Dominic Cummings Speaks Out On Alleged Lockdown Violations As Tories Turn On Boris Tyler DurdenMon, 05/25/2020 — 09:05
As the scandal reaches a fever pitch following Prime Minister Boris Johnson’s failed attempt to draw a line under the scandal last night, it appears Dominic Cummings will now face down the British press baying for his blood.
With US markets closed for the Memorial Day Holiday, and most of the country looking forward to a holiday-shortened week, the furor over the US being 700 deaths away from 100k has inexplicably been drowned out by a burgeoning scandal in the UK involving Johnson and Cummings, his senior advisor and (according to the PM’s left-wing critics) svengali, long considered a critical part of the PM’s team.
Cummings has elicited widespread calls for him to resign by Labor and Tory MPs, as well as an NHS doctor who has said he will resign on Friday if Cummings hasn’t by then.
Cummings alleged crime? He appeared to flout the extremely restrictive social distancing guidelines that he himself — as a key figure in Johnson’s government — help craft. As we explained last night, the backlash against Cummings (and several similar scandals playing out in the US, Japan and elsewhere) is part of a populist backlash against the the burdensome lockdowns and government elites who signed off on them: “One rule for me, and another for thee” has become a rallying cry of sorts.
Even Wall Street strategists have picked up on the fulminating anger surrounding whether Cummings should resign — as 15 Tory MPs and several members of Johnson’s cabinet have now called on him to do. Here’s a quote from a client note from Rabobank:
“Arrogant and offensive.” Not today’s Daily. Well not deliberately and/or any more than usual.
Rather those three words, followed by “Can you imagine having to work with these truth twisters?” were tweeted out by the British civil service on its official account yesterday before being deleted. This was in reference to the UK government lining up to bend over backwards to support PM Johnson’s advisor Dominic Cummings, who stands accused of having broken the virus lockdown rules that he helped draw up. Listen to UK radio and read the press: the sense of public anger is palpable when just weeks ago people were genuinely concerned for BoJo’s health. The lockdown was already fraying: now it may be undermined by a perceived “one rule for them and another for us”. Which we have a whole lot of globally on many fronts.
As Rabo points out above, even the civil service has turned on BoJo, who just weeks ago was fighting for his life in a London hospital, enjoying sky high approval ratings, and eliciting fawning editorials.
For those who are catching up on the scandal, here’s a quick summary courtesy of Sky:
Boris Johnson is under growing pressure to fire top aide Dominic Cummings as 19 Conservative MPs, bishops and NHS staff called for his resignation over suggestions he broke lockdown rules.
The prime minister told the nation on Sunday Mr Cummings acted “responsibly, legally and with integrity” after his chief adviser admitted travelling 260 miles to his parents in Durham for childcare support after his wife displayed coronavirus symptoms.
Members of the public also claimed to have seen him in Barnard Castle, a picturesque town 30 miles from Durham, then again in the county after he had returned to London.
As the BBC reports, Cummings is expected to make a statement and take questions, an unprecedented act for a government advisor. However, the timing of Cummings statement and press conference are unclear…
No idea what will be in Cummings Statement… but can guarantee the final few words will be “First Question to Laura Kuenssberg of the BBC”
— Jon Hannah 🔸 #stopdv #fbpe #ubinow (@JCHannah77) May 25, 2020
…But Sky News will likely broadcast Cummings’ statement and Q&A, which we expect may include new details about why two alleged trips to Barnard Castle, a picturesque town 30 miles from Cummings’ parents’ place in Durham, fell within the strict quarantine restrictions that Cummings himself helped design. Once a live feed is available, we will share it here.
Meanwhile, here’s a timeline of the Cummings scandal, courtesy of ITV:
As the coronavirus crisis escalates, the UK is placed into lockdown with strict limitations on travel. The government guidelines state: “You should not be visiting family members who do not live in your home.”
Mr Johnson and Health Secretary Matt Hancock test positive for coronavirus, while chief medical officer Chris Whitty says he has symptoms of the disease and is self-isolating.
Transport Secretary Grant Shapps told the BBC he believes Mr Cummings was last seen in Downing Street on the same day and speculates he may have travelled either on the 27th or 28th.
Downing Street confirms Mr Cummings is suffering from coronavirus symptoms and is self-isolating.
