June 10/Huge swing towards the BREXIT side 55% vs 45%/GLD advances another 6.54 tonnes up to 893.92 tonnes..this was a paper addition and not physical gold/July gold advances another 234 contracts or 23400 oz of gold/Silver OI for July also very high at 100,000 contracts/Japanese 10 yr bond yields fall to -.14%/German 10 yr bund yield falls to .019%/Most sovereign bond yields plummet today/Tensions rise between the USA, China and Russia/

Good evening Ladies and Gentlemen:

Gold:  $1,273.20 UP $3.30    (comex closing time)

Silver 17.31  UP 6 cents

In the access market 5:15 pm

Gold $1273.95

silver:  17.34

i) the June gold contract is an active contract. Late last night we had a good sized  142 notices filed for 14,200 oz.  The total number of notices filed in the first 9 days is enormous at 14,249 for 1,424,900 oz.  (44,33 tonnes)

ii) in silver we had 0 notices filed.  total number of notices served  in the 9 days:  202 for 1,10,000 oz

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 273.28 tonnes for a loss of 30 tonnes over that period

 

In silver, the total open interest ROSE by 1610 contracts UP to 194,583 AS THE PRICE OF SILVER WAS WELL UP by 28 cents with respect to YESTERDAY’S trading. In ounces, the OI is still represented by just under 1 BILLION oz i.e. 0.972 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia &ex China)

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

In gold, the total comex gold OI ROSE by a CONSIDERABLE 8,627 contracts UP to 515,599 as the price of gold was UP  $10.10 with YESTERDAY’S trading (at comex closing).

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

 

 GLD

 

We had A HUGE change  in inventory, A DEPOSIT OF 6.54 TONNES into the GLD/Inventory rests at  893.92 tonnes.

 SLV

We had no change in inventory into the SLV Inventory/Tonight it rests  at 338.725 million oz.

Both the GLD and SLV are massive frauds as they have no metal behind them!

.

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

1. Today, we had the open interest in silver rise by 1610 contracts UP to 194,583 as the price of silver was up by 28 cents with YESTERDAY’S trading. The gold open interest ROSE by 8,627 contracts UP to 515,599 as the price of gold was up $10.10 yesterday.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

2b)  COT report/

(Harvey)

3. ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN 13.06 POINTS OR .41%/ /Hang Sang closed DOWN 255.24 OR 1.20%. The Nikkei closed DOWN 162.51 POINTS OR 0.97% Australia’s all ordinaires  CLOSED DOWN 0.92% Chinese yuan (ONSHORE) closed DOWN at 6.5626 /Oil FELL to 49.94 dollars per barrel for WTI and 51.37 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.5932 yuan to the dollar vs 6.5624 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS USA DOLLARS LEAVES CHINA 

 

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

i)The big story of the day:  Japanese 10 yr bond yields fall to a record low of -.14%

( Mogi/Bloomberg)

ii)The big giant brokerage firm Nomura announces that they are equity the European equity business: why? they did not make a cent in the years they were in Europe

( zero hedge)

b) REPORT ON CHINA

i)New tensions arise in the East China seas were the Senkaku islands are located (Chinese call these islands Diaoyu) as China sends in a Chinese warship.To add to the tension a Russian frigate was located in the same waters.  Remember that China and Russia are joined at the hip in policy matters.

( zero hedge)

 

ii)This ought to annoy the USA: China orders 1,000 heavy transport aircraft to carry arms and soldiers over greater distances.  Why did China order these to be built?  Because of the souring relationship between the USA and Russia.

( zero hedge)

4. EUROPEAN AFFAIRS

i)John Browne states that the BREXIT fears are deliberately overblown.  His most most important point is this; a BREXIT will do far more damage to the EU and than Britain itself and may help in the long run to the UK has more trade deals could be negotiated without the EU

( John Browne/Euro Pacific Capital)

 

ii)Good reason for citizens of the UK to vote for a BREXIT: Goldman Sachs , JPMorgan and the IMF seek a BREMAIN vote:

iii)the war of words between the head of the Bundesbank and Mario Draghi of the ECB intensify as the German 10 yr bund reaches .02%.  Correctly Weidmann warns of an “abrupt surge” in risk premium as bonds become an asset bubble reading to be pierced:

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

( zero hedge)

ii)

Just what the USA needed: Obama now wants a greater military presence in Afghanistan:

( zero hedge)

6.GLOBAL ISSUES

 

7.OIL ISSUES

(courtesy zero hedge)

8.EMERGING MARKETS

none today

9. PHYSICAL STORIES

i)A terrific commentary today from Alasdair Macleod as he talks about the pension mess that permeates the globe.  Pension funds can no longer create the returns that they have been accustomed to in years forgone. Negative interest rates are not only killing the banks but also pension funds.  Alasdair has a solution:  buy gold.  The one problem: there is not enough gold in the world for them to buy.  That is why we must buy gold to protect ourselves

( Alasdair Macleod/GATA)

ii)Good gold discussion between Lars Schall and Grant Williams on the gold rigging!( zero hedge)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Both inflation expectations and confidence plunge to record lows.Remember that consumer is 70% of USA GDP

( zero hedge)

ii)And now Gallup’s economic confidence:  it tumbles to a 2 yr low:

( Gallup/zero hedge)

 

iii)Take a look at the following two chart:  home improvement and luxury spending.  Both take a huge plunge.

