May 1/London in deep backwardation in gold/traders refuse to take the sure profit on selling today and buying back in one month/Fear of not getting their metal back/Greek pensioners still do not have their money/China and Russia to hold naval exercises in the Mediterranean/USA manufacturing falters/Construction falters/Atlanta Fed reduces 2nd quarter GDP to .8%/

Good evening Ladies and Gentlemen:

 

 

 

Here are the following closes for gold and silver today:

 

Gold:  $1174.50 down $7.90 (comex closing time)

Silver: $16.11 down 2 cents (comex closing time)

 

In the access market 5:15 pm

Gold $1178.80

Silver: $16.16

 

 

Gold/silver trading:  see kitco charts on the right side of the commentary.

I forgot that today is a holiday in China and in Europe where demand for gold is the greatest.  Thus our crooked bankers had a free pass to short gold/silver. Gold and silver will resume their northbound pattern on Monday.

Following is a brief outline on gold and silver comex figures for today:

 

At the gold comex today,  we had a poor delivery day, registering 0 notices served for nil oz.  Silver comex filed with 302 notices for 1,510,000  oz .

 

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 242.27 tonnes for a loss of 61 tonnes over that period. Lately the removals have been rising!

 

 

In silver, the open interest rose 307 contracts despite the fact that Thursday’s silver price was down by 55 cents. It sure looks like we had some short covering by the crooked bankers. Also lately it is the custom for OI to liquidate somewhat once we get into an active delivery month. The total silver OI continues to remain extremely high with today’s reading at 178,859 contracts maintaining itself at  multi-year highs. We are now at multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.

 

 

In silver we had 302 notices served upon for 1,510,000 oz.

 

 

In gold,  the total comex gold OI rests tonight at 410,255 for a gain of 9918 contracts despite the fact  gold was down by $27.40 yesterday. We had 0 notices served upon for nil oz.

 

 

Today, we a huge addition in gold inventory at the GLD of 2.69 tonnes/  Gold Inventory rests at 741.75  tonnes. There is now no question that London is out of gold. China’s major source of gold will now be the FRBNY

 

In silver, /  /we had no change in  silver inventory to the SLV/ and thus the inventory tonight is 327.673 million oz

 

We have a few important stories to bring to your attention today…

 

1. Today we had the open interest in silver fall by 2859 contracts despite the rise in price yesterday (12 cents).  The OI for gold fell by 3226 contracts down to 400,337 contracts as the price of gold was down by $3.80 yesterday. GLD remained constant but SLV lost close to 3.0 million oz

(report Harvey)

 

2,One important commentaries on Greece today:

 

Many Greek pensioners still do not have their money yet as the government scrambles to pay them.

(zero hedge)

The big story of the day…

 3. As I have been reporting to you, London England is having trouble locating physical gold.  Gold is in deep backwardation and now traders are reluctant to sell their gold today and buy it back 30 days later for a sure profit because they feel the chances of getting it back may not be that good.
(courtesy Andrew Maguire/Kingworldnews./GATA)
4. China and Russia are to have a joint naval exercise in the Mediterranean Sea
(zero hedge
5. Two more traders have been arrested for spoofing of gold
(zero hedge/GATA/CME)
6 USA construction sales down badly. Also manufacturing falters badly. We have the fewest employment in the manufacturing sector in decades.
(zero hedge)
7. Atlanta Fed now lowers 2nd Quarter GDP to .8% due to lousy construction spending.
(zero hedge)
8 Auto sales decline for the fifth month in a row
(zero hedge)

we have these and other stories for you tonight

 

Let us now head over to the comex and assess trading over there today.

Here are today’s comex results:

 

The total gold comex open interest rose by 9918 contracts from 400,337 up to 410,255 despite the fact that gold was down by $27.40 yesterday (at the comex close).  We are in our next non active delivery month is May and here the OI fell by 0 contracts remaining at 226. We had zero notices filed yesterday.  So we neither lost nor gained any gold ounces standing for May. The next big active delivery contract month is June and here the OI rose by 6663 contracts up to 260,388. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 67,444. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was good at 222,945 contracts. Today we had 0 notices filed for nil oz.

 

And now for the wild silver comex results.  Silver OI rose by 307 contracts from 178,552 up to 178,859 despite the fact that the price of silver was down in price by 55 cents, with respect to yesterday’s trading.  Somebody big is willing to take on JPMorgan. We must have had some guys leaving the silver arena as they did not like what they saw. We also are witnessing the OI contracting once an active delivery month is upon us whether it is silver or gold. We are into the active delivery month of May. In our May delivery month the OI fell by 1644 contracts down to 1727 for a loss of 1644 contracts. We had 1481 contracts filed upon yesterday.  So we lost 163 contracts or 815,000 oz will not stand for delivery in this May delivery month. The estimated volume today was poor at 16,497 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 69,717 contracts which is excellent in volume except we had some rollovers. We had 302 notices filed for 1,510,000 oz today.

 

 

may initial standings

May 1.2015

 

Gold

Ounces

Withdrawals from Dealers Inventory in oz  nil
Withdrawals from Customer Inventory in oz  nil
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 6,748.27 oz (Delaware)
No of oz served (contracts) today 0 contracts (nil oz)
No of oz to be served (notices)  226 contracts(22,600) oz
Total monthly oz gold served (contracts) so far this month 0 contracts(nil)
Total accumulative withdrawals  of gold from the Dealers inventory this month  nil

Total accumulative withdrawal of gold from the Customer inventory this month

 nil

Today, we had 0 dealer transaction

 

 

 

Today, we had 0 dealer transaction

total Dealer withdrawals: nil oz

 

we had 0 dealer deposit

 

total dealer deposit: nil oz

 

we had 0 customer withdrawals

 

 

total customer withdrawal: nil oz

 

we had 1 customer deposits

 

i) Into Delaware: 6748.27 oz

 

total customer deposit: 6748.27 oz

 

We had 0  adjustments:

 

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account

To calculate the total number of gold ounces standing for the May contract month, we take the total number of notices filed so far for the month (0) x 100 oz  or  nil oz , to which we add the difference between the open interest for the front month of May (226) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.

Thus the initial standings for gold for the May contract month:

No of notices served so far (0) x 100 oz  or ounces + {OI for the front month (226) – the number of  notices served upon today (0) x 100 oz which equals 22,600 oz standing so far in this month of May. (.702 tonnes of gold)

 

 

 

Total dealer inventory: 571,168.307 or 17.76 tonnes

Total gold inventory (dealer and customer) = 7,795,755.174. (242.48) tonnes)

 

 

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 242.27 tonnes for a loss of 61 tonnes over that period. Lately the removals  have been rising!

 

end

 

 

And now for silver

 

May silver initial standings

May 1 2015:

Silver

Ounces

Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 300,049.64 oz (Brinks)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory 599,44937. oz (Brinks)
No of oz served (contracts) 302 contracts  (1,510,000 oz)
No of oz to be served (notices) 1425 contracts (7,125,000 oz)
Total monthly oz silver served (contracts) 1783 contracts (8,915,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  nil
Total accumulative withdrawal  of silver from the Customer inventory this month 1,233,0715.  oz

 

Today, we had 0 deposits into the dealer account:

total dealer deposit: nil   oz

 

we had 0 dealer withdrawal:

total dealer withdrawal: nil oz

 

We had 1 customer deposits:

i) Into Brinks:  599,440.37 oz

 

 

total customer deposits: 599,440.37  oz

We had 1 customer withdrawals:

i) Out of Brinks: 300,049.64 oz

 

total withdrawals;  300,049.64 oz

we had 1 adjustments:

 

iii) Out of Delaware;  5009.95 oz was adjusted out of the dealer and this landed into the customer account of Delaware.

Total dealer inventory: 62.171 million oz

Total of all silver inventory (dealer and customer) 174.680 million oz

.

The total number of notices filed today is represented by 302 contracts for 1,510,000 oz. To calculate the number of silver ounces that will stand for delivery in April, we take the total number of notices filed for the month so far at (1783) x 5,000 oz    = 8,915,000 oz to which we add the difference between the open interest for the front month of April(1727) and the number of notices served upon today (302) x 5000 oz equals the number of ounces standing.

Thus the initial standings for silver for the May contract month:

1783 (notices served so far) + { OI for front month of April(1727) -number of notices served upon today (302} x 5000 oz = 16,035,000 oz of silver standing for the May contract month.

we lost 163 contracts or 815,000 oz  not stand for delivery.

 

for those wishing to see the rest of data today see:

http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com

 

end

 

The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.

***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:

i) demand from paper gold shareholders

ii) demand from the bankers who then redeem for gold to send this gold onto China

vs no sellers of GLD paper.

 

And now the Gold inventory at the GLD:

May 1/ we had a huge addition of 2.69 tonnes of gold into the GLD/Inventory rests tonight at 741.75 tonnes

 

April 30/ no change in gold inventory/739.06 tonnes of gold at the GLD

April 29/no change in gold inventory/739.06 tonnes of gold at the GLD

April 28/ no change in inventory/739.06 tonnes of gold at the GLD

April 27. we lost 3.29 tonnes of gold inventory at the GLD/Inventory rests tonight at 739.06 tonnes

April 24. no changes in gold inventory at the GLD/Inventory at 742.35 tonnes

April 23. no changes in gold inventory at the GLD/inventory at 742.35 tonnes

April 22. no changes in gold inventory at the GLD/inventory at 742.35 tonnes

April 21.2015: a huge addition of 3.26 tonnes of gold inventory at the GLD/Inventory rests at 742.35 tonnes

April 20.2015: no change in gold inventory at the GLD/Inventory rests at 739.06 tonnes

April 17.2015/ we had a huge addition of 3.01 tonnes of gold inventory at the GLD.  It looks like the raids at the GLD have stopped.

April 16.2015: no change in inventory at the GLD/total inventory at 736.08 tonnes

April 15/ a huge addition of 1.79 tonnes of gold inventory added to the GLD/ Inventory tonight at 736.08 tonnes

April 14/ no change in gold inventory at the GLD/Inventory rests at 734.29 tonnes

April 13.2015: we had a withdrawal of 1.75 tonnes of GLD/Inventory at 734.29 tonnes

April 30/2015 /  we had no change in tonnage of gold inventory at the GLD/Inventory stands at 739.06 tonnes

The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).

GLD : 739.06 tonnes.

end

 

And now for silver (SLV):

May 1/no change in silver inventory at the SLV/327.673 million oz

April 30/no change in silver inventory at the SLV/327.673 million oz

April 29/ we lost 2.963 million oz of silver inventory from the SLV/inventory tonight 327.673 million oz

April 28/another huge addition of 1.434 million oz to the SLV/Inventory stands tonight at 330.636 million oz

April 27.we had a huge addition of 2.976 million oz to the SLV/Inventory stands tonight at 329.202 million oz

April 24/ we had a small withdrawal of 88,000 oz of silver at the SLV/326.226 million oz

April 23.no changes in silver inventory at the SLV/326.334 million oz of inventory

 April 22/no changes in silver inventory at the SLV/326.334 million oz of inventory

April 21.2015/we had another huge addition of 1.434 million oz of silver into the SLV

April 20/ no change in silver inventory tonight/SLV 324.900 million oz.