Durham police are “made aware of reports that an individual had travelled from London to Durham and was present at an address in the city”.
The force says officers “made contact with the owners of that address who confirmed that the individual in question was present and was self-isolating in part of the house.”
“In line with national policing guidance, officers explained to the family the arrangements around self-isolation guidelines and reiterated the appropriate advice around essential travel.”
An unnamed neighbour tells the Daily Mirror and the Guardian that Mr Cummings was seen in his parents’ garden.
“I got the shock of my life as I looked over to the gates and saw him,” they said.
The Guardian approaches Downing Street about the story, only to be told by a spokesperson: “It will be a no comment on that one.”
March 30 to April 6:
The period for which Mr Cummings’ wife Mary Wakefield describes the family’s battle with coronavirus, in the April 25 issue of the Spectator.
She makes no mention of the trip to Durham and describes the challenges of caring for their son while suffering the symptoms of Covid-19.
“This might be my only really useful advice for other double-Covid parents or single mothers with pre-schoolers: get out the doctor’s kit and make it your child’s job to take your temperature.
“Any game that involves lying down is a good game.”
Number 10 is again contacted for comment regarding Mr Cummings’ trip by the Guardian. Instead of defending the journey, officials decline to comment.
Mr Cummings and his family are apparently spotted out walking 30 miles away from Durham in Barnard Castle, according to Robin Lees, 70, a retired chemistry teacher, whose claim is reported by the Observer and Sunday Mirror on May 24.
Mr Cummings returns to work for the first time since news he was suffering from coronavirus emerged.
Questions are raised about his adherence to social distancing advice as he is photographed walking in Downing Street with fellow aide Cleo Watson.
An unnamed witness apparently sees Mr Cummings out walking with his wife in Durham, recognising him by his trademark beanie hat and overhearing him remarking that the bluebells are “lovely”. The claim is reported by the Observer and Sunday Mirror on May 24.
The government lifts the restriction on how far people can drive to reach the countryside and take exercise, but visits and overnight stays to second homes remain prohibited.
News breaks in the Mirror and the Guardian of Mr Cummings’ trip to Durham.
While there is no comment from Downing Street, close friends of Mr Cummings say: “He isn’t remotely bothered by this story, it’s more fake news from the Guardian. There is zero chance of him resigning.”
Downing Street appears to be standing by the PM’s chief aide, saying in a statement: “Owing to his wife being infected with suspected coronavirus and the high likelihood that he would himself become unwell, it was essential for Dominic Cummings to ensure his young child could be properly cared for.
“At no stage was he or his family spoken to by the police about this matter, as is being reported.”
Speaking to reporters outside his home, Mr Cummings says: “I behaved reasonably and legally.”
When a reporter suggests his actions did not look good, he replies: “Who cares about good looks? It’s a question of doing the right thing.
It’s not about what you guys think.”
Later at the daily Downing Street briefing, Mr Shapps says Mr Cummings has the PM’s “full support” and that Mr Johnson “knew that he was unwell and that he was in lockdown”.
Mr Shapps says it had always been permissible for families to travel to be closer to relatives as long as they “go to that location and stay in that location”.
Mr Johnson also pledged his “full support” on Saturday to his under-fire chief adviser.
Meanwhile, the deputy chief medical officer for England, Jenny Harries, says travelling during lockdown was permissible if “there was an extreme risk to life”, with a “safeguarding clause” attached to all advice to prevent vulnerable people being stuck at home with no support.
In a new statement released later in the evening, Durham police say officers were made aware on March 31 that Mr Cummings was present at an address in the city.
The force adds that the following morning an officer spoke with Mr Cummings’ father at his own request, and he confirmed his son had travelled with his family to the North East and was “self-isolating in part of the property”.
It says the force “deemed that no further action was required. However, the officer did provide advice in relation to security issues”.
In another evening statement, a No 10 spokesperson accuses the Mirror and Guardian of writing “inaccurate” stories about Mr Cummings, including claims that he had returned to Durham after going back to work in Downing Street on April 14.
“We will not waste our time answering a stream of false allegations about Mr Cummings from campaigning newspapers,” the spokeperson said.
Asked by a journalist outside his home whether he had returned to Durham in April, Mr Cummings says: “No, I did not.”