Home improvements if a proxy for new home sales and new home construction.
Luxury goods are meant for the wealthy and they too have stopped spending:
( zero hedge)
iiib)USA fertility rate unexpected drops to the lowest on record:  1.30And the pundits do not understand this??

Millennials are staying at home. You do not need any other explanation.

( Mish Shedlock)

iv)Trading today at 3:30 when we got  word of a huge 55% vs 45% split in favour of a BREXIT

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 515,599 for a GAIN of 8,672 contracts AS THE PRICE OF GOLD WAS UP $10.10 with respect to YESTERDAY’S TRADING. And we should expect another dandy rise in OI Monday with gold’s advance today. WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEARTHAT IS JUNE, A VERY ACTIVE MONTH. 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. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH..  IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 1672 for a loss of 1119 contracts. We had 1101 notices filed yesterday, so we LOST A TINY 18 contracts or 1800 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI ROSE by 234 contracts UP to 2972.This may  be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI ROSE by 6,935 contracts UP to 375,211. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was POOR at 132,281. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was fair at 171,395 contracts. The comex is not in backwardation.

Today we had 142 notices filed for 14200 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by 1610 contracts from 192,973 UP to 194,583 as the price of silver was up BY 28 cents with YESTERDAY’S TRADING. The front month of June saw it’s OI FALL by 10 contracts DOWN TO 339. We had 0 notices filed yesterday, so we lost 10 contracts or an additional 50,000 ounces  will not stand for delivery. The next big delivery month is July and here the OI fell by 3,299 contracts DOWN to 100,389. The volume on the comex today (just comex) came in at 47,299 which IS EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was huge at 76,464. Silver is not in backwardation . London is in backwardation for several months.
 
We had 0 notices filed for nil oz.
 

JUNE contract month:

INITIAL standings for JUNE

June 10.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil  16,943.527oz

HSBC, SCOTIA

( 50 KILOBARS

/SCOTIA)

Deposits to the Dealer Inventory in oz 12,056.25 OZ

375 KILOBARS

Deposits to the Customer Inventory, in oz   31,335.55  oz

477 KILOBARS &

????

XXX.000

No of oz served (contracts) today 142 contracts
(14,200 oz)
No of oz to be served (notices) 1530 contracts

153,000 oz

Total monthly oz gold served (contracts) so far this month 14,249 contracts (1,424,900 oz)

(44.32 TONNES SO FAR)

Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ
Total accumulative withdrawal of gold from the Customer inventory this month  130,173.2 OZ
STRANGE ACTIVITY AGAIN INSIDE THE GOLD COMEX TODAY

Today we had 1 dealer DEPOSIT

i) into Brinks dealer:  12,056.25 oz  (375 kilobars)

total dealer deposit:  12,056.25  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

 

Today we had 2 customer deposit:

i) into JPM:  15,335.55 oz  (477 kilobars)

ii) a strange one!!  16,000.00 oz into Scotia

this is a phony as it it exact oz and it is not kilobars and 16,000.00 oz is not divisible by 32.15 oz

Total customer deposits;  31,335.55 OZ

Today we had 2 customer withdrawals:

I) OUT OF SCOTIA 1607.500 OZ

II)OUT OF HSBC: 15,336.027 OZ

it seems that only HSBC numbers are real/everybody else is phony

 

total customer withdrawals: 29,014.100 OZ

Today we had 1 adjustment:

i) out of Scotia:

287.645 oz was adjusted out of the dealer and into the customer and this I will include as a settlement.(.0008 tonnes)

 

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 142 contracts of which 56 notices was stopped (received) by JPMorgan dealer and 66 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (14,249) x 100 oz  or 1,424,900 oz , to which we  add the difference between the open interest for the front month of JUNE (1672 CONTRACTS) minus the number of notices served upon today (142) x 100 oz   x 100 oz per contract equals 1,577.900 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE.  THE BANKERS JUST RECEIVED THEIR MINSKY MOMENT!! 
 
