May 11/GLD sees another 2.67 tonnes added to inventory: rests tonight at 841.92 tonnes/no change in silver SLV/Silver comex sees huge rise in OI to 205,391/small liquidation in gold comex OI.amount of gold standing at comex for May continues to rise: now at 6.3732 tonnes/Italian banks are now in more trouble with a surprsing big loss at Banca Populare/Macy’s stock massacred today/Dow falters badly today by over 217 points/.

Good evening Ladies and Gentlemen:

Gold:  $1,274.60 up $10.70    (comex closing time)

Silver 17.30  up 22 cents

In the access market 5:15 pm

Gold $1277.60

silver:  17.43

Today, our banker friends huffed and they puffed when they saw the latest OI figures for silver/gold.Gold OI: 579,777 and silver:  205,391. The open interest for silver is a noose around their neck. They were mildly successful in removing a small number of gold leaves. They took their temper tantrum initially on the gold/silver shares midday but that too was short lived.  Gold and silver had a good day, and by closing time, the gold/silver equity shares also had a stellar day.

 

 

 

Let us have a look at the data for today

.

At the gold comex today we had a GOOD delivery day, registering 100 notices for 10,000 ounces for gold,and for silver we had 25 notices for 125,000 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 232.13 tonnes for a loss of 71 tonnes over that period

.

In silver, the open interest rose by 1476 contracts up to 205,391 as the price was silver was UP by 1 cent with respect to yesterday’s trading. Not much liquidation for us to see today . In ounces, the OI is still represented by just over 1 BILLION oz i.e. .1.027 BILLION TO BE EXACT or 146% of annual global silver production (exRussia &ex China)

In silver we had 25 notices served upon for 125,000 oz.

In gold, the total comex gold OI FELL BY 7429  CONTRACTS DOWN to 579,777 contracts AS THE PRICE OF GOLD WAS DOWN $1.90 with YESTERDAY’S TRADING(at comex closing). Again the liquidation of contracts was not to the liking of our crooked banks.

 

As far as the GLD, we had another huge change in tonnes (despite the gold price being down) a deposit of 2.67 tonnes into the GLD. The new inventory rests at 841.92 tonnes.  I have no problem in telling you that the addition was paper gold and not physical as London is having a tough time finding real metal. We had no changes in silver inventory at the SLV. Inventory rests at 335.073 million oz.

.

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

1. Today, we had the open interest in silver ROSE by 1,476 contracts UP to 205,391 as the price of silver was UP by 1 cent with YESTERDAY’S trading. The gold open interest FELL by A SMALLISH 7,429 contracts as  gold WAS DOWN  $1.90  YESTERDAY. Somebody big is standing FOR SILVER and surrounding the comex with paper longs ready to ponce once called upon to take out physical silver.I also believe that for the first time we are witnessing players wishing to stand for real physical in gold. The May contract for gold investors are refusing the tempting fiat offer and want only physical. The amount standing for May remains at a very high 6.37 tonnes.

(report Harvey).

 

2 a) Gold trading overnight, Goldcore

(Mark OByrne/off today

2b)  Gold trading earlier this morning;

(Harvey)

2c) COT report

Harvey

3. ASIAN AFFAIRS

i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed UP  BY 4.446 PTS OR 0.16%  /  Hang Sang closed DOWN 187.39 OR 0.93%. The Nikkei closed UP 13.82 POINTS OR 0.09% . Australia’s all ordinaires  CLOSED UP 0.54% Chinese yuan (ONSHORE) closed UP at 6.50160.  Oil ROSE to 44.74 dollars per barrel for WTI and 45.88 for Brent. Stocks in Europe DEEPLY IN THE RED . Offshore yuan trades  6.5337 yuan to the dollar vs 6.50160 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS.

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

none today

b) REPORT ON CHINA

NONE TODAY

4.EUROPEAN AFFAIRS

i)Our  important insolvent Italian bank, Banco Popolare is in trouble again today with a surprise Q1 loss driven by more soaring bad loan writedowns. It is down 14% on the day and 25% on the week.  As you will recall they are planning a merger with Banca Popolare di Milano that will create Italy’s third largest banking group.  Italy’s entire non performing loan sector is around 360 billion euros.  They Italian authorities have created a bad bank Atlas which is suppose to house most of these bad loans.  The problem, of course, is that they raised only 4.5 billion euros to purchase the junk.  And please note the systemic risk here when you look at the performance of our favourite European bank: Deutsche bank

( zero hedge)

 

ii)Denmark has had 4 years of negative interest rates (NIRP).  The idea for NIRP is to create inflation in the country as they bring forward spending by creating costs to the citizen for keeping funds in the bank.  However it has having the opposite effect:  citizens are now more prone not to spend because they sense something is wrong. Hugh-Smith goes over the various aspects as to why NIRP has failed!

( Charles Hugh Smith/zero hedge)

5.GLOBAL ISSUES

We have been highlighting this to you on several occasions:

If the USA dollar strengthens then Europe Japan and Emerging Markets win but China loses and so does commodities.  If the USA dollars weakens, then Europe, Japan emerging markets loses, but China and commodities win. Because of this, a war is now waging between central banks trying to put their country on the winning side.  It generally ends in a global failure.  And as Smith correctly states:

no nation ever devalued its way to hegemony or empire.”

a must read.

( Charles Hugh Smith)

 

6.RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)The nuclear arms race is back as Russia is furious with the USA as it launches a European ballistic missile shield:

( zero hedge)

 

ii)The crook Erdogan has threatened Europe again.  Unless  1.they get 80 million visa free travel for its citizens and 2. the 3 billion euros goes directly to Erdogan and not to UN agencies to dispense with the aid, then he will unleash the refugees throughout Europe;

( zero hedge)

7.EMERGING MARKETS

Former soccer great Rivaldo is telling tourists to stay away from the Olympics as the violence is endemic:
(courtesy zero hedge)

8.OIL ISSUES

Oil spikes big time after the DOE reports a huge inventory draw down and a big production drop;

(courtesy DOE/zero hedge)

PHYSICAL MARKETS

i)Craig Hemke gives a terrific commentary on the importance of the latest banking participation report.  Because the banks have accounts in London with OTC and with LBMA, these positions are not accounted for.  However from the participation report you can see the control the banks have by selling naked huge amounts of  gold contracts to stifle gold’s advance. The mantra of the CFTC is that the futures exchange is a price discovery mechanism. This is now thrown out the window”

( Craig Hemke/ TF Metals/Chris Powell/GATA)

 

ii)Legendary hedge fund manger Paul Singer now states that gold is just beginning its rally. Strangely JPMorgan is also predicting a new gold bull market

( Paul Singer/Elliott Management/JPMorgan  Marcelli)

 

iii)A terrific commentary from Steve St Angelo on record silver eagles and maples from Canada and the USA. The data has now been released in Canada for maple sales.  Together with USA Eagles, both exceed mine production by over 33 million oz.  Thus both countries must import silver for other uses such as pharmaceuticals, photography etc.

a must read.
( Steve St Angelo/SRSRocco report)

USA STORIES WHICH WILL INFLUENCE THE PRICE OF GOLD/SILVER

i)Macy’s stock was massacred today after the company slashed its outlook.  They scared the living daylights out of investors when they stated that the consumer is “uncertain”.  Inventories reach record levels against declining revenues of 7.4% IN THE QUARTER

Macy’s is a good Bellwether was to what is going on inside the uSA

( zero hedge/Macy’s)

 

Let us head over to the comex:

The total gold comex open interest  fell to an OI level  of 579,777  for a loss OF 7,429 contracts AS  THE PRICE OF GOLD WAS DOWN $1.90 with respect to YESTERDAY’S TRADING. We are now entering the NON active delivery month of MAY. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IT SURE SEEMS THAT THE LATER HAS STOPPED.   The month of May saw its OI FALL 99 contracts DOWN to 1317. We had 100 notices filed ON YESTERDAY so we GAINED 1 contract or an additional 100 oz will stand for delivery. . The next big active gold contract is June and here the OI FELL by 15,703 contracts DOWN to 368,855. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) wasVERY GOOD at 253,678. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was EXCELLENT at 205,413 contracts. The comex is not in backwardation. We are LESS THAN 3 weeks away from first day notice for the huge June contract.

Today we had 100 notices filed for 10,000 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by 1476 contracts from 203,915 UP to 205,391 as  the price of silver was DOWN BY 1 cent with YESTERDAY’S TRADING. For the first time in over 2 years, we have not witnessed a liquidation of open interest as we ENTERED first day notice .  The next active contract month is May and here the OI FELL by 174 contracts DOWN to 878. We had 138 notices filed YESTERDAY so we LOST 36 contracts or AN ADDITIONAL  180,000 oz of silver will NOT  stand for delivery in this active month of May. The next non active month of June saw its OI FALL by 55 contracts DOWN to 819  OI.The next big delivery month is July and here the OI ROSE by 636 contracts UP to 141,659. The volume on the comex today (just comex) came in at 59,230 which is EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was AGAIN EXCELLENT AT 49,493. Silver is not in backwardation. London is in backwardation for several months.
THE HIGH OPEN INTEREST FOR THE ENTIRE COMPLEX PLUS THE HIGH OI FOR THE FRONT MAY CONTRACT MUST BE SCARING OUR BANKERS TO NO END.
 
We had 25 notices filed for 125,000 oz.
 

MAY contract month:

INITIAL standings for MAY

Initial Standings for MAY
May 11.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil  20,897.500 OZ

SCOTIA

 

650 KILOBARS

Deposits to the Dealer Inventory in oz 5,000 oz

Brinks

Deposits to the Customer Inventory, in oz  64,300.000 OZ

BRINKS

2,000 KILOBARS

No of oz served (contracts) today 100 contracts
(10,000 oz)
No of oz to be served (notices) 1217 CONTRACTS

121,700 OZ

Total monthly oz gold served (contracts) so far this month 832 contracts (83,200 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month  211,700.4 OZ

Today we had 1 dealer deposit

i) Into Brinks:  FOR THE THIRD STRAIGHT DAY: an exact and crazy 5,000.000 oz

total dealer deposit: 5,000.00 oz

THIS IS NOT A KILOBAR ENTRY/NOT DIVISIBLE BY 32.15 OZ.