A host of Tory MPs call for him to resign or for Mr Johnson to sack him.
But the PM, who fronts the daily Downing Street briefing, firmly backs Mr Cummings, saying his aide acted in the best interests of his child, in a way “any parent would frankly understand”.
He insists Mr Cummings “acted responsibly, legally and with integrity”.
The Prime Minister told a Downing Street press conference: “I have had extensive face-to-face conversations with Dominic Cummings.”
“Only A Matter Of Time Before Developing-Market Stocks Unravel In An Unruly Manner“Tyler DurdenMon, 05/25/2020 — 08:57
Authored by Marcus Wong, EM market strategist who writes for Bloomberg
Emerging-market equities are looking more fragile as valuations appear out-of-sync with earnings, especially given the increasingly bleak narrative surrounding virus cases and U.S.-China trade tensions. Something akin to a Jenga game nearing its end, with players wondering which move will be the one to bring everything crashing down.
EM valuations appear close to a historical pivoting point, given the MSCI gauge is more than 13 times forward earnings on a 12– month blended basis. The index corrected on four occasions over the past five years when valuations approached or breached that level.
Lofty S&P 500 valuations offer little reassurance for EM stocks, meantime. The outperformance in U.S. equities has been supported by unprecedented intervention from the Federal Reserve, especially via corporate bond buying. With the exception of rich emerging-nations such as South Korea, most developing-nation central banks have been less ambitious with stimulus, perhaps constrained by concerns for their currencies and perceptions of debt-monetization.
Investors continue to pull out from EM ETFs for a record 13th consecutive week, and the bulk of the cumulative $21.9 billion in outflows hit equity funds.
While new virus cases in the developed world have mostly stabilized, key developing nations are catching up. Brazil overtook the U.K. on May 18 as the nation with the third-highest number of virus cases globally. Russia is second only to the U.S., which still has the most coronavirus cases.
Poorer developing economies are dealing with an impossible dilemma — the trade-off between causing starvation and deepening poverty via lockdowns, versus allowing a wider outbreak for the pandemic. With lockdown fatigue setting in, more nations are opting to save people’s livelihoods — risking a resurgence of infections.
Although emerging-market currency volatility has eased, it is still close to the highest in almost 20 months compared to developed-market counterparts.
There is also the risk of rising emerging-market inflation due to food price risk, as my colleague Simon Flint points out. Developing nations are particularly vulnerable to the impact of nationwide lockdowns and border shutdowns, given to weaker food supply chains and a relative scarcity of cold– storage facilities.
Most observers expect another emerging-market stock sell-off this year, probably by September, according to a Bloomberg survey of 61 investors, strategists and traders conducted in April. And those questions were posed and answered before President Donald Trump escalated his war of words with China.
The re-emergence of U.S.-China trade tensions could not have come at a worse time, underscoring concerns that political rhetoric will heat up ahead of November’s U.S. elections. In the near term, China’s announcement of its intention to impose a new security law in Hong Kong has already resulted in threats of sanctions from the U.S. America is due to release a report on Hong Kong Human Rights on May 25.
With the drumbeat of negatives getting louder by the day, it may only be a matter of time before developing-market equities unravel in an unruly manner.
S&P Futures Jump, Global Markets Rise In Holiday-Muted SessionTyler DurdenMon, 05/25/2020 — 08:16
US equity futures jumped in thin holiday volume, rising alongside European and Asian markets, and are now less than 20 points away from 3,000 having put the key resistance level of 2,950 in the rearview mirror, as investors cheered the reopening of more economies while ignoring the rapid deterioration in US-China relations which has put the fate of Hong Kong on the line. The dollar was flat despite the weakest yuan fixing in 12 years, while oil recovered modest overnight losses.
MSCI’s gauge of world stocks gained 0.32%. The pan-European STOXX600 index climbed 0.8%, with European markets green across the board, after a survey showed German business morale rebounded in May, boosting optimism around economic re-openings, although caution prompted the dollar to snap a rare losing streak.
With nervous investors wary of adding to their equity holdings over concerns on what a post-lockdown world would look like, Germany’s Ifo institute survey for May gave some relief. Its expectations index rebounded strongly to 80.1, from 69.4 last month, beating expectations of 75.0, while the business climate index rose to 79.5 from a downwardly revised 74.2 in April, also higher than forecast, and fueling optimism about the outlook of Europe’s biggest economy after a drop in the first quarter.