Thus the INITIAL standings for gold for the JUNE. contract month:
No of notices served so far (14249) x 100 oz  or ounces + {OI for the front month (1672) minus the number of  notices served upon today (142) x 100 oz which equals 1,577,900 oz standing in this   active delivery month of JUNE (49.079 tonnes).
INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE GAINED BACK ALMOST  ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS AND A LITTLE MORE (49.079 TONNES) .
WE  lost 18 contracts or an additional 1800 oz will not stand for silver.
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 49.079 tonnes of gold standing for JUNE and 51.487 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 6.889 TONNES FOR MAY + 49.079 TONNES FOR JUNE + 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 – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008  = 65.803 tonnes still standing against 51.04 tonnes available.
 Total dealer inventor 1,655,331.926 tonnes or 51.487 tonnes
Total gold inventory (dealer and customer) =8,786136.01 or 273.28 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 273.28 tonnes for a loss of 30 tonnes over that period. 
 
JPMorgan has only 25.70 tonnes of gold total (both dealer and customer)
JPMorgan now has only .900 tonnes left in its dealer account.
THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!
 
 end
HUGE ACTIVITY AGAIN INSIDE THE SILVER COMEX
And now for silver
 

June initial standings

 June 10.2016

Silver
Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory  1,332,919.799 oz

Scotia,BRINKS,

DELAWARE,

HSBC,CNT

Deposits to the Dealer Inventory NIL
Deposits to the Customer Inventory   765,743.800  oz

 

JPM

No of oz served today (contracts) 0 CONTRACTS 

nil OZ

No of oz to be served (notices) 339 contracts

1,695,000 oz

Total monthly oz silver served (contracts) 202 contracts (1,010,000 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  15,233,675.8 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 deposit:

i) Into JPM: 765,743.800 oz

 

Total customer deposits:765,743.800 oz.

 

We had 5 customer withdrawals

i) Out of Scotia:126,477.390  oz

ii) Out of Delaware:  598,306.409 oz

iii) Out of Brinks; 437,677.68 oz

iv) Out of HSBC; 167,435.120 oz

v) Out of CNT: 3023.200 oz

:

total customer withdrawals:  1,332,919.799 oz

this is another huge loss in silver and we are not in an active delivery month!

 
 

 

 we had 0 adjustment

 

LOOKS LIKE WE ARE HAVING A BANK RUN AT THE SILVER COMEX/today 1,656,614.322 oz leaves the customer account (eligible acct) 
The total number of notices filed today for the JUNE contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (202) x 5,000 oz  = 1,010,000 oz to which we add the difference between the open interest for the front month of JUNE (339) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JUNE contract month:  202 (notices served so far)x 5000 oz +{339 OI for front month of JUNE ) -number of notices served upon today (0)x 5000 oz  equals  2,705,000 of silver standing for the JUNE contract month.
We lost 10 silver  contract or an additional 50,000 ounces will not stand for metal in this non  active delivery month of June.
 
Total dealer silver:  22.482 million  (RECORD LOW INVENTORY)
Total number of dealer and customer silver:   150.799 million oz
The total open interest on silver is NOW moving away from an all time high with the record of 207,394 being set May 18.2016. The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
end
At 3:30 EST  we receive the COT report which gives position levels of our major players.
No doubt we will see a huge increase in the commercial net short position
First the gold COT:

– Published: Friday, 10 June 2016 | E-Mail  | Print

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
295,688 67,069 41,132 112,940 356,632 449,760 464,833
Change from Prior Reporting Period
21,099 -10,385 2,371 -20,684 8,970 2,786 956
Traders
164 88 76 47 62 252 193
 
  Small Speculators      
  Long Short Open Interest    
  46,570 31,497 496,330    
  -777 1,053 2,009    
  non reportable positions Change from the previous reporting period  
COT Gold Report – Positions as of Tuesday, June 07, 2016
Our large specs:
Those large specs that have been long in gold added a monstrous 21,099 contracts to their long side.
Those large specs that have been short in gold covered a huge 10,385 contracts from their short side.
Our crooked commercials led by thief Jamie Dimon over at JPM
Those commercials who are long in gold pitched an astronomical 20,684 contracts from their long side.
Those commercials who have been short in gold added another 8970 contracts to their short side.
Our small specs:
Those small specs that have been long in gold pitched 777 contracts from their long side
Those small specs that have been short in gold added 1053 contracts to their short side.
The small specs seem confused, they think that they are commercials.