 

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 1 customer deposits:

i) Into Scotia: a crazy 64,300.000 oz (or 2,000 kilobars)

total customer deposit: 64,300.000 OZ

Today we had 1 customer withdrawal:

i) Into SCOTIA:  20,897.500 oz  650 KILOBARS

Total customer withdrawals:  20,897.500 oz  650 KILOBARS

Today we had 0 adjustment:

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 100 contracts of which 17 notices was stopped (received) by JPMorgan dealer and 1 notices were stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the MAY contract month, we take the total number of notices filed so far for the month (832) x 100 oz  or 83200 oz , to which we  add the difference between the open interest for the front month of MAY (1317 CONTRACTS) minus the number of notices served upon today (100) x 100 oz   x 100 oz per contract equals 204,900 oz, the number of ounces standing in this non active month.  This number is huge for May. Let us see if this number remains constant throughout themonth
 
Thus the initial standings for gold for the MAY. contract month:
No of notices served so far (832) x 100 oz  or ounces + {OI for the front month (XXX) minus the number of  notices served upon today (100) x 100 oz which equals 204,900 oz standing in this non  active delivery month of MAY(6.3732 tonnes).
WE GAINED 1 CONTRACT OR 100 OZ WILL  STAND FOR DELIVERY
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 6.3732 tonnes of gold standing for MAY and 18.619 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 6.3732 TONNES FOR MAY + 12.3917 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  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes  = 20.822 tonnes still standing against 18.308 tonnes available.  .
 
Total dealer inventor 598,614.083 tonnes or 18.619 tonnes
Total gold inventory (dealer and customer) =7,463,221.920 or 232.137 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 232.137 tonnes for a loss of 71 tonnes over that period. 
 
JPMorgan has only 20.97 tonnes of gold total (both dealer and customer)
May is not a very good delivery month and yet 6.3732 tonnes of gold is standing.  What is different from other months is that the bankers cannot offer any fiat to those standing. They want the real stuff. We are extremely close to the all time highs in both gold and silver OI.
 end
And now for silver
 

MAY INITIAL standings

 May 11.2016

Silver
Ounces
Withdrawals from Dealers Inventory nl oz
Withdrawals from Customer Inventory  665,613.377 oz

CNT, SCOTIA

Deposits to the Dealer Inventory  NIL

 

Deposits to the Customer Inventory  836,978.200 oz

SCOTIA

No of oz served today (contracts) 25  CONTRACTS

125,000 OZ

No of oz to be served (notices) 873 contracts

4,365,000 oz

Total monthly oz silver served (contracts) 1920 contracts (9,600,000 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  2,490,376.6 oz

today we had 0 deposit 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 SCOTIA: 836,978.200 oz

 

Total customer deposits: 836,978.200  oz.

We had 2 customer withdrawals

i) out ouf CNT: 605,135.837 oz

ii) Out of SCOTIA: 60,477.540 oz

:

total customer withdrawals:  665,613.377 oz

 
 

 

 we had 1 adjustment AND IT WAS A DILLY!

i)Out of DELAWARE:  EXACTLY 2,000.000 OZ WAS REMOVED FROM THE CUSTOMER ACCOUNT OF DELAWARE AS A COUNTING ERROR?????

The total number of notices filed today for the MAY contract month is represented by 25 contracts for 125,000 oz. To calculate the number of silver ounces that will stand for delivery in May., we take the total number of notices filed for the month so far at (1920) x 5,000 oz  = 9,600,000 oz to which we add the difference between the open interest for the front month of MAY (898) and the number of notices served upon today (25) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the MAY contract month:  1920 (notices served so far)x 5000 oz +(898{ OI for front month of MAY ) -number of notices served upon today (25)x 5000 oz  equals 13,965,000 oz of silver standing for the MAY contract month.
WE LOST ANOTHER 36  CONTRACTS OR 180,000 OZ WILL NOT STAND AS THEY WERE CASH SETTLED.
 
Total dealer silver:  29.692 million
Total number of dealer and customer silver:   153.025 million oz
The open interest on silver is still close an all time high with the record of 206,748 being set in the last week of April. The registered silver (dealer silver) is now at multi year lows as silver is being drawn out and heading to China and other destinations.
end
And now the Gold inventory at the GLD
May 11/another huge deposit of 2.67 tonnes in gold inventory at the GLD/Inventory rests at 841.92 tonnes
May 10/Another huge deposit of 2.38 tonnes in gold inventory at the GLD/Inventory rests at 839.25 tonnes
May 9/Surprisingly we had another deposit of 2.68 tonnes of gold into the GLD with gold down!! Inventory 836.87 tonnes
May 6 SURPRISINGLY WE HAD ANOTHER HUGE DEPOSIT OF 8.65 TONNES OF GOLD INTO THE GLD/ INVENTORY RESTS AT 834.19 TONNES
May 5/SURPRISINGLY WE HAD A HUGE DEPOSIT OF 3.90 TONNES OF GOLD WITH THE PRICE OF GOLD DOWN???
May 4/ we had a small deposit of .6 tonnes of gold into the GLD/inventory rests at 825.54 tonnes
May 3/no change in gold inventory at the GLD/Inventory  rests at 824.94 tonnes
May 2/a hugechange in gold inventory at the GLD a deposit of 20.80/Inventory rests at 824.94 tonnes
April 29/no change in gold inventory at the GLD/Inventory rests at 804.14 tonnes
April 28/we gained 1.49 tonnes of gold at the GL/Inventory rests at 804.14
April 27/no change in gold inventory at the GLD/rests at 802.65 tonnes
aPRIL 26/ a withdrawal of 2.38 tonnes of gold/inventory rests at 802.65 tonnes
April 25.2016: no change in gold inventory/rests tonight at 805.03 tonnes
April 22/ no changes in gold inventory/rests tonight at 805.03 tonnes
April 21/no change in gold inventory/rests tonight at 805.03 tonnes
April 20/no change in gold inventory/rests tonight at 805.03 tonnes
April 19./we had a huge withdrawal of 7.43 tonnes from the GLD/Inventory rests tonight at 805.03 tonnes
April 18.2016/a huge addition of 6.38 tonnes of gold  in gold inventory at the GLD/Inventory rests at 812.46
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

May 11.:  inventory rests tonight at 841.92 tonnes

end

Now the SLV Inventory
 May 11.2016/no change in silver inventory/rests tonight at 335.073 million oz/
May 10.2016/we had a huge withdrawal of 1.046 million oz in silver leaving the SLV,no doubt for Shanghai which lately has been gobbling up whatever inventory it could lay its hands on/Inventory rests at 335.073 million oz.
May 9. no change in silver inventory/rests at 336.119 million oz.
May 6/ SURPRISINGLY WE HAD A WITHDDRAWAL OF 1.142 MILLLION OZ FROM THE SLV
INVENTORY RESTS AT 336.119 MILLION OZ
MAY 5.2016: NO CHANGE IN INVENTORY/rests tonight at 337.261 million oz
May 4/we had a good size withdrawal of 1.553 million oz from the SLV/Inventory rests at 337.261 million oz
May 3: we had another huge deposit of 1.807 million oz/inventory rests at 338.814 million oz
May 2/a huge in silver inventory at the SLV/a deposit of 1.49 million oz/Inventory rests at 337.007 million oz
April 29.2016/no change in silver inventory at the SLV/Inventory rests at 335.580
April 28/no change in silver inventory at the SLV/Inventory rests at 335.580 million oz
April 27/we had another addition of 856,000 oz into the SLV/Inventory rests at 335.580
aPRIL 26/no change in silver inventory at the SLV/Inventory rests at 334.724 million oz.
April 25.2016/ No change in silver inventory/rests tonight at 334.724 million oz.
April 22/ no changes in silver inventory/rests tonight at 334.724 million oz
April 21/no change in silver inventory/rests at 334.724 million oz/
April 20/no change in inventory/rests at 334.724 million oz
April 19./we had a huge inventory deposit of 1.437 million oz/inventory rests at 334.724
.
May 10.2016: Inventory 335.073 million oz
end
 
1. Central Fund of Canada: traded at Negative 4.4 percent to NAV usa funds and Negative 4.4% to NAV for Cdn funds!!!!
Percentage of fund in gold 60.9%
Percentage of fund in silver:37.8%
cash .+1.3%( May 11/2016).
2. Sprott silver fund (PSLV): Premium rises   to -.24%!!!! NAV (MAY 11.2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises 1.64% to NAV  ( MAY 11.2016)
Note: Sprott silver trust back  into NEGATIVE territory at -0.24% /Sprott physical gold trust is back into positive territory at +1.64%/Central fund of Canada’s is still in jail.
It looks like Eric Sprott got on the nerves of our bankers as they lowered the premium in silver to -.24%.  Remember that Eric is to get 75 million dollars worth of silver in a new offering.
 
 
 

END

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

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne (goldcore)/

Gold Bullion Is “Long Term Insurance Policy” – HSBC’s Steel

Gold bullion is a “long term insurance policy” according to James Steel, chief commodities analyst at HSBC, who spoke with Tom Keene about what’s driving gold markets on “Bloomberg Surveillance” yesterday.

gold bullion insurance(Source: Bloomberg)

In Bloomberg’s “Single Best Chart,” Keene displays inflation adjusted ‘London gold prices’ going back to 1950.

Steel is cautious on gold in the short term but positive in medium and long term and thinks gold will “churn higher.”

When asked about whether he has a “message for gold bugs … people who have Krugerrands in their dressing room drawer”, Steel spoke of gold’s portfolio insurance benefits and “the diversification argument is the most powerful … it is an insurance policy”.

A better question would be what is his message to typical retail investors – or”paper bugs” if one wishes to be pejorative – who have no allocation to gold bullion whatsoever and whose investments and savings are at risk due to the looming next phase of the global financial crisis.