April 17.2015: no change in silver inventory tonight at the SLV.324.900 million oz

April 16.2015: no change in silver inventory tonight at the SLV/324.900 million oz

April 15.2015: no change in silver inventory tonight at the SLV/324.900 million oz is the inventory tonight.

 

May 1/2015 we had no change in inventory at the SLV  / inventory rests at 327.673 million

 

end

 

 

And now for our premiums to NAV for the funds I follow:

Central fund of Canada data not available today/

Note: Sprott silver fund now for the first time into the negative to NAV

Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded at Negative 6.4% percent to NAV in usa funds and Negative 6.8% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.3%

Percentage of fund in silver:38.3%

cash .4%

( May 1/2015)

 

 

2. Sprott silver fund (PSLV): Premium to NAV rises to+0.06%!!!!! NAV (May 1/2015)

3. Sprott gold fund (PHYS): premium to NAV rises to -.24% to NAV(May 1/2015

Note: Sprott silver trust back  into positive territory at +0.06%.

Sprott physical gold trust is back into negative territory at -.24%

Central fund of Canada’s is still in jail.

end

 

At 3:30 pm we received our COT report.

First the gold COT

Rather tame report

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
189,929 88,672 52,390 125,733 232,605 368,052 373,667
Change from Prior Reporting Period
5,362 5,350 1,427 -374 1,492 6,415 8,269
Traders
144 90 75 50 47 230 180
 
Small Speculators  
Long Short Open Interest  
35,523 29,908 403,575  
-219 -2,073 6,196  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, April 28, 2015
Our large specs
Those large specs that have been long in gold, added 5362 contracts to their long side.
Those large specs that have been short in gold added 5350 contracts to their short side.
Our commercials:
Those commercials that have been long in gold pitched a tiny 374 contracts from their long side.
Those commercials that have been short in gold added 1492 contracts to their short side.
Small specs;
Those small specs that have been long in gold pitched a tiny 219 contracts from their long side.
Those small specs that have short in gold covered 2073 contracts from their short side.
Conclusion: commercials go net short by 1866 contracts and thus bearish.
end
And now for silver:
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
64,340 41,410 21,236 69,451 103,450
3,492 4,887 -3,759 -3,700 -3,537
Traders
96 44 40 44 42
Small Speculators Open Interest Total
Long Short 179,461 Long Short
24,434 13,365 155,027 166,096
795 -763 -3,172 -3,967 -2,409
non reportable positions Positions as of: 159 110
Tuesday, April 28, 2015
Our large specs:
Those large specs that have been long in silver added 3792 contracts to their long side
Those large specs that have been short in silver added another large 4887 contracts to their short side.
Our commercials;
Those commercials that have been long in silver added 3700 contracts to their long side
Those commercials that have been short in silver covered 3537 contracts from their short side.
Our small specs:
Those small specs that have been long in silver added 795 contracts to their long side.
Those small specs that have been short in silver covered 763 contracts from their short side.
Conclusion: commercials go slightly net long for the week by 237 contracts. (bullish)
Your major physical gold stories for this morning.

Gold trading early this morning:

 

(courtesy Mark O’Byrne)

JP Morgan Cornering Silver Bullion Market?

Why is JP Morgan accumulating the biggest stockpile of physical silver in history?
Legendary silver analyst Ted Butler believes JP Morgan are in a position to corner silver market
– JP Morgan may be holding as much as 350 million ounces of physical silver
– JP Morgan realises the value of owning physical silver bullion today
– Silver at $16 today – Set to soar to over $50 again

 goldcore_chart2_01-05-15

JPMorgan Chase, the largest U.S. bank, one the largest providers of financial services in the world and one of the most powerful banks in the world has accumulated one of the largest stockpiles of silver the world has ever seen.

The total JP Morgan silver stockpile has increased dramatically in the last four years. In 2011, JP Morgan has little or no physical silver. By 2012, they had acquired 5 million ounces of silver bullion.

Incredibly, in the last 3 years their COMEX silver stockpile has increased tenfold and is now over 55 million ounces (see chart below)

goldcore_chart3_01-05-15
Here’s a breakdown of the Comex’s recent physical silver deliveries to JP Morgan:

April 7th: 1,110,000 ounces

April 8th: 1,280,000 ounces

April 9th:  893,037 ounces

April 10th: 1,200,224 ounces

April 14th: 1,073,000 ounces

April 15th: 1,191,275 ounces

April 16th: 1,183,777.295 ounces

This is a huge bout of deliveries in a very short space of time. It’s such a large amount, that it even creates a spike on the long-term chart of JP Morgan’s silver stockpile (see chart).

JP Morgan has accumulated another 8.3 million ounces of silver in just the past 2 weeks alone.

Is JP Morgan accumulating silver at these depressed levels in anticipation of geopolitical and financial turmoil?

It seems likely. JPMorgan Chase Chairman and CEO Jamie Dimon in his recent letter to shareholders warned

“Some things never change – there will be another crisis, and its impact will be felt by the financial market”.

Dimon warned that the trigger for the next crisis may not be the same trigger as the last one – but there will be another crisis.

“Triggering events could be geopolitical (the 1973 Middle East crisis), a recession where the Fed rapidly increases interest rates (the 1980-1982 recession), a commodities price collapse (oil in the late 1980s), the commercial real estate crisis (in the early 1990s), the Asian crisis (in 1997),so-called “bubbles” (the 2000 Internet bubble and the 2008 mortgage/housing bubble), etc. While the past crises had different roots (you could spend a lot of time arguing the degree to which geopolitical, economic or purely financial factors caused each crisis), they generally had a strong effect across the financial markets.”

The preference for silver instead of gold may be explained by the current depressed prices.

In the last two weeks JP Morgan Chase has accumulated more than eight million ounces of physical silver.

goldcore_chart4_01-05-15

At the same time, JP Morgan Chase restricted the use of cash for selected markets and went so far as to restrict clients from using cash for credit card payments, mortgages, equity lines and auto loans. There will also be no ability to store cash or bullion in their safe deposit boxes.

JP Morgan’s massive silver buying brings to mind the Hunt Brothers’ attempt to corner the silver market in the late 1970s. The Texas oil-tycoons tried to corner the silver market by accumulating a massive silver futures position.

Regulatory authorities increased margins which saw silver prices fall and the trade go against them. When they failed to meet a $100 million margin call they were almost completely wiped out.

The Hunts faced losses of $1.7 billion and a widespread panic on Wall Street was averted when a consortium of U.S. banks bailed out the main brokerage firm involved.

The story has become the stuff of legend in the annals of precious metals trading and indeed trading. Before their buying on the COMEX, silver traded at $6 an ounce. It gradually rose in price before a blow off spike to $48.70 in January 1980.

At the time the Hunt brothers were believed to have acquired futures contracts worth one third of total annual global mine supply on leverage. Had they been in a position to meet the margin call the outcome may have been quite different.

Had they accumulated physical silver rather than paper silver in the form of futures contracts, as JP Morgan are doing, the Hunts would likely have made an absolute fortune.

So, it is interesting to note that legendary silver market analyst Ted Butler has estimated that JP Morgan may currently hold far more than their official figure of 55 million ounces.

Butler believes the true figure to be closer to 350 million ounces. Annual global silver production is 820 million ounces which, if Butler is correct, puts JP Morgan in a position to corner the physical silver market today, unlike the Hunt brothers back in 1980. As this would equate to a holding 42.7% of total annual supply.

JP Morgan has been acquiring this vast hoard of physical silver while holding the largest short position in the silver futures market, i.e. while suppressing the silver price with its unlimited access to free money, according to Butler.

What motivation could one of the key insiders on Wall Street have to accumulate such vast quantities of physical silver? It seems clear JP Morgan anticipates strong demand for physical silver in the not too distant future – either due to another crisis or purely due to the tiny size of the physical silver market and very favourable supply demand dynamics.

In the event of more market dislocations, demand for silver and gold will surge again. Heretofore – in similar circumstances – demand has been dampened by institutions dumping contracts for massive volumes of silver, paper or electronic silver, onto the futures  markets.

Silver in USD - 10 Years (Thomson Reuters)

However, it would appear that JP Morgan now have less motivation to cap silver in the paper markets and indeed are set to make enormous profits from the physical position they have taken. Indeed, they are likely to reverse their leverage short positions and also go long in the silver futures market in order to maximise profits.

When JP Morgan chooses to exploit this advantage remains to be seen. It seems likely that a major event is imminent in the markets and demand for physical gold and silver will likely soon surge again.

Will banks take their thumb off the electronic silver market and allow prices to rise in the near future?

This is hard to know but seems increasingly likely. However, it would seem like a good opportunity to take a similar position to an institution which is very well connected and very well informed due to its relationship with and influence over the U.S. government, the U.S. Treasury and the U.S. Federal Reserve.

Silver is no longer regarded as a good investment and it is only owned by a small minority of hard money advocates and bullion buyers who realise its importance as a hedging instrument and a safe haven, store of value asset.

JP Morgan, however, seems to realise the value of owning physical silver bullion today.

Conclusion


Precious metals look the most undervalued of all the asset classes – particularly silver.

The fundamental reasons for our very bullish outlook on silver is due to continuing and increasing global macroeconomic, systemic, geopolitical and monetary risks; silver’s historic role as money and a store of value; the declining and very small supply of silver; significant industrial demand and most importantly significant and increasing investment demand including from the largest bank in America.

Silver is currently trading at just over $16 per ounce. GoldCore continue to believe that silver will surpass its non-inflation adjusted high $50 per ounce in the coming years. Indeed, we believe that silver will surpass its inflation adjusted high or real record high of over $150 per ounce in the next 5 to 7 years.

JP Morgan’s silver accumulation suggests another economic crisis looms large and that silver is set to soar … again.

Important Guide: 7 Key Gold and Silver Storage Must Haves

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,179.00, EUR 1,049.24 and GBP 771.04 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,204.80, EUR 1,075.99 and GBP 779.73 per ounce.

Gold fell 1.76 percent or $21.20 and closed at $1,182.80 an ounce yesterday, while silver slid 2.48 percent or $0.41 closing at $16.12 an ounce. In Asia overnight, Singapore gold prices were flat and inched down 0.1 percent to $1,182.50 an ounce near the end of day trading.

Gold in U.S. Dollars - 1 Week

Gold recovered after an almost 2 percent drop yesterday when stop loss orders were triggered in a brutal sell. The sell off was blamed on the better than expected employment figures but the scale of the losses were more than would have been expected – especially given that the data has been very negative this week – especially the poor GDP number.

A tumultuous week saw the dollar and bonds fall sharply, bond yields soar and stock markets in Europe and the United States weaken.

Japanese manufacturing activity contracted in April for the first time in almost a year as domestic orders and output fell, adding to fears that QE has failed and the large Japanese economy is on the verge of another recession or depression.

Yesterday’s U.S. jobless claims were at their lowest level in fifteen years at 262,000 below analysts consensus of 288,000. This surprise would suggest that the labour market is recovering which would be positive for the U.S. economy. However, the veracity of some of the jobs numbers remains in doubt with some analysts concerned that figures are being “hedonically adjusted” and manipulated.