Conclusion:
the commercials go net short by a huge 29,654 contracts while the large specs went net long by 31,484
judging from the action today, expect fierce raids next week in gold.
And now for silver:
Seems that our bankers are totally confused in silver.  They do not have their way like they do in gold.
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
86,676 29,635 21,265 56,476 128,310
-3,139 1,451 1,123 -3,494 -7,625
Traders
87 59 43 36 42
Small Speculators Open Interest Total
Long Short 192,376 Long Short
27,959 13,166 164,417 179,210
-232 -691 -5,742 -5,510 -5,051
non reportable positions Positions as of: 145 128
  Tuesday, June 07, 2016
Our large specs:
Those large specs that have been long in silver pitched (???) 3139 contracts from their long side. ??
Those large specs that have been short in silver added 1451 contracts to their short side??
Our commercials:
Those commercials that have been long in silver pitched 3494 contracts from their long side
Those commercials that have been short in silver covered a whopping 7625 contracts from their short side.
Our small specs;
Those small specs that have been long in silver pitched 3067 contracts from their long side
Those small specs that have been short in silver added 1338 contracts to their short side.
Ladies and Gentlemen:
It sure looks like the commercials are starting to throw in the towel as the commercials go net long by 4131 contracts.
Both Bill Holter and I stand by our comments that the long in both gold OI June and many silver OI are of sovereign Chinese interests.
end
And now the Gold inventory at the GLD
June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes
JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones
June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes
june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes
June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes
June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes)
June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes
June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes
May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES
May 27/no change in gold inventory at the GLD/Inventory rests at 868.66 tonnes
May 26./no change at the GLD/Inventory rests at 868.66 tonnes
May 25./no change in gold inventory at the GLD/Inventory rests at 868.66 tonnes
MAY 24/ a good sized withdrawal of 3.86 tonnes of paper gold from the GLD/Inventory rests at 868.66 tonnes
May 23./this is rather impossible: another huge deposit of 3.26 tonnes into the GLD with the price of gold down again today?/inventory rests at 872.52 tonnes
May 20/what!!!A MONSTER DEPOSIT OF :8.92 TONNES OF GOLD INTO THE GLD INVENTORY/AND WITH GOLD DOWN $2.80??/INVENTORY RESTS AT 869.26
May 19/ANOTHER HUGE DEPOSIT OF 4.46 TONNES OF GOLD INTO THE GLD/iNVENTORY RESTS AT 860.34 TONNES
May 18 /no changes in inventory at the GLD/Inventory rests at 855.89 tonnes.
May 17/ we had a huge deposit of 4.76 tonnes of gold into the GLD/Inventory rests tonight at 855.89 tonnes/in the last two and 1/2 weeks we have added 50 tonnes of gold and this most likely was all paper gold addition..
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

June 10.:  inventory rests tonight at 893.92 tonnes

end

Now the SLV Inventory
June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz
JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz.
June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz
june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/
June 6/no change at the SLV/Inventory rests at 337.299 million oz/
June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz
June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz
June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz
May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ
May 27/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz/
May 26./ no change in silver inventory at the SLV/Inventory rests at 335.739 million oz
May 25./no change in silver inventory at the SLV/Inventory rests at 335.739
MAY 24/no change in inventory at the SLV/Inventory rests at 335.739 million oz
May 23./we had a small withdrawal of 285,000 oz and that generally means payment of fees.Inventory rests at 335.739 million oz
May 20/WE HAD A GOOD SIZED DEPOSIT OF 951,000 OZ INTO THE SLV/INVENTORY RESTS AT 336.024 MILLION OZ
May 19/no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz
May 18/no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz/
May 17/no change in silver inventory at the SLV/Inventory rests at 335.073 million oz/
.
June 10.2016: Inventory 338.725 million oz
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 3.5 percent to NAV usa funds and Negative 3.3% to NAV for Cdn funds!!!!
Percentage of fund in gold 61.1%
Percentage of fund in silver:37.5%
cash .+1.4%( June 10/2016). /
2. Sprott silver fund (PSLV): Premium FALLS  to -0.15%!!!! NAV (June 10.2016) 
3. Sprott gold fund (PHYS): premium to NAV  RISES TO +1.65% to NAV  ( June 10.2016)
Note: Sprott silver trust back  into NEGATIVE territory at -15% /Sprott physical gold trust is back into positive territory at +1.65%/Central fund of Canada’s is still in jail.
 
 
 

END

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

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

Soros Buying Gold On BREXIT, EU “Collapse” Risk

George Soros is again buying gold and selling and going short stocks due to BREXIT and EU “collapse” risk, after a six year hiatus from the gold market.


Gold in USD (2009 to 2012)

The multi-billionaire hedge fund manager, the man who “broke the Bank of England” and one of the richest and most powerful men in the world has now publicly warned that inflation is likely soon and is voicing concerns about BREXIT, the disintegration of the EU, a Chinese financial crash, global contagion and a new World War.

Soros Fund Management, which manages around $30 billion for the Soros family, is now aggressively selling and going short stocks and diversifying into gold and shares in gold mining companies, due to his now even “gloomier” view of the global financial system and the global economic outlook.

Soros has become more involved in trading at his family office, due to his many concerns and the risk that “large market shifts may be at hand”, according to a person familiar with the matter as reported by Bloomberg.