Watch interview here

Gold and Silver Prices and News
Gold Climbs on Investment Demand as Goldman Raises Forecast (Bloomberg)
Gold sticks near 2-week low on firm dollar, equities (Reuters)
Goldman Raises Gold Forecast While Retaining Bearish Outlook (Bloomberg)
Demand for gold on the rise amid uncertainty in global markets (HBL)
Britain’s biggest ever gold nugget ‘worth £50,000’ discovered in Wales (Telegraph)

Singer Says Gold Rally Just Beginning as Central Bankers Doubted (Bloomberg)
Keiser Interviews Rickards About Gold (Youtube)
New York Court Investigates Claims Silver and Gold Prices Rigged (AFR)
Comex Gold Open Interest (ZH)
SWOT Analysis: Will the Gold Rally Persist? (GoldSeek)
Read More Here

Gold Prices (LBMA AM)
11 May: USD 1,264.85, EUR 1,111.04 and GBP 875.90 per ounce (To be updated)
10 May: USD 1,264.85, EUR 1,111.04 and GBP 875.90 per ounce
09 May: USD 1,277.75, EUR 1,121.54 and GBP 884.68 per ounce
06 May: USD 1,280.25, EUR 1,121.06 and GBP 883.04 per ounce
05 May: USD 1,275.75, EUR 1,114.95 and GBP 879.23 per ounce
04 May: USD 1,280.30, EUR 1,114.18 and GBP 883.59 per ounce

Silver Prices (LBMA)
11 May: USD 17.04, EUR 15.00 and GBP 11.82 per ounce (To be updated)
10 May: USD 17.04, EUR 15.00 and GBP 11.82 per ounce
09 May: USD 17.33, EUR 15.21 and GBP 11.99 per ounce
06 May: USD 17.31, EUR 15.15 and GBP 11.93 per ounce
05 May: USD 17.38, EUR 15.21 and GBP 12.01 per ounce
04 May: USD 17.18, EUR 14.96 and GBP 11.86 per ounce

Protecting_Your_Savings_in_the_Coming_Bail_In_Era_-_Copy-3.jpg Storing_Gold_in_Switzerland 7_Key_Storage_Must_Haves.png

Read Our Most Popular Guides in Recent Months

Mark O’Byrne
Executive Director

end

 

Craig Hemke gives a terrific commentary on the importance of the latest banking participation report.  Because the banks have accounts in London with OTC and with LBMA, these positions are not accounted for.  However from the participation report you can see the control the banks have by selling naked huge amounts of  gold contracts to stifle gold’s advance. The mantra of the CFTC is that the futures exchange is a price discovery mechanism. This is now thrown out the window”

(courtesy Craig Hemke/Chris Powell/GATA)

 

TF Metals Report: Assessing the latest bank participation report

Section:

1:58a ET Tuesday, May 10, 2016

Dear Friend of GATA and Gold:

Conscientious as ever, the TF Metal’s Report’s Turd Ferguson today reviews the monthly Bank Participation Report of the U.S. Commodity Futures Trading Commission about positioning in the U.S. gold futures market, acknowledging that the report is likely full of deceptions if not outright lies but adding that it may have some value through historical comparison.

Your secretary/treasurer would add that in addition to the proven unreliability of the data as noted by Ferguson, the reporting banks may have offsetting and unreported positions in other markets and the positions reported to the CFTC may not even be the banks’ own but effectively central bank positions and thus backed by infinite money or credit, the central bsnks’ primary mechanism of destroying markets, a mechanism that cannot be examined by mainstream financial journalism or mainstream market commentary.

Indeed, for all anyone outside central banking knows today, central bank policy now may be to devalue currencies by pushing gold upward instead of downward as usual, and so an ever-enlarging short position in gold futures may be required by central banks to keep their revaluation of gold under control. In any case, no one who fails to take central bank trading into account knows anything worth knowing about the gold market. The gold market is first of all governments and central banks.

Ferguson’s analysis is headlined “Assessing the Latest Bank Participation Report” and it’s posted at the TF Metals Report here:

http://www.tfmetalsreport.com/blog/7618/assessing-latest-bank-participat…

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

END

Legendary hedge fund manger Paul Singer now states that gold is just beginning its rally. Strangely JPMorgan is also predicting a new gold bull market

(courtesy Paul Singer/Elliott Management/JPMorgan  Marcelli)

Paul Singer: “Gold Rally Just Starting” As JPM Predicts A New Gold Bull Market

It was just last week when legendary hedge fund manager Stanley Druckenmiller delivered his latest anti-Fed sermon and once again extolled gold as the asset class to own in these experimental times in which the “bull market in stocks is exhausted”, saying “what was the one asset you did not want to own when I started Duquesne in 1981? Hint…it has traded for 5000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates. Some regard it as a metal, we regard it as a currency and it remains our largest currency allocation.”

Today, it is the turn of that other prominent anti-Fed crusading hedge fund billionaire, Elliott Management’s Paul Singer, who in his latest letter said that gold’s best quarter in 30 years is probably just the beginning of a rebound as global investors weigh the ramifications of unprecedented monetary easing on inflation.

As cited by Bloomberg, Singer said that “it makes a great deal of sense to own gold. Other investors may be finally starting to agree,” Singer wrote in an April 28 letter to clients. “Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies.”

He said that “if investors’ confidence in central bankers’ judgment continues to weaken, the effect on gold could be very powerful. We believe the March quarter’s price action could represent something closer to the beginning of such a move than to the end.”

What makes Singer’s outlook especially notable is that it thankfully disagrees with the view from Goldman Sachs which as we reported last night, was stopped out of its short gold position with a 4.5% loss, and while forecasting modestly higher prices in 3, 6 and 12 months (it now sees gold at $1,100 instead of $1,000) still expects weaker gold prices over the next 12 months. Which considering Goldman’s absolutely abysmal predictive track record is great news for gold bulls.

Bloomberg adds that in addition to expressing his gold view through options, Singer is backing a new venture focused on royalties, streaming, and other forms of investments in the mining industry that will be led by Shaun Usmar of Barrick Gold Corp.

And while Goldman cotninues to bash gold (which has once again jumped this morning right on schedule), some unexpected support to Singer’s view came from none other than JPMorgan’s Private Bank whose Solita Marcelli told CNBC that “we’re recommending our clients to position for a new and very long bull market for gold.” After seeing three back-to-back years of losses, the precious metal has rallied 20 percent in 2016. And that’s just the start of the next leg higher, according to Marcelli. “[We think] $1,400 is very much in the cards this year.

As CNBC adds, the firm’s global head of fixed income, currencies and commodities reasoned that, with so many negative interest rate policies around the world, gold will continue to be bought as an alternative currency. And, with expectations that investors will seek to hedge against the resulting volatility, Marcelli believes that gold will remain attractive in a world where bonds and U.S. rates may cease to be the main risk-off asset.

Central Banks may consider diversifying their reserves [as they anticipate] negative rates on existing holdings,” said Marcelli, when discussing the commodity as safe-haven trade. “Gold is a great portfolio hedge in an environment where the world government bonds are yielding at historically low levels.”

While Marcelli admits the move will come slowly, she remains convinced that the commodity will continue to grind higher — with that key $1,400 level being the first line in the sand.

“Gold is looking more and more attractive every single day,” concluded Marcelli. “As a nonyielding asset, it has a minimal storage cost, so when you compare it to negative-yielding assets, it actually has a positive carry.”

It is refreshing to see that in a world in which over $7 trillion in bonds have a negative yield, someone has done the math. It is less refreshing that gold is once again so prominently featured in the official narrative, because if cash has recently become a target in a global NIRP world, that means that gold, whose wealth preservation qualities are vastly greater, will surely undergo an Executive Order 6102 redux in the coming years as governments around the globe seek to eliminate access to hard assets.

END
A terrific commentary from Steve St Angelo on record silver eagles and maples from Canada and the USA. The data has now been released in Canada for maple sales.  Together with USA Eagles, both exceed mine production by over 33 million oz.  Thus both countries must import silver for other uses such as pharmaceuticals, photography etc.
a must read.
(courtesy Steve St Angelo/SRSRocco report)

Surging North American Silver Investment Pushes Domestic Supply Deficit To New Record

by on May 11, 2016

Let me explain.  We need to start off by showing the total Canadian Silver Maple Leaf sales for 2015.  The Royal Canadian Mint finally published their 2015 Annual Report in which they stated that sales of Silver Maples jumped 18% from 29.2 million (Moz) in 2014 to 34.3 Moz in 2015:

Canadian-Maple-Leaf-Sales-2014-vs-2015

Sales of Canadian Silver Maples started off strong in Q1 2015, but declined in Q2 2015 by falling 400,000 oz compared to the same period in 2014 (7.2 Moz Q2 2014 vs 6.8 Moz Q2 2015).  However, things turned around significantly in the Q3 and Q4 2015 during the silver retail investment shortage (July-Oct).

Sales of Silver Maples were a record 18.6 Moz in the second half of 2015 versus 13.8 Moz in the second half of 2014.  If we add Canadian Silver Maple Leaf sales to U.S. Mint Silver Eagles for 2015, it jumped to a stunning 81.3 Moz compared to 73.2 Moz in 2014.

I discussed this in my THE SILVER CHART REPORT which was released in June 2015.  Here isCHART #37 of a total of 48 charts in the report:

U.S. & Canadian Silver 
Production vs Silver Eagle & Maple Sales

As we can see, combined U.S. and Canadian domestic silver production was 96.6 Moz in 2001 while total Silver Maple & Eagle sales were only 9.2 Moz.  Thus, the total Silver Maple & Eagle sales only accounted for 9% of the two countries silver mine supply.  This trend started to change significantly in 2008 as Silver Maple & Eagle sales consumed nearly half of U.S. and Canadian silver mine supply.

However, this trend turned into a deficit 2011 as Silver Maple & Eagle sales were 9.4 Moz higher than domestic silver mine supply (63.1 Moz Official Coins vs 53.7 Moz supply).  Even though Silver Maple & Eagle sales declined in 2012, the net investment supply deficit resumed again in 2013 and 2014.  Matter-a-fact, Silver Maple & Eagle sales were nearly 20 Moz more than U.S. and Canadian domestic silver mine supply in 2014.

Surging North American Silver Investment Pushes Domestic Supply Deficit To New Record In 2015

Well, if you think 2014 was a banner year for the silver investment domestic supply deficit, take a look at my updated chart including the data for 2015:

US-&-Canadian-
Silver-Production-vs-Silver-Eagle-&-Maple Sales-2015

Here we can see that total Silver Maples & Eagles of 81.3 Moz is 33.7 Moz more than domestic silver mine supply of 47.6 Moz from the U.S. and Canada.  Moreover, this only includes the manufacture of these two Official Silver Coins.  This does not include the estimated 40-50 Moz of private rounds and bars now including in the 2016 World Silver Survey.

What a difference since 2001… AYE?  Total Silver Maple & Eagle sales in 2001 were less than 10% of U.S. and Canadian Mine supply.  Thus, these two countries had plenty of silver to supply their investment needs that year.  However, the U.S. and Canada had to import 33.7 Moz in 2015 just to produce these two Official Silver coins.

While the U.S. and Canada can continue to import enough silver to meet its current needs, this may not be true in the future.