The Fed at their policy meeting this week said that the health of the economy is dependent on the jobs market and inflation data. Next week’s non farm payrolls number will be watched for more signals but the poor GDP number this week should be a real alarm wake up call.

The weaker than expected GDP number suggests that the Fed will be slower to increase interest rates than was previously expected. This is something we have been warning of for some time as we believe the U.S. recovery is far more fragile than is realised.

Silver in U.S. Dollars - 1 Week

Interest rates remaining near record lows for longer than had been anticipated should be bullish for gold and silver.

In Europe in late morning trading gold bullion was off 0.34 percent at $1,180.44 an ounce. Silver was up 0.6 percent at $16.23 an ounce and platinum fell 0.29 percent at $1,137.49 an ounce.

Gold and silver are higher in dollar terms this week after the sharp falls seen in stock markets and in the dollar after the poor GDP number sent shivers through markets globally.

Breaking Gold and Silver News and Research Here

 

end

 

The following is extremely important;  London gold is in deep backwardation and now traders are reluctant to enter “risk free” trades by selling gold today and buying it back in 30 days.  Why? because they are afraid that they will not get their gold back.

(courtesy Kingworldnews/Andrew Maguire)

 

London gold is too tight for traders to risk arbitrage, Maguire tells KWN

Created 2015-05-01 17:24

1:23p ET Friday, May 1, 2015

Dear Friend of GATA and Gold:

London’s gold market is heavily in backwardation, offering lucrative arbitrage opportunities that traders won’t take because they fear that they won’t be able to recover metal they sell short, London metals trader Andrew Maguire tells King World News today.

“This week the so-called ‘risk-free’ profit has been as high as $1.50 per ounce and has been averaging close to $1 per ounce,” Maguire says. “I can sell 100,000 ounces right now and I get back my 100,000 ounces in just 30 days, and I scoop a so-called ‘risk-free’ profit of somewhere around $100,000 or $150,000. Why are the arbitragers not all over this trade to the point they equalize the price? That is how healthy markets work.

“It is because insiders are well-connected enough to the physical market to know that the recent price drop is a synthetic sham and that the real physical markets are extremely tight. They don’t want to risk not receiving their bullion back in 30 days.”

Maguire’s interview is excerpted at the KWN blog here:

http://kingworldnews.com/andrew-maguire-we-are-now-seeing-stunning-behin… [1]

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end

 

Alasdair Macleod with his weekly message to us:

(courtesy Alasdair Macleod)

 

Alasdair Macleod: Why deflation is unlikely

Section:

8:18p ET Thursday, April 30, 2015

Dear Friend of GATA and Gold:

Deflation is unlikely, GoldMoney research director Alasdair Macleod writes tonight, because central banks will be rapidly increasing money and credit as the decline in economic conditions worsens. Then gold and silver, he adds, will be seen more as money and less as commodities. Macleod’s commentary is headlined “Why Deflation Is Unlikely” and it’s posted at GoldMoney’s Internet site here:

http://www.goldmoney.com/research/analysis/why-deflation-is-unlikely?gmr…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

 

end

 

Central banks consider joining the LBMA. (So much for transparency.)

Section:

4p ET Thurday, April 30, 2015

Dear Friend of GATA and Gold:

Central banks have expressed interest in joining the London Bullion Market Association, which pretty much runs the London gold market, according to a report by the LBMA’s chief executive officer in the May edition of its newsletter, The Alchemist.

Summarizing developments with the association’s membership committee, LBMA Chief Executive Ruth Crowell writes: “The committee continues to review a growing number of membership applications, which demonstrates the growing relevancy and diversity of the association. Two new mining companies have joined the ranks of the association. The LBMA welcomes other producers to join and have a voice in the London market. Another demonstration of the diverse reach of the association is the recent interest expressed by some central banks.”

Crowell’s report was called to GATA’s attention today by our consultant, gold researcher Ronan Manly. It appears on Page 24 of The Alchemist, which is posted in PDF format at GATA’s Internet site here:

http://www.gata.org/files/LBMAAlchemist-May2005.pdf

In a statement to the Bank of England’s Fair and Effective Market Review Committee in January —

http://www.gata.org/node/15241

— Crowell wrote that “the role of the central banks in the bullion market may preclude ‘total’ transparency, at least at public level,” so presumably the more central banks are directly involved with the LBMA, the less transparent the London gold market will become.

Will the LBMA and the central banks that join it even announce the new memberships? Would such an announcement, confirming the surreptitious involvement in the gold market by central banks, be reported by mainstream financial news organizations? Would any gold market analyst, financial journalist, or gold mining company executive wonder, aloud or just to himself, what central banks are doing in the gold market and what objectives they are pursuing? Would any of them try actually putting a question about it to a central bank?

Or are central banks and their agent bullion banks supremely confident that all those people will obediently avert their gaze and that the rigging of the gold market will remain an open secret that simply cannot be discussed in polite company?

All GATA can do is keep compiling and clamoring about the documentation of central bank rigging of the gold market and other markets —

http://www.gata.org/taxonomy/term/21

— and note that the emperor wears no clothes.

If you’re inclined to support GATA’s work, please visit:

http://www.gata.org/node/16

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end

 

The CME suspends two gold traders for spoofing!! They are suspended for 60 days.  This is quite a joke!

CME Group suspends two gold traders for 60 days for spoofing

Section:

CME Group Bars Two Gold Futures Traders for Allegedly Spoofing

By Ann Saphir
Reuters
Thursday, April 30, 2015

CME Group Inc. on Thursday barred two traders from its markets for allegedly colluding to enter orders repeatedly with no intention of trading, a strategy that has been fingered as a key contributor to the 2010 Wall Street flash crash.

Heet Khara and Nasim Salim, both traders of CME Group’s gold and silver futures contracts on its Comex exchange in New York, are prohibited from trading for 60 days, according to a disciplinary notice released by the futures exchange giant.

Each trader, the notice said, “entered orders or layered multiple orders to encourage market participants to trade opposite his smaller orders resting on the opposite side of the book. … After receiving a fill on his smaller orders,” each trader “would then cancel the resting order or layered multiple orders that he had entered on the opposite side of the order book.”

Reuters was not able to immediately contact either trader to comment on the CME notice.

The CME’s action is notable for its swiftness. The activity at issue began in February and last took place on Tuesday, CME Group said. Most CME discplinary actions are carried out after years of investigations. …

… For the remainder of the report:

http://www.reuters.com/article/2015/04/30/cme-group-traders-idUSL1N0XR41…

 

end

 

 

Saudis, Russians No Longer Buying Gold In Dubai As Oil Slump Curbs Precious Metals Shopping

Over the course of the oil price slump we’ve documented the far-reaching effects of falling crude. Leaving aside the capital markets for now, the downturn has rippled through oil boom towns both in the US and Canada. Take Fort McMurray (in oil-rich Alberta) for instance, where home sales fell 66% in February or Sidney, Montana where the collapse in oil revenue has left law enforcement and schools strapped for cash in the face of rising crime and crumbling infrastructure. Then there is of course Texas which, until recently, was America’s job creation engine but which shed a recession-like 24,500 non-farm jobs in March alone.

Blue collar workers in North America aren’t the only one’s feeling the pain however. Sliding crude has also taken its toll on precious metals vendors in Dubai whose customer base is drying up now that fewer Saudis and Russians are going on gold shopping sprees in the country’s Dubai Gold Souk marketplace.

Here’s Bloomberg:

Under streets and alleys covered by roofs to protect window shoppers from the intense desert sun, more than 300 stores peddle everything from ingots to Bedouin jewelry. The Dubai Gold Souk had become one of the largest such marketplaces, offering tax-free precious metal, as Persian Gulf oil wealth ballooned in the past few decades.

 

Now, with the plunge in crude throttling economies across the Middle East, gold buyers are harder to find. Demand for the metal is slowing in the region and Dubai has seen a drop-off in some visitors. Shopkeepers say sales are declining because tourists from Saudi Arabia and Russia have less cash to spend. Sellers offer discounts for gold that two years ago fetched a premium.

 

“The market is dead,” Jeffrey Rhodes, who has spent 27 years in Dubai’s gold industry and founded Rhodes Precious Metals Consultancy DMCC, said by telephone on April 21. “There’s no real demand here”…

 

Even with fewer shoppers in the market, which rose to prominence in the 1940s and is spaced across two buildings as high as six floors, Dubai is still a major trading hub. The weight of all the gold jewelry on display comes to about 25 metric tons, the same as five Indian elephants, according to an association representing the vendors.

 

Shopping trips from the Middle East “are fewer and shorter, and they spend less,”Gerhard Schubert, founder of Schubert Commodities Consultancy DMCC and a member of the Dubai Multi Commodities Centre’s responsible sourcing committee, said by telephone from Dubai on April 28. “This will be even worse after Ramadan, during the Eid holiday when you normally have a million Saudis coming over. I’m sure the numbers will be down this year”…

 

“We are still surviving, but everyone is worried about the future.” 

Yes, everyone is worried about the future for all of the poor souls who can now only afford to go tax-free gold shopping in Dubai four times a year as opposed to say six times, but who knows, with the US Navy now escorting US flagged cargo ships through the Strait Of Hormuz (as a precautionary measure of course), one errant pot shot across the bow could be just what the doctor ordered for still-depressed crude prices and by extension, for the poor gold vendors of Dubai.

 

end

 

A good history lesson as to what happens to your gold if you deposit it at the Bank of England with a scathing assist from my old nemesis the BIS.

 

have fun with this…

What Happens When You Hand Over Your Gold To The Bank Of England For “Safekeeping”

“The Bank for International Settlements is the bank which sanctions the most notorious outrage of this generation— the rape of Czechoslovakia.”

— George Strauss, Labor MP, speaking in the House of Commons, May 1939

“the Bank for International Settlements should be liquidated before it
furnished any more sinews of war to Germany, and that the odd
relationship between the British government and the Bank of England
should be re-examined without delay.”

— “Sees British Hands Tied on Czech Gold,” New York Times, June 6, 1939

When Nazi Germany annexed the Czechoslovak border province of the Sudetenland in September 1938, it immediately absorbed a good part of the country’s banking system as well as most of Czechoslovakia’s strategic defenses. By then the country’s national bank had prudently transferred most of its gold abroad to two accounts at the Bank of England: one in the name of the BIS, and one in the name of the National Bank of Czechoslovakia itself. (Countries had deposited some of their gold reserves in a sub-account at the BIS account in London to ease gold sales and purchases.) Of the 94,772 kilograms of gold, only 6,337 kilograms remained in Prague. The security of the national gold was more than a monetary issue. The Czechoslovak reserves, like those of Republican Spain, were an expression of nationhood. Carved out of the remains of the Austro-Hungarian Empire in 1918, the Czechoslovak Republic was a new and fragile nation. A good part of the gold had been donated by the public in the country’s early years. Josef Malik, the governor of the national bank, and his fellow Czechs believed that, even as the Nazis’ dismembered their homeland, if the national gold was safe, then something of the country’s independence would endure.

They were wrong. The Czechoslovaks’ faith in the probity of the BIS and the Bank of England was tragically misplaced. The gold was sacrificed, with barely a second thought, to the needs of transnational finance and the Third Reich.