Soros recently warned that the EU is “on the verge of collapse” because of its handling of the Greek economic crisis and refugee crisis and said the prospect of a BREXIT from EU Superstate posed a fresh threat to the EU.

Soros, 85, has been spending more time in the office directing trades and recently oversaw a series of big, bearish investments, said the person, who asked not to be identified discussing private information. Soros Fund Management LLC sold stocks and bought gold and shares of gold miners last quarter, anticipating weakness in various markets, according to a government SEC filing. The Wall Street Journal earlier reported Soros’s decision.

George_Soros_-_Festival_Economia_2012_02George Soros (Source: Wikipedia)

The smart money such as Soros, old money such as Berenger Bank, large institutional money such as Munich Re and Blackrock, who understand diversification and gold’s function as a store of value continues to diversify into gold. There is an awareness with these smart, “insider” money of gold’s benefit as a hedging instrument and safe haven asset but also an awareness that the outlook for prices is very positive, at these depressed levels.

The less informed money continues not to appreciate the risks that are again building in the system. Risk appetite remains high and there is a distinct lack of awareness regarding how risks, such as BREXIT and contagion in the EU, may impact financial markets and traditional assets such as stocks, bonds, property and indeed deposits.

Governments, economists, financial advisers, brokers and of course bankers did not see the first crisis coming in 2008 and they are not seeing it now. Some are simply not informed or aware of the risks and others choose to ignore them and spin the illusion that all is well and there is nothing to be worried about.

The cosy consensus and groupthink of economic recovery continues and there is a remarkable lack of a plurality of opinion and lack of debate regarding the risks posed to savers and investors today.

The real risks of another global financial crisis as warned in recent days by Martin Wolf and Japanese Prime Minister Abe are largely being ignored again – as was the case before the first crisis.  A few market observers are warning about and again they are largely being ignored

The inability to look at the reality of the global financial and economic challenges confronting us today will see investors suffer financial losses again. In the coming crisis, depositors and savers are also exposed due to the new bail-in regimes.

Real diversification and an allocation to gold bullion coins and bars remains the key to weathering the second global financial crisis.

Recent Market Updates
UK Gold Demand Rises On BREXIT “Nerves”
 Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
 Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

– Silver Price To Surge 800% on Global Industrial and Technological Demand

 BREXIT Gold Diversification As Vote Fuels Market Uncertainty
 Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold


Gold and Silver Prices and News
Silver Acting Like ‘Gold on Steroids’ as Assets Near Record High (Bloomberg)
UK clients “seeking to buy gold amid increased risks of a Brexit vote…” (Examiner)
Gold holds near 3-wk high, set for second weekly rise (Reuters)
Euro zone at risk of suffering lasting economic damage – Draghi – (RTE)
Gold near three week high as German bond yields hit new low (Guardian)

3 Reasons Why Gold Won’t Tank – UBS (CNBC)
Commodities super cycle is gathering steam (Marketwatch)
Ireland in ‘frontline’ as Brexit fear sparks sell-off (Examiner)
France shuns Europe as Brexit revolt spreads (Telegraph)
Unsustainable Debt will Melt most Paper Assets (CTM.com)
Read More Here

Gold Prices (LBMA AM)
10 June: USD 1,266.60, EUR 1,121.07 and GBP 876.87 per ounce
09 June: USD 1,258.35, EUR 1,107.98 and GBP 870.53 per ounce
08 June: USD 1,252.40, EUR 1,101.61 and GBP 851.65 per ounce
07 June: USD 1,241.10, EUR 1,091.42 and GBP 851.02 per ounce
06 June: USD 1,240.55, EUR 1,092.67 and GBP 859.08 per ounce
03 June: USD 1,211.00, EUR 1,086.63 and GBP 839.34 per ounce

Silver Prices (LBMA)
10 June: USD 17.32, EUR 15.33 and GBP 12.01 per ounce
09 June: USD 17.05, EUR 15.03 and GBP 11.79 per ounce
08 June: USD 16.75, EUR 14.73 and GBP 11.50 per ounce
07 June: USD 16.31, EUR 14.36 and GBP 11.18 per ounce
06 June: USD 16.40, EUR 14.46 and GBP 11.39 per ounce
03 June: USD 16.10, EUR 14.45 and GBP 11.17 per ounce

Mark O’Byrne
Executive Director
end
A terrific commentary today from Alasdair Macleod as he talks about the pension mess that permeates the globe.  Pension funds can no longer create the returns that they have been accustomed to in years forgone. Negative interest rates are not only killing the banks but also pension funds.  Alasdair has a solution:  buy gold.  The one problem: there is not enough gold in the world for them to buy.  That is why we must buy gold to protect ourselves
(courtesy Alasdair Macleod/GATA)

Alasdair Macleod: The pensions mess — Can gold help?

Section:

By Alasdair Macleod
GoldMoney.com, St. Helier, Jersey, Channel Islands
Thursday, June 9, 2016

The British have recently seen two unpleasant examples of the cost of pension fund deficits.

A deficit at British Steel, estimated to be about L485 million, was followed by a deficit at British Home Stores of L571 million. In both cases, pension fund deficits have scuppered corporate rescue plans, because understandably no buyer will take on these liabilities.

These two cases are the small tips of a very large iceberg, and reflect problems not just in Britain, but anywhere where pension schemes exist. They have been brewing for some considerable time, but have escalated as a direct consequence of central banking’s monetary policies. They are a crisis whose cause is concealed not only from the pensioners, but from trustees and investment managers as well.

This article lays out the problem and its scale, so far as it is known, and notes that a pension fund that has a holding in gold is a very rare animal. Indeed, one of the best known examples, the Teacher Retirement System of Texas, holds less than 1 percent of its $130 billion assets in gold. …

… For the remainder of the commentary:

https://www.goldmoney.com/research/goldmoney-insights/the-pensions-mess-..

 

 

END

 

Good gold discussion between Lars Schall and Grant Williams on the gold rigging!

(courtesy zero hedge)

 

Gold rigging will fail as investors see fraud of ‘paper gold,’ Grant Williams says

Section:

10:15a ET Friday, June 10, 2016

Dear Friend of GATA and Gold:

Fund manager and market analyst Grant Williams, interviewed by Lars Schall for Matterhorn Asset Management’s Gold Switzerland, says he is certain the gold market is rigged and that as investors realize that “paper gold” isn’t real gold, they will demand real gold and take it out of the banking system, causing a big problem for the market riggers.

Williams says: “The stories of rigging in the gold and silver markets are legendary. There are so many of them. Some of them are wackier than others, but if the last three or four years have taught us anything, it’s that all financial markets are rigged and I truly believe they are. I’ve been involved in financial markets for 30 years, and so if you want to tell me that they can rig Libor, one of the key rates in the entire world, but no one wants to rig the gold and silver market, I think you’re out of your mind.

end

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

 
 

:

1 Chinese yuan vs USA dollar/yuan  UP to 6.5626 ( DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.5932) / Shanghai bourse  CLOSED   / HANG SANG CLOSED DOWN 255.24 OR 1.20%

2 Nikkei closed DOWN 67.05 OR 0.40% /USA: YEN FALLS  TO 106.73

3. Europe stocks opened ALL IN THE RED  /USA dollar index UP to 94.19/Euro DOWN to 1.1297

3b Japan 10 year bond yield: FALLS  TO -.140%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.73

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  49.94  and Brent: 51.37

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 DOWN for WTI and DOWN 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 0.035%   German bunds in negative yields from 9 years out

 Greece  sees its 2 year rate RISE to 8.37%/: 

3j Greek 10 year bond yield RISE to  : 7.43%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1266.60/silver $17.23(7:45 am est)  RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 4 in  roubles/dollar) 64.35-

3m oil into the 49 dollar handle for WTI and 51 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 .9638 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0889 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 IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU.

3r the 9 Year German bund now  in negative territory with the 10 year FALLS to  + .035%

/German 9 year rate negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

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

4. USA 10 year treasury bond at 1.654% early this morning. Thirty year rate  at 2.455% /POLICY ERROR)

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

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

Global Stocks Sharply Lower As Bond Yields Hit New Record Lows; Oil Slides Below $50

The overnight market action has so far been a repeat of yesterday’s, when global bond yields relentlessly slid to fresh record lows around the globe following the launch of the ECB’s corporate bond monetization program, and which unlike in recent days has been seen increasingly as a “risk off” signal, pressuring worldwide equities sharply lower. Indeed, Asia was down 1% and various European bourses flirting with a 2% drop, with US equity futures down about 0.6%, but the biggest story once again remains the collapse in yields, as 10Y government notes in Japan, Germany and the U.K. all posted record-low yields over last 24 hours, with US Treasury set to follow soon. For now, all eyes are fixed on the 10Y German Bund and what time today it goes into negative territory.

One explanation for today’s risk off mood is rising concerns about upcoming event catalysts: “ahead of the Fed and BOJ next week, and the vote on Brexit the week after, no one wants to take risk today,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. A better explanation is that stocks are finally paying attention to what the bond market has been screaming in recent weeks which is simple: deflation, if not stagflation. At this point lower yields will likely result in lower stock prices.

As we noted yesterday, when UK Gilt yields had slid to the lowest level in history, while 10y Treasuries closed below 1.7% at 1.688% after dropping a couple of basis points in yield, the rush into bond safety is unprecedented. That took US Tsys to the lowest level since February and a lot of the chatter is how they’ve now broken the downside of the recent tight trading range with February’s low mark of 1.659% now well within sight. Meanwhile 10y Bunds continue to set new dizzying lows. They finished a couple of basis points lower yesterday at 0.031% and touched an intraday low of 0.022% mid-way through the afternoon. Yesterday’s move actually meant Bund yields were 41% tighter on the day and is the third time in five days that yields have tightened by over 40%! Bloomberg’s global developed sovereign bond index is now yielding just 0.601%, the lowest on record after starting the year at 1.021%. Moments ago Bunds were trading below 0.02% and appear set to cross into the negative zone at some point today unless the ECB steps in with a bout of selling, as it did last April/May.

And while in recent weeks the collapse in global yields was largely ignored by risk assets, this time caution prevails as the week draws to a close, with global stocks headed for their biggest two-day decline in a month as investors finally gird themselves for potentially seismic events this month. The MSCI All-Country World Index pared its fourth weekly advance. Bonds rose, sending yields from Japan to Germany to all-time lows, before next week’s Federal Reserve meeting and Britain’s referendum on European Union membership later in the month. Rates on investment-grade corporate debt in euros were also near lows following purchases by the European Central Bank.

The Dollar Spot Index rose for a second day, adding 0.2% after rallying 0.4% on Thursday, which in turn has pressured commodities as copper declined again and WTI slid back under $50.

According to Bloomberg, optimism that drove U.S. stocks to a 10-month high this week may have peaked before meetings by the Fed and the Bank of Japan, Britain’s vote and U.S. political conventions, all of which have the potential to roil markets. While policy makers have done what they can with stimulus to shore up economies, they’ve pushed yields lower, hurting earnings prospects for banks.European shares have fallen every day since the ECB’s corporate bond-buying program started on Wednesday.

In other words, the ECB has another policy failure on its hands, and this time it may have no choice but to buy stocks as a last ditch measure to prevent an all out rout.

“The market is looking at a very small chance of the Fed moving next week,” Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd., said by phone. “While that’s been supportive of risk assets, a delay in the Fed rate hike is also a reflection of weaker economic backdrop. Further weakness in U.S. economic data along with the potential for Brexit would be a cause for concern.”

The MSCI world index lost 0.6 percent at 10:32 a.m. in London. It reached a six-month high mid-week as the S&P 500 came within 0.6 percent of a record. The gauge of global equities is still heading for a 0.3 percent weekly advance, while the U.S. measure has climbed 0.8 percent — both set for a fourth week of gains. Futures on the S&P 500 Index slipped 0.6 percent, following a 0.2 percent retreat in the U.S. benchmark. The index — which remains about 1 percent away from its record high — clawed back declines of as much as 0.5 percent Thursday as gains in utilities and telephone companies countered losses among banks and mining shares.

Market Wrap

  • S&P 500 futures down 0.6% to 2093
  • Stoxx 600 down 1.5% to 336
  • FTSE 100 down 1.4% to 6143
  • DAX down 1.8% to 9903
  • S&P GSCI Index down 0.8% to 384.8
  • MSCI Asia Pacific down 1% to 130
  • Nikkei 225 down 0.4% to 16601
  • Hang Seng down 1.2% to 21043
  • S&P/ASX 200 down 0.9% to 5313
  • US 10-yr yield down 3bps to 1.66%
  • German 10Yr yield down less than 1bp to 0.03%
  • Italian 10Yr yield up 1bp to 1.39%
  • Spanish 10Yr yield up 2bps to 1.44%
  • Dollar Index up 0.25% to 94.19
  • WTI Crude futures down 1.6% to $49.75
  • Brent Futures down 1.4% to $51.20
  • Gold spot down 0.2% to $1,267
  • Silver spot down 0.3% to $17.23

Top Global News

  • Tesla Denies Model S Defect, Effort to Discourage Report to U.S.: Issued a lengthy rebuttal to reports that the U.S. is investigating a potential safety defect involving Model S sedan suspensions, and said it hasn’t discouraged customers from reporting issues to regulators
  • Obama Endorses Clinton, a Signal to Democrats and to Sanders: President to join campaign against Trump at Wisconsin event; Warren Endorses Clinton, Saying She’ll ‘Get Into This Fight’
  • Twitter Says Some Accounts Locked After Password Disclosures: Said some of its accounts were locked to prevent potential disclosures from hacks of other websites that may have leaked login credentials on the internet
  • AT&T Said to Make 2nd Round Offer for Yahoo Assets: Reuters: Yahoo set to put together new shortlist of bidders in coming days after AT&T, Verizon made 2nd round bids, Reuters reports
  • Puerto Rico Debt-Crisis Plan Passes House in Bipartisan Vote: Senate said to plan action before July 1 bond payment deadline
  • Japan’s Line Seeking to Raise as Much as $1 Billion in IPO: Naver-owned company to list in New York and Tokyo in July
  • Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe: Received a whistle-blower complaint alleging the bank inflated the value of mortgage bonds on its books and masked losses around 2013, according to people with knowledge of the situation
  • Merck & Co. to Buy Afferent Pharmaceuticals for $500m Upfront: To acquire all outstanding stock of closely held Afferent for $500m in cash upfront
  • Ralph Lauren Hires Coach CFO as It Shakes Up Management Ranks: Nielsen’s appointment comes after CEO turnaround announcement
  • Wendy’s Says Breach Was ‘Considerably’ Bigger Than It Thought: Discovered malicious software aimed at getting customers’ payment-card information from point-of-sale systems
  • U.S. Seeks Oil-Reserve Overhaul to Ease Mandatory Drawdowns: Energy Department seeking $2 billion to overhaul oil stockpile
  • Banks Gain Ground in Push to Change Derivatives Capital Rule: Basel leverage rule said to punish banks for handling trades
  • Goldman CEO Says Fed Hike Would Be Good for Confidence: Echos: A rate increase in the U.S. would be well received by markets, CEO Lloyd Blankfein says in interview
  • PepsiCo Said to Cancel Meeting on Diet Pepsi Revival Plan: WSJ
  • American Farm Bureau Federation Favors Bayer-Monsanto Merger: HB
  • SolarCity, Arizona Public Service Talks Suspended: AZCentral

Looking at regional markets, we start in Asia which traded lower following yesterday’s modest US losses thanks to the last hour USDJPY-driven ramp, and where stocks snapped a 3-day win streak. Nikkei 225 (-0.4%) and ASX 200 (-0.9%) were both pressured following the downturn in energy which saw WTI crude futures also pull back from 3 consecutive days of gains, while weakness in basic materials also led the declines in Australia. The Hang Seng (-1.2%) completed the negative picture in Asia as a lack of drivers and the closure of markets in China kept demand subdued. Finally, 10yr JGBs gained with the June futures contract printing its highest on record, while both the 10yr, 20yr and 30yr yields declined to fresh record lows amid the risk-averse sentiment and the BoJ in the market to acquire over JPY 1.2trl in government debt.

Top Asian News

  • Japan Bond Yield Falls to Record as Debt Surges Around the World: Joins a rally in U.S. and European debt on concern the outlook for the global economy is worsening
  • Korea Prosecutors Raid Lotte, Hotel Unit Offices as Probes Widen: Search of offices comes as Hotel Lotte scales back IPO
  • Ant Financial Said to Buy 20% of Hedge Fund Data Firm: Alibaba’s finance affiliate is said to pay $38m for Shanghai Suntime stake
  • Nanshan Buys Virgin Australia Stake From Air N.Z. at 18% Premium: deal subject to regulatory approval by Chinese authorities
  • Miners Cut Distressed Debt Pool by $60b as Rebound Firms: Anglo, Glencore, Freeport no longer make distressed bond list
  • Fidelity Sees Indonesia Buying Opportunity as S&P Keeps at Junk: Holdings in fund 21.7% vs 4.3% y/y
  • Singapore Losing Out to Hong Kong in Race to Be Most Competitive: stricter rules on foreign labor may explain Singapore’s slide

In Europe, this morning has started with a steep sell-off in equities with all European Bourses down in the session in tandem with the decline in oil prices. The Stoxx Europe 600 Index has been struggling for the past two weeks and slipped 1.6 percent on Friday, down for a third consecutive day for the first time since the beginning of May. All but nine of the 600 companies retreated, with banks and insurers leading the drop. Deutsche Lufthansa AG fell 4.5 percent after announcing the surprise departure of Chief Financial Officer Simone Menne. DAX is currently down -2.0% with the worst performing sector being financials. In terms of notable company news, the Sainsbury’s acquisition of Home Retail is starting to take shape with Sainsbury’s CFO replacing Home Retail’s CEO and announcing that the takeover should be completed in Q3. Elsewhere Lufthansa shares declined 4.5% after the airline announced the surprise departure of CFO Simone Menne. In credit markets, global yields have continued to plunge with Bunds hitting fresh record lows of 0.02%, while yields in the long end have notably underperformed as participants continue to hunt for yield. Of note, Bunds hitting around 165.18 could see yields fall to around —0%. 

Top European News

  • Billionaire Roekke Agrees to Buy BP’s Norwegian Unit in Oil Push: Det Norske agreed to buy BP’s Norwegian unit in a NOK10.8b ($1.3b) stock deal, to issue 135m shares at NOK80 each
  • Naspers Said to Plan Sale of Polish EBay Competitor Allegro: Morgan Stanