to resign before February surged to over 70% over the weekend from around 33% on Friday, while Globe & Mail columnist Lawrence Martin commented on X that “Everybody's gearing up for Trudeau's resignation announcement, expected by Monday
• US President-elect Trump urged his fellow Republicans in Congress to combine his priorities into one bill which would cut taxes, bolster border security and increase domestic energy production, writing "it will all be made up with tariffs, and much more, from countries that have taken advantage of the U.S. for years". (Truth Social)
• Biden-Harris administration announces Arizona state University research park as the planned site for third chips for America R&D flagship facility.
• US National Security Advisor Sullivan says the US is finalizing steps to remove roadblocks in civil nuclear partnerships with Indian firms.
• US House Speaker Mike Johnson plans to pass a bill by May that will address Trump’s priorities — including border security and tax cuts — using reconciliation, which won’t need any Democratic votes. BBG
• President-elect Donald Trump’s aides are exploring tariff plans that would be applied to every country but only cover critical imports, three people familiar with the matter said — a key shift from his plans during the 2024 presidential campaign. WaPo
• New York became the first US city to launch a congestion charge zone on Sunday, according to FT.
• China's main stock exchanges asked some large mutual funds to restrict stock selling at the start of the year, three sources familiar with the matter said, as authorities sought to calm markets heading into a tricky period for the world's second-largest economy. RTRS
• China’s central bank has signaled its resolve to stabilize the yuan’s exchange rate, with a stronger tone taken during its latest policy meetings, as the Chinese currency looks to be directly affected by US president-elect Donald Trump’s policies. SCMP
• China’s Caixin services PMI for Dec comes in ahead of expectations at 52.2 (up from 51.5 in Nov and above the consensus forecast of 51.4). WSJ
• France’s 2025 budget will aim to narrow the deficit to between 5% and 5.5% of economic output, Finance Minister Eric Lombard said. BBG
• Ukraine is in an increasingly dire state as Russia captures territory at the fastest pace since the start of the invasion, with Moscow capitalizing on its greatest advantage: manpower. WaPo
• OpenAI’s Sam Altman says the company “is now confident” it knows how to build AGI (artificial general intelligence), and that 2025 could “see the first AI agents join the workforce and materially change the output of companies.” He added that OpenAI is “beginning to turn our aim beyond AGI, to superintelligence.” Sam Altman

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly subdued following the lack of macro catalysts over the weekend and as participants digested the mixed signals from Chinese Caixin PMI data, while Japanese markets underperformed in their first trading session of 2025. ASX 200 failed to sustain early gains as strength in real estate and tech was offset by losses in materials and miners. Nikkei 225 retreated on return from the New Year holiday closures amid higher yields and after the US blocked Nippon Steel's bid to take over US Steel, while a weaker currency failed to support the risk appetite as participants also braced for weak results from retailers including Fast Retailing and Seven & I Holdings. Hang Seng and Shanghai Comp were choppy following the somewhat mixed PMI data in which Chinese Caixin Services PMI data beat expectations, but the Caixin Composite PMI figure slowed, while comments late last week from the PBoC's MPC, which recommended strengthening the intensity of monetary policy adjustments and said it will cut RRR and interest rates at the proper time, did little to spur demand.

Top Asian News

• China's stock exchanges asked some mutual funds to restrict stock selling at the start of the year, according to Reuters sources.
• PBoC pledged more financial support for innovation and consumption, while it will encourage foreign capital to invest in domestic tech.
• PBoC is expected to ramp up offshore yuan bill sales in Hong Kong in January and has ample toolkits and experience to react to yuan depreciation, while China has the ability to keep the yuan basically stable at reasonable and balanced levels, according to PBoC-backed Financial News.
• BoJ Governor Ueda said the virtuous cycle strengthened gradually last year and he plans to increase interest rates with continued economic improvements but added the timing of an adjustment is dependent on economy and inflation, while Ueda added that momentum for wage increases is key and they must be vigilant to various risks in deciding timing for adjusting degree of monetary support.