-END-

Your early WEDNESDAY 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 6.50160 (BIG REVALUATION UPWARDS ) / Shanghai bourse  CLOSED UP 4.446 OR 0.16%  / HANG SANG CLOSED DOWN 187.39 OR 0.93%

2 Nikkei closed UP 13.82 OR 0.16% /USA: YEN FALLS TO 108.70

3. Europe stocks opened ALL IN THE RED  /USA dollar index DOWN to 94.04/Euro UP to 1.1400

3b Japan 10 year bond yield: FALLS   TO -.103%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.08

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  44.74  and Brent: 45.88

3f Gold UP  /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 andUP 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 0.121%   German bunds in negative yields from 8 years out

 Greece  sees its 2 year rate FALL to 7.90%/: 

3j Greek 10 year bond yield FALL to  : 7.70%   (YIELD CURVE NOW DEEPLY INVERTED)

3k Gold at $1276.50/silver $17.54(7:45 am est) BROKE RESISTANCE AT 16.52 

3l USA vs Russian rouble; (Russian rouble UP 35 in  roubles/dollar) 65.92-

3m oil into the 44 dollar handle for WTI and 45 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 TRADES TO 109.08 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 .9723 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1098 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 8 Year German bund now  in negative territory with the 10 year FALLS to  + .121%

/German 8 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 1.76% early this morning. Thirty year rate  at 2.60% /POLICY ERROR)

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

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

US Futures, European Stocks Drop As USDJPY Tumbles

One day after the biggest jump in stocks in two months on what has still been an undetermined catalyst, overnight global equities did a U-turn with European stocks falling toward a one-month low and U.S. stock index futures declining, as crude oil dropped toward $44 a barrel. A driver the move lower was a sharp reversal in the USDJPY which dropped 100 pips from yesterday’s highs which took places just as Goldman predicted the USDJPY has finally bottomed, facilitated by a weaker dollar (also following a Goldman report yesterday forecasting the USD was about to surge).

S&P 500 futures fell 0.2% after Walt Disney Co. tumbled 5.5% in premarket New York trading after posting second-quarter results that missed analysts’ estimates. Macy’s Inc. is among companies releasing earnings Wednesday. In Europe, the Stoxx 600 lost 0.7%. A gauge of lenders fell the most on the index, with Raiffeisen Bank International AG tumbling 8.6 percent after saying it’s considering merging with its parent company to ease the pressure of regulatory requirements. ABN Amro lost 2.4 percent. Total SA and Eni SpA dragged energy producers down as oil prices retreated.

Commodities were once again at the forefront of the action, with industrial metals from aluminum to zinc climbing as Glencore Plc forecast demand to exceed supply. Soybeans, silver and gold also gained, while crude fell before U.S. inventories data. As the chart below shows, however, the main driver of market action remains the dollar, which impacts both commodities, and risk as the two continue to move broadly in line all year.

In an amusing twist, China’s Economic Information Daily publication wrote a front page article saying China should avoid short-term A-Share intervention, adding that state-backed funds such as the China Securities Finance Corp. should be long-term investors in the A-share market and avoid short-term intervention, adding that CSFC traded stocks frequently during 1Q, which artificially distorted the market: report.

Aside from central bank intervention in various markets, skepticism still remained: “earnings so far have been OK but not strong enough to deliver a real upside for stock prices,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany. “What is still really missing from this environment is a notable rally in the banking stocks, which is an important driver for any stock market rally. With oil moving down, it’s negative for oil producers.”

Elsewhere, the Lyxor ETF Brazil rose 1.3 percent before a Senate vote that would force Rousseff out of office and into an impeachment trial. The Philippine Stock Exchange Index surged 3.1 percent, extending Tuesday’s 2.6 percent rally, as Rodrigo Duterte, a tough-talking mayor of Davao city, won Monday’s presidential vote. The peso gained 0.4 percent on Wednesday.

Market Wrap

  • S&P 500 futures down 0.2% to 2073
  • Stoxx 600 down 0.7% to 333.8
  • Eurostoxx 50 -1.1%
  • FTSE 100 -0.3%
  • CAC 40 -1.1%
  • DAX -0.8%
  • IBEX -1.2%
  • FTSEMIB -2.1%
  • SMI -0.4%
  • MSCI Asia Pacific up 0% to 127.6
  • Nikkei 225 up 0.1%
  • Hang Seng down 0.9%
  • Kospi down 0.1%
  • Shanghai Composite up 0.2%
  • ASX up 0.6%
  • US 10Yr yield down 2bps to 1.75%
  • Italian 10Yr yield down 3bps to 1.48%
  • Spanish 10Yr yield down 3bps to 1.61%
  • German 10Yr yield down 1bps to 0.11%
  • Gold spot up 0.5% to $1272.2/oz
  • Brent Futures down 0.6% to $45.3/bbl

Top Global Headlines

  • IMF Might Not Join Greek Bailout at Current Review: Kathimerini: newspaper cites three unidentified European officials
  • Norway Increases Oil Wealth Spending to Ward Off Recession: fiscal stimulus impulse rises to 1.1ppt From 0.7ppt
  • The Fog of Brexit: Investor complacency over Brexit may not last, Macro View column says
  • Glencore CEO Lists Mining’s Mistakes After $1 Trillion Spree: Glasenberg outlines a ‘recipe for better returns’ from mining
  • Staples-Office Depot Merger Collapses After Block by Judge: shares of both companies plunge in after-market trading

Looking at regional markets, Asia stocks traded mixed with most of the major bourses taking the impetus from a firm Wall St. close. ASX 200 (+0.6%) traded higher after yesterday’s energy advances which saw WTI regain the USD 44/bbl level, while a recovery in basic materials also benefited large cap miners with BHP Billiton surging nearly 4%. Nikkei 225 (+0.1%) was positive, although the index pulled off its best levels as JPY strength pared some exporter gains, while participants also digested a slew of earnings. Chinese markets were mixed with the Shanghai Comp (+0.2%) higher after the PBoC upped its liquidity injection. 10yr JGBs saw subdued trade as a mildly positive risk-tone in Japan dampens demand for government paper, while the BoJ’s presence in the market for JPY 1.24tr1 in JGBs stemmed any significant downside.

Japan PM Abe adviser Hamada said that Japan retains right for FX intervention and Japan should intervene if JPY strengthens rapidly to 100.00 against USD. However, Hamada also further stated that he does not think JPY will appreciate much from between 105.00-110.00 levels.

Asian Top News

  • China’s Africa Push Reaches Currencies in Deal Investors Decry: Naira-yuan swap may delay, not prevent devaluation, Citi says
  • A Young Tokyo Stock Picker Rubs His Hands as Japan Gets Old: Kuzuhara’s fund gains as Topix tumbles, winning several awards
  • Japan’s Biggest Traders See No Commodities Recovery in Sight:
  • India Acts to Stop Investors Using Mauritius as Tax Shelter: Capital gains on investments from April 1, 2017 to be taxed
  • Toyota Forecasts 35% Decline in Net Income on Stronger Yen: Plans to buy back up to 3.42% of its shares
  • Hong Kong Exchange Net Declines on Lower Trading Volume: 1Q net HK$1.43b vs HK$1.58b y/y
  • Takata Forecasts Profit Despite Looming Air-Bag Recall Costs: restructuring panel expected to make proposals by October

European equities have suffered this morning, with Euro Stoxx lower by around 1.0% and DAX slipping back below the psychological 10,000 level. Leading the way lower this morning has been financials, with the FTSE MIB underperforming after a number of Italian banks reported their earnings and with Banco Popolare among the worst performers in Europe. Similarly, high profile Credit Suisse and Deutsche Bank are also softer this morning as the latter retraces much of its post-earnings upside. On the other hand, the FTSE outperforms this morning, granted a reprieve by modest strength in the material sector. Despite the upside in equities, Bunds have traded flat throughout the session ahead of supply today from Germany and Portugal. As has been the case throughout the week, today has seen a large quantity of corporate issuance, including deals from the likes of J&J.

European Top News

  • ABN Amro 1Q Profit Falls on Lower Fee Income: regulatory charges jump to EU98m from none in 2015
  • EON Profit Beats Estimates With 30% Jump on Gazprom Accord: gas supply accord boosts earnings by about EU400m
  • Bilfinger Quarterly Loss Widens as Two Directors Step Down: Thomas Blades named chairman of executive board from 3Q
  • Raiffeisen Eyes Merger With Parent to Ease Regulatory Burden: six-month review started, decision for deal due this year
  • TUI to Sell Adventure-Holidays Arm to Focus on Mass Tourism: to sell about 50 adventure travel brands
  • Carlsberg Sales Rise Slightly as Profit Forecast Maintained: to move 300 back-office jobs to India to shed costs
  • Premier Oil Says It Will Meet or Exceed 2016 Production Forecast: co. comments in statement
  • Altice First-Quarter Earnings Stall as French Unit Struggles: Numericable-SFR facing stiff competition
  • Statoil Could Pump More Oil at Giant Sverdrup Field, Lundin Says: output rate from phase 1 seen almost 27% above earlier target

In FX,the all important yen climbed 0.6 percent to 108.62 per dollar, after sliding more than 2 percent over the last two days. This happens the day after Goldman said that USDJPY has bottomed and the USD is – once again – set to soar. The currency has gained more than 10 percent this year, making it harder for the Bank of Japan to achieve its inflation goal, and Finance Minister Taro Aso reiterated Tuesday that the government can intervene to stabilize the exchange rate if necessary. The pound weakened for the first time in three days versus the euro as a report showed U.K. industrial production grew less in March than analysts forecast, adding to signs that Britain’s economy is suffering as it heads toward a referendum on its membership of the European Union. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell for a second day following on Goldman’s forecast that the USD is set to jump. The gauge had its strongest rally in almost a year in the five days through Monday.

In commodities, all eyes were on WTI crude which fell 0.9% to $44.28 a barrel, after climbing 2.8 percent in the last session. Concern over supply disruptions in Nigeria and Libya, holders of Africa’s largest oil reserves, was countered by speculation that U.S. data on Wednesday will show American stockpiles expanded from the highest level since 1929. Zinc and lead rose by more than 1.7 percent in London, while copper gained 1.2 percent. Commodities are “now close to pre-supercycle levels,” when growth in Asia fueled a surge in prices, Glencore said Tuesday. The London Metal Exchange’s LMEX Index of six industrial metals closed at a one-month low on Tuesday. Gold gained 0.5 percent, buoyed by the dollar’s retreat. Goldman Sachs Group Inc. this week raised its forecasts for bullion prices as it scaled back expectations of U.S. Federal Reserve rate hikes over the next year. Silver climbed as much as 1.3 percent.