The Nazis’ first demand came in February 1939 when Berlin ordered Prague to transfer just over 14.5 metric tons of gold, supposedly to back the German currency now circulating in the Sudetenland. This was certainly an innovative idea— first invade a neighboring country, annex part of it, and then demand that the newly truncated state supply the gold to pay for the loss of its territory.

The following month the question became academic. On March 15 the Wehrmacht marched into Prague. The German protectorate of Bohemia and Moravia was declared, and Czechoslovakia no longer existed. But the gold reserves did. Three days later a Reichsbank official was dispatched to the National Bank of Czechoslovakia and  ordered the directors, under the threat of death, to issue two orders. Thanks to diligent detective work by Piet Clements, the BIS archivist, we have a clear picture of what happened next. The first order instructed the BIS to transfer the 23.1 metric tons of Czechoslovak gold held at the BIS account at the Bank of England to the Reichsbank BIS account, also held at the Bank of England. The second order instructed the Bank of England to transfer almost 27 metric tons of gold held in the National Bank of Czechoslovakia’s own account to the BIS’s gold account at the Bank of England.

Malik and his fellow directors hoped that it would be obvious that the instructions had been issued under duress and so would not be implemented. The Nazis had just invaded Czechoslovakia and would obviously target the national gold reserves. But Malik had not reckoned on Montagu Norman. The governor of the Bank of England had no interest in whether Czechoslovakia was free or a Nazi colony. “Political” considerations must not affect the BIS’s transactions. The transfer order, he said, must go through.

Meanwhile, in Basel, Johan Beyen, the Dutch president of the BIS, wavered. Beyen discussed the matter with the BIS’s legal adviser, Felix Weiser. But like Norman, Weiser took the most formalistic approach possible. As long as the paperwork was in order, the monies must go through. Weiser argued, somewhat bizarrely, that there could be no legal grounds to claim that the transfer order had been issued under duress, as such a plea could be brought before a Swiss court only by the persons who had acted under duress. Clearly, the directors of the National Bank of Czechoslovakia were unlikely to travel to Switzerland to present their case. Therefore any decision not to authorize the transfer would be one of BIS policy, rather than administration. The board of the BIS made policy. Thus Beyen would have to consult the board to stop the payment. (This was poor advice for another reason— under the terms of the BIS statutes the Swiss authorities anyway had no jurisdiction over gold transfers between states.)

Beyen was unwilling to take a decision without authorization. But who could he ask? The chairman of the BIS board, Sir Otto Niemeyer, of the Bank of England, was traveling to Egypt and so was incommunicado. At 6 p.m. on March 20, Roger Auboin, the bank’s general manager, told Beyen that the governor of the Bank of France had discussed the matter with London. The Bank of England and the Bank of France would not be taking any action to stop the transfer, because they felt that there were no grounds for action. The BIS transfer order went through.

With London, Paris, and Basel’s compliance, Nazi Germany had just looted 23.1 metric tons of gold without a shot being fired. More than two-thirds of that gold was traded with the Dutch and Belgian national banks and was eventually transported from Amsterdam and Brussels to the Reichsbank’s vaults in Berlin. Czechoslovakia’s diligent planning to safeguard its national gold reserves, together with its misplaced faith in the integrity of the new international financial system, had come to nothing. The second transfer order for the 27 metric tons held in the National Bank of Czechoslovakia’s own account at the Bank of England did not go through. Sir John Simon, the chancellor of the Exchequer, had instructed banks to block all Czechoslovak assets. But Czechoslovak gold held in a BIS account at the Bank of England, it seemed, was not defined as a national asset and was beyond the reach of UK laws.

Norman and Beyen’s decision caused despair and incomprehension in Prague and uproar in London. The loss of the Czechoslovak gold was all “Norman’s fault,” exclaimed the Daily Herald. Paul Einzig, of the Financial News, ran a stream of stories exposing the complicity of both the treasury and the Bank of England in the affair. Einzig demanded to know why the treasury had not stopped the transfer, as it was in clear violation of the law known as the Czechoslovakia Act. Brendan Bracken, a journalist and ally of Winston Churchill, declared in the House of Commons that “the Bank of England after what has happened may no longer be looked on as the safest place in the world and the phrase ‘Safe as the Bank of England’ may no longer apply.” Churchill himself demanded to know how the government could urge people to enlist in the military when it was “so butter-fingered that six million pounds of gold can be transferred to the Nazi government.”

The real villain of the affair was Norman. Beyen, who later served as Dutch foreign minister and as executive director of the International Monetary Fund, was an ineffectual bureaucrat, paralyzed by the idea that he might have to take responsibility for a decision.Norman could have stopped the transfer immediately. He was the governor of the Bank of England, which held the two BIS accounts involved. At the very least he could have asked for the transfer to be referred to the BIS board for a decision, which would also have been a face-saving measure. He chose not to do so. It was clear that war was coming, one that Britain would have to fight. The Nazi invasion of Czechoslovakia had destroyed the last hopes of peace. That country’s gold reserves, held in London, were now a British national security issue.

Yet Norman’s priority was not the best interests of his homeland, but rather the independence of his beloved BIS. Even as the shells were loaded into the German tanks, Norman still believed that for the bankers it could be business as usual. Nothing could interfere with the bankers’ sacred neutrality and gentlemanly trust in one other, not even the coming conflagration with a regime whose evil was now plain to see. The Bank of France had refused to stop the transfer but had also asked Norman to block it. Norman was adamant. There could be no political interference in the operations of the BIS, even, it seemed, when they were ordered at gunpoint.

Norman did not express any regret at all over the Czech gold transfer. In fact, he was positively indignant at the very idea that the British government might have some say in the bank’s actions. He wrote, “I can’t imagine any step more improper than to bring government into the current banking affairs of the BIS. I guess it would mean ruin. I imagine the Germans would never have paid any interest to the BIS, and at the board we would have then likely have found the Germans, Italians, and Japs standing together!” Norman then lied to Sir John Simon, the chancellor of the Exchequer, albeit with a very telling falsehood. Simon asked Norman if he could not have warned the government that, thanks to the BIS, Germany was about to acquire “large additional financial strength.” Norman told Simon that while the Bank of England held gold for the BIS, it did not know if the gold was actually owned by the BIS or was held by the BIS for other central banks. This was untrue, as Norman later admitted. Norman then made a significant, even shocking, admission. He told Simon that “he was very doubtful that he would have thought it his duty, as Director of the BIS, to make a statement about its transactions to the British government.”

Norman even wrote to Beyen to clarify the matter and to assure the BIS president where his ultimate loyalties lay in Basel. Norman did not want to publicly correct the minutiae of what was being reported in the press and Hansard, the British parliamentary journal— that the Bank of England did not know whose gold was held in the BIS accounts— as that would expose him. “The difficulty is that if I point out to the Treasury that this is incorrect, I lay myself open to being asked details of BIS transactions, which I do not consider the Treasury are entitled to know.”  This was little short of treason. As Norman’s compatriots were enlisting in the military, preparing to risk their lives for the freedoms and luxury that he enjoyed, as his country prepared for the war against the Nazis that all knew was coming, Norman blithely announced that his primary loyalty was not to Britain, but to a hyper-privileged, international bank that was not even a decade old.

The mistake of Malik, the director of the National Bank of Czechoslovakia, was to believe that either Norman, Beyen, or indeed any of the BIS management could conceive of any moral or political dimension to their decisions. The world’s most powerful international bankers were not only unwilling to obstruct the Nazi seizure of Czechoslovak— or Austrian— assets. They simply could not conceive of any reason why they should do so. As long as the formalities were observed, the necessary papers were stamped and the gold was re-assigned. Norman’s precious independence for both the Bank of England and the BIS had been bought at a high price— in mountains of gold ingots to pay for steel to build bombs that would soon rain down on London.

* * * * *

… the affair had highlighted the deeply unsettling connections between the Bank of England, the British government, and the BIS. There was a good deal of cross-party feeling in Britain, reported the New York Times, that “the Bank for International Settlements should be liquidated before it furnished any more sinews of war to Germany, and that the odd relationship between the British government and the Bank of England should be re-examined without delay.”  The New York Times then was able to assume that its readers would understand a classical allusion. The word “sinews” was a reference to an epithet of Cicero, the Roman philosopher, who had said, “The sinews of war are infinite money.” Cicero’s observation was as prescient then as during the late 1930s. But those who wanted the BIS to be liquidated were too late. Thanks to the BIS the “sinews of war” and the flow of near-infinite money were about to be immeasurably strengthened.

Source: TOWER OF BASEL: The Shadowy History of the Secret Bank that Runs the World by Adam LeBor.

Average:
Early morning trading from Asia and Europe last night:

1. Stocks lower on major Chinese bourses as bubblemania is the name of the game in Shanghai (down) and Hong Kong down  /Japan bourse up 11.62 or 0.06% /yen falls to 119.80/Shanghai to allow short selling to stop their bubble/China then cuts RRR by 1% and Chinese authorities sooth fears that they want to prick that huge bubble.

 

1b Chinese yuan vs USA dollar/yuan weakens to 6.2018

2 Nikkei up 11.62 or 0.06%

3. Europe stocks up/USA dollar index down to 94.61/Euro rises to 1.1273/

3b Japan 10 year bond yield: another jump to .35% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.80/

3c Nikkei still  above 20,000

3d USA/Yen rate now well below the 120 barrier this morning

3e WTI  59.47  Brent 66.26

3f Gold down/Yen down

3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion.  Japan’s GDP equals 5 trillion usa.

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt.  Fifty percent of Japanese budget financed with debt. Last night Japan refused to increase it’s QE

3h  Oil up  for WTI and up for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to 36.0 basis points. German bunds in negative yields from 4 years out.

Except Greece which sees its 2 year rate falls quite a bit to 19.66%/Greek stocks up 3.12%/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  10.47% (down 60 in basis point in yield)

3k Gold at 1180 dollars/silver $16.17

3l USA vs Russian rouble;  (Russian rouble up 1/20  rouble/dollar in value) 51.46 , the rouble is still the best acting currency this year!!

3m oil into the 59 dollar handle for WTI and 66 handle for Brent/Saudi Arabia increases production to drive out competition.

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation.  This can spell financial disaster for the rest of the world/China may be forced to do QE!! (last Monday they lowered its RRR it is effectively doing QE)

30  SNB (Swiss National Bank) still intervening again in the markets driving down the SF.  It is not working:  USA/SF this morning 92.80 as the Swiss Franc is still rising against most currencies.  Euro vs SF is 1.0460 well below the floor set by the Swiss Finance Minister.

3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering/Poor UK manufacturing report today.

3r the 4 year German bund remains in negative territory with the 10 year close to negativity at +.36/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.

3s This week the ECB increased the ELA to Greece  by another large 1.4 billion euros. The new maximum is 76.9 billion euros.  The ELA is used to replace depositors fleeing the Greek banking system.  The bank runs are increasing exponentially. The ECB is contemplating cutting off the ELA which would be a death sentence to Greece and they are as well considering a 50% haircut to all Greek sovereign collateral which will totally wipe out the entire Gr. banking and financial sector.