European bourses are almost entirely in positive territory (ex-FTSE 100), with sentiment lifted by strength in Tech names. Bourses slipped a touch in early morning trade, but managed to stabilise and then head back to best levels where they generally reside. European sectors initially opened with a slight positive bias, but now displays a bit more of a mixed picture. Tech is by far the clear outperformer today, for a couple of reasons. Firstly, Foxconn reported strong December sales figures, helping to lift sentiment in the sector. Elsewhere, reports suggest that Microsoft plans to spend USD 80bln to build out AI this FY. US equity futures are entirely in the green, with slight outperformance in the tech-heavy NQ, taking impetus from the sectoral strength seen in Europe thus far. Microsoft plans to invest USD 80bln in FY25 to construct AI-capable data centres, with over half of this expenditure directed towards the US, CNBC reports. The investment is part of the company’s broader strategy to support AI advancements, including its partnership with OpenAI. Foxconn’s Q4 revenue hit a record USD 64.7bln (+15% Y/Y), exceeding estimates, driven by strong AI server demand. While consumer electronics, including iPhones, saw flat growth, Foxconn expects significant year-on-year growth in Q1 2025. NOTE: Foxconn denied reports that its chairman expressed positive outlook, that 2025 sales will trend upwards topping TWD 7tln, and said the company did not make any such financial forecasts.

Top European News

• The percentage of UK businesses planning to raise prices in the coming three months rose to about 55% from 39% as tax increases and higher wage costs caused confidence to slump, according to a survey of 5,000 businesses by the British Chambers of Commerce via FT.
• Austrian Chancellor Nehammer said coalition talks between the two largest centrist parties in Austria on forming a government without the far-right Freedom Party have collapsed, while he will stand down as Chancellor and leader of the People’s Party in the coming days. It was later reported that the Austrian President van der Bellen agreed to meet with far-right Freedom Party leader Kickl on Monday and that Conservative People’s Party (OVP) Secretary-General Stocker was named as interim party leader. Furthermore, Stocker expects far-right leader Kickl will be tasked with forming a government and said the OVP will take part in coalition talks with the far-right Freedom Party and take them seriously.
• Many Eurozone economists warned that the ECB has been too slow to cut interest rates to help the economy and 46% of the economists surveyed said the ECB had fallen behind the curve, according to a poll by FT.
• French Budget Minister reiterates there will be a "Special Tax" on the biggest companies; is convinced they can find a majority in parliament to get a budget through. The 2024 deficit will be "around" 6.1%; sees 2025 deficit in a 5-5.5% range

FX

• A subdued start to the week thus far with DXY continuing the downward action from Friday and falling further under the 109.00 level to print a current range between 108.43-109.06 (vs Friday's 108.89-109.22 parameter). US Services & Composite PMI (Final) due, with Fed speak from Daly thereafter.
• EUR is firmer amid the broader Dollar weakness and clawing back some of last Thursday's losses, with today's range currently between 1.0296-1.0352 (vs Thursday's best at 1.0372). Further support for the EUR was seen after the German state of Hesse reported December CPI at 2.7% Y/Y (prev. 2.0%).
• Weakness in JPY despite the softer Dollar but as a function of higher US yields, with Tokyo traders returning to the markets following their Christmas and New Year break. The pair was also unfazed by overnight comments from BoJ Governor Ueda who stated that he plans to increase interest rates with continued economic improvements but added the timing of an adjustment is dependent on the economy and inflation. USD/JPY resides in a 157.14-82 current range and eyes last Thursday's peak at 157.84.
• Sterling is the top G10 performer this morning amid broader USD weakness alongside potential tailwinds from reports that the percentage of UK businesses planning to raise prices in the coming three months rose to about 55% from 39% as tax increases and higher wage costs caused confidence to slump, according to a survey of 5,000 businesses by the British Chambers of Commerce via FT. GBP/USD resides in a USD 1.2408-1.2491 parameter as it eyes last Thursday's high at 1.2535.
• Antipodeans are both firmer amid the broader rise in high-beta FX, with Antipodeans also feeling tailwinds from higher base metals. Overnight, Antipodeans benefitted alongside the early strength in CNH after the PBoC continued to set a much stronger-than-expected yuan reference rate setting although the upside was limited and there was a relatively muted reaction to the varied Caixin PMI data.