On today’s US calendar, algos will be focused on the DOE energy inventory report at 10:30am while the only data of note is the April Monthly Budget Statement. There’s a similar lack of Fedspeak although we will hear from the ECB’s Weidmann and Nowotny today. Keep an eye on Brazil however where the Senate is scheduled to vote on the impeachment process: a simple majority of 41 senators would be enough for the Senate to accept the request, which would force President Rousseff to temporarily step down for as long as 180 days, a period in which Vice President Michel Temer would take over and have full autonomy to appoint a new cabinet and run the government. Results may not be out until sometime late tonight or early next morning, but it looks like one to watch.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities trade lower as underperformance in financial names dampens sentiment in the region
  • GBP lags FX markets in the wake of further disappointing UK data, this time with industrial and manufacturing production failing to meet expectations
  • Looking ahead, highlights Include Industrial Production & Manufacturing Production from the UK, US MBA Mortgage Applications, DOE U.S. Crude Oil Inventories
  • Long-end Treasuries higher overnight as European equities drop with crude oil and precious metals rally; auctions continue with $23b 10Y notes, WI 1.735%; last sold at 1.765% in April.
  • The most aggressive traders are joining the growing ranks of those betting against the three-month rally in U.S. stocks. Since the end of February, investors have sent $1.3 billion into exchange-traded notes that pay two or three times the inverse of the market’s return
  • Today may be the last day in office for President Dilma Rousseff, as Brazil’s Senate gears up for a vote that would force her out and into an impeachment trial she appears unlikely to survive. The Senate debate is scheduled to last 10 hours and end with a vote around 7 p.m. local time
  • Norway’s government boosted the amount of oil money it will spend this year to a record, dipping deeper into its sovereign wealth fund to ward off a recession
  • Spain is the latest euro-region sovereign to sell 50-year bonds, with an issue via banks that’s likely to price today. It follows half-century deals last month from France and Belgium as countries take advantage of historically low interest rates
  • U.K. industrial production grew less than forecast in March as manufacturing barely rose and oil and gas output shrank. Output rose 0.3%, figures from the Office for National Statistics published today show
  • Billionaire hedge fund manager Paul Singer said that gold’s best quarter in 30 years is probably just the beginning of a rebound as global investors weigh the ramifications of unprecedented monetary easing on inflation
  • Sovereign 10Y yields mostly lower led by Greece (-12bp); European equities lower, Asian markets higher; U.S. equity- index futures drop. WTI crude oil falls, precious metals rally

DB’s Jim Reid concludes the overnight wrap

Yesterday broke a recent spell of apathetic to soft risk markets. A big rebound across the commodity complex and in particular for Oil helped to fuel what was a much better day for risk generally. A Q1 loss for Credit Suisse that wasn’t quite as bad as feared also helped financials turn in a decent day and the progress between Greece and its Creditors did little to dampen the tone either. The S&P 500 ended the session with a +1.25% gain which was the biggest single day gain since March 11th. Prior to this we’d seen the Stoxx 600 close +0.91% although it was peripheral bourses which put in the better performance in Europe. Spanish and Italian equities were up +1.32% and +1.41% respectively while Greek equities rallied to the tune of +3.15%. Indeed 10y Greek government bond yields also finished the day nearly 60bps lower.

Across commodities, as highlighted it was energy markets which stood out. WTI wiped out all of the previous day losses by rallying +2.81% (to close at $44.66/bbl) while Brent was up an even more impressive +4.33% to close back above $45/bbl. It’s all about the supply side of the equation for the market at the moment and yesterday’s bounce seemed to be predicated on possible production curtailments in Nigeria. Indeed, concern over increasing rebel violence in the Niger River delta has seen major producers commence evacuation procedures there. Production concerns in Libya were also a factor yesterday as well as the ongoing focus on the wildfires in Canada. Away from energy markets base metals were also generally firmer with the exception of Copper. Iron ore (+0.49%) snapped a two-day 9% loss while Zinc (+0.71%), Nickel (+1.22%) and Lead (+0.95%) also had better days.

Credit markets were not to be left behind with the more energy sensitive US market outperforming. CDX IG ended the session 3.5bps tighter, the second successive daily gain and the best single day move tighter since the end of March. CDX HY rallied 16bps while in Europe we saw Main and Crossover finish 3bps and 8bps tighter respectively. The bigger focus for credit right now though is the huge amounts of primary issuance that we’re seeing this week. €11bn worth of deals priced in the European market yesterday across 13 issuers taking the week to date volume past €17bn. Meanwhile in the US nearly $10bn of deals priced meaning that week to date volumes in the two days so far (currently $36bn) already exceeds the YTD weekly average with expectations still for steady issuance over the remainder of the week. While we’re on the subject of credit, a quick mention that this morning our latest Credit Bites note was released which takes a look at the latest monthly Moody’s default rate release. It should have hit your emails just before this.

Switching our focus now to the latest in markets this morning, bourses in Asia had initially gotten off to a decent start, largely following the US lead from last night, but have since given up the bulk of the gains now with the Yen strengthening and the rally in Oil coming to a halt. Indeed the Nikkei is currently +0.29% but was up as much +1.47% at one stage, with the Yen rallying around half a percent. The Hang Seng (-0.63%) and Kospi (-0.38%) are now in the red after also starting strongly, while the Shanghai Comp (+0.62%) is firmer but has traded in a 1% range. Oil markets are off around half a percent, while credit markets a marginally tighter generally.

Moving on. On Monday we recapped the current state of play with regards to earnings season in the US and today we’re taking a closer look at the same data for European earnings. As it stands we are now 79% of the way through the season and earnings beats are currently standing at 57% based on Bloomberg data. While that is less than what we’ve seen in the US, a similar theme has played out in that earnings are beating on low and downwardly revised guidance. The energy sector is a good example of that with 77% of companies beating earnings guidance despite YoY EPS for the sector being down over 60%. In fact our European equity strategy colleagues highlighted in their report from a couple of days ago that overall EPS for the Stoxx 600 is -21% yoy and excluding the impact of energy and financials is ‘just’ -4% YoY but is still lower nevertheless. Much like the US it’s the downward revision guidance which is helping to somewhat artificially inflate that beat miss ratio. Since the turn of the year our colleagues note that Stoxx 600 consensus EPS growth for 2016 has fallen to 0.3% from around 7% which is a significantly sharper decline than in previous years.

Turning to the macro, there was some contrasting economic data for us to touch on yesterday. Releases out of the US were generally a little better than expected. Wholesale inventories were reported as rising +0.1% mom in March as expected, while trade sales were up a greater than expected +0.7% mom (vs. +0.5% expected). The NFIB small business optimism reading was up 1pt last month relative to April to 93.6 (vs. 93.0 expected) and so rebounding off the recent low. Meanwhile JOLTS job openings printed at 5.76m in March, more than expected (5.45m expected) and up from 5.61m in February. Recent data since May 4th has now seen the Atlanta Fed revise up their Q2 GDP forecast to 2.2% from the prior 1.7% estimate.

In contrast, yesterday’s industrial production reports in Europe were generally disappointing. Indeed reports for Germany (-1.3% mom vs. -0.3% expected), France (-0.3% mom vs. +0.7% expected) and Italy (0.0% mom vs. +0.2% expected) all missed expectations and paint some downside risk to Thursday’s report for the wider Euro area. On the positive side, the March export numbers out of Germany (+1.9% mom vs. 0.0% expected) bettered expectations and helped Germany to further widen its trade surplus. We’ll get the Q1 GDP report for Germany this Friday where currently expectations are running at +0.6%.

Looking at the day ahead, the economic diary is relatively sparse today. This morning in Europe the only release of note comes from the UK where we’ll get the March industrial and manufacturing production reports (industrial production expected to come in at +0.5% mom). Later this evening meanwhile and over in the US the only data of note is the April Monthly Budget Statement. There’s a similar lack of Fedspeak although we will hear from the ECB’s Weidmann and Nowotny this evening. It’s worth keeping an eye on Brazil however where the Senate is scheduled to vote on the impeachment process. Our EM colleagues noted last night that a simple majority of 41 senators would be enough for the Senate to accept the request, which would force President Rousseff to temporarily step down for as long as 180 days, a period in which Vice President Michel Temer would take over and have full autonomy to appoint a new cabinet and run the government. Results may not be out until sometime late tonight or early next morning, but it looks like one to watch.

end

ASIAN AFFAIRS

i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed UP  BY 4.446 PTS OR 0.16%  /  Hang Sang closed DOWN 187.39 OR 0.93%. The Nikkei closed UP 13.82 POINTS OR 0.09% . Australia’s all ordinaires  CLOSED UP 0.54% Chinese yuan (ONSHORE) closed UP at 6.50160.  Oil ROSE to 44.74 dollars per barrel for WTI and 45.88 for Brent. Stocks in Europe DEEPLY IN THE RED . Offshore yuan trades  6.5337 yuan to the dollar vs 6.50160 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS.

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

none today

b) CHINA ISSUES

none today

EUROPEAN ISSUES

Our  important insolvent Italian bank, Banco Popolare is in trouble again today with a surprise Q1 loss driven by more soaring bad loan writedowns. It is down 14% on the day and 25% on the week.  As you will recall they are planning a merger with Banca Popolare di Milano that will create Italy’s third largest banking group.  Italy’s entire non performing loan sector is around 360 billion euros.  They Italian authorities have created a bad bank Atlas which is suppose to house most of these bad loans.  The problem, of course, is that they raised only 4.5 billion euros to purchase the junk.  And please note the systemic risk here when you look at the performance of our favourite European bank: Deutsche bank

(courtesy zero hedge)

Italian Banks Are Crashing (Again) After Bad-Loan Writedowns Soar

Banco Popolare is dragging the rest of the Italian banking system drastically lower today after a“susprise” Q1 loss driven by soaring bad loan writedowns. Banco Popolare is down 14% on the day (25% in a week) to a record low, as Reuters reports the bank was forced to admit the reality of its bad loans by the European Central Bank as a condition for approving a planned merger with Banca Popolare di Milano that will create Italy’s third-biggest banking group.

A week in the life of Italian banks… bloodbath…

As Reuters notes,Italian banks have lost nearly 40 percent of their market value so far this year, weighed down by concerns they could need additional capital to shoulder losses from sales of bad loans that rose to 360 billion euros ($410 billion) during a long recession.

A share rebound triggered by the hasty creation last month of the fund intended to inject capital into weaker lenders and buy their bad loans proved short-lived.

Banco Popolare said late on Tuesday that it had written down loans for 684 million euros in the first quarter, nearly four times more than in the same period of 2015, posting a net loss of 314 million euros for the first three months.

CEO Pierfrancesco Saviotti told an analyst call that the loan writedowns were the first step towards selling chunks of bad loans and that it would book further provisions this year.

He said the ECB wanted provisions to cover 62 percent of the most troubled loans up from a 60 percent coverage ratio the bank reached in the first quarter.

Bankers say other Italian banks are likely to follow in the steps of Banco Popolare and raise cash to make up for loan losses.

Loans to insolvent borrowers are valued on average at around 40 percent of their nominal value on Italian banks’ balance sheets but market prices for these assets reach at most 30-35 cents on the dollar when the loan is backed by a good-quality property.