 

3t Greece informally asked the IMF to delay its payment for May 1 and they refused.

3 u. With the big meeting in Riga a failure on Friday,sheer anger developed between the Finance Ministers and the Greek contingent. There was no substance in the meetings to suggest that Greece was going to reform. Greece will not reform its public pensions.

If the ECB cuts off Greece’s ELA they would have very little money left to function.

4.  USA 10 year treasury bond at 2.07% early this morning. Thirty year rate well below 3% at 2.78%/yield curve flatten/foreshadowing recession.

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy zero hedge/Jim Reid Deutsche bank)

Futures Flat As Global Markets Closed For May Day

Following a volatile end to April, on whose last day many decided to frontrun “selling in May before going away”, the world has taken a breather and overnight China was closed to celebrate May day, unable to celebrate the “beat” of the official Chinese Manufacturing PMI which printed unchanged from last month, at 50.1, goalseeked to beat the consensus expectation of 50.0 by the smallest of possible increments. After tumbling by 2.7% on Thursday, the negative sentiment in Japan following the BOJ’s unwillingness to ease further persisted, with the Nikkei closing barely unchanged following a last minute surge to end the day up 0.06%.

Asian equities saw a subdued session amid thinned trading, after taking the lead from a negative Wall Street close. Nikkei 225 (+0.06%) reversed its earlier weakness heading into the close, with participants continued to fret about the lack of further easing from the BoJ. ASX 200 (+0.36%) rose led by basic materials, after Vale, the world’s 3rd largest miner, suggested slowing down its iron ore exports. Sentiment was further lifted by a better than Exp. Official Chinese Manufacturing PMI (50.1 vs. Exp. 50.0 (Prev. 50.1). JGB’s fell in tandem with yesterday’s continued global sell-off across fixed income, with the long-end better bid following today’s enhanced liquidity auction of old 20s/30s/40s. Markets in China, Taiwan, India and Singapore were closed for public holidays.

As expected the session has been relatively subdued, the FTSE traded flat despite strength in the basic materials sector ?bolstered by reports that Vale, the world’s 3rd largest miner, suggested slowing down its iron ore exports causing UK Miners to outperform. In addition, the negative UK PMI Manufacturing SA (Mar) M/M 51.9 vs. Exp. 54.6 lifted Gilts following the release, however remains to be supported as uncertainty looms leading up to the May 7th Election.

The weak UK Manufacturing data dragged GBP/USD into negative territory with the weaker headline number being attributed to the relative strength in GBP. In holiday related thin conditions EUR ticked higher against all crosses with demand for EUR/JPY helping the cross to test 135.00 while EUR/GBP broke the 0.7300 handle. Furthermore, Greek asset classes are closed however, the market await any developments with Greece as they are expected to make their delayed EUR 200mln payment to the IMF on Wednesday due to the holiday.

In the commodity complex, Brent and WTI crude futures trade in modest negative territory despite the weaker USD-index (-0.3%). Elsewhere, precious metals have traded in a flat below the USD 1,200 after yesterday’s flurry of positive data weighed on the yellow metal.

In Summary: U.K., Irish shares fall, with Stoxx 600 down for fourth day, on track for its worst week of the year. Most European stock markets closed for holiday, volume is 30% of the 10 day average. Brent crude, gold decline, silver rises. U.K. April manufacturing PMI below ests. U.S. manufacturing PMI, ISM manufacturing, construction spending, vehicle sales, Michigan confidence due later.

Market Wrap

  • S&P 500 futures up 0.3% to 2084.5
  • Stoxx 600 down 0.2% to 395
  • US 10Yr yield up 2bps to 2.05%
  • German 10Yr yield little changed 0.37%
  • MSCI Asia Pacific down 0.1% to 153.1
  • Gold spot down 0.1% to $1183.2/oz
  • Euro up 0.25% to $1.1252
  • Dollar Index up 0.03% to 94.63
  • Italian 10Yr yield up 2bps to 1.52%
  • Spanish 10Yr yield up 2bps to 1.48%
  • French 10Yr yield little changed at 0.64%
  • S&P GSCI Index down 0.1% to 445.2
  • Brent Futures down 0.3% to $66.6/bbl, WTI Futures down 0.1% to $59.6/bbl
  • LME 3m Copper down 0.2% to $6324.5/MT
  • LME 3m Nickel down 0.4% to $13900/MT
  • Wheat futures up 0.2% to 474.8 USd/bu

Bulletin headline news summary from Bloomberg and RanSquawk

  • With China away from market, overnight trade was relatively subdued, although the Nikkei 225 was weighed upon by yesterdayís decision by the BoJ to refrain from additional easing
  • Further dovish rhetoric from New Zealand weighed on NZD with AUD also weakening in sympathy
  • EUREX and Euronext will be closed today due to a European market holiday
  • Gilts (+41 ticks) have edged higher throughout the session supported by lacklustre UK Manufacturing PMI and ongoing political uncertainty
  • A subdued session so far, given the widespread EU market closures with the exception of the UK.
  • Looking ahead, sees the of release Canadian & US Manufacturing PMI, ISM Manufacturing, Univ. of Michigan, Fed’s Mester, Fed’s Williams and earnings from Chevron.
  • Trading likely to be quiet as Hong Kong, Europe closed for May Day holiday; U.K. closed on Monday
  • The U.S. Navy has begun accompanying U.S.-flagged ships through the Strait of Hormuz in response to Iran’s seizure of a cargo ship flying the flag of the Marshall Islands, American defense officials said
  • U.K.’s manufacturing PMI fell to 7-month low of 51.9 from 54 in March, median est. 54.6; new export orders shrank for fifth time in seven months
  • China’s official manufacturing PMI was at 50.1 in April vs 50.0 median forecast in a Bloomberg survey
  • Apple Inc. may sell its first yen bonds, in a move that would further diversify its fundraising currencies after making debut offerings in euros and the Swiss franc
  • $1.5b IG priced yesterday, $900m high yield. BofAML
  • Sovereign bond yields higher.  U.K. stocks little changed,
  • U.S. equity-index futures higher. Crude oil, gold and copper decline

DB’s Jim Reid concludes the overnight recap

 

April was actually a pretty positive month for most assets but with some sharp declines over the last few days for European equities and Government bonds creating a nervous end to the month. We’ll review April and YTD performance at the end today with graphs and tables in the pdf.

Yesterday the Atlanta Fed came out with their first GDPNow forecast for Q2 which came in at 0.9% – well below the consensus which is still broadly around 3% (DB 2.5%). After their long standing prediction of a soft Q1 print, way before the consensus and the eventual accurate final number, their views will be closely tracked from here. If they’re right we probably don’t need to worry about the recent government bond sell-off.

Talking of the sell-off it was a bad end to the month for the core bond markets. In Europe the German 10yr yield ended the day +8bps higher at 0.37% (back nearly to where QE started from), the French 10yr rose +7bps but with the Italian and Spanish 10yr outperforming to be basically flat on the day. There was a bit of a shock for some as 5 year bunds ended the day in positive yield territory (+0.005bps) for the first time since January 27th. The Greek 10yr yield fell another -80bps as sentiment around Greece remained positive (more later). Over in the US the 10yr ended the day broadly flat with a late rally after having been 6bp higher as Europe closed. The USD broke its recent downward slide, rising against most G10 currencies (although not the EUR which climbed into the 1.12 handle range). The VIX rose another half point to 14.

The month didn’t end well in US equities with a late sell-off which saw the S&P 500 -1.01% with no particular single catalyst for it. There was some chatter about the Nasdaq BioTech index falling -9.3% over the past 5 days and Apple having its worst 3-day slide (-5.7%) for 15 months. Month-ends are always a bit unpredictable so it’ll be interesting if the trends of the last few days continue into early May. In Europe equities were mixed whilst credit managed to eke out a small gain. Although most of the main equity bourses were slightly higher, the Stoxx 600 fell -0.4%. iTraxx Crossover tightened -1bp whilst in the US CDX HY widened +5bps.

Overnight in Asia, markets are trading in negative territory with the Nikkei down -0.2% although a number of markets in the region are closed for Labour Day. Asian credit markets are trading broadly flat. Some of the weakness in the Japanese markets is being driven by comments made by BoJ Governor Kuroda after markets closed on Thursday saying that no further policy easing was needed for now even though inflation won’t return to 2% within their 2 year timeframe. After stripping out the impact of last yearís tax change and the volatile fresh food components CPI came in at +0.2 YoY today for April. Elsewhere the headline CPI came in slightly ahead of expectations at +2.3% YoY (vs +2.2% expected and prior). The core read also rose slightly, to +2.1% YoY.

We also saw April manufacturing PMI updates from Japan and China with the former edging up to 49.9 (from 49.7) and the latter holding steady at 50.1 (vs consensus fall to 50). The alternative China PMI from HSBC/Markit slipped to a one-year low of 49.2 though. China is closed today.

Looking to yesterday’s news, in Europe we saw German March retail sales (which fell -2.3% MoM vs an expected rise of +0.5%) and April unemployment (which came in-line with expectations at 6.4%). We also saw Spanish Q1 GDP which surprised to the upside rising +0.9% QoQ (vs consensus expectation of +0.8%) and April CPI which came in broadly in-line at +0.7% MoM. Finally in Europe we also had the Italian and Eurozone April CPI both of which came in in-line with expectations (both at 0% YoY change) as the eurozone number rose from a negative -0.1% YoY last time around.

Over in the US it was another day of market sensitive releases as we got the Q1 employment cost index (which rose to +0.7% exceeding consensus estimates of +0.6%) as well as the March personal income, spending and PCE all of which marginally disappointed. Initial jobless claims came in much lower than expected at 262k although it seems there may have been some seasonal factors in play. Finally in terms of data we had the Milwaukee April ISM which disappointed (48 vs 53 expected) whilst the April Chicago PMI surprised to the upside (at 52).

Returning to the positive Greek sentiment yesterday, this seemed to be driven by headlines that both sides had agreed to actively pursue negotiations starting Thursday with the target of getting a preliminary deal done by May 3rd with the idea being for the finance ministers to sign off on the accord at the May 11th meeting (Bloomberg News). This seems too good to be true at the moment but there does seem to be a better tone to negotiations at the moment although Eurogroup chief Dijsselbloem kept the pressure on by suggesting that the Greek government should spend less time on interviews and more on avoiding abyss. The stakes remain high.

Looking to the day ahead it looks set to be a slightly quieter day compared to the past couple especially with many countries celebrating May or Labour Day. In the UK we have the April manufacturing PMI which is expected to rise to 54.6. In the US we will get the final read on US April PMI, March construction spending (expected to rise to +0.5% MoM), the April ISM (expected to rise to 52) and the latest UoM sentiment. On the earnings front we will hear from Smurfit Kappa and Lloyds in Europe and the likes of Chevron and Berkshire Hathaway in the US.

end

Greek Pensioners Crash Pension Fund Board Meeting, Form Lines At Bank

On Thursday we noted that no matter how tempting it may be to tune out the almost hourly warnings from various sources claiming Greece is finally set to run out of cash, one can’t just assume the government will yet again find another couch cushion to reach into in order to scrape up a few more euros to pay government employees and creditors and thereby forestall the inevitable for another few weeks. Eventually, there simply will be no more money and the first signs that Greece has entered the final, terminal phase in the long and painful road to complete insolvency showed up last month in the form of a sweeping decree which required municipalities to transfer excess cash to the central bank.

That mandate was greeted with incredulity and with the country’s local governments less than willing to turn over their funds, Athens finally ran out of money (if only for 8 or so hours) on Tuesday when pensioners showed up at ATMs only to discover that their money simply was not there. Amusingly, the government blamed the delay on a “technical glitch”, and while we suppose it’s not exactly a lie to call running out of money a “technical glitch”, it was abundantly clear that the country’s socialist saviors were making a feeble attempt to avert a pensioner mutiny. Today, we get more details about the situation and sure enough, the retirees are restless.

Via The Australian:

Panicking pensioners queued at banks, raided their accounts and broke into a board meeting of the state pension fund as Greece struggled to pay its two million pension recipients.

Officials claimed that a “technical hitch” had delayed some payments as Greece braced itself to run out of money in days without a breakthrough from secret talks in Brussels…

The country’s state pension funds almost defaulted after a shortfall of “several hundred million euros” delayed payments to pensioners this week. Many people panicked when they discovered that their pension payments were not in their accounts.

“Normally I only withdraw half the money at the end of the month but today I’m taking it all,” said Sotiria Zlatini, 75, a former civil servant. “There are so many rumours going round.”

In a sign of public discontent, pensioners broke into a board meeting of the state pension fund demanding that it stop transferring cash reserves to the government under an emergency decree to keep the country solvent.

Meanwhile, Syriza remains stuck between insolvency and its campaign promises and it now appears that the government’s “red lines” may once again undercut the negotiating process just when it appeared that some progress (whatever that means at this point) was possible over the weekend. Here’s Bloomberg:

Greek Prime Minister Alexis Tsipras told his cabinet on Thursday that he’s confident a deal to unlock bailout aid is close, even as his government sent conflicting signals on its willingness to agree on long-stalled reforms.

Tsipras addressed his ministers as Greece and its euro-area partners stepped up talks in a bid to reach a preliminary deal by May 3, ahead of looming debt payments in early May, three people with knowledge of the talks said earlier. The aim would be for finance ministers to sign off on the accord by their next scheduled meeting on May 11, the officials said, asking not to be named because the talks are private…

One European Union official cautioned that at the moment getting a technical deal by Sunday looked optimistic. Hard and long negotiations will take place over the coming days, with more talks planned for next week. Even so, reaching a comprehensive agreement by May 11 remains unlikely, the official said.

An agreement could still stumble at opposition within Tsipras’s government. In a sign of the obstacles yet to overcome for a deal, Tsipras told his ministers that any agreement would be in line with the popular mandate as expressed by the government’s “red lines” in the talks, according to Sakellaridis. The remark echoed a statement by Greece’s Finance Ministry on Wednesday that the government “retains red lines” in the negotiations, which include a sales tax on islands, pension and labor market reforms and asset sales.

Finance Minister Yanis Varoufakis on Thursday said Greece wouldn’t discuss pension cuts or the sales tax increase in the current talks, with any pension reform being part of a broader agreement in June.

Despite the red line rhetoric, Tsipras admits that a referedndum may be necessary on a possible deal with creditors which essentially means that in a worst case scenario, Athens may have to make concessions that are inconsistent with the ‘annihilate all austerity’ line that got Syriza elected.

The problem, as we noted earlier this week, is that two out of three Greeks aren’t interested in a referendum. Of course they’re also not interested in leaving the euro… or in implementing further austerity measures in order to get a bailout… or in empty ATMs.

We wish them the best of luck.

 

end

 

This is an interesting development:  China and Russia unveiling their first ever Mediterranean joint naval exercise.  As I have stated previously, China is the money and Russia the muscle;
(courtesy zero hedge)

China, Russia Unveil First-Ever Mediterranean Joint Naval Exercise

Sabre-rattling much? For the first time in history, Chinese and Russian navies will begin a significant joint naval exercise in The Mediterranean Sea in mid-May. As RT reports, Chinese Defense Ministry spokesman Geng Yansheng, “The aim is to deepen both countries’ friendly and practical cooperation, and increase our navies’ ability to jointly deal with maritime security threats,” but diplomatically added “these exercises are not aimed at any third party and have nothing to do with the regional situation.” Against a background of this week’s “upgraded Japan-American military relationship” following Abe’s visit to Obama, as one analyst notes, “the geopolitical significance of its exercising alongside Russia will not be lost on the U.S. and NATO.”

 

 

The Chinese and Russian Navies have exercised together since 2012 in waters off Russia’s eastern seaboard; but as RT reports,

The Russian and Chinese Navies are to hold a joint exercise in the Mediterranean Sea in mid-May, a first in that part of the world.A total of nine warships from the two countries are to participate, Beijing said.

 

“The aim is to deepen both countries’ friendly and practical cooperation, and increase our navies’ ability to jointly deal with maritime security threats,” Chinese Defense Ministry spokesman Geng Yansheng said on Thursday in a monthly news briefing.

 

“What needs saying is that these exercises are not aimed at any third party and have nothing to do with the regional situation,” he added, saying that the Chinese Navy would contribute its warships currently on an anti-piracy mission in the Gulf of Aden.

 

Russia and China have previously held joint naval exercises in the Pacific in waters they both have direct access to.The Mediterranean Sea Cooperation-2015 drill would focus on navigation safety, at-sea replenishment, escort missions and live fire exercises, Geng said.

 

Moscow and Beijing are intensifying defense cooperation as both countries oppose US criticism of its military policies. China is being accused of aggressive deployments in the South China Sea, where it is contesting territories with several regional nations. The PLA’s Navy and Air Force have been increasingly at odds with Japan and South Korea, key American allies.

The implications and messaging are significant, as The NY Times reports,the two countries want to show they have escalated their strategic partnership.

“It suggests Russia and China are sending a political signal to the U.S. and Europe that the continental powers are standing together to support each other’s expanding interests in the face of maritime opposition,”

 

 

“The geopolitical significance of its exercising alongside Russia will not be lost on the U.S. and NATO,”  Shi Yinhong, a professor of international relations at Renmin University in Beijing said, “although it would be churlish of anyone in the West to complain about it, given the number of joint drills the U.S. and its allies conduct in China’s near seas.”

*  *  *
Following yesterday’s US decision to safeguard vessels through the Strait of Hormuz, it appears the proxy wars are becoming less proxy.

 

end

 

Oil related stories:

Oil rigs continue to decline:

 

 

(courtesy zero hedge)

Crude Bounces After Oil Rig Count Decline Slows

Oil prices have tumbled this morning ahead of the Baker Hughes rig count data but algos bounced them after the pace of oil rig count decline slowed further. For an unprecedented 21st week in a row, the US total rig count declined this week (down 27 to 905).  Oil rigs fell 24 to 679 for the fastest total collapse in rig counts in history (down over 57% in 21 weeks). This is a faster pace of decline than the previous week for total rigs but a slower pace of decline for oil rigs.

  • *U.S. OIL RIG COUNT DOWN 24 TO 679, BAKER HUGHES SAYS
  • *U.S. TOTAL RIG COUNTDOWN 27 TO 905 , BAKER HUGHES SAYS

If lagged oil prices are any historical guide then the decline is due to stall very soon…

 

Oil Rig count decline is slowing…

 

Have we started to see the rig count collapse finally weigh on production…?

 

But oil prices have roundtripped today from yesterday’s end of month exuberance… and bounced higher on the rig count news…

 

Charts: Bloomberg

end

Here is zero hedge’s account on the arrest of a gold manipulator:

(courtesy zero hedge)

Gold Manipulator Busted After Zero Hedge Report On HFT Gold Spoofing

In the aftermath of the Nav Sarao scapegoating farce, one week ago Zero Hedge decided to give the confused CFTC a helping hand and launched a daily series highlighting the constant spoofing and “manipulation” (in the CFTC and DOJ’s own words) that takes place in every asset class, but mostly in the E-mini futures (“Dear CFTC: This Is The Market Manipulating “Spoofing” Taking Place In The E-Mini Just Today“). Virtually every day since then we presented the “regulators” at the commodity trading commission a clear example of stock market manipulation, with the exception of Tuesday, when with the exclusive help ofNanex, we showed a clear case of gold spoofing.

This is what we said on April 28:

Here (courtesy of Nanex) are several examples in the June 2015 Comex Gold Futures this morning. All times are Eastern Daylight. In each of these cases, no trades (or a tiny few) executed against the large “spoof” order. You can see how prices were influenced by the sudden appearance (and disappearance) of these large, outsized orders.

 

1. June 2015 Comex Gold

 

Note how large buy and sell orders push prices up and down.

 

 

2. Another set of instances appear about 50 minutes after the first set (shown in chart 1).

 

3. Another set of spoofing instances appear about an hour after the second set (shown in chart 2).

 

You’re welcome CFTC — it’s the least we can do.

 

Best wishes, 

 

Zero Hedge 

 

Reminder: We won’t stop this until you are forced to address the glaring hypocrisy and utter incompetence of everyone involved in the regulation of market microstructure.

Much to our dismay, overnight we learned that while the CFTC continues to be very, very confused and challenged by all those lobby payments by the world’s “liquidity providing” HFTs and ignores all documented evidence of manipulation, the Chicago Mercantile Exchange – owner of the futures exchange wheer the bulk of modern manipulation takes place – did read this evidence of manipulation, and decided to immediately take action, suspending two traders for placing the manipulative “spoofing and layering” trades profiled here three days ago which were virtually identical to the ones that got Navinder Singh Sarao into headlines around the world last week. Except, of course, the asset class manipulated was gold. And, perhaps what’s far worse, the manipulation sent the price of gold briefly higher.

The names of the perpetrators: perhaps not surprisingly, Heet Khara and Nasim Salim. Extend to Navinder Sarao and a pattern emerges…

This is the full CME release:

NOTICE OF SUMMARY ACCESS DENIAL ACTION: COMEX 15-0103-SA-1 

 

NON-MEMBER:

 

NASIM SALIM 

 

CME RULE: 413. SUMMARY ACCESS DENIAL ACTIONS (in part)

 

A. The Chief Regulatory Officer or his delegate, upon a good faith determination that there are substantial reasons to believe that such immediate action is necessary to protect the best interests of the Exchange, may order that: 1) any party be denied access to any or all CME Group markets; 2) any party be denied access to the Globex platform; 3) any party be denied access to any other electronic trading or clearing platform owned or controlled by CME Group; or (4) any Member be immediately removed from any trading floor owned or controlled by CME Group. 

 

FINDINGS

 

On April 30, 2015, CME Group’s Market Regulation Department (“Market Regulation Department”), through its Chief Regulatory Officer, summarily denied Nasim Salim (“Salim”) direct and indirect access to all CME Group markets, the CME Globex electronic trading platform, any other electronic trading or clearing platform owned or controlled by CME Group, and all trading floors owned or controlled by CME Group. The summary access denial prohibits trading, placing orders, and controlling or directing the trading for any person or entity in any CME Group exchange product. The summary access denial further prohibits the affiliation or business dealing with any member or member firm of CME, CBOT, NYMEX, or COMEX.

 

CME Group’s Chief Regulatory Officer’s summary access denial of Salim was based upon the findings of an investigation conducted by the Market Regulation Department, which revealed that on multiple trade dates during the time period of March 1, 2015 through April 28, 2015, Salim engaged in a pattern of activity in which he repeatedly entered orders or layered multiple orders for Gold and Silver futures contracts without the intent to trade. Specifically, Salim entered these orders or layered multiple orders to encourage market participants to trade opposite his smaller orders resting on the opposite side of the book. After receiving a fill on his smaller orders, Salim would then cancel the resting order or layered multiple orders that he had entered on the opposite side of the order book.

 

Salim introduced Heet Khara (“Khara”), who is also the subject of a summary access denial action, to his first FCM and Salim had an account at the second FCM at which Khara traded in a disruptive manner. Further, it appears that on multiple occasions Salim and Khara coordinated efforts to engage in disruptive activity. In an example from April 28, 2015, Salim entered small-lot orders on one side of the market in Gold futures, after which Khara entered large orders on the opposite side. When Salim’s small orders were filled, Khara canceled the large orders. Salim has not responded to correspondence from the Exchange.

 

The foregoing conduct, as well as Salim’s failure to cooperate with the Exchange, present a good faith determination that there are substantial reasons to believe that such immediate action is necessary to protect the best interests of the Exchanges and the marketplace.  

 

ACCESS DENIAL:

 

Pursuant to Rule 413, this access denial will remain in effect for 60 days, commencing on the effective date below and continuing through and including June 29, 2015, unless the Chief Regulatory Officer or his delegate provides written notice that this access denial will be extended for an additional period of time.

We expect the CFTC and the DOJ to unleash the wrath of god now that the CME showed them how gold manipulation works, something they figured out bylooking a this article.

And while we are delighted that yet one more alleged case of gold manipulation is now confirmed, we are curious if the CME, CFTC and DOJ will also prosecute instances of gold manipulation when the ultimate outcome is the price of gold going lower instead of higher, such as the one documented in “Vicious Gold Slamdown Breaks Gold Market For 20 Seconds“, “Stop Logic” Gold Slam Was So Furious It Shut Down CME Trading Again” and on countless other occasions most of which have been duly documented on this website.

Finally, we wonder: will the CME, CFTC, DOJ, and FBI pursue as promptly all those instances of constant S&P 500 manipulation and spoofing we profiled over the past week in particular, and over the past 6 years in general? Or was this merely another “Sarao” case when several (non-Caucasian) traders are scapegoated by the regulators, with the naive expectation that investors will suddenly assume the market – in this case that of gold – is no longer rigged?

end

Your more important currency crosses early Friday morning:

 

Euro/USA 1.1273 up .0063

USA/JAPAN YEN 119.80 up .326

GBP/USA 1.5290 down .0063

USA/CAN 1.2095 up  .0017

This morning in Europe, the Euro rose quite a bit by 63 basis points, trading now well above the 1.12  level at 1.1273; Europe is still reacting to deflation, announcements of massive stimulation, a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, a possible default of Greece and the Ukraine.

In Japan Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31. The yen continues to trade in yoyo fashion as this morning it settled down again in Japan by 33 basis points and trading just below the 120 level to 119.80 yen to the dollar.

The pound was well down this morning as it now trades just below the 1.53 level at 1.5290  ( still very worried about the health of Barclay’s Bank and the FX/precious metals criminal investigation/Dec 12 a new separate criminal investigation on gold, silver and oil manipulation).

The Canadian dollar is down by 17 basis points at 1.2095 to the dollar

We are seeing that the 3 major global carry trades are being unwound.  The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies

2, the Nikkei average vs gold carry trade (still ongoing)

3. Short Swiss franc/long assets (European housing/Nikkei etc.  This has partly blown up (see  Hypo bank failure). Swiss franc is now 1.0280 to the Euro, trading well above the floor 1.05.  This will continue to create havoc with the Hypo bank failure.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral.  Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this morning :up  11.62 or 0.06%

Trading from Europe and Asia:
1. Europe stocks all in the green

2/ Asian bourses most in the red … Chinese bourses: Hang Sang in the red (massive bubble forming) ,Shanghai in the red  (massive bubble ready to burst),  Australia  in the red: /Nikkei (Japan) in the green/India’s Sensex in the red/

Gold very early morning trading: $1181

silver:$16.17

 

Early Friday morning USA 10 year bond yield: 2.07% !!!  up 3  in basis points from Thursday night/

 

USA dollar index early Friday morning: 94.61 down 20 cents from Thursday’s close. (Resistance will be at a DXY of 100)

 

This ends the early morning numbers, Thursday morning

 

And now for your closing numbers for Thursday:

 

Closing Portuguese 10 year bond yield:2.09% down 2 in basis points from Thursday

 

Closing Japanese 10 year bond yield: .36% !!! up 2 in basis points from Thursday

 

(not good if the Japanese government is losing control of their bond market)

 

Your closing Spanish 10 year government bond,  Friday, up 7 in basis points in yield from Thursday night.

 

Spanish 10 year bond yield: 1.53% !!!!!!

 

Your Friday closing Italian 10 year bond yield: 1.50% down 3  in basis points from Thursday:

trading 3 basis points below Spain.

 

 

IMPORTANT CURRENCY CLOSES FOR TODAY

 

 

Closing currency crosses for Friday night/USA dollar index/USA 10 yr bond: 4 pm

 

Euro/USA: 1.1192 down .0019  ( Euro down 19 basis points)

USA/Japan: 129.03 up .557  ( yen down 56 basis points)

Great Britain/USA: 1.5123 down .0230   (Pound down 230 basis points)

USA/Canada: 1.2136 up .0058 (Can dollar down 58 basis points)

 

The euro fell today.   It settled down 19 basis points against the dollar to 1.1192 as the dollar rebounded today on all fronts with massive central bank intervention. The yen was up 56 basis points  and closing just above the 120 cross at 120.03 The British pound lost huge ground today, 230 basis points, closing at 1.5123. The Canadian dollar lost a lot ground to the USA dollar, down 58 basis points closing at 1.2136.

As explained above, the short dollar carry trade is being unwound, the yen carry trade , the Nikkei/gold carry trade, and finally the long dollar/short Swiss franc carry trade are all being unwound and these reversals are  causing massive derivative losses. And as such these massive derivative losses is the powder keg that will destroy the entire financial system. The losses on the oil front and huge losses on the USA dollar will no doubt produce many dead bodies.

 

 

 

Your closing 10 yr USA bond yield: 2.11% up 7 in basis points from Thursday

 

 

Your closing USA dollar index:

95.23  up 63 cents on the day.

 

European and Dow Jones stock index closes:

 

England FTSE up 25.32 or 0.21%

Paris CAC  off

German Dax   off

Spain’s Ibex   off

Italian FTSE-MIB  off

 

The Dow: up 183.64 or 1.03%

Nasdaq; down 63.97 or 1.29%

 

OIL: WTI 59.22 !!!!!!!

Brent: 66.55!!!!

 

Closing USA/Russian rouble cross: 51.08 up 4/10 rouble per dollar on the day.

 

 

end

 

 

And now your important USA stories:

 

NYSE trading for today.

Muted May-Day Volume Sparks Hey-Day For Stocks

We are up today because we were down yesterday… and every data item today was completely abysmal! Only one way to play…

With most of the rest of the world enjoying “May-Day”, volumes were dismal as it seemed the machines had no one to play with… S&P e-mini volume 30% below recent (weak) average! And half yesterday’s

Which can only mean one thing!!! From Wednesday’s FOMC, the S&P shows that The Fed knows what it is doing and closes green just

All surging today, led by Trannies but notice Small Caps went nowehere from the opening ramp…

On the week – eveything was red but Small Caps stood out – worst week in over 6 months

What Really Matter Though!! Dow 18,000; S&P 2,100; and Nasdaq 5,000 – Mission Accomplished into a sports-frenzied weekend

There was some ugliness… Flash Crashes this afternoon…

Social Media Carnage…

Credit markets were considerably less excited than stocks today

Treasury yields were extremely ugly this week – 3rd worst week of the year…

The dollar’s early weakness today rebounded as the buying frenzy ensued in stocks… still a notably weak week for the USDollar. (4th worst week in 2 years)…

Commodities were mixed today with gold and silver smacked early on (and crude) but copper just kept soaring as China reflation is back in vogue (gold ended lower for the 3rd week in a row) – it’s pretty clear what time of day to be trading…

Copper’s biggest week since 2011…

Some context for all of this…

Charts: Bloomberg

Bonus Chart: WTF! A new 6 year low in US Macro and Fwd EPS stagnant

end
Manufacturing the weakest in 2 years. Construction spending plunges and the employment in the manufacturing sector is the lowest ever.
(courtesy zero hedge)

US Manufacturing Weakest In 2 Years As Construction Spending Plunges; Mfg Employment Lowest Since 2009

April’s Manufacturing PMI printed a minimally disappointing 54.1 (against 54.2 prior and expectations) – its lowest since January and hardly the post-weather Q2 surge everyone was hoping for. New Orders and Production were the weakest since December and export business fell for the first time in 5 months and input prices dropped for the 4th month in a row; all leading Markit to demand The Fed remain patient. ISM Manufacturing missed expectations and has not risen for 5 months (its longest streak since the recession) with a contraction in the employment index to lowest since Sept 2009. And then Construction Spending plunged 0.6% (against a +0.5% exp.) – the 7th miss in 10 months and worst April print since 2009.

 

Construction Spending was dismal…

 

… Growing at the lowest annual pace since the crisis, and just a fraction away from being the latest confirmation of a recession. One thing is certain: Q1 GDP will now be revised negative.

ISM Manufacturing remains at 2 year lows…

 

As employment collapses…

ISM Survey respondents:

  • “Low energy costs continue to help the bottom line.” (Food, Beverage & Tobacco Products)
  • “Automotive industry is still very strong.” (Fabricated Metal Products)
  • “Business holding relatively flat in North America, softening a bit globally.” (Transportation Equipment)
  • “Foreign Exchange is reducing revenue, but volume has remained consistent.” (Chemical Products)
  • “International shipments still being delayed by the strikes at ports on the West Coast.” (Computer & Electronic Products)
  • “Production and orders remain strong and steady.” (Primary Metals)
  • “Business conditions are good, with slowly rising demand for our products.” (Miscellaneous Manufacturing)
  • “Labor, both skilled and unskilled, remains difficult to find qualified individuals.” (Furniture & Related Products)
  • “Continuing to expedite shipments through Vancouver due to ongoing port delays.” (Machinery)
  • “Customers perceive that raw materials prices have bottomed out so are now releasing orders.” (Plastics & Rubber Products)

Uhm, did ISM forget it is no longer February when using the response template? The port strikes are over.

Not the post-Q1-weather bounce everyone was looking for.

 

Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said:

“With manufacturing output growth slowing to the weakest seen so far this year and exports falling for the first time since November, the survey results raise worries that the dollar’s appreciation is hurting the economy.

 

“The slowing in the economy is accompanied by a renewed weakening of price pressures, linked to the exchange rate bringing down the cost of imports. Input prices showed one of the steepest falls seen since the recession, a cost-saving which producers often passed on to customers. Prices charged rose at the slowest rate seen for almost three years.

 

“The weakening growth trend and fall in price pressures add to a growing clutch of disappointing numbers which suggest the Fed will err on the side of caution and hold off from rate hikes until a clearer picture emerges of the economy’s health. Any policy tightening therefore looks likely to be deferred until at least September, but the fact that both manufacturing and services continue to grow at reasonably robust rates at the start of the second quarter suggest that rate hikes towards the end of the year should not be ruled out.”

*  *  *

It appears Markit is desparate not to be the only macro indicator flashing “all clear” as everything elese goes pear-shaped, and is preparing to converge with the Atlanta Fed in the coming weeks.

end
The Atlanta Fed cuts Q2 GDP to only .8% once the data for construction spending was released:
(courtesy Atlanta Fed/zero hedge)

Atlanta Fed Cuts Q2 GDP Forecast To +0.8% After Construcion Spending Crunch

Just as we warned earlier, the April data is not suggesting the kind of post-weather Q2 bounce in economic growth that everyone is praying for  (or not if you’re long stocks). On the heels of this morning’s tumble in construction spending, The Atlanta Fed forecasts second-quarter real nonresidential structures investment to collapse 20%, leading to a mere 0.8% Q2 GDP growth estimate (dramatically below consensus hope expectations of 3.3% growth).

 

 

 

Source: Atlanta Fed

end

This is not good: auto sales drop again for the 5th month in a row:

(courtesy zero hedge)

Auto Sales Drop, Miss For 5th Month In A Row; Worst Year-To-Date Performance Since 2009

Spin that Phil LeBeau…

 

This is the biggest miss for domestic auto sales since September (and weakest total print since last April)…This is the longest streak of missed expectations since 2008

 

Printing 12.88mm SAAR vs 13.40mm in March – this is the biggest year-to-date drop since 2009.

 

Charts: Bloomberg

end
Six policeman charged in the death of Freddie Gray:
(courtesy zero hedge)

6 Baltimore Cops Charged After MD Attorney Finds Them “Grossly Negligent…Freddie Gray’s Death Was A Homicide” – Live Feed

It appears the situation in Baltimore just got a lot more serious as MD State Attorney Marilyn Mosby states:

  • *CHARGES FILED AGAINST 6 BALTIMORE PD POLICE OFFICERS
  • *MARYLAND ATTNY: “WE HAVE PROBABLE CAUSE TO FILE CRIMINAL CHG”
  • *MARYLAND ATTNY: “GRAY’S DEATH WAS A HOMICIDE”

Furthermore:

  • *MARYLAND ATTNY: GRAY INDICATED HE COULDN’T BREATHE WHEN CUFFED
  • *MARYLAND ATTNY: GRAY HAD LAWFULLY POSSESSED KNIFE
  • *BALTIMORE CITY STATE’S ATTORNEY MARILYN MOSBY SPEAKS W/PRESS
  • *MARYLAND ATTNY: POLICE FAILED TO ESTABLISH PROBABLE CAUSE
  • *MARYLAND ATTNY: GRAY ILLEGALLY ARRESTED
  • *GRAY WASN’T SEAT BELTED WHEN PLACED IN POLICE WAGON
  • *MARYLAND ATTNY: GRAY HAD FLEX CUFFS PUT ON, NO SEAT BELT
  • *GRAY SUFFERED NECK INJURY AS A RESULT OF BEING UNRESTRAINED
  • *MD ATTNY: POLICE DIDN’T RENDER, REQUEST MEDICAL ATTN. FOR GRAY
  • *MD ATTNY: POLICE GROSSLY NEGLIGENT WHEN MAKING OTHER STOP
  • *MD ATTNY: GRAY UNRESPONSIVE ON FLOOR; MEDICAL HELP NOT PROVIDED
  • *MD ATTNY: 2ND DEGREE MANSLAUGHTER CHARGES, OTHERS, FILED
  • *MD ATTNY MOSBY APPEALS FOR PEACE

Mosby’s announcement on the steps of the War Memorial Building was greeted with cheers and applause. She said she told Gray’s family that “no one is above the law,”and so as The Baltimore Sun details, the six Baltimore police officers involved in the arrest of Freddie Gray – who died last month after being injured in police custody – have been charged criminally,State’s Attorney Marilyn Mosby announced Friday.

Officer Caesar Goodson Jr., 45, who was the driver of a police van that carried Gray through the streets of Baltimore, was charged with second-degree murder, manslaughter, second-degree assault, two vehicular manslaughter charges and misconduct in office.

 

Officer William Porter, 25, was charged withinvoluntary manslaughter, second-degree assault and misconduct in office.

 

Lt. Brian Rice, 41, was charged withinvoluntary manslaughter, second-degree assault and misconduct in office.

 

Sgt. Alicia White, 30, was charged withinvoluntary manslaughter, second-degree assault and misconduct in office.

 

Officer Edward Nero, 29, was charged withsecond-degree assault and misconduct in office.

 

Officer Garrett Miller, 26, was charged withsecond-degree assault, misconduct in office and false imprisonment.

Warrants were issued for the arrest of all six officers. It wasn’t immediately clear where the officers were on Friday morning.

Mosby said Gray was improperly arrested on April 12 because officers had no probable cause to detain him.

 

In a detailed recounting of the events, Mosby described Gray being repeatedly denied medical attention by police officers, even as he asked for medical help and later was unresponsive in a police van.

 

Gray suffered a “severe and critical neck injury” as a result of being handcuffed, shackled and being unrestrained in the van.

 

Mosby said an investigation found officers bound Gray’s wrists and ankles and left him stomach-down on the floor of a police van as they drove around West Baltimore. Despite his repeated requests for medical attention, they did not provide it and continued to drive without securing him in the van, she said.

 

Officers on at least five occasions placed Gray in the van or checked on him and failed to secure him, she said. By the time they reached the Western District police station, he was not breathing and in cardiac arrest, she said.

 

Mosby said her office did a “comprehensive, thorough and independent” investigation that began April 13, the day after Gray was injured.

 

“My team worked around the clock, 12- and 14-hour days,” she said.

Mosby called on the public to remain calm.

“I heard your call for ‘no justice, no peace,'” she said. “Your peace is sincerely needed as I work to deliver justice on behalf of this young man.”

*  *   *

The Statement:

 

Here is a full list of charges, as released by the Office of the State’s Attorney for Baltimore City.

Officer Garrett E. Miller

  1. Assault/second degree (10 yrs.)
  2.  Assault/second degree (10 yrs,)
  3.  Misconduct in office (8th Amendment*)
  4.  Misconduct in office (8th Amendment* )
  5.  False imprisonment (8th Amendment* )

Sgt. Alicia D. White

  1. Manslaughter (involuntary) (10 yrs.)
  2.  Assault/second degree (10 yrs.)
  3.  Misconduct in office (8th Amendment*)

Officer Caesar R. Goodson Jr.

  1. Second degree depraved heart murder (30 yrs.)
  2.  Manslaughter (involuntary) (10 yrs.)
  3.  Assault/second degree (10 yrs.)
  4.  Manslaughter by vehicle (gross negligence) (10 yrs.)
  5.  Manslaughter by vehicle (criminal negligence) (3 yrs.)
  6.  Misconduct in office (8th Amendment* )

Officer William G. Porter

  1. Manslaughter (involuntary) (10 yrs.)
  2.  Assault/second degree (10 yrs.)
  3.  Misconduct in office (8th Amendment*)

Lt. Brian W. Rice

  1. Manslaughter (involuntary) (10 yrs.)
  2.  Assault/second degree (10 yrs.)
  3.  Assault/second degree (10 yrs.)
  4.  Misconduct in office (8th Amendment*)
  5.  Misconduct in office (8th Amendment*)
  6.  False imprisonment (8th Amendment*)

Officer Edward M. Nero

  1. Assault/second degree (10 yrs.)
  2.  Assault/second degree (10 yrs.)
  3.  Misconduct in office (8th Amendment*)
  4.  Misconduct in office (8th Amendment* )
  5.  False imprisonment (8th Amendment*)
Let us wrap up with week courtesy of greg Hunter:

WNW 188-US Naval Tensions Mount, No Growth Economy, Baltimore Spreading, Jade Helm Joke

4By Greg Hunter’s USAWatchdog.com  (5.1.15)

Looks like, for once the U.S. and Iranian Navies may be inching towards confrontation. It was announced that the U.S. Navy will be escorting U.S. flagged ships through the Strait of Hormuz. This came after an erroneous report that the Iranians had boarded a U.S. flagged ship. The Hormuz has 35% of the world’s seaborne oil shipments. The U.S. Navy intercepted some Iranian cargo ships last week heading to Yemen. They turned around, and now the U.S. carrier group has also left the area. The Saudis are fighting to remove terrorists that are partial to Iran. There is no end in sight with the fighting, and the Saudis are not allowing flights to land to resupply the Houthi (Shia) rebels. There is a Sunni coalition that is enforcing an air and sea blockade.

The first quarter GDP numbers are in, and they were dismal. As I have said, many times, there is no recovery. The first quarter so-called growth came in at a paltry .2% growth. This is not growth. If you factor in any sort of inflation, then you really have a contracting economy, not a growing one. If the Fed is not going to increase rates, it may be forced to inject another round of QE, or money printing? We will see as the year unfolds, but I am not seeing a rate increase anytime soon, and that is what the Fed basically said at its meeting this week.

Do you think Baltimore and Ferguson are really about police brutality of a stinking economy especially for the lower ranks in this country. I said this is why the President sent Al Sharpton to Ferguson, Missouri, and I think this is at the core of the problems in Baltimore. The unemployment rate in the African American community is at least double of that in the white community, and black youth unemployment is staggering. The Obama Administration knows this and does not want to address the real issue, and that is falling wages and massive offshoring of American Jobs.

Here is an article in the St. Louis paper about the Trans Pacific-Partnership, or the TPP. People hate it or love it, and it is all being negotiated in secret. Dems are not going to jump on board, and some Republicans hate it too. It would allow the President to negotiate a deal, but some say it should not be done in secret, and it should not supersede our national laws. Also, it will give the President sole power to negotiate a deal, and you can see how well he has done with the Iran Nuke deal. I rest my case.

The White House press corps got a good laugh this week over Texas Governor Greg Abbot putting his state national guard to watch the upcoming military exercise Jade Helm. Abbot is worried about his citizens’ sovereignty, but the White House says it’s just a military drill and there is nothing to worry about. Many folks speculate that this is just a dress rehearsal for martial law because the economy might implode. Abbot is not a kook and was a former Texas Attorney General before he was governor. If I was in the White house press corps, I would ask why the name Jade Helm 15. They just did not pick those names at random like basketball kangaroo. I would also ask why the creepy slogan for Jade Helm–it’s “Master of the Human Domain.” Please explain that, Josh Earnest, and try not to laugh too much.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

end

Well that about does it for today
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One comment

  1. Hi Harvey, I sent a short story to your Facebook ID. Please read and respond. Thanks, DSD

    Like

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