Fixed Income

• USTs are pressured following the downside seen last week post-data and as the region awaits a hefty and frontloaded supply schedule. Furthermore, JGBs influenced overnight with the contract to a fresh low after remarks from Ueda who stated that he plans to increase interest rates with continued economic improvements but added the timing of an adjustment is dependent on the economy and inflation. As it stands, USTs are at lows of 108-12, matching the 30th December base with support from the session’s proceeding at 108-11+ and then the 108-06+ contract trough.
• Bunds are softer in-fitting with the above and as the region counts down to its own supply. Macro focus this morning has been on the Final PMIs, PMIs which were subject to upward revisions across the board sparking some modest pressure in EGBs. Furthermore, while most of the German State CPIs are scheduled for release later in the week after the mainland figure, the metric from Hesse came in much hotter than the prior for December Y/Y; which, if indicative, presents a further upward skew to the mainland numbers later today. Bunds are currently at a 132.22 low, a base which leaves just the contract trough at 132.00 from November as support.
• Gilts underperformed into its own PMI metrics, which saw modest downward revisions and helped to lift Gilts slightly off their base, though the benchmark was unable to reclaim the 92.00 mark or by extension test the opening 92.02 high. The referenced initial pressure stemmed from a British Chambers of Commerce survey which reported that 55% of UK businesses intend to lift prices in the next three months (prev. 39%) amid tax increases and elevated wage costs. Action which has pushed Gilts to a 91.78 base, within reach of the 91.64 contract low from December. As such, the UK’s 10yr yield is back towards highs of 4.65% from end-2024, levels which continue to pressure Chancellor Reeves’s headroom.
• Saudi Arabia mandates USD 3,6,10yr benchmarks, according to IFR. 3yr debt IPT at 120bps over UST. 10yr debt IPT at around 140bps over UST.

Commodities

• WTI and Brent are softer with prices failing to garner much support from the declining Dollar and overall positive risk tone in Europe, although APAC sentiment was mostly subdued. Geopolitical updates include reports that Israel wants to keep some sites outside the northern border in Lebanon indefinitely. Brent Mar sits in a USD 76.11-76.89/bbl parameter.
• Nat Gas is modestly softer intraday in fitting with the broader price action in energy. Some upticks were seen amid reports that European gas storage is depleting at the fastest rate since 2018, according to Bloomberg citing sources. Meanwhile, a major winter storm is reported to have hit the US, producing heavy snow and significant ice which is expected to last days, with some 30 states issuing weather alerts; US Nat Gas futures rose 9% intraday.
• Gold is subdued despite the softer Dollar in the run-up to this week's risk events including the FOMC Minutes and NFP jobs data. Spot gold resides in a narrow USD 2,647.49-2,625.26/oz range after dipping under Friday's USD 2,636.70/oz.
• Copper is on a firmer footing amid the softer dollar, Chinese Caixin Services PMI also has provided some tailwinds. 3M LME copper resides in a USD 8,781.50-8,913.00/t range.
• Saudi Aramco February Crude OSP: Arab light to US at + USD 3.50/bbl vs ASCI; Arab light to NW Europe at + USD 0.05/bbl to ICE Brent, via Aramco.
• Ukraine reportedly attempted to attack Zaporizhzhia nuclear power plant on January 5th with drones, according to Ifx citing Russian defence minister.
• US plans more sanctions on tankers carrying Russian oil, according to a source cited by Reuters.
• LNG tanker Coral Nordic will unload at Belgium’s Zeebrugge terminal on January 9th from Ruvys.
• German energy import Uniper’s (UN01 GY) CEO Mike Lewis said the company is working to protect its fleet of LNG tankers from seizure by nations friendly to Russia after it was hit with a EUR 14bln penalty by a Russian court in March as part of an international dispute with a subsidiary of Russian state-backed gas company Gazprom, according to FT.
• European gas storage depletes at the fastest rate since 2018, according to Bloomberg citing sources. Storage at 70% full on January 4th vs the 5yr seasonal average of 76%.
• Goldman Sachs cut its gold price forecast in which it sees the precious metal to reach USD 2,910/oz by year-end and pushed back its USD 3,000/oz target to mid-2026, citing slower-than-expected Fed easing.

Geopolitics: Middle East

• US President Biden notified Congress of USD 8bln arms sale to Israel, according to Axios.
• Hamas said it approved a list of 34 hostages presented by Israel to be exchanged in a ceasefire deal. However, it stated that any deal would depend on an agreement regarding a withdrawal and ceasefire, while it has not seen progress on issues regarding this, and Israeli PM Netanyahu’s office later stated that Hamas had not provided a list of hostage names.
• Saudi Foreign Minister met with US envoy Hochstein in Riyadh and discussed developments in Lebanon and regional issues.
• Syrian Foreign Minister Al-Shibani travelled to Doha to meet with senior Qatari officials.
• US is to ease aid restrictions for Syria in a limited show of support for the new government, according to WSJ.
• Iran will face a difficult year with the Trump administration which plans to increase sanctions on Iran, while the Trump administration sees Iran as still a threat to US allies and the Trump team is considering the option of air strikes to prevent Iran from building a nuclear weapon, according to WSJ.
• Israel wants to keep some sites outside the northern border in Lebanon indefinitely, via AJA Breaking.

Geopolitics: Ukraine

• IAEA said staff reported hearing loud blasts near Ukraine's Zaporizhzhia Nuclear Power Plant on Sunday which coincided with reports of a drone attack on the plant's training centre, while the IAEA has not been able to confirm any impact and noted that reports stated there were no casualties and no impact on any nuclear power plant equipment, according to Reuters.
• Ukrainian President Zelensky said security guarantees for Ukraine to end Russia's war will only be effective if the US provides them and he needs to sit down with US President-elect Trump to decide how to stop Russian President Putin before Ukraine can enter talks with the Russian side. Zelensky also said Europe must also have a voice in deciding a course of action before Ukraine talks to Russia and that Putin will destroy Europe if the US leaves the NATO military alliance, while he noted that North Korea has provided Russia with 3.7mln artillery shells in the war and that 3,800 North Korean troops fighting Ukraine in Russia's Kursk region have been killed or wounded so far. Furthermore, Zelensky separately commented that there were heavy Russian and North Korean losses in Russia’s Kursk region.
• Ukraine’s air force said on Sunday morning that it had downed 61 drones launched by Russia in an overnight attack.
• Russia’s Defence Ministry said Russian forces took control of the Nadiya settlement in Ukraine’s Luhansk region, while it also announced that Ukraine launched a counter-attack in Russia’s Kursk region.

Geopolitics: Other

• North Korea fired a suspected ballistic missile which was reported to have fallen shortly after and appeared to have landed outside of Japan's exclusive economic zone, while the South Korea military said North Korea fired what appeared to be one intermediate-range ballistic missile.

US Event Caldendar

• 09:45: Dec. S&P Global US Services PMI, est. 58.5, prior 58.5
• 09:45: Dec. S&P Global US Composite PMI, prior 56.6
• 10:00: Nov. -Less Transportation, est. 0.3%, prior -0.1%
• 10:00: Nov. Cap Goods Ship Nondef Ex Air, est. 0.3%, prior 0.5%
• 10:00: Nov. Cap Goods Orders Nondef Ex Air, est. 0.1%, prior 0.7%
• 10:00: Nov. Factory Orders Ex Trans, prior 0.1%
• 10:00: Nov. Factory Orders, est. -0.4%, prior 0.2%
• 10:00: Nov. Durable Goods Orders, est. -0.4%, prior -1.1%

DB's Jim Reid concludes the overnight wrap

Hope you all had a great weekend and welcome back to those returning to work today. If you’ve just got back, markets have had a fairly rough time since Christmas, with the S&P 500 down another -0.48% last week, whilst China’s Shanghai Composite saw its biggest weekly decline (-5.55%) since February. However, we did start to see a recovery on Friday, with the S&P 500 snapping a run of 5 consecutive daily declines with a +1.26% advance, whilst futures on the index are very slightly higher this morning with a +0.05% gain.

One factor helping to turn sentiment around on Friday was strong economic data out of the US, with the ISM manufacturing print up to a 9-month high of 49.3 in December (vs. 48.2 expected). Moreover, the new orders component ticked up to an 11-month high of 52.5. Plus that came just a day after the weekly initial jobless claims fell to their lowest level since April. So collectively, that helped to reassure investors that the US growth outlook was still robust into the new year.

Later in the session on Friday, we also got confirmation that Mike Johnson had been re-elected as Speaker of the House of Representatives in the new US Congress. On Friday, that had appeared in some doubt, as the Republicans only have a 220-215 margin over the Democrats following the election, and a few Republicans had been resistant to supporting Johnson. Indeed, two years ago it took former Speaker Kevin McCarthy a total of 15 ballots to be elected. For markets, the vote was also in focus because it was seen as the first test of how cohesive the narrow Republican majority would prove, and whether they’ll be able to enact Donald Trump’s second-term agenda, with his inauguration now just two weeks away. Indeed, this is the narrowest majority in the House of Representatives since the midterm election in 1930, so it’s quite a different situation to the start of Trump’s first term, when the Republicans initially had a 241-194 majority in the House.

In the meantime, we had comments from several different Fed speakers about the policy outlook over the weekend and on Friday. Generally, those comments have implicitly sounded quite cautious about the scale of further easing, which echoes the Fed’s hawkish shift in their December dot plot, where they only signalled 50bps of cuts for 2025. For instance, on Friday Richmond Fed President Barkin said he was “in the camp of wanting to stay restricted for longer.” Then over the weekend, San Francisco Fed President Daly said that inflation was still “uncomfortably above our target”, whilst Governor Kugler said that “we know the job is not done” with inflation still not at 2% yet. This backdrop has seen US Treasury yields move higher this morning, with the 30yr yield (+1.8bps) currently at 4.83%, which would be its highest closing level since November 2023. And this Wednesday coming up, we’ll get the minutes from the FOMC’s recent meeting in December, so it’ll be interesting to see how that debate unfolded given there was a dissenting vote.

As we look forward to the first full week of 2025, a key question for the Fed’s outlook will be how strong the US jobs report for December is, which is out this Friday. In terms of what to expect, our US economists are looking for nonfarm payrolls to grow by +150k in December. That would be beneath the +227k print in November, but that gain was boosted by a bounce back from previous weather disruption and the end of strikes. Indeed, a +150k print would basically be in line with the 6-month average, which is currently running at +143k. Otherwise, our economists see the unemployment rate ticking up a tenth to 4.3%.

Turning to Europe, the main focus this week will be the Euro Area flash CPI print for December, which is out tomorrow. This is an important one, as it comes amidst growing concern about European inflation, particularly with the recent rise in natural gas prices, along with the recent depreciation of the euro. On top of that, the December flash print from Spain last week was stronger than expected, so the backdrop hasn’t been too favourable, and both headline and core inflation for the Euro Area are widely expected to remain above the ECB’s 2% target. We’ve seen that have an impact in markets too, and last week saw the 10yr bund yield move higher for a 5th consecutive week.

Elsewhere in Europe, another thing to look out for will be the ongoing political situation in France and efforts to put together a new budget. That comes as last week saw the Franco-German 10yr spread widen by +4.8bps to 86.3bps, which is the widest it’s been since early December, back when the National Rally confirmed they would vote against Michel Barnier’s government. That underperformance was evident among other French assets last week, with the CAC 40 down -0.99%, in contrast to the +0.20% gain for the Europe-wide STOXX 600.

Staying on politics, it’s been reported by Canada’s Globe and Mail newspaper that Prime Minister Justin Trudeau is expected to resign as Liberal Party leader this week. Canada has to hold a federal election by October at the latest, and Trudeau’s Liberals are polling well behind the opposition Conservatives, with CBC’s poll tracker currently putting the Conservatives on 44%, and the Liberals on 21%. Trudeau has already faced calls from some Liberal MPs to resign, and his position came under further pressure last month after finance minister and Deputy PM Chrystia Freeland resigned from the cabinet.

Overnight in Asia, most of the major equity indices are trading lower, with the Nikkei (-1.49%) falling sharply as Japan’s markets reopen after the new year. That also comes as BoJ Governor Ueda confirmed their expectations to keep hiking rates, saying that “we will raise the policy interest rate to adjust the degree of monetary easing if economic and price conditions keep improving”. Elsewhere, Chinese equities have posted further declines, with the Shanghai Comp (-0.29%) and the CSI 300 (-0.29%) losing ground. However, South Korean equities have posted strong gains, with the KOSPI up +1.83% this morning.

Finally on the week ahead, US stock markets will be closed on Thursday for the funeral of former President Jimmy Carter, whilst bond markets will close early that day.

Tyler Durden Mon, 01/06/2025 - 08:04