This won’t end well… and yet everyone is ignoring the systemic concerns here… It’s far from over at DB…

 end
Denmark has had 4 years of negative interest rates (NIRP).  The idea for NIRP is to create inflation in the country as they bring forward spending by creating costs to the citizen for keeping funds in the bank.  However it has having the opposite effect:  citizens are now more prone not to spend because they sense something is wrong. Hugh-Smith goes over the various aspects as to why NIRP has failed!
(courtesy Charles Hugh Smith/zero hedge)

NIRP’s Not Working

Einstein’s defintion of insanity was “doing the same thing over and over again and expecting a different outcome.” It appears, judging by the world’s central bankers’ utter failure to ignite anything but speculative bubbles in risk assets they are all insane and, while the phenomenon of negative rates is relatively new in Europe and Japan (in other words they can decalre it too soon to judge), it has been four years since Denmark went full NIRP-tard, and inflation has done nothing but collapse.

As Bloomberg reports,

The latest data from Statistics Denmark is bad news for ECB President Mario Draghi and other central bank governors seeking to fuel inflation through ultra-low interest rates.

Denmark’s consumer price index in April was unchanged from a year ago for the second month in a row and up a less-than-expected 0.1 percent from March.

After four years of negative interest rates, it looks like the (inverse) relationship between rates and prices may be broken for good.

Because, as Charles Hugh-Smith detailed previously, what NIRP communicates is: this sucker’s going down, so sell everything and hoard your cash and precious metals.


The last hurrah of central banks is the negative interest rate policy–NIRP. The basic idea of NIRP is to punish savers so severely that households and businesses will be compelled to go blow whatever money they have on something–what the money is squandered on is of no importance to central banks.

All that matters is that people and enterprises are forced to spend whatever cash they have rather than “hoard” it, i.e. preserve and conserve their capital.

That this is certifiably insane is self-evident. If an economy depends on bringing future spending into the present by destroying savings, that economy is doomed regardless of NIRP, for eventually the cash runs out and spending declines anyway.

But NIRP will fail completely and totally due to another dynamic— one I addressed last month in Another Reason Why the Middle Class and the Velocity of Money Are in Terminal Decline. As correspondent Mike Fasano noted, negative interest rates force us to save even more, not less:

“People like me who have saved all their lives realize that they their savings (no matter how much) will never throw off enough money to allow retirement, unless I live off principal. This is especially so since one can reasonably expect social security to phased out, indexed out or dropped altogether. Accordingly, I realize that when I get to the point when I can no longer work, I’ll be living off capital and not interest. This is an incentive to keep working and not to spend.”

If banks start charging savers interest on their cash, savers will have to save even more income to offset the additional costs imposed by central banks on their savings.

A third dynamic dooms the insane negative interest rate policy: what does it say about the stability and health of the status quo if central banks are saying the only way to save the status quo is to force everyone to empty their piggy banks and spend every last dime of cash?

What exactly are we saving by destroying savings and capital? Isn’t capital the foundation of capitalism? The answer is we are saving nothng but a rotten-to-the-core, parasitic, predatory banking system, coddled and enabled by corrupt central banks and states.

What NIRP says about central banks is that they have run out of options and are now in their own end zone, heaving the final desperate Hail Mary pass that has no hope of saving them from complete and total defeat.

NIRP also says the economy that needs NIRP is sick unto death and doomed to an implosion of impaired debt, over-leveraged risk-on bets and asset bubbles generated by stock buybacks and central bank purchases of risky assets.

The central bankers are delusional if they think NIRP will inspire confidence in investors, punters, households and enterprises. Rather, NIRP signals the failure of central bank policies and the end-game of credit expansion as the solution for all economic ills.

What NIRP communicates is: this sucker’s going down, so sell everything and hoard your cash and precious metals. If that’s what the central banks want households and enterprises to do, NIRP will be a rip-roaring success.

 end

GLOBAL ISSUES

We have been highlighting this to you on several occasions:

If the USA dollar strengthens then Europe Japan and Emerging Markets win but China loses ad does commodities.  If the USA dollars weakens, then Europe, Japan emerging markets loses, but China and commodities win. Because of this a war is now waging between central banks trying to put their country on the winning side.  It generally ends in a global failure.  And as Smith correctly states:

 

no nation ever devalued its way to hegemony or empire.”

a must read.

(courtesy Charles Hugh Smith)

 

The Coming War of Central Banks

May 11, 2016

Charles Hugh Smith

Welcome to a currency war in which victory depends on your perspective.

History has shifted, and we’re leaving the era of central bank convergence and entering the era of central bank divergence, i.e. open conflict. In the good old days circa 2009-2014, central banks acted in concert to flood the global banking system with easy low-cost credit and push the U.S. dollar down, effectively boosting China (whose currency the RMB/yuan is pegged to the USD), commodities, emerging markets and global risk appetite.

That convergence trade blew up in mid-2014, and the global central banks have been unable to reverse history. In a mere seven months, the U.S. dollar soared from 80 to 100 on the USD Index (DXY), a gain of 25%–an enormous move in foreign exchange markets in which gains and losses are typically registered in 100ths of a percent.

This reversal blew up all the positive trades engineered by central banks:suddenly the yuan soared along with the dollar, crushing China’s competitiveness and capital flows; commodities tanked destroying the exports, currencies and economies of commodity-dependent nations; carry trades in which financiers borrowed cheap USD to invest in high-yielding emerging markets blew up as currency losses negated the higher returns, and global risk appetite vanished like mist in the Sahara.

The net result of this reversal is global markets have struggled since mid-2015, when the headwinds of the stronger dollar finally hit the global economy with full force.

In one last gasp of unified policy convergence, G20 nations agreed to crush the USD again in early March 2016, to save China from the consequences of a stronger yuan and the commodity markets (and lenders who over-extended loans to commodity producers).

That Shanghai Accord lasted all of two months. The engineered collapse has already reversed, and the USD is gaining ground, reversing the gains in risk assets, commodities and China’s export-dependent, debt-based stability.

The problem is there is no win-win solution to this foreign exchange battle.Japan and the Eurozone benefit from a stronger USD as the euro and yen weaken, but China loses as the USD soars.

Commodities lose when the USD gains, but the domestic U.S. consumer’s purchasing power increases as the USD strengthens.

It’s Triffin’s Paradox writ large: As the primary global reserve currency, The USD plays both a domestic and an international role, and each set of users has a different set of priorities.

No matter what policy the Federal Reserve pursues, there will be powerful winners and losers.

This sets up a war between central banks everywhere in which winning may be as disastrous as losing. The conventional central bank policy is to lower interest rates to weaken their currency, as a means of boosting exports.

But the unintended consequence of lowering rates is capital flight, as capital flees devaluation and negative returns and seeks higher returns elsewhere.This is a self-reinforcing process, as capital flight causes the currency to lose value, reducing the purchasing power and wealth of all who hold the currency. This motivates everyone who anticipates this devaluation to get their money out of the depreciating currency, which further weakens the currency which then triggers even more capital flight, and so on.

The only way to avoid the devaluation is to pull your cash out of that currency and put it into a currency that’s strengthening. For many, that currency will be the USD, due to its ubiquity and the liquidity of its capital markets.

Nations such as China are boxed into a lose-lose choice. If they lower rates to weaken their currency (to maintain a competitive export sector), they trigger capital flight, which weakens the domestic economy and creates a self-reinforcing feedback loop.

If they do nothing and their currency rises as other nations aggressively devalue their currencies, their export sectors whither as competing exporters take market share.

Any central bank that dares to raise rates will make their nation a magnet for capital seeking a higher return–both in yield and in currency appreciation.

The Fed is boxed in, too: if the Fed can’t raise rates after seven years of “growth,” then its credibility suffers. If it raises rates, that accelerates the capital flow into USD and the U.S., pushing the dollar higher, which then triggers mayhem in China, emerging markets, commodity markets and U.S. corporate profits earned overseas.

Welcome to a currency war in which victory depends on your perspective. If the USD continues strengthening, the winners will be those holding USD, as their currency will increase its purchasing power as other currencies devalue.

As I always note: no nation ever devalued its way to hegemony or empire.

My new book is #3 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book’s website.

 

end

RUSSIAN AND MIDDLE EASTERN AFFAIRS

The nuclear arms race is back as Russia is furious with the USA as it launches a European ballistic missile shield:

(courtesy zero hedge)

The Nuclear Arms Race Is Back: Russia Furious As US Launches European Ballistic Missile Shield

Back in November 2008, then Russian president Dmitry Medvedev made a stark warning to NATO: “Russia will deploy Iskander missile systems in its enclave in Kaliningrad to neutralize, if necessary, the anti-ballistic missile system in Europe.

Several years we followed up with a report that as Europe was ramping up NATO expansion, Russia may have followed through on its warning when as Bild then reported, Russia stationed missiles with a range of about 500 kilometers in its Kaliningrad enclave and along its border with the Baltic states of Estonia, Latvia and Lithuania.

There was not official confirmation at the time however we expect the European ICBM theater will get hot in the coming days because as Reuters reports, the United States’ European missile defense shield goes live on Thursday almost a decade after Washington proposed protecting NATO from Iranian rockets and despite repeated Russian warnings that the West is threatening the peace in central Europe.

Amid high Russia-West tension, U.S. and NATO officials will declare operational the shield at a remote air base in Deveselu, Romania, after years of planning, billions of dollars in investment and failed attempts to assuage Russian concerns that the shield could be used against Moscow.

As Robert Bell, a NATO-based envoy of U.S. Defense Secretary Ash Carter explained “we now have the capability to protect NATO in Europe. The Iranians are increasing their capabilities and we have to be ahead of that. The system is not aimed against Russia,” he told reporters, adding that the system will soon be handed over to NATO command.

First agreed by the U.S. government 2007 and then canceled and relaunched by the newly-elected U.S. President Barack Obama in 2009, the missile defense shield’s stated aim is to protect North America and Europe from so-called rogue states such as Iran and North Korea. That is part of a U.S. strategy that includes missile interceptors in California and Alaska.

To be sure the Kremlin was not content with this explanation, which is a clear defection from the carefully established Game Theory equilibrium in the aftermath of the nuclear arms race, and one which potentially removes a Russian first strike threat, thereby pressuring Russia.

As a result, Reuters notes that “Russia is incensed at such of show of force by its Cold War rival in formerly communist-ruled eastern Europe where it once held sway. Moscow says the U.S.-led alliance is trying to encircle it close to the strategically important Black Sea, home to a Russian naval fleet and where NATO is also considering increasing patrols.”

Worse, the precarious nuclear balance of power in Europe has suddenly shifted, and quite dramatically: despite U.S. assurances, the Kremlin says the missile shield’s real aim is to neutralize Moscow’s nuclear arsenal long enough for the United States to make a first strike on Russia in the event of war.

The move will also prompt further escalations on both sides: as a reminder, the readying of the shield also comes as NATO prepares a new deterrent in Poland and the Baltics, following Russia’s Crimean adventure in 2014. In response, Russia is reinforcing its western and southern flanks with three new divisions.

