Zero­Hedge News

• Gold Tum­bles Below $1800, Tests Crit­i­cal Tech­ni­cal Sup­port
  Gold Tum­bles Below $1800, Tests Crit­i­cal Tech­ni­cal Sup­port Tyler Dur­den Tue, 11/​24/​2020 — 09:52

  As Crypto soars, non-​digital-​gold is plung­ing, with futures break­ing below $1800 for the first time since July. Since the elec­tion and vac­cine news, gold futures have crashed from $1960 to $1798…

  The big ques­tion is, will gold find sup­port at its 200DMA, or is this a sys­temic break­down that ignores the future deficit-​spending col­lapse of cred­i­bil­ity in the global reserve currency?

  As it appears — for now — that dig­i­tal gold is prefer­able to real gold…

  Is Benoit back?

• Herd Immu­nity Thresh­old Now Expected By Mid-​2021
  Herd Immu­nity Thresh­old Now Expected By Mid-​2021 Tyler Dur­den Tue, 11/​24/​2020 — 09:45

  By Jim Reid, chief credit strate­gist at Deutsche Bank

  Monday’s are the new Friday’s. AstraZeneca/​Oxford Uni kept the vac­cine Mon­day theme going this morn­ing by reveal­ing their vac­cine is effec­tive (70% aver­age) albeit with the tan­ta­lis­ing prospect that the tech­nique that sug­gested 90% effec­tive­ness (half dose first fol­lowed by the full dose) could be used for all rather than the 62% effec­tive treat­ment (two full dosages). In terms of why a half dose might be more effec­tive first it could be with how it bet­ter primes the immune system.

  Today’s chart of the dayupdates when we could first vac­ci­nate the vul­ner­a­ble and then achieve herd immu­nity in the G10 if we assume that AstraZenenca/​Oxford even­tu­ally migrates to the 90% effi­cacy rate, one and a half doses are used, and we assume pre-​orders are filled on time for the three vac­cines to report so far. Japan and the UK would be first, shortly fol­lowed by the US with Aus­tralia and the EU lag­ging a bit but there by around the end of H1.Although logis­tics may slow things down, remem­ber other vac­cines could come on stream and accel­er­ate the process.

  For EM much is hang­ing on AstraZeneca/​Oxford. It is sub­stan­tially cheaper with EM coun­tries being offered it at cost which is part of the rea­son it has been pre-​ordered by so many of them. It has the real oppor­tu­nity to pro­vide a global solu­tion. If the half dose/​full dose tech­nique is proved to be more effec­tive it will also reduce the vol­ume of vac­cine used mean­ing more can go around.

  Other advan­tages are that it uses well known vac­cine tech­nol­ogy rather than the new m-​MRA tech­nique used by Pfizer/​BioNTech and Mod­erna which may encour­age wider uptake, and also that it can be stored at fridge tem­per­a­ture for six months rel­a­tive to the –70C to –20C for Pfizer, and –20C for Mod­erna (can be stored in a fridge for a week before use).

  Over­all the Mon­day news from the last cou­ple of weeks has been an incred­i­ble vic­tory for sci­ence and a per­sonal view is that we’ll be get­ting back very close to nor­mal life in Q2 2021.

• Pre­ma­ture Exac­er­ba­tion: Nomura Warns Mar­ket Meltup “Has Esca­lated Beyond Any­thing Antic­i­pated“
  Pre­ma­ture Exac­er­ba­tion: Nomura Warns Mar­ket Meltup “Has Esca­lated Beyond Any­thing Antic­i­pated“ Tyler Dur­den Tue, 11/​24/​2020 — 09:31

  The post-​election plunge in fear and surge in greed has not gone unno­ticed by Nomura’s Char­lie McElligott:

  …the speed by which implied vols have con­tin­ued to col­lapse since then (with the lat­est risk boost from the announce­ment of Janet Yellen as Trea­sury Sec­re­tary — more on that later) has sim­ply esca­lated beyond any­thing I could have anticipated…

  Why? McEl­lig­ott explains:

  Well, US finan­cial con­di­tions are hit­ting all-​time eas­i­est lev­els in real-​time (UST yield curves low and flat, Credit at tights, lower USD and said destruc­tion of Eq vol)…

  …which after the failed QT exper­i­ment and the scar-​tissue con­tained therein has made “loose fin conds” an unspo­ken “de facto man­date” of the Fed and global CB’s.

  Addi­tion­ally, McEl­li­goot notes that the announce­ment of Janet Yellen as Biden’s Trea­sury Sec­re­tary effec­tively greenlights:

  1) “lower for­ever” pol­icy sup­port, big fis­cal advo­cacy (even though the mag­ni­tude of that is depen­dent on the Repub­li­can Sen­ate coa­lesc­ing, which is dif­fi­cult to imag­ine at this junc­ture) and,

  2) quasi-​debt mon­e­ti­za­tion, as the Fed and Trea­sury evolve closer to one like-​minded entity

  And everyone’s all-​in, as the cross-​asset-​strategist notes that

  The feed­back from clients is uni­ver­sally bull­ish into year-​end, where any sort of cor­rec­tive move would be a dip to buy — align­ing into the post-​election vol com­pres­sion pair­ing with pro-​cyclical YE sea­son­al­ity and the upcom­ing finan­cial con­di­tions crush from uber-​dovish CB’s in Decem­ber ECB and Fed meetings

  But McEl­lig­ott does have a warn­ing about this appar­ently pre­ma­ture exacerbation…

  This actu­ally /​per­versely brings for­ward the tim­ing on profit-​taking on the Cal­en­dar Spreads we’ve been advo­cat­ing dis­cussed to take advan­tage of this antic­i­pated 2020 YE vol col­lapse vs stick­ier 2021 option­al­ity, as the term struc­ture steep­en­ing nears overshooting

  Finally, we do note that while Nomura’s clients are buy­ing every dip with both hands and feet, it appears the ‘Insid­ers’ are the ones sell­ing to them…

  Source: Bloomberg

  Who are you going to believe — fast-​money momo-​chasers or the exec­u­tives at the firms dump­ing into ever more stratos­pheric valuations?