APRIL 8/Gold/silver rise having weathered a raid today/COT report shows huge net long positions for our commercials/Comex silver OI also drops despite the higher price/Huge meeting of the Fed behind closed doors on Monday: something big has happened and it is not to set rates: I believe a derivative bust!!/Despite Europe’s stock market gains today, the bank stocks continue to flounder/Deposit rates skyrocket overnight in Riyadh: either lack of liquidity or the banks over there do not trust each other/Atlanta fed lowers first quarter GDP estimate to only 0.1%

Gold:  $1,242.50 up $6.30    (comex closing time)

Silver 15.38  up 23 cents

In the access market 5:15 pm

Gold $1239.50

silver:  15.36

Let us have a look at the data for today.

At the gold comex today, we had a POOR delivery day, registering 18 notices for 1800 ounces  for gold,and for silver we had 2 notices for 10,000 oz for the non active April delivery month.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 212.603 tonnes for a loss of 90 tonnes over that period.

In silver, the open interest fell by a surprising 3562 contracts DOWN  to 176,296 DESPITE THE FACT THAT the silver price was UP 11 cents with respect to yesterday’s bullish trading. In ounces, the OI is still represented by .881 billion oz or 126% of annual global silver production (ex Russia ex China).

In silver we had 0 notices served upon for NIL oz.

In gold, the total comex gold OI ROSE BY A WHOPPING  13,067  contracts UP to 483,493 contracts as the price of gold was UP $13.70 with yesterday’s trading.(at comex closing).nO WONDER WE HAD AN ATTEMPTED RAID TODAY BUT IT FAILED.

We had another no changes in the GLD,  / thus the inventory rests tonight at 819.60 tonnes and the withdrawal was no doubt  for fees to the custodian and insurance. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex.   In silver,we had no  changes,  and thus the Inventory rests at 334.724 million oz.

.

First, here is an outline of what will be discussed tonight:

 

1. Today, we had the open interest in silver FALL by 3,562 contracts DOWN to 176,296 as the price of silver was UP 11 cents with yesterday’s trading. Investors continue to flock into silver on the dovish Yellen speech where she indicated that she is reticent to raise rates All global mints are recording record silver sales.Today, the bankers capitulated and covered some of their shorts. The total OI for gold rose by 13,067 contracts to 483,493 contracts as gold was UP $11.70 in price from yesterday’s level.

(report Harvey)

2 a) Gold trading overnight, Goldcore

(Mark OByrne)

b) COT report

(Harvey)

3. ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN 23.46 POINTS OR 0.78%  /  Hang Sang closed UP 104.35 OR 0.51%. The Nikkei closed UP 71.48 POINTS OR 0.46% . Australia’s all ordinaires  CLOSED DOWN 0.53%. Chinese yuan (ONSHORE) closed DOWN at 6.4725.  Oil ROSE  to 38.55 dollars per barrel for WTI and 40.70 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.4865 yuan to the dollar vs 6.4725 for onshore yuan. LAST WEEK:Japanese INDUSTRIAL PRODUCTION plunges the most in almost 5 years as negative interest rates ARE KILLING BUSINESS./JAPANESE TANKEN CONFIDENCE INDEX PLUMMETS/JAPAN HAS NEVER RECOVERED FROM THOSE BAD DATA RELEASES/TODAY THE USA/YEN CROSS REMAINS AT THE 108 CROSS SETTING OFF CRUMBLING BOURSES AROUND THE GLOBE

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

ii)Japan and Asia’s largest clothing retailer, Fast Retailing plummets in trading as they slash their guidance.  They blames the strong yen for their problems:

( zero hedge)

iii)The big question;  when will the central bank of Japan intervene in the fx currency market:

( zero hedge)

b) REPORT ON CHINA

iv)REUTERS

i)It seems that the maneuvers orchestrated by the POBC in stopping the USA from raising rates has worked.  Chinese foreign exchange reserves has posted a surprise rise in March. However we must also wait to see what is owed on derivatives which can be substantial
( Reuters)
ii)Iran slashes price and yet oil surges on Yellen hope???

( zero hedge)

4.EUROPEAN AFFAIRS

i)Even with today’s 3% surge, European bank stocks have crashed for 4 straight weeks:

(courtesy zero hedge)

 

ii)the following is extremely important:
Dave Kranzler has been following what is going on inside Deutsche bank for quite some time.  As you are all very much aware, these guys are the largest derivative player in the world.  He smells  (as do I) that a derivative bust has occurred.
The huge rise of the yen  (and the speed of the ascent) against the dollar despite the weakness in the Japanese economy generally spells trouble to a derivative player and it sure looks like they have blown up.

This morning, we got news of a closed meeting of the Fed for Monday and they stated it was to discuss rates:  (see below USA stories)
i) there is no way they are going to raise rates as markets are in turmoil
ii) they are not going to keep them the same, because why else call for a meeting
iii) will they lower rates?  maybe but that could wait until next meeting
I wrote to Bill Holter early this morning and said that it looked to me like a huge derivative melt down by somebody. Is Deutsche bank, the ECB and the Fed having a weekend POW WOW???
( Dave Kranzler/IRD)

5.RUSSIA AND MIDDLE EASTERN AFFAIRS

During the night overnight deposit rates exploded northbound from 0.15% all the way up to 1.84%

There are only two explanations for this:

a) There is a lack of liquidity

b) the Saudi banks do not trust one another..

both are not good

(courtesy zero hedge)

6.OIL ISSUES

We have a huge traffic jam of oil tankers in the Gulf.  It seems that Iraq is ramping up production to over 3.26 million barrels per day in March.

( Charles Kennedy/OilPrice.com)

7.PHYSICAL STORIES

i)Alasdair Macleod’s commentary tonight is on gold and interest rates

(Alasdair Macleod)

ii)Amazing:  gold manipulation is mentioned at Kitco.

( GATA/Rickards/Kitco)

iii)Good luck to Crystallex if they think that they can collect on their 1.4 billion USA arbitration ruling:

(National Post/Toronto/GATA)

iv)Competition is brewing in London for gold’s $5 trillion trading hub:

( Eddie Van Der Walt/Bloomberg/GATA)

v)Our moronic mining companies keeping handing in their physical gold and silver to our derivative bankers who continue to whack the metal.  They should supply metal directly to retail customers

( Peter DeGraaf/ GATA)

vi)John Hathaway states that the war on cash  and negative interest rates  (a war on savers) will drive the scramble for physical gold

( John Hathaway/Kingworldnews)

8.USA STORIES WHICH WILL INFLUENCE THE PRICE OF GOLD/SILVER

i)Something must be up! Why hold an emergency meeting two weeks after they had one..and to discuss rates??? It looks to me like somebody big as blown up and they need an emergency meeting to discuss what to do.  We will find out soon enough

(zero hedge)

ii)NY Fed President, Dudley reverses course and goes dovish:

( zero hedge)

iii)Consumer spending falls again in March.  The consumer is not healthy probably due to reaching peak debt:

( zero hedge)
iv)Some more bad news: wholesale inventories drop the most in almost 3 years.  Also a huge miss on wholesale “sales”.  Thus a complete slowdown.  The inventory to sales ratio is still high at 1.36, meaning that inventory liquidation has still a long way to go.  We now await the Atlanta Fed’s first quarter revision with another downstroke@

( zero hedge)
v)One day after Puerto Rico halted debt payments, this raised the risk of widespread defaults.  Yesterday, we see that Puerto Rico securities had the biggest one day drop in almost 8 months:  get set for monetary controls

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 483,493 for a gain of 13,067 contracts as the price of gold was UP $11.70 in price with respect to yesterday’s bullish trading.  We are now entering the active delivery month of April. For the past two years, we have strangely witnessed two interesting developments with respect to the gold open interest:  1) total gold comex collapse in OI as we enter an active delivery month or for that matter an inactive month, and 2) a continual drop in the amount of gold standing in an active month. We certainly witnessed both parts today . In the front month of April we lost 187 contracts from 3719 contracts down to 3532.  We had 41 notices filed so we lost 146 contracts or an additional 14,600 gold ounces that will not stand for delivery. The next non active contract month of May saw its OI rise by 147 contracts up to 2769. The next big active gold contract is June and here the OI ROSE by 12,183 contracts up to 365,696. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was POOR at 148,418 . The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was fair at 202,529 contracts. The comex is not in backwardation.