The missile defense shield relies on radars to detect a ballistic missile launch into space. Tracking sensors then measure the rocket’s trajectory and intercept and destroy it in space, before it re-enters the earth’s atmosphere. The interceptors can be fired from ships or ground sites. It is being launched despite repeated Russian warnings that its activation would prompt an appropriate response.

The Russian ambassador to Denmark warned a year ago that Danish warships would become targets for Russian nuclear missiles if Denmark joined the shield project by installing radars on its vessels. Denmark is upgrading at least one frigate to house a ballistic missile sensor.

“Ballistic missile defense sites could pose threats to the stability and strategic assets of the Russian Federation,” Russia’s ambassador to NATO, Alexander Grushko, told Reuters last month.

Meanwhile, Turkey is already hosting a U.S. radar and the Netherlands has equipped ships with radars. The United States also has four ships in Spain as part of the defenses, while all NATO nations are contributing funding. US officials have tried to tone down Russian concerns and dismiss the Russian view as “strategic paranoia”, blaming Moscow for breaking off talks with NATO in 2013 that were aimed at explaining how the shield would operate. What is ignored is that at the same time, the US State Department and the CIA were plotting NATO expansion into Ukraine to bring the alliance that much closer to Russia.

The United States says Russia was seeking a treaty limiting the capability and range of ballistic missile interceptors. “No government could agree to that,” U.S. adviser Bell said.

Russian officials are concerned about technology that the United States says it does not have, including a missile defense interceptor capable of speeds of 10 km (6.2 miles) per second that could destroy Russian missiles.

Curiously, the US continues to push the argument that the missile shield is only there to defend against Iranian agressions, despite a historic deal between world powers and Tehran to limit Iran’s nuclear program. The West believes Iran’s Revolutionary Guards continue to develop ballistic missile technology, carrying out two tests late last year. “They are looking for greater distance and accuracy,” said Douglas Barrie, an aerospace defense specialist at the International Institute for Strategic Studies (IISS). “They can still miss by hundreds of meters, but that doesn’t rule out firing against a city or a very large airfield.”

Which is strange considering that on Friday the United States will also start construction on a second site in Poland due to be ready in 2018, giving NATO a permanent, round-the-clock shield in addition to radars and ships already in the Mediterranean. Poland, one can argue, is hardly the target of millitant Iranian clerics, and makes it very clear that this deterrence step is merely aimed at Russia.

But what makes this step particuarly dangerous is that Russia will now have to be forced to retaliate and since it does not have a comparable defensive technology, Putin will have no choice but to deploy more ICBMs on Russia’s borders, which in turn will exponentially escalate the threat of an “inadvertent” launch. Although considering how the “market” responds to newsflow these past few years, this may also be seen as a bullish catalyst for stocks.

END
The crook Erdogan has threatened Europe again.  Unless  1.they get 80 million visa free travel for its citizens and 2. the 3 billion euros goes directly to Erdogan and not to UN agencies to dispense with the aid, then he will unleash the refugees throughout Europe;
(courtesy zero hedge)

Turkey Threatens Europe: “Unless Visas Are Removed, We Will Unleash The Refugees”

Following months of appeasement of Turkey’s dictator Recep Erdogan, Europe has found itself surprised that as it yields to every incremental demand, Turkey simply asks for more and more. One such example was chronicled by the FT earlier today in “Turkey demands EU hands over €3bn for refugees” in which we read that “a row has erupted between Turkey and the EU over billions of pounds in aid for Syrian refugees, casting fresh doubt on a fragile deal to halt the flow of people towards Europe.”

Erdogan’s argument is that he want the money to be transferred over to him directly to dispense with as he pleases, while Europe insists that UN agencies oversee that the money be spent as designated for refugee needs, instead of funding another wing for Erdogan’s palace. Of course, the only reason why Erdogan is confident he has leverage is because Turkey is currently hosting over 3 million Syrian refugees that is holding back from flooding into Europe once more, potentially resulting in the most acute episode of Europe’s refugee crisis.

And to his credit, Erdogan has been successful in that, because as the following chart shows, for the first time since April 2015, more refugees arrived in Europe via Italy than on the path through Greece to the east. The flow of migrants through the Aegean Sea has waned since the European Union and Turkey struck a deal in March to send refugees back that arrive in Greece.

 

However, this potential onslaught of Europe-bound refugees is also Erdogan’s biggest trump card: should Europe deny anything Turkey wants, he will simply open the gates leading to spiraling political chaos of the type already seen in Austria and Germany where anti-immigrant parties have stormed higher in the political polls in recent months.

Confirming precisely that, was a warning by Burhan Kuzu, a high-ranking deputy for Turkey’s ruling AKP party and former adviser to President Erdogan, who said that Ankara will send migrants back to the EU if the European Parliament won’t grant visa-free travel to Turkish citizens.  Kuzu made several statements on Twitter in anticipation of Wednesday’s session of European parliament, at which visa exemption for Turkish nationals in the Schengen zone, as part of a migrant deal between Brussels and Ankara, was to be discussed.

“The European Parliament will discuss the report that will open Europe visa-free for Turkish citizens. If the wrong decision is taken, we will unleash  the refugees!” in what was an unmistakable threat.

Avrupa Parlamentosu,yarın Türk Vatandaşlarına Avrupa yolunu vizesiz açacak raporu görüşecek.Yanlış bir karar verirse Mültecileri göndeririz!

He also told Bloomberg: “If Turkey’s doors are opened, Europe would be miserable.

“Europe is on the edge of an important decision: It will decide on Turkey’s visa-free travel rights today. If a positive decision comes out, this is also a benefit for Europe,” the MP wrote in a separate tweet.

As RT writes, it’s not the first time the deputy has threatened to flood Europe with over 2 million migrants from North Africa and Middle East, stranded in Turkish refugee camps.“Finally the EU understood Turkey’s stake and loosened its purse strings. What did we say? ‘We will open the borders and set Syrian migrants on you’,” he wrote back in December 2015.

But in the worst news for Greece, and an indication that Erdogan’s gambit is no longer working, EUobserver wrote earlier that the European parliament had “quietly” suspended discussions of visa-free travel for Turkey Monday. EU parliament chief Martin Schulz put the debate on hold because Turkey had not yet met all EU visa-free criteria, said Judith Sargentini, a Dutch Green MEP. According to the site, the move is aimed at putting pressure on the European Commission so that it would take a firmer stance on Turkey fulfilling its part of the deal.

“The ball is back with the European commission,” one of the MEPs told EUobersver, while the other stressed that the suspension will “make the parliament more important.”

Meanwhile, Turkey’s minister for EU affairs Volkan Bozkir met with EU Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos, in Strasbourg today. The minister will also hold talks with Johannes Hahn, Commissioner for European Neighborhood Policy and Enlargement Negotiations, on Friday in Brussels. No press events were planned following both meetings.

The reason for the visit is because on May 4, the European Commission proposed to the European Parliament and the EU Council to lift visa restrictions for Turkish citizens, if Ankara fulfils five conditions by the end of June. They included measures to prevent corruption, holding talks on an operational agreement with Europol, judicial cooperation with all EU member states, bringing data protection rules in line with EU standards, and the revision of legislation on the fight against terrorism. It was the last condition that Turkey found particularly unacceptable.

Bozkir told Turkish NTV broadcaster Wednesday that “it is not possible for us to accept any changes to the counter-terrorism law” as demanded by the EU.

This followed a firm statement by Erdogan who told the EU on Friday that Turkey would not make the changes, declaring: “we’re going our way, you go yours”.

Wednesday’s repeated refusal, and assertion that there had never been a reciprocal deal over the laws, will likely alarm EU officials already worried by the departure of Prime Minister Ahmet Davutoglu, seen as a more flexible negotiating partner.

The EU said last week Turkey still had to change some laws, including narrowing its legal definition of terrorism, to secure visa-free travel for its citizens – part of a wide-ranging deal to secure Turkish help in reducing the flow of migrants into Europe.

Turkey’s clear rejection and insistence that it has all the required leverage, sets Europe and Turkey for what will be a dramatic showdown in which Turkey’s increasingly despotic dictator will either be appeased one more time, or his bluff will be called.

With Europe hit by the biggest migrant crisis in decades, the EU and Ankara signed the migrant deal back in March. According to the agreement, Turkey would take back refugees seeking asylum in the EU in exchange for a multi-billion euro aid package and some political concessions, including the visa-free regime.

If the deal falls apart, Turkey will surely flood millions more in refugees who will unleash far more political havoc across Europe, and certainly Germany, than Greece ever could.

So for all those focusing closely on the risk of Brexit or developments in Greece this summer where the third Greek bailout may or may not give the insolvent nation a few more months before its next payment to the ECB is due while it pretends to “reform”, a far bigger risk is what Greece’s neighbor to the east, ruled by an unhinged, irrational president, will end up doing, and how Europe would respond if he actually follows through with his bluff.

Average:

EMERGING MARKETS

Former soccer great Rivaldo is telling tourists to stay away from the Olympics as the violence is endemic:
(courtesy zero hedge)

Brazilian Soccer Star Warns Olympic Visitors “Stay Home, Your Life Is At Risk Here”

With The Olympics set to open in less than 3 months, Brazilian soccer great Rivaldo is telling tourists to stay away from the Olympics in Rio de Janeiro because of the danger of endemic violence.As AP reports, Rivaldo posted the warning on his Instagram account and alluded to the case of a 17-year-old woman killed on Saturday in a shootout.

“Things are getting uglier here every day,” Rivaldo wrote. “I advise everyone with plans to visit Brazil for the Olympics in Rio — to stay home. You’ll be putting your life at risk here. This is without even speaking about the state of public hospitals and all the Brazilian political mess. Only God can change the situation in our Brazil.

Rivaldo may have a point, as AP concludes,

In a recent statement, Amnesty International said at least 11 people were killed in police shootings in Rio’s impoverished favelas in April. It said at least 307 people were killed by police last year, accounting for 20 percent of the homicides in the city.

Violence is one in a long line of problems facing South America’s first Olympics.Although venues are largely ready, the Zika virus, water pollution, and lukewarm tickets sales are worrying organizers. In addition, Brazil is in its deepest recession in decades and President Dilma Rousseff is fighting impeachment.

It’s no surprise then that ticket sales are lagging tremendously.