“Today’s Ifo index echoes more real-time signals that economic and social activity has started to pick up significantly since the first lifting of the lockdown measures in late April,” ING economists said in a note. “In short, the low point of the slump should now be behind us and there even is the chance for a short-lived strong rebound in the coming months.”
Construction and healthcare shares led a broad advance in the Euro Stoxx Index, with Bayer AG jumping almost 9% after Bloomberg reported it reached agreements to resolve some cancer lawsuits over its Roundup weedkiller.
In Asia, the MSCI’s index of Asia-Pacific shares outside Japan was 0.3% higher on thin volume, as stocks gained led by industrials and health care, after falling in the last session. Hong Kong shares inched higher after Friday’s slump, following police clashes at the weekend with protesters marching against China’s move to crack down on dissent. All markets in the region were up, with Australia’s S&P/ASX200 gaining 2.2% and Japan’s Topix Index rising 1.7%. The Topix gained 1.7%, with W-Scope and Showcase Inc/Japan rising the most. The Shanghai Composite Index rose 0.1%, with Danhua Chemical Technology and Beijing Sanyuan Foods posting the biggest advances
Contracts on all three major US indexes also rose, but with markets in Singapore, Britain and the United States closed for public holidays on Monday, market moves were relatively small and held within well-worn ranges. Emini futures gained 1%.
Volumes may be light with holidays in the U.S., U.K. and Singapore. Treasuries weren’t trading, and futures on the 10-year note were little changed. Elsewhere, bond markets were stable with Italy’s 10-year yield at 1.60%, just off six-week lows hit on Friday, and safe-haven German 10-year yields down 1 basis point at –0.50%.
In FX, China set its daily yuan reference rate at the weakest level since 2008 after the increasing acrimony drove the currency to a seven-month low on Friday. A benchmark of emerging-market stocks headed for its first rise in three sessions.
The bullishness in the stock markets contrasted with caution in currency markets, where the dollar ended a rare weekly loss to rise to a one-week high against its rivals in early trading, but has since given up much of the gains. The dollar gained after China’s move to impose a new security law on Hong Kong heightened concerns about the stability of the city and global trade prospects.
Traders were rattled on Friday when Beijing announced details of the security legislation, which critics see as a turning point for the territory. Sino-U.S. ties have worsened since the coronavirus outbreak, with the administrations of President Donald Trump and President Xi Jinping trading barbs over the pandemic, including accusations of cover-ups and lack of transparency.
“One big threat to the recovery in markets is the escalating war of words between the U.S. and China,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney. Separately, “the main focus will likely remain on continuing evidence that the number of new Covid-19 cases is slowing in developed countries, progress towards medical solutions, the reopening of economies and signs that economic activity is picking up.”
“Rising tensions between the U.S. and China around Hong Kong, trade policy and who is responsible for the 2020 economic dislocation are threatening to end the post March-trough rally,” said Perpetual analyst Matthew Sherwood.
While fresh turmoil in Hong Kong is threatening to damage an already souring Sino-U.S. relationship, investors are looking to the reopening of economies from Japan to Australia and the U.S. to provide impetus to global stock markets, which have already priced in a successful reopening and then some.
In commodities, WTI rose 32 cents, or 1%, to $33.57 a barrel. Brent crude was up 9 cents, or 0.20% higher, at 35.14.