Today we had 18 notices filed for 1800 oz in gold.

 

And now for the wild silver comex results. Silver OI fell by a considerable 3,562 contracts from 179,858 down to 176,296 despite the fact that the price of silver was up 11 cents with yesterday’s  bullish trading.  We are now in the next contract month of April and here the OI fell by 10 contracts falling to 66. We had 0 notices filed yesterday so we  lost 10  silver contracts or an additional 50,000 oz will not stand for delivery in this non active month of April. The next active contract month is May and here the OI fell by 6,484 contracts down to 101,618. This level is exceedingly high. However we do have 3 weeks before first day notice on Friday, April 29.The volume on the comex today (just comex) came in at 26,858 , which is fair. The confirmed volume yesterday (comex + globex) was huge at 66,940. Silver is not in backwardation.    In London it is in backwardation for several months.
The bankers must be getting very anxious as they attempted a raid today with the obvious objective to loosen many gold and silver leaves from the silver tree as possible.  They failed miserably!! The fact that silver OI fell despite the bullish atmosphere yesterday suggests some bankers decided to throw in the towel and cover some of their massive silver shorts.
 
 
We had 2 notices filed for 10,000 oz.
 

April contract month:

INITIAL standings for APRIL

April 8/2016

Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil 20,897.500  oz

SCOTIA

Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz  nil oz
No of oz served (contracts) today 41 contracts
(4100 oz)
No of oz to be served (notices) 3618 contracts 361,800 oz/
Total monthly oz gold served (contracts) so far this month 1133 contracts (113,300 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month 76,851.9 oz

Today we had 0 dealer deposits

Total dealer deposits; nil oz

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 0 customer deposit:

total customer deposits:  nil oz

 

Today we had 1 customer withdrawals:

i) Out of Scotia:  29,897.500  (650 kilobars)

total customer withdrawals; 20,897.500 OZ

Today we had 0 adjustments:

 

AGAIN NO GOLD ENTERS THE COMEX AND THIS MONTH IS AN ACTIVE DELIVERY MONTH.

it sure looks to me like the comex has little physical gold inside their facilities.

.
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 18 contracts of which 5 notices was stopped (received) by JPMorgan dealer and 5 notices were stopped (received)  by JPMorgan customer account. 
 
To calculate the initial total number of gold ounces standing for the Mar contract month, we take the total number of notices filed so far for the month (1133) x 100 oz  or 113,300 oz , to which we  add the difference between the open interest for the front month of April (3532 CONTRACTS) minus the number of notices served upon today (18) x 100 oz   x 100 oz per contract equals the number of ounces standing.
 
Thus the initial standings for gold for the April. contract month:
No of notices served so far (1133) x 100 oz  or ounces + {OI for the front month (3532) minus the number of  notices served upon today (18) x 100 oz which equals 475,100 oz standing in this non  active delivery month of April (14.777 tonnes).
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
 
We thus have 14.777 tonnes of gold standing for April and 10.846 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing.
We now have partial evidence of gold settling for last months deliveries We now have 14.777 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes   = 22.767 tonnes still standing against 10.846 tonnes available.  .
 
Total dealer inventor 349,358.291 oz or 10.846 tonnes
Total gold inventory (dealer and customer) =6,835,208.989 or 212.603 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 212.603 tonnes for a loss of 90 tonnes over that period. 
 
JPMorgan has only 21.15 tonnes of gold total (both dealer and customer)
 end
 
And now for silver
 

APRIL INITIAL standings

/April 8/2016:

Silver
Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 71,984.46 OZ. CNT, Delaware

HSBC,Scotia

Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 10,227.740OZ

Delaware,

 

No of oz served today (contracts) 2 contracts

10,000 oz

No of oz to be served (notices) 64 contracts)(320,000 oz)
Total monthly oz silver served (contracts) 123 contracts (615,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month nil oz
Total accumulative withdrawal  of silver from the Customer inventory this month 2,060,268.6 oz

today we had 0 deposits into the dealer account

total dealer deposit: nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 1 customer deposits:

i) Into Delaware:  10,227.74 oz

 

total customer deposits: 10,227.74 oz

We had 1 customer withdrawals:

i) Out Brinks: 71,984.46 oz

:

total customer withdrawals:  71,984.46  oz

 
 

 

 we had 0 adjustments

 

The total number of notices filed today for the April contract month is represented by 2 contracts for 10,000 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 (123) x 5,000 oz  = 615,000 oz to which we add the difference between the open interest for the front month of April (66) and the number of notices served upon today (2) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the April. contract month:  123 (notices served so far)x 5000 oz +(x66{ OI for front month of April ) -number of notices served upon today (2)x 5000 oz  equals 935,000 oz of silver standing for the March contract month.
we lost 10 silver contracts or an additional 50,000 oz will not stand for delivery.
 
Total dealer silver:  32.452 million
Total number of dealer and customer silver:   155.239 million oz
The open interest on silver continues to rise despite the low price of silver. It looks like we are heading for a commercial failure.
 
end
At 3:30 pm we receive the COT report which gives the positions by our major players
First let us head over to the Gold COT:
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
263,781 73,381 44,650 118,103 325,348 426,534 443,379
Change from Prior Reporting Period
1,699 1,105 -1,079 -5,124 -5,843 -4,504 -5,817
Traders
159 95 79 42 56 245 188
 
  Small Speculators      
  Long Short Open Interest    
  47,560 30,715 474,094    
  -1,863 -550 -6,367    
  non reportable positions Change from the previous reporting period  
COT Gold Report – Positions as of Tuesday, April 05, 2016
Our large specs:
Those large specs that are long in gold added 1699 contracts to their long side
Those large specs that have been short in gold added 1105 contracts to their short side
Our commercials:
Those commercials that have been long in gold pitched 5124 contracts from their long side
Those commercials that have been short in gold covered 5843 contracts
Our small specs:
Those small specs that have been long in gold
Conclusion:
Looks like our commercials are getting a little frightened as they are starting to cover their shorts.
And now our Silver COT:
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
79,942 27,931 25,696 51,291 110,956
449 2,945 3,860 3,616 -4,823
Traders
90 52 42 39 40
Small Speculators Open Interest Total
Long Short 179,913 Long Short
22,984 15,330 156,929 164,583
-3,267 2,676 4,658 7,925 1,982
non reportable positions Positions as of: 149 121
  Tuesday, April 05, 2016   © SilverSeek.com

Our Large Specs:

 

Those large specs that have been long in silver added 561 contracts to their long side
Those large specs that have been short in silver pitched 3028 contracts from their short side???
Our commercials:
Those commercials that have been long in silver added a huge 3,411 contracts to their long side
Those commercials that have been short in silver covered a huge 5041 contracts from their short side.
Our small specs:
Those small specs that have been long in silver pitched 3256 contracts from their long side
Those small specs that have been short in silver added 2729 contracts to their short side.
Conclusions:
the commercials go net long by a huge 8452 contracts.
It sure looks like the commercials are capitulating.  They are being forced to cover.
end

And now the Gold inventory at the GLD

APRIL 8/no changes in tonnage of gold/rests tonight at 819.60 tonnes

APRIL 7/ a huge deposit of 4.17 tonnes of “paper” gold was added to our GLD/Inventory rests tonight at 819.60 tonnes

APRIL 6/a withdrawal of .29 tonnes of gold and probably this was to pay for fees for the custodian and insurance/inventory rests at 815.43 tones

April 5/ a withdrawal of 2.37 tonnes of gold from the GLD/Inventory rests at 815.72 tonnes

APRIL 4/a withdrawal of 1.19 tonnes from the GLD/Inventory rests at 818.09 tonnes of gold

April 1/no changes in gold inventory at the GLD/Inventory rests at 819.28 tonnes

MARCH 31/a small withdrawal of 1.19 tonnes/inventory rests tonight at 819.28 tonnes

MARCH 30/no changes in inventory/inventory rests tonight at 820,47 tonnes

March 29/a withdrawal of 3.27 tonnes of gold from the GLD/Inventory rests at 820.47 tonnes.  (No doubt we will see a rise in gold inventory with tomorrow’s reading)

March 28/no change in inventory at the GLD/Inventory rests at 823.74 tonnes

March 24.2016: a deposit of 2.08 tonnes of gold into its inventory/and this after a big drubbing these past two days??/Inventory rests at 823.74 tones

March 23/no changes at the GLD today despite the gold drubbing. Inventory rests at 821.66 tonnes

March 22./no changes in inventory at the GLD/Inventory rests at 821.66 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

April 8.2016:  inventory rests at 819.60 tonnes

 

end

 

Now the SLV Inventory
APRIL 8/no changes in silver inventory/rests tonight at 334.724 million oz
APRIL 7/no change in silver inventory/rests tonight at 334.724 million  oz
April 6/no change in silver inventory/Inventory rests at 334.724 million oz
April 5/ a deposit of 2.146 million oz of silver into the SLV/Inventory rests at 334.724 million oz/
APRIL 4/no change in silver inventory tonight/inventory rests at 332.578 million oz
Apri 1: we had a huge deposit of 2.189 million oz of silver into the SLV (with silver badly down?)/.Inventory rests tonight at 332.578 million oz
MARCH 31/ no change in silver inventory at the SLV tonight/inventory rests at 330.389 million oz
MARCH 30/no change in inventory/inventory rests at 330.389 million oz
March 29.2016: a huge deposit of 1.475 million oz of silver into the SLV/Inventory rests at 330.389 million oz
March 28/no change in silver inventory at the SLV/Inventory rests at 328.914 million oz
March 24.2016/no change in inventory/rests tonight at 328.914 million oz/
March 23/we lost 1.428 million oz as a withdrawal today/SLV inventory rests at 328.914 million oz
.
April 8.2016: Inventory 334.724 million oz
.end
1. Central Fund of Canada: traded at Negative 5.5 percent to NAV usa funds and Negative 5.3% to NAV for Cdn funds!!!!
Percentage of fund in gold 64.3%
Percentage of fund in silver:35.7%
cash .0%( April 8.2016).
2. Sprott silver fund (PSLV): Premium to NAV falls to  5.71%!!!! NAV (April 8.2016) 
3. Sprott gold fund (PHYS): premium to NAV rises  to -0.10% to NAV  ( April 8.2016)
Note: Sprott silver trust back  into positive territory at +5.71%/Sprott physical gold trust is back into negative territory at -0.10%/Central fund of Canada’s is still in jail.
 
 
 end

And now your overnight trading in gold, FRIDAY MORNING and also physical stories that may interest you:

Trading in gold and silver overnight in Asia and Europe
 

By Mark O’Byrne

Number One Reason To Buy Gold and Silver Is “Cyber Financial Warfare”

The number one reason to buy gold bullion given the new risks in the 21st century digital age is “cyber financial warfare,” Jim Rickards, Chief Global Strategist at West Shore Funds told “Bloomberg Markets” this week.

rickards_new_case_gold

The respected analyst and best selling author has just released his new book, ‘The New Case for Gold’ and discussed the risks that digital money and wealth pose to all investors and savers today. He also talks about the Federal Reserve, China’s gold buying strategy, why gold is safer and more liquid than stocks, bonds and cash and tells Scarlet Fu and Alix Steel why “gold is going to go to $10,000 per ounce”.

Rickards’ most important point and one we have been making for many months now (see here) is that today there are additional benefits of owning physical gold outside the financial system due to the real risks of hacking, cyber warfare and terrorism and the threats these pose to all forms of digital wealth – which is most wealth today.

“There are new reasons to have gold, which I talk about in the book, 21st century reasons. [Russian President] Vladimir Putin has a 6,000-member cyber brigade working night and day to destroy, disrupt and erase digital wealth. So how many billionaires do you say, ‘what do you have, stocks, bonds?’ No you don’t, you have electrons. Putin can wipe those out. The thing about gold, you can’t hack it, you can’t erase it, you can’t delete it. It’s tangible,” Rickards said.

Rickards does not mention silver. However, given silver bullion has similar qualities to gold bullion, a strong case can be made those who buy silver coins and bars, either in their possession or in allocated and segregated secure storage will also be protected from the increasing “digital wealth” risks of today.

The other important point that Rickards makes is that “paper gold is paper gold” and ETFs and futures are paper gold which can be defaulted on and therefore, it is vital you own physical coins and bars.

Read Cyber War Poses Risk of Bail-Ins to Banks and Deposits

Watch Must See Video with Rickards on Bloomberg Here

Gold Prices (LBMA)
8 April: USD 1,235.00, EUR 1,085.18 and GBP 877.33 per ounce
7 April: USD 1,237.50, EUR 1,086.07 and GBP 879.70 per ounce
6 April: USD 1,225.75, EUR 1,079.76 and GBP 868.38 per ounce
5 April: USD 1,231.50, EUR 1,083.59 and GBP 866.32 per ounce
4 April: USD 1,215.00, EUR 1,068.80 and GBP 854.58 per ounce

Silver Prices (LBMA)
8 April: USD 15.16, EUR 13.34 and GBP 10.78 per ounce
7 April: USD 15.22, EUR 13.38 and GBP 10.81 per ounce
6 April: USD 15.07, EUR 13.28 and GBP 10.71 per ounce
5 April: USD 15.19, EUR 13.37 and GBP 10.69 per ounce
4 April: USD 15.58, EUR 13.92 and GBP 10.99 per ounce

silver_britannias
Silver Britannias – VAT and CGT Free

Gold News and Commentary

Gold Heads for Best Week in More Than a Month on Fed Rate View (Bloomberg)
Gold poised for best week in five on cautious Fed, safe-haven demand (Reuters)
Gold Gains Most in a Week on U.S. Fed Reserve Rate Caution (Bloomberg)
Gold gains on lower dollar after Fed remains cautious on rates (Reuters)
U.K. Industry May Drag on Growth After Unexpected February Drop (Bloomberg)

Why Investors Should Buy Gold – Rickards (Bloomberg)
Why Swiss Bank Is Buying Gold (Zero Hedge)
Why Gold Is Great Investment For The Long-Term Investor (Seeking Alpha)
Something Big Happened In The Gold Market (Gold Seek)
Big Trouble Ahead For Copper Is Good For Silver (Silver Seek)

Read More Here

Silver_Britannia_Coins
VAT Free Silver Coins – Delivery In Ireland, UK and EU

Mark O’Byrne
Executive Director
Published in Weekly Market

END

 

Alasdair Macleod..