END

OIL MARKETS

Oil spikes big time after the DOE reports a huge inventory draw down and a big production drop;

(courtesy DOE/zero hedge)

 

Oil Spikes After DOE Reports Huge Inventory Draw, Production Drop

Following Genscape and API’s 1.4mm barrel build estimates at Cushing, DOE confirmed a 1.52mm build. However, API’s 3.45mm build overnight was shockingly opposed by DOE’s 3.41mm inventory draw – the 3rd biggest weekly draw of the year (as we suspect Canadian issues are impacting levels). Gasoline also saw an unexpected draw and Distillates drew down. Following last week’s big production drop (Alaska), US crude production fell once again – for the 16th week in a row. This combination of a surprise draw and lower production shocked prices of WTI above $45.50

API

  • Crude +3.45mm (Exp unch)
  • Cushing +1.46mm (+1.1mm exp)
  • Gasoline +271k (+710k exp)
  • Distillates -1.36mm

DOE

  • Crude -3.41mm (+2.9mm whisper)
  • Cushing +1.52mm (+1.45mm whisper)
  • Gasoline -1.23mm (+162k whisper)
  • Distillates -1.67mm (-1.146mm whisper)

DOE bucked the trend and reported a huge draw, 3rd biggest weekly draw of the year…

Following last week’s significant production drop (driven by Alaska much more than The Lower 48), production fell once again – the 16th week in a row to the lowest since Spet 2014…

API ‘weakness’ didn’t last long as oil pumped and dumped overnight in its usual stop-running way, but was fading into the DOE data and thensopared higher after DOE’s shock draw…

On the all important topic of marginal gasoline demand and stocks, in the past week, gasoline consumption continued to rise, and remains at a record – for this time of the year level…

…. while gasoline stocks dipped modestly in what was an expected seasonal draw.

END

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/WEDNESDAY morning 7:00 am

Euro/USA   1.1400 UP .0028 ( STILL REACTING TO USA FAILED POLICY)

USA/JAPAN YEN 108.70 UP 0.514 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.4445 DOWN .0003 (STILL THREAT OF BREXIT)

USA/CAN 1.2886 DOWN .0030

Early THIS  WEDNESDAY morning in Europe, the Euro ROSE by 28 basis points, trading now WELL above the important 1.08 level FALLING to 1.1367; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED UP BY 4.446 PTS OR 0.16% / Hang Sang CLOSED DOWN 187.39 OR  0.93%   / AUSTRALIA IS HIGHER BY 0.55%(RESOURCE STOCKS DOING WELL / ALL EUROPEAN BOURSES ARE ALL IN THE RED  as they start their morning/

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 and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

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 WEDNESDAY morning: closed UP 13.82 OR 0.08% 

Trading from Europe and Asia:
1. Europe stocks IN THE RED AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 187.59 PTS OR 0.93% . ,Shanghai CLOSED  UP 4.446 OR 0.16%/ Australia BOURSE IN THE GREEN: /Nikkei (Japan) CLOSED IN THE GREEN/India’s Sensex IN THE RED

Gold very early morning trading: $1277.40.

silver:$17.54

Early WEDNESDAY morning USA 10 year bond yield: 1.76% !!! DOWN 1 in basis points from MONDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.60 DOWN 1 in basis points from TUESDAY night.

USA dollar index early WEDNESDAY morning: 94.04 DOWN 23 cents from TUESDAY’s close.(Now below resistance at a DXY of 100.)

This ends early morning numbers WEDNESDAY MORNING

 

END

And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield:  3.24% DOWN 11 in basis points fromTUESDAY

JAPANESE BOND YIELD: -0104% UP 1 in   basis points from TUESDAY

SPANISH 10 YR BOND YIELD:1.60% DOWN 5 IN basis points from TUESDAY

ITALIAN 10 YR BOND YIELD: 1.47  DOWN 4 IN basis points from TUESDAY

the Italian 10 yr bond yield is trading 13 points lower than Spain.

GERMAN 10 YR BOND YIELD: .126% UP 1/5 IN BASIS POINTS ON THE DAY

 

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

 

Euro/USA 1.1423 UP .0050 (Euro =UP 50 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 108.49 DOWN 0.724 (Yen UP 73 basis points )

Great Britain/USA 1.4449 DOWN .0003 Pound DOWN 3 basis points/

USA/Canada 1.2844 DOWN 0.0073 (Canadian dollar UP 73 basis points with OIL FALLING a bit(WTI AT $46.07.  CANADA IS GETTING KILLED BY THAT HUGE FIRE IN ALBERTA)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 50 basis points to trade at 1.1423

The Yen ROSE to 108.49 for a GAIN of 73 basis points as NIRP is STILL a big failure for the Japanese central bank/

The pound was DOWN 3 basis points, trading at 1.4449

The Canadian dollar ROSE by 73 basis points to 1.2844, WITH WTI OIL AT:  $46.06

The USA/Yuan closed at 6.4910

the 10 yr Japanese bond yield closed at -.104% DOWN 2 IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 2 IN basis points from TUESDAY at 1.73% //trading well below the resistance level of 2.27-2.32%) HUGE policy error

USA 30 yr bond yield: 2.58 DOWN 3 in basis points on the day ( HUGE POLICY ERROR)

Your closing USA dollar index, 93.82 DOWN 44 CENTS ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY

London:  CLOSED  UP 5.84 OR 0.09%
German Dax :CLOSED DOWN 70.12 OR 0.70%
Paris Cac  CLOSED DOWN 21.54  OR 0.50%
Spain IBEX CLOSED DOWN 111.30 OR 1.27%
Italian MIB: CLOSED DOWN 236.64 OR 1.32% (BANKING CRISIS)

The Dow was DOWN 217.23  points or 1.21%

NASDAQ DOWN 49.19 points or 1.02%
WTI Oil price; 46.09 at 4:30 pm;

Brent Oil: 47.44

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.08 (ROUBLE UP 1 AND 18/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD COLLAPSED TO ONLY .126% FOR THE 10 YR BOND

.

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:45.99

BRENT: 47.33

USA 10 YR BOND YIELD: 1.735%

USA DOLLAR INDEX: 93.81 down 44 cents

END

And now your more important USA stories which will influence the price of gold/silver

Trading Today in Graph form

Stocks Dump, Bonds Jump As Retail Wreckage Trumps Crude Spike

Remember how awesome it all felt yesterday, yeah that’s all gone… Pride (in senseless uncorrelated low volume rallies) always comes before the fall…

 

Macy’s ate the jam out of the market rally’s donut today despite crude’s spike (and thus Energy stocks) on the DOE inventory draw… This was S&P Retail Sector’s worst day since Aug 2011…

Who could have seen that coming?

 

And it’s gone…yesterday’s panic buying algo turns into a sell it all algo…

 

Trannies worst day in 2 months…

 

As it touched its 50DMA from below and dropped back below its 200DMA…

 

As The Dow (Macy’s & Disney) and Trannies (odd, oil was up?) tumbled into the red for the week… as did Small Caps in the last few minutes…

 

An early dump in “most shorted” stocks was squeezed back into the European close… but didn’t hold…

 

Macy’s was fingered as the blame but yesterday’s market meltup had no legs under it anyway.Here is Macy’s puke with the analysts who has the highest profit target…

 

VIX pushed back above 14.50, we suspect S&P tests back to unch YTD before this ends…

 

What will financials do next?

 

Stocks began to catch down to Treasury’s reality…

 

Treaury yields began to fall early but buying accelerated after the hugely strong 10Y auction…2s30s flattened 5bps…

 

The USD Index dropped for the first day in the 7 today, driven by JPY strength…

 

USD weakness helped spur strength in commodities (apart from Copper which contionues to be pressured by China’s bubble unwind) but crude was the crazy one today…

 

Here’s crude for all those who need some entertainment…

 

And precious metals pumped and dumped overnight…but ended the day higher

 

Charts: Bloomberg

Bonus Chart: What Happens Next?

END

 

Macy’s stock was massacred today after the company slashed its outlook.  They scared the living daylights out of investors when they stated that the consumer is “uncertain”.  Inventories reach record levels against declining revenues of 7.4% IN THE QUARTER

Macy’s is a good Bellwether was to what is going on inside the uSA

(courtesy zero hedge/Macy’s)

 

 

Macy’s Massacred After Slashing Outlook On “Uncertain Consumer” As Inventories Reach Record Highs

The retailer apocalypse continues this morning with Macy’s crashing almost 10% in the pre-market after missing top-line and slashing its outlook citing the “uncertain direction of consumer spending,” which seems odd given the confidence with which The Fed, Obama, and every talking head proclaims the US consumer’s health. Comp store sales plunged 6.1% (almost double expectations) and this comes at a time when clothing inventories are at an all-time record high relative to sales.

“We are seeing continued weakness in consumer spending levels for apparel and related categories. In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook. Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy’s and Bloomingdale’s are key destinations, as well as a slowdown in some center core categories – further intensifying the challenges associated with growing topline sales revenue,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer.

Sales in the first quarter of 2016 totaled $5.771 billion, a decrease of 7.4 percent,compared with sales of $6.232 billion in the same period last year. The year-over-year decline in total sales reflects, in part, the 41 stores closed in 2015. Comparable sales on an owned plus licensed basis were down by 5.6 percent in the first quarter. On an owned basis, first quarter comparable sales declined by 6.1 percent.

Noting that the uncertain direction of consumer spending makes predictions of future performance difficult, Macy’s, Inc. now expects full-year 2016 comparable sales on an owned plus licensed basis to decrease in the range of 3 percent to 4 percent, with comparable sales on an owned basis to be approximately 50 basis points lower. This compares with previous guidance for comparable sales on an owned plus licensed basis to decline by approximately 1 percent in fiscal 2016.

With top-line sales expected to remain below our initial expectations, the company has revised its guidance for earnings per diluted share (excluding settlement charges) in fiscal 2016 to a range of $3.15 to $3.40. This compares with previous guidance of $3.80 to $3.90 per diluted share in 2016.

The headlines are ugly…

  • *MACY’S 1Q NET SALES $5.77B, EST. $5.93B
  • *MACY’S 1Q OWNED BASIS COMP SALES DOWN 6.1%, EST. DOWN 3.1%
  • *MACY’S 1Q COMPS PLUS LICENSED DOWN 5.6%, EST DOWN 3.2%
  • *MACY’S NOW SEES YR ADJ. EPS $3.15-$3.40, SAW $3.80-$3.90

The result.. more pain

And it is not going toget better any time soon as inventories are at record highs relative to sales…

Inventories of clothing rose 0.2 percent in March as sales dropped 5.9 percent, pushing the inventory-to-sales ratio for apparel wholesalers to 2.32 months, the highest on record, according to a Commerce Department report released Tuesday.

END
Well that is all for today
I will see you tomorrow night
Harvey
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One comment

  1. […] MAY 11, 2016 [Paper] GLD SEES ANOTHER 2.67 [Paper] TONNES ADDED [paper sold] TO INVENTORY In U.S. […]

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