Top Overnight News
China’s Foreign Minister warned the US not to try and change China and said some Americans were risking a “new cold war”
Hong Kong protesters held their biggest rally in months following China’s dramatic move to crack down on dissent in the city as lawmakers are set to consider legislation that would punish anyone who disrespects China’s national anthem
China Investment Corp. is looking for more resilient assets as the nation’s $941 billion sovereign wealth fund seeks to boost long-term returns
Germany’s 9 billion-euro ($9.8 billion) bailout of Deutsche Lufthansa AG is being slowed by discussions meant to ensure the rescue plan receives swift European Union approval once it’s finalized, people familiar with the matter said. Bild am Sonntag reported earlier that Lufthansa would face a three– year deadline for repayment of the aid package to save the ailing airline
U.K. Prime Minister Boris Johnson put his own authority on the line as he fought to save his most senior aide Dominic Cummings in the face of growing demands to fire the adviser for allegedly breaking lockdown rules
The Japanese government was set to end its nationwide state of emergency by lifting the order for Tokyo, its surrounding areas and Hokkaido on Monday, allowing more parts of the economy to re-open as new coronavirus cases tail off
Asian equity markets began the week mostly higher following last Friday’s recovery on Wall St. where the US major indices gradually clawed back opening losses after encouraging comments from NIH’s Fauci and US plans for large Phase 2 trials, spurred vaccine-related optimism. ASX200 (+1.5%) and Nikkei 225 (+1.5%) traded positive with tech and energy front running the broad gains seen across Australia’s sectors, while sentiment in Tokyo was underpinned by expectations the state of emergency will be lifted today in all remaining areas including the capital and with the government reportedly considering compiling a new package mostly consisting of financial support to companies which would be funded by a second supplementary budget valued more than JPY100tln. Hang Seng (-1.0%) and Shanghai Comp. (Unch.) lagged their regional peers with the mainland bourse choppy amid ongoing US-China tensions and with the Hong Kong benchmark extending on last Friday’s near-6% slump after thousands of protester rallied on Sunday against China’s national security law, while the protests were met heavy handed by the police which used pepper spray and a water cannon to disperse the crowd. Finally, 10yr JGBs were marginally lower amid gains in Japanese stocks but with downside stemmed by the BoJ ‘s presence in the market for nearly JPY1.1tln of JGBs mostly concentrated in 1yr-10yr maturities.
European bourses have kicked the week off on the front-foot after taking a positive lead from Asia.In the absence of UK and US participants, European indices initially eked out mild gains but sentiment picked up in recent trade (Eurostoxx 50 +1.1%) in spite of lingering tensions between US and China and ongoing concerns about an impending clash regarding the EU recovery fund with sentiment instead potentially lifted by a pick-up in reopening efforts across the continent. Sectors are higher across the board with outperformance seen in IT and industrial names, with performance for the latter bolstered by German heavyweight Bayer (+6.9%) after the Co. reportedly reached a verbal agreement regarding 50-85k of the 125k US Roundup lawsuits. Elsewhere, individual movers include Lagardere (+11.8%) with Co. shares boosted after French billionaire Arnault agreed to buy a stake in the Co., whilst Deutsche Lufthansa (+2.0%) shares have been supported amid ongoing hopes that the Co. can strike a deal with the German government and reports that the airline will resume more flights as of mid-June; something which has also provided a tailwind in the travel-space for Tui (+11.3%). Elsewhere, gains of over 2% for Renault were faded early doors (currently +1.1%) with the Co. and Nissan set to announce billions of USD in cost cutting measures this week, according to sources. Note, competitor Peugeot (+2.8%) has managed to maintain strength in early European trade as markets await details of support measures for the French auto sector that are due to be announced tomorrow.
In FX,the G10 underperformers thus far in holiday-thinned volumes as the Single Currency eyes a roadblock regarding the EU Recovery Fund – with the “frugal four” (Austria, Denmark, Netherlands, and Sweden) countering the Franco-German proposal of grant distributions. The perceived hawks call for loan allocations – a drawback for peripheries Italy, Spain, and Greece (among others) – with the former also facing a potential rise in domestic anti-Euro sentiment. EUR/USD breached Friday’s 1.0885 low which coincide with the 10DMA to a current low of 1.0871, having briefly dipped below its 21DMA at 1.0873. Further levels to the downside include a Fib at 1.0864 (61.8% of the 1.0775−1.1008 move) ahead of the psychological 1.0850. Unrevised German GDP finals and an overall mixed Ifo survey did little to shift the narrative. Option expiries see EUR550mln at 1.0875−85, 800mln at 1.0895−1.0900, and EUR1bln rolling off between 1.0910−20. The Franc meanwhile sees safe-haven outflows, albeit to a greater extent vs. its Japanese counterpart as EUR/CHF revisits support around the 1.0575 area.
DXY, CNY, HKD — The broader Dollar and Index initially extends on overnight gains before pulling back, with support also derived from the heavy EUR basket contribution. DXY inched higher towards 100.000 (vs. low 99.716) to the upside with its 50DMA residing nearby at 100.02. Elsewhere, the Yuan remains on the backfoot amid heightened US-Sino tensions, coupled with international backlash for Mainland’s crackdown on anti-govt Hong Kong behaviour. Further, the PBOC set the weakest CNY fixing since 2008 (7.1209 vs. Prev. 7.0939) following Friday’s losses. HKD meanwhile unsurprisingly experienced weakness but USD/HKD sees itself just above the bottom end of the 7.75−7.85 peg.
GBP, CAD — The marginally better performers ex-USD, but action remains minimal in thin conditions. Cable overnight remained restricted under 1.2200 as PM Johnson was said to face Cabinet revolt after supporting senior adviser Cummings who faced calls to resign after breaching the lockdown – potentially leading to Cabinet dissent and citizens disobeying lockdown rules. Brexit developments have also remained in focus amid the diminishing timeframe to hammer out an FTA by year-end. Weekend developments noted that the UK is in a fresh stand-off with the EU regarding delays in granting diplomatic status to the EU’s representation in London. Furthermore, relations with China should be watched over the Hong Kong developments – with PM Johnson reportedly looking to reduce Huawei’s involvement in UK5G network within the next three years. Cable resides towards the bottom of the current 1.2162−91 intraday band, ahead of a 61.8% Fib of last week’s bounce coinciding with Friday’s low ~1.2160. The Loonie meanwhile tracks price action in the US energy benchmarks. USD/CAD resides just south of 1.4000, having earlier tested resistance at its 21DMA at 1.4007 (intraday high).
AUD, NZD — Antipodeans tracked the weakness in the Yuan as tensions with China remain elevated and with the US-Sino spat also providing less basis to join in on global lockdown easing optimism/vaccine hopes. AUD/USD drifted off session lows ~0.6520 (vs. high 0.6550) amid a pullback in the DXY, with the 100 and 21DMAs both residing at 0.6490. The Kiwi meanwhile fares modestly worse as the AUD/NZD cross found a current base at 1.0700. NZD/USD meanwhile sees itself just under 0.6100 (vs. high 0.6108) but threatening Friday’s low at 0.6079.
JPY — Modest losses for the Japanese currency, albeit more-so a function of the firmer Buck. Reports noted that Japan is to lift the state of emergency declaration in Tokyo, Kanagawa, Saitama, and Hokkaido today. USD/JPY sees itself hovering on either side of its 55DMA (107.71) vs. its overnight low at 107.54 and ahead of its 50DMA at 107.91..
In commodities,WTI and Brent front month futures see mild gains in early trade with traded volumes on the lighter side amid absences from UK and US markets/participants; while fresh fundamental news flow remains light. Eyes remain on the wider implications on global trade and sentiment from the fallout of the US-Sino trade spat threatening a cold war, whilst investors must not be distraction from the prospects of reinstated lockdowns should COVID-19 cases rise again. On Friday, the Baker Hughes rig count printed another decline in active rigs, whilst OPEC Secretary General Barkindo posited tentative signs of recovery and we believe the worst is behind us. WTI July meanders around USD33.50/bbl (USD32.50 – 33.75/bbl range), whilst Brent July sees itself oscillating between gains and losses, now residing north of USD35/bbl (34.50−35.40 range). Spot gold moves in tandem to the Buck as sees itself with mild intraday losses around USD1730/oz (USD1724 – 35 band) whilst copper mimics price action in stocks to reclaim USD2.40/lb to the upside.
I was listening to a interview with one of my favorite pendent on world events Jim Willie, from the hat trick letter. Which can be found at the goldenjackass. When he said something that I have been thinking for a long time. Better told by Jim and in much greater detail.l And with more reasons than I couldn’t ever come up with. It also relates to a story I posted about Jackie Kennedy. This is very important that you have this information…
Just in case you missed it, Remember the story of Jackie Kennedy stating that Johnson killed JFK (A Bush co-Hort) At the time Bush was an agent for the C.I.A. Was Johnson just easier to point at?
And how about the Secret Service Stand down?
Webmaster Note: In the video it is said that the agent said “See you guys I’m going to lunch!” This begs the question be asked, Where was his replacement?
This is going to take more than the attention span of most Americans. And which is the real reason we are in the mess that we are. To busy to pay attention!