Alasdair Macleod: Gold and interest rates

Submitted by cpowell on Thu, 2016-04-07 14:26. Section: 

By Alasdair Macleod
GoldMoney, St. Helier, Jersey, Channel Islands
Thursday, April 7, 2016

It is commonly assumed that the gold price and interest rates move in opposite directions. In other words, a tendency towards higher interest rates is accompanied by a lower gold price.

Like all assumptions about prices, sometimes it is true and sometimes not.

The market today is all about synthetic gold, gold that is referred to but rarely delivered. The current relationship is therefore one of relative interest rates, because positions in synthetic gold, in the form of futures and forwards, are financed from wholesale money markets. This is why a rumor that interest rates might rise sooner than expected, if it is reflected in forward interbank rates, leads to a fall in the gold price.

To the extent that this happens, the gold price has been captured by the modern banking system, but it was not always so. …

… For the remainder of the commentary:

https://www.goldmoney.com/research/goldmoney-insights/interest-rates-and…

 

END

 

Amazing:  gold manipulation is mentioned at Kitco.

(courtesy GATA/Rickards/Kitco)

Gold price suppression is mentioned without a sneer at Kitco

Submitted by cpowell on Fri, 2016-04-08 08:21. Section: 

4:17p HKT Friday, April 8, 2016

Dear Friend of GATA and Gold:

You don’t need another interview with fund manager, financial letter writer, and geopolitical strategist Jim Rickards about his new book, “The New Case for Gold,” but his interview Thursday with Daniela Cambone of Kitco News is notable for showing that gold price suppression suddenly can get mentioned at that Internet site, and even mentioned without prompting a sneer.

Kitco’s summary of the interview says of Rickards, “He suggests that China is suppressing the gold price through the Comex market in order to build up more physical supplies.”

Rickards adds that “there’s this big stealth game going on with gold” as central banks facilitate flow of the metal to China to allow that country to hedge the U.S. dollar debt position in its foreign exchange reserves, but central bankers don’t want to talk about it.

Gold price suppression is raised by Cambone at the 2:50 mark in the video of the interview, which can be seen at Kitco here:

http://www.kitco.com/news/video/show/Kitco-News/1233/2016-04-07/How-Badl…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

END

 

Good luck to Crystallex if they think that they can collect on their 1.4 billion USA arbitration ruling:

(National Post/Toronto/GATA)

Venezuela ordered to pay Crystallex $1.4 billion in arbitration ruling

Submitted by cpowell on Fri, 2016-04-08 08:38. Section: 

By Peter Koven
National Post, Toronto
Tuesday, April 5, 2016

An arbitration tribunal has ordered the Venezuelan government to pay a whopping US$1.386 billion to Canadian miner Crystallex International Corp., saying the state caused all of Crystallex’s investments “to become worthless.”

The award relates to the rich Las Cristinas gold project in Venezuela. Crystallex had a contract to develop the mine, but Hugo Chavez’s government refused to issue a key permit and informed the company in 2011 that the contract was “unilaterally terminated.” No reasonable explanation was provided.

Crystallex quickly launched an international arbitration case at the World Bank’s investment dispute centre, and the tribunal finally ruled in its favour this week. …

The decision provides little solace for Crystallex’s former shareholders, as the company filed for creditor protection in late 2011 and was delisted from the Toronto Stock Exchange. But it does create an opportunity for creditors to realize value. …

… For the remainder of the report:

http://business.financialpost.com/news/mining/venezuela-ordered-to-pay-c…

end

 

Competition is brewing in London for gold’s $5 trillion trading hub:

(courtesy Eddie Van Der Walt/Bloomberg/GATA)

London’s $5 trillion gold hub getting ready for a major overhaul

Submitted by cpowell on Fri, 2016-04-08 08:51. Section: 

By Eddie Van Der Walt
Bloomberg News
Wednesday, April 6, 2016

There’s a competition brewing to figure out how the world’s largest gold-trading hub can get bigger and better.

Much of the $5 trillion in transactions cleared every year in London is done by telephone or in electronic chat rooms and are the same kind of one-on-one deals that gave birth to the marketplace three centuries ago. But traders and bankers say the system may not provide enough transparency to satisfy regulators or attract new business at a time when more gold is being bought and sold in New York and Shanghai.

That’s why the main participant group, the London Bullion Market Association, is evaluating bids to create a trading and reporting platform. At the same time a different plan is being developed by the World Gold Council, a mining industry group that is working with the London Metal Exchange to come up with new futures contracts, said two people with direct knowledge of the venture. The proposals, if successful, would alter the way gold is bought and sold in the city.

“It’s a pretty big moment for London, and it’s time to choose,” said Mark O’Byrne, a director in Dublin at brokerage GoldCore Ltd. “Everybody wants to bring more players to the table, but there is a risk that through the failure to work together, liquidity is diluted and the market weakened.” …

… For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-04-06/gold-market-hub-set-fo…

end

 

Our moronic mining companies keeping handing in their physical gold and silver to our derivative bankers who continue to whack the metal.  They should supply metal directly to retail customers

(courtesy Peter DeGraaf/ GATA)

Peter DeGraaf: Gold and silver miners should ‘starve the paper market’

Submitted by cpowell on Fri, 2016-04-08 09:47. Section: 

5:46p HTK Friday, April 8, 2016

Dear Friend of GATA and Gold:

Financial letter writer Peter DeGraaf urges gold and silver mining companies to stop selling their production to warehouses that supply bullion to be derivatized and hypothecated by bullion banks and instead to “starve the paper market” by producing more metal for retail investors and collectors in the form of rounds and small bars. DeGraaf’s urging is headlined “An Open Letter to Mining CEOs” and it’s posted at 24hGold here:

http://www.24hgold.com/english/article-gold-silver-an-open-letter-to-min…

— and at GoldSeek here:

http://news.goldseek.com/GoldSeek/1459951560.php

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

end

 

John Hathaway states that the war on cash  and negative interest rates  (a war on savers) will drive the scramble for physical gold

(courtesy John Hathaway/Kingworldnews)

War on cash and savers will prompt scramble for real metal, Hathaway says

Submitted by cpowell on Fri, 2016-04-08 09:56. Section: 

5:55p HKT Friday, April 8, 2016

Dear Friend of GATA and Gold:

Tocqueville Gold Fund manager John Hathaway tells King World News today that the war on cash and savers being waged by central banks likely will prompt a scramble for physical gold — and there isn’t much available for sale at current prices. An excerpt from Hathaway’s interview is posted at KWN here:

http://kingworldnews.com/john-hathaway-warns-panic-into-physical-gold-to…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

end

 

Eric does a follow on offering and he will use the funds to buy more silver

Sprott Physical Silver Trust Prices Follow-on Offering of Trust Units In An Aggregate Amount of US$74,907,000

…The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust’s objective and subject to the Trust’s investment and operating restrictions described in the prospectus related to the Offering…

http://finance.yahoo.com/news/sprott-physical-silver- trust-prices-130917067.html

-END-

Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight

 
 

:

1 Chinese yuan vs USA dollar/yuan UP to 6.4725 / Shanghai bourse  CLOSED DOWN 23.46  OR 0.78% / HANG SANG CLOSED UP 104.35 OR 0.51% 

2 Nikkei closed UP 71.68  or UP 0.46% (STILL REACTING TO POOR INDUSTRIAL PRODUCTION/POOR RETAIL SALES/TERRIBLE TANKEN CONFIDENCE INDEX/USA: YEN RISES SLIGHTLY TO 1.0866)

3. Europe stocks opened ALL IN THE GREEN /USA dollar index UP to 94.55/Euro DOWN to 1.1366

3b Japan 10 year bond yield: FALLS   TO -.064%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.66

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  38.56  and Brent: 40.66

3f Gold DOWN   /Yen UP

3g Japan 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.

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 FALLS to 0.093%   German bunds in negative yields from 9 years out

 Greece  sees its 2 year rate RISE to 10.84%/: 

3j Greek 10 year bond yield FALL to  : 9.00%   (YIELD CURVE NOW INVERTED)

3k Gold at $1235.60/silver $15.21 (7:15 am est) 

3l USA vs Russian rouble; (Russian rouble UP 88/100 in  roubles/dollar) 67.29

3m oil into the 38 dollar handle for WTI and 40 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN COLLAPSES TO 108.33 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9578 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0867 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN STARTS ITS CAMPAIGN AS TO WHETHER EXIT THE EU.

3r the 9 Year German bund now  in negative territory with the 10 year FALLS to  + .093%

/German 9 year rate negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.72% early this morning. Thirty year rate  at 2.54% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Stocks To Reopen In The Green For 2016 After Crude, USDJPY Rebound

In the final day of the week, it has again been a story of currencies and commodities setting stock prices, however instead of yesterday’s Yen surge which slammed the USDJPY as low as 107.67 and led to a global tumble in equities, and crude slide, today has been a mirror image after a modest FX short squeeze, which sent the Yen pair as high as 109.1, before easing back to the 108.80 range. This, coupled with a 3.5% bounce in WTI, which is back up to $38.54 and up 4.9% on the week as speculation has returned that Russia and OPEC members can reach a production freeze deal on April 17, led to a global stock rebound which will see the S&P open back in the green for 2016.

This is the “unchanged for 2016” line:

And while it may seem that markets haven’t really gone anywhere this week, and we are back almost where we started off, it has been anything but a smooth ride because, in Bloomberg’s words, “markets whipsaw and currency volatility approach the highest since 2011” as shown in the chart below.

European equities trimmed a fourth weekly decline, their longest streak since October 2014, and U.S. index futures signaled the Standard & Poor’s 500 Index will climb after the biggest plunge since February. The yen’s first drop in six days buoyed Japanese shares, while Spanish 10-year bonds pared their worst week this year. Gold and Treasuries fell as demand for havens eased.

“Markets are so unpredictable right now – there are risk-on days and there are times when everyone exaggerates the negatives,” Dirk Thiels, head of investment management at KBC Asset Management in Brussels, told Bloomberg. “The rebound was just about bringing valuations back to average, and not really a sign that any bearish sentiment is easing. Maybe a better earnings season can change that, but right now you don’t need a lot for markets to get nervous.”

Late yesterday afternoon, the four Fed chairs sat down, in a session in which the Fed’s mission to be ” central planner of the world” was greenlight, after Alan Greenspan said global developments must inevitably be taken into account by U.S. policy makers, which Yellen, who was also on the panel, said she and her colleagues carefully consider the impact of their actions on the rest of the world.

In any case, for now it seems that futures and stocks will close off the week on a positive note and green for the year.

Market Wrap

  • S&P 500 futures up 0.6% to 2048
  • Stoxx Europe 600 up 0.5% to 329.77
  • MSCI Asia Pacific up 0.2% to 126.15
  • US 10Yr yield up 2 bps to 1.71%
  • Dollar index little changed at 94.48
  • WTI oil futures up 3.4% to $38.51/bbl
  • Gold spot down 0.4% to $1235.19/oz

Global News

  • Verizon Is Said to Plan Bid for Yahoo as Google Weighs Own Offer; Yahoo Said to Extend Bid Deadline by a Week to April 18: Re/Code
  • Gap Tumbles After Its March Sales Miss Already-Low Expectations
  • Uniqlo Parent Fast Retailing Plunges After Profit Outlook Cut to 5-Year Low
  • Oil Set for Weekly Gain as U.S. Output Falls Before Freeze Talks
  • ‘Batman v Superman’ Seen Earning Less Profit Than Superman Alone
  • Alibaba Affiliate Said to Lift Target in Record Tech Funding
  • Bill Ackman Says Valeant Not Selling Bausch & Lomb Unit: CNBC
  • Jessica Alba’s Honest Co. Said to Consider Sale: WWD

Looking at regional markets, we start in Asia where equities traded lower mostly across the board following similar weakness on Wall St. where a decline in energy and losses in financials dampened sentiment. Nikkei 225 (+0.5%) initially underperformed on the significant JPY strength allied with index giant Fast Retailing declining to its lowest level since 2013 after poor earnings and cutting its guidance. However, Japanese stocks then recovered in late trade amid short-covering alongside a rebound in USD/JPY. Elsewhere, mainland China conformed to the dismal tone with the Shanghai Comp (-0.8%) weighed following a lacklustre PBoC liquidity injection of CNY 20bIn for a total net weekly drain of CNY 275b1n. 10yr JGBs traded higher following the risk-averse tone in Asia and managed to retain gains despite improving risk appetite in Japan, while the BoJ were also in the market to acquire JPY 470b1n in government debt.

European equities have pared some of yesterday’s losses as risk-on sentiment returns to the fray following the gains in energy prices as WTI crude futures surges above USD 38/bbl. Allied with this, gains in financials has also attributed to the upbeat tone, with Italian banks leading the charge. Subsequently, notable outperformance has been observed in the FTSE MIB after source reports noting that a solution to the systemic weakness in Italian banks could be hatched as soon as Monday. As a result of the gains across EU bourses, Bunds have grinded lower throughout much of the morning, while peripheral bonds gain on the back of the aforementioned optimism surrounding plans to resolve NPLs in the Italian banking sector.

In FX, the yen weakened 0.5 percent to 108.78 per dollar after surging to 107.67 last session, its strongest level since October 2014. Despite Friday’s pullback, the currency is still up more than 2.5 percent this week as the Fed’s dovish approach to U.S. interest-rate policy weighs on the greenback and traders speculate that Japanese officials are reluctant to intervene in the market. Early London trade has seen a follow-up of the JPY retracement, where we have managed to extend the USD/JPY move through 109.00 temporarily. Ultimately, Japanese officials will be happy to see the 110.00 handle again, but near term, any major moves here are likely to be capped ahead of this. Even so, much of the JPY buying has been spec based, so pre-weekend trade is likely to include a heavy bout of position squaring.

Finance Minister Taro Aso said Friday in Tokyo that rapid yen movements — whether strengthening or weakening — are undesirable, especially if they’re abrupt. Recent movements have been one-sided and the government will act appropriately if necessary, he said.

The major data release however, came out of the UK.The major data release however, came out of the UK. Trade and manufacturing stats for Feb were both notably weak, but after a brief downturn, both Cable and EUR/GBP have calmed significantly. Ahead of this, early Cable sales were turned back aggressively, pushing up to 1.4140 before topping out.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed. The Aussie gained 0.4 percent to 75.36 U.S. cents, while the rand strengthened 0.6 percent.

A JPMorgan Chase & Co. index measuring price swings in Group-of-Seven currencies rose for the five days through Thursday to just below its highest level since December 2011. It climbed above a gauge for emerging-market currencies for the first time since August.

In commodities, WTI and Brent crude futures trade higher today after extending gains through USD 38.00/bbl and USD 40.00/bbl respectively in a move driven by the broader risk-on sentiment seen throughout the market place today. In terms of energy specific newsflow, things are relatively light on this front with Doha-centric headlines largely a reiteration of previous rhetoric.

West Texas Intermediate crude rallied 3.6 percent to $38.60 a barrel. Futures are on track for a 4.9 percent weekly advance. Brent was up 3.1 percent to $40.66 a barrel on Friday.

Speculation has returned that Russia and OPEC members can reach a deal on freezing oil output when they meet in Doha on April 17. Saudi Arabia has said it will only agree if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Iran’s support. An unexpected drop in U.S. crude inventories in data out this week also helped crude’s recovery.

Copper for three-month delivery added 0.5 percent, with aluminum, nickel and tin also climbing. Copper slumped the most in six months on Thursday, wiping out its gains for 2016, as miners and investors gathering at an industry conference in Chile expressed concern over demand for the metal. Nickel rallied after sliding 2.3 percent Thursday. Gold (-0.17%) trades relatively flat with prices just off yesterday’s high as the USD recovered from its worst levels, with the precious metal still on course for its largest weekly gain in over a month. Elsewhere, copper and iron saw dampened demand following a risk-averse tone across Asia with the latter on course for a 3rd consecutive weekly decline.

It’s another reasonably quiet day over in the US with just the February wholesale inventories and trade sales report. Away from the data we’ll hear from the Fed’s Dudley this afternoon when he is due to give a speech on the US economy. German Chancellor Merkel is also due to address a regional convention of her CDU party this afternoon which may be worth keeping an eye on.

Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equities have pared some of yesterday’s losses as risk-on sentiment returns to the fray following the gains in energy prices as WTI crude futures surges above USD 38/bbl.
  • Early London trade has seen a follow-up of the JPY retracement, where we have managed to extend the USD/JPY move through 109.00 temporarily
  • Looking ahead, today sees the release of US Wholesale inventories, Canadian Jobs report as well as comments from Fed’s Dudley (Soft Dove, Voter) and ECB’s Nowotny (Neutral)
  • Treasuries lower in overnight trading as global equity markets rally and WTI crude oil rebounds back above $38 a barrel; gold moved lower as safe haven demand eased.
  • Fed chair Yellen stated last night during a panel with three of her predecessors that U.S. economy is “coming close” to full employment but that some slack remains
  • More than $10 billion of high-yield debt is on track to be sold this week in the U.S., which would make for the busiest five consecutive days since November. In Europe, fund managers are increasingly willing to buy speculative-grade securities
  • Iran ratcheted up its offense in the oil market after breaking a pricing tradition, signaling it’s seeking to win market share at a time when rival producers are trying to forge a deal on freezing output
  • The yen advanced to 107.67 on Thursday, the strongest since before the central bank expanded monetary stimulus in October 2014. Some strategists say 105 is the level where Japanese policy makers would consider stepping in to sell
  • China plans to ease risk management curbs on brokerages to release funds to develop capital-intensive businesses such as securities lending and margin financing that helped fuel a stock market bubble last year
  • Italian government officials and bank executives are stepping up efforts to reach an agreement over a planned fund that may be state backed to help the cooperative lenders lure private investors in share sales
  • U.K. Prime Minister David Cameron was accused of “hypocrisy” after he said he held a stake in an offshore fund set up by his late father until six years ago, an admission broadcast on national television following four days of questions over the investment
  • Sovereign 10Y bond yields mixed; European, Asian equity markets rise; U.S. equity-index futures rise. WTI crude oil higher, copper and gold drop

DB’s Jim Reid concludes the morning, and weekly, wrap.

Earlier in the week we highlighted that those assets that should in theory have been the main beneficiaries of the ECB’s move 4 weeks ago are actually some of the worst performing global assets over the period. Well yesterday it was the same suspects which sold off sharply. European Banks closed -2.22% lower and in turn took the four-day loss this week to close to -6%. The Italian FTSE MIB finished -2.45% (and is down 5% this week so far) while the Spanish IBEX sold off -1.26% (down close to 4% on the week). It wasn’t much better in credit land with some sharp moves wider for CDS indices. The iTraxx Main and Crossover indices were 5bps and 18bps wider respectively, but again it was financials which caught the eye with the senior and sub fins indices 5bps and 20bps wider. It wasn’t much better across the pond where the S&P 500 eventually finished up with a -1.20% loss meaning the index has moved either up or down by at least 1% in the last three sessions.

A poor day for sentiment was also underscored by what appears to be an unrelenting rally for the Yen which is showing little sign of abating. Yesterday saw the currency break under 108 early in the morning, touching an intraday low of 107.67 before eventually hovering back around 108.5 (still +1.44% stronger on the day yesterday) which is roughly where it is this morning. Putting the recent moves in perspective, the Yen has now appreciated every day this month and is close to 4% stronger in that time. If we go back to the moments since the BoJ cut rates into negative territory in January, the Yen is nearly 11% stronger in that time. All of this is fuelling talk potential currency intervention from the BoJ and as a minimum we’re setting up for an interesting meeting on April 28th.

Glancing at our screens this morning, most Asian bourses look like they’re closing out the week in the red. Markets in China are again leading the moves lower with the Shanghai Comp currently -0.90% and CSI 300 -0.79%. The Hang Seng is -0.70% while the ASX and Kospi are -0.45% and -0.33% respectively. Only the Nikkei (+0.54%) is up having recovered off an early drop lower. Credit indices are a couple of basis points wider.

Meanwhile, late last night saw Fed Chair Yellen take part in a discussion with former Fed Chairs Bernanke, Greenspan and Volcker. Yellen in particular made mention to the fact that she believes that the US economy has continued to progress in a satisfactory way’, while also noting that she believes that the Fed is ‘coming close to our assigned congressional goal of maximum employment’. For the most part there was much agreement between the speakers, playing down concerns of financial bubbles and agreeing that fiscal policymakers should look to support the Fed’s economic stimulus.

Moving on. Away from the obvious focus on the price action yesterday, some attention was also paid to the release of the ECB minutes from that meeting four weeks ago. While the text revealed that there was some disagreement around some of the finer details of the announced package, it was noted that some officials were seemingly in favour of considering an even deeper rate cut last month. It was also revealed that incentives for banks that expand lending received ‘very broad support’ but that the expansion to including corporate bonds purchases received just ‘broad support’. Meanwhile in the ECB’s annual bank report yesterday, ECB President Draghi was quoted as saying that ‘we face continued disinflationary forces’ and ‘that we face questions about the direction of Europe and its resilience to new shocks’. However the President confirmed that in light of this ‘our commitment to our mandate will continue to be an anchor of confidence for the people of Europe’ and in a separate speech later on in the day noted that the Bank will do ‘whatever is needed’ to lift inflation.
In fact it was a somewhat busy day for ECB chatter yesterday. Peter Praet made explicit reference to the fact that helicopter money is not being discussed ‘even informally’ by the ECB, which was a view also shared by Constancio and Visco too, although the latter also noted that no policy tool within the ECB’s mandate can or should be dismissed, while Praet highlighted that the ECB stands ready to ‘recalibrate’ its stimulus if need.

Unsurprising in the context of the risk-off move which enveloped markets yesterday, it was core government bond markets which came off the big winners. 10y Treasury yields finished the session nearly 7bps lower at 1.690% which is the lowest now since February 11th. Closer to home Bunds in particular extended their move lower after finishing down 3bps at a lowly 0.088%. That curve is in fact now back to being in negative territory up to 9 years in maturity. Those moves are in stark contrast to what we’ve been seeing in the periphery however. Spanish 10y bonds closed 9bps higher in yield yesterday at 1.601%. The losing streak there has now extended to six days which is the longest run since July 2012. The bigger move was seen in Portugal where similar maturity bonds were a sharp 23bps wider to 3.407% (they did go as high as 4% in February). The uncertain political situation there is still making investors nervous, likewise there are still lingering concerns around the domestic banking sector which remains fragile in light of the Novo Banco issue a few months ago.

In commodity land Gold (+1.47%) had a good session, while Oil markets took a rare back seat in the context of the rest of the moves, with WTI hovering around the $37/bbl mark. Speaking of Oil, yesterday our commodities team published a report highlighting that scepticism is the most rational response to the producer negotiations in the lead up to the Doha talks in nine days time. They note that while market expectations of a ‘freeze ex-Iran ex-Libya’ have risen, such an agreement would actually do little to change the supply outlook. Without the participation of Iran and Libya, production could extend its 1.6 mmb/d increase since the historic ‘quota hold’ in November 2014. The Kuwaiti suggestion that production could be held at a Jan-Fed average level does not help very much since February OPEC production was down only 90 kb/d from January, a seven-year high.

A quick wrap up of yesterday’s data which on the whole didn’t have much of an impact on markets. In the US we saw initial jobless claims back down to 267k last week and a touch lower than expected. That means that claims have now stood below 300k for 57 consecutive weeks. Meanwhile, consumer credit in February was said to have risen $17.2bn (vs. $14.9bn) with gains for both revolving and non-revolving credit. Away from this we heard from the San Francisco Fed President Williams who confirmed that he views two rates rises from the Fed this year as the ‘right course’.

It’s another reasonably quiet day over in the US this afternoon with just the February wholesale inventories and trade sales report. Away from the data we’ll hear from the Fed’s Dudley (at 1.30pm BST) this afternoon when he is due to give a speech on the US economy. German Chancellor Merkel is also due to address a regional convention of her CDU party this afternoon which may be worth keeping an eye on.

END

ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN 23.46 POINTS OR 0.78%  /  Hang Sang closed UP 104.35 OR 0.51%. The Nikkei closed UP 71.48 POINTS OR 0.46% . Australia’s all ordinaires  CLOSED DOWN 0.53%. Chinese yuan (ONSHORE) closed DOWN at 6.4725.  Oil ROSE  to 38.55 dollars per barrel for WTI and 40.70 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.4865 yuan to the dollar vs 6.4725 for onshore yuan. LAST WEEK:Japanese INDUSTRIAL PRODUCTION plunges the most in almost 5 years as negative interest rates ARE KILLING BUSINESS./JAPANESE TANKEN CONFIDENCE INDEX PLUMMETS/JAPAN HAS NEVER RECOVERED FROM THOSE BAD DATA RELEASES/TODAY THE USA/YEN CROSS REMAINS AT THE 108 CROSS SETTING OFF CRUMBLING BOURSES AROUND THE GLOBE

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

Japan and Asia’s largest clothing retailer, Fast Retailing plummets in trading as they slash their guidance.  They blames the strong yen for their problems:

(courtesy zero hedge)

Asia’s Largest Clothing Retailer Plummets After Slashing Guidance By A Third; Blames Strong Yen

It didn’t take long for the impact of the stronger yen, and the weak global economy, to manifest themselves on the company that is Asia largest clothing retailer.

Moments ago, shares of Japan’s clothing empire Fast Retailing, whose most prominent brand is Uniqlo, plunged by 10% sending its stock price to the lowest since June 2013, after the company cut its profit forecast made just four months ago by a third from JPY180 billion to JPY120 billion (well below the JPY169 consensus) a five year low, saying a stronger yen eroded the value of overseas sales and unexpectedly warm winter weather hurt demand for the company’s down coats and thermal underwear. It also announced it would cut its dividend to JPY350/shr vs. JPY370 per the prior guidance.

The sellside, which completely missed the collapse in profits, was quick to come up with a narrative:

  • “Lack of any ground breaking new functionality has raised concerns that rivals have caught up with similar products in the summer range”, writes Nomura Securities chief researcher Masafumi Shoda in report
  • Earnings show “fresh evidence of the pitfalls involved in selling a limited range of items in mass quantities under a single brand” writes SMBC Nikko Securitites senior analyst Kuni Kanamori in report

Bloomberg adds that billionaire Chairman Tadashi Yanai had bet on expanding the company’s Uniqlo casual clothing brand outside Japan, opening flagship stores in shopping districts from London to Paris, Shanghai, New York and Seoul. The move, prompted by stagnating economic growth in Japan, has made the company more vulnerable to a strengthening Japanese currency.

The yen’s gain, which as reported earlier had wiped out all losses since the expansion of Japan’s QE in October 2014 and is up over 10% in 2016, led to a JPY22.8 yen foreign-exchange loss in the first half, the retailer reported Thursday. Chief Financial Officer Takeshi Okazaki warned that there could be more exchange losses if the yen continues to strengthen.

It wasn’t just the stronger Yen: Fast Retailing also took a 21 billion yen impairment loss related to its J Brand premium denim label in the U.S. and its domestic and overseas stores, but the message to both its and all other investors was clear: either the BOJ steps in with some more easing, or more companies are going to suffer from comparable “shock announcements” in the coming weeks as Japan’s earnings season evolves.

END
The big question;  when will the central bank of Japan intervene in the fx currency market:
(courtesy zero hedge)

When Will The BOJ Intervene: This Is What Wall Street Thinks Is Kuroda’s Breaking Point

With the Yen soaring (and USDJPY plunging) some 10% in 2016, in the process crushing the tightly correlated Nikkei and leading to such outcomes as the largest Asian clothes retailer slashing profits by a third in just 4 months due to the strong currency, everyone has been wondering i) why is the BOJ waiting to intervene when it had no problems unleashing NIRP when the USDJPY was about 1000 pips higher and ii) when will it intervene again?

According to a poll by Bloomberg, Japanese authorities may intervene in the currency market if USD/JPY falls below 100 based on the median estimate of 14 analysts compiled by Bloomberg News.

Estimates range from 95 to 110.

As we reported earlier, the USDJPY hit a 17-month low – the lowest since BOJ’s QE expansion in Oct. 2014) before rebounding 0.5% today to 108.73 on warnings from Japanese Finance Minister Aso that abrupt yen movements are most undesirable.

Additionally, Japan Chief Cabinet Secretary Suga warned several times this week that the authorities are closely watching the FX mkt and will act appropriately if necessary as there have been one-sided moves in FX mkts.

Curiously, LDP lawmakers, who form the ruling party, are less eager for intervention Bloomberg writes. LDP policy chief Tomomi Inada said today now isn’t the time for FX intervention, echoing Keiichiro Tachibana earlier this week. Begs the question if the G-20 “Shanghai Accord” was mostly coordinated and precleared with political figure, and not so much with central banks?

In any event, an intervention by the BOJ is indeed just a matter of time, the only question is at what level in the USDJPY and how long before the determined shorts push the Yen as high as it will need for Kuroda to demand mercy.

Here are some analyst views:

“At the moment, there is no international support for intervention anywhere near current levels, particularly considering the yen is actually historically quite weak here,” says Ray Attrill, global co-head of FX strategy at National Australia Bank

Decline in USD/JPY below 100 “would mark the confirmation that psychology around the currency has completely changed,” says Gareth Berry, an FX strategist at Macquarie Bank.

“Chance for intervention at this level is quite low,” says Sim Moh Siong, an FX strategist at Bank of Singapore; cites G-7 meeting next month (the meeeting will take place May 26-27)

Here is a summary of what Wall Street thinks is the USDJPY level at which Kuroda will intervene

  • Bank of Singapore: 100
  • BofAML: 105
  • CBA: 100
  • Daiwa Securities: 100
  • JPMorgan: 95
  • Julius Baer: 100-105
  • Macquarie: 100
  • Mitsubishi UFJ Morgan Stanley: 99
  • NAB: 100
  • Nomura: 105
  • RBS: 105-110
  • Societe Generale: 104
  • Swissquote Bank: 100
  • Westpac: 106.5

Median: 100

Average: 101.75

end

b) CHINA ISSUES

REUTERS
It seems that the maneuvers orchestrated by the POBC in stopping the USA from raising rates has worked.  Chinese foreign exchange reserves has posted a surprise rise in March. However we must also wait to see what is owed on derivatives which can be substantial
(courtesy Reuters)

China’s FX reserves post surprise rise in March on more stable yuan

Chinese 100 yuan banknotes are seen in a counting machine while a clerk counts them at a branch of a commercial bank in Beijing, China, in this March 30, 2016 file picture. REUTERS/Kim Kyung-Hoon/Files

Chinese 100 yuan banknotes are seen in a counting machine while a clerk counts them at a branch of a commercial bank in Beijing, China, in this March 30, 2016 file picture.

REUTERS/KIM KYUNG-HOON/FILES

By Meng Meng and Kevin Yao

BEIJING/SHANGHAI (Reuters) – China’s foreign exchange reserves surprisingly rose in March, the first monthly gain since November, as cooling expectations of U.S. interest rate hikes eased pressure on the yuan.

Chinese authorities have taken a raft of measures to curb outflows sparked by concerns over the slowing economy and U.S. interest rate rises, and intervened in the currency market to support the yuan CNY=CFXS.

China’s foreign exchange reserves – the world’s largest – climbed $10.26 billion in March to $3.21 trillion, central bank data showed on Thursday. The reserves beat a Reuters poll forecast of a drop to $3.18 trillion from $3.20 trillion in February, but are still down sharply from a peak of $3.99 trillion in June 2014.

The reserves fell by $28.57 billion in February, after plummeting $99.5 billion in January and $107.9 billion in December, the biggest monthly drop on record.

“Looking ahead, we believe that the pressure on CNY will moderate somewhat, while the capital outflows are likely to continue over the foreseeable future,” said Zhou Hao, senior emerging markets economist at Commerzbank in Singapore.

CURRENCY VALUATION EFFECTS

Analysts believed the rise in reserves in March was partly due to favorable currency valuation effects, as the euro and Japanese yen strengthened against the U.S. dollar in the month.

Zhou estimated that the valuation effect was about $30 billion in March, implying net outflows in the month.

Recent data showed capital outflows from China have moderated, in part helped by expectations the Fed will slow the pace of interest rate rises this year. Federal Reserve Chair Janet Yellen’s comments last week that the U.S. central bank should proceed cautiously in adjusting policy have caused a broad-based retreat in the dollar.

Chinese officials have said the economy was showing signs of improvement while capital outflows were easing.

To be sure, analysts believe that China still faces a tough job keeping the yuan stable, particularly at a time of persistent supply glut and tepid domestic demand.

The yuan will come under renewed downward pressure if the U.S. dollar rises significantly in coming months, a policy adviser to the People’s Bank of China said last month.

The PBOC has moved to curb currency speculation since late December 2015, including limiting yuan-based funds’ overseas investments and implementing a reserve requirement ratio on offshore banks’ domestic yuan deposits. It has also started to manage the yuan against a basket of currencies.

“The currency policy changes put in place after mid-January are showing a strict adherence to the basket peg. It is a more disciplined policy,” said Tim Condon, head of Asia research at ING in Singapore.

“The Chinese government sees the narrowing of the foreign reserve declines as a welcome side effect of the policy.”

The PBOC published forex reserves denominated in the IMF’s Special Drawing Rights (SDR) for the first time. The reserves were equivalent to 2.28 trillion SDR.

The central bank said the SDR measure would help limit valuation changes in the reserves caused by currency volatility.

“This would also help enhance the role of the SDR as a unit of account,” the central bank said in a statement.

The IMF admitted China’s yuan into its benchmark currency basket in November last year, a victory for Beijing’s campaign for recognition as a global economic power.

($1 = 6.4712 Chinese yuan)

(Additional reporting by Pete Sweeney and Elias Glenn; Editing by Jacqueline Wong)

 

END

EUROPEAN AFFAIRS

 

Even with today’s 3% surge, European bank stocks have crashed for 4 straight weeks:

(courtesy zero hedge)

European Banks Crash For 4th Straight Week

Even with today’s 3% surge – the most in a month – on the heels of Unicredit’s CEO proclaiming that EU banks are “intensely” looking for fundin solutions, European banking stocks have collapsed for a 4th straight week for the worst losses since 2012.

Following the brief exuberance after Draghi unleashed his latest bazooka – which it seems was all front-run – European banking stocks have collapsed almost 20% – the biggest loss since April 2012.

end

Gold: Something Is Melting Down In The Global Financial System

Deutsche Bank is the financial system’s “Hurt Locker”  – Investment Research Dynamics/Kranzler Research

It’s been well documented that the $/yen has been the “lever” by which the Federal Reserve and the U.S. Treasury ( via its Working Group on Financial Markets) has been manipulating the stock market higher and keeping a cap on the price of gold.  Craig Hemke of TFMetalsReport.com has done a brilliant job documenting and commenting on this dynamic:  It’s All About The Yen.  I would recommend looking at his archives to see the historical context of his work.

The yen has been depreciating vs the dollar at a rapid rate since October 2012.  NotUntitledcoincidentally the SPX embarked on a nearly uninterrupted upward move that took it from 1099 in early October to its all time high of 2130 in May 2015.  TheUntitleddirectional correlation between the USD/YEN and the SPX was highly conspicuous, if not an outright signal of official market market intervention.

Starting in early August, however, the $/yen began to break down technically, as the yen began to appreciate vs. the dollar – primarily in big “waterfall” chunks.  Not coincidentally, the SPX began to “tip over” at about the same time.  Yesterday the $/yen plunged briefly below the key 110 level, closing at 109.78.

Untitled1Today (Wed, April 7th) the dollar crashed another 1.4% the yen.  For clarification, a 1% move in a currency is considered to be a huge move.  As you can see from the 1yr $/yen graph to the left, the $USD has depreciated in value quite rapidly vs. the yen.   There has not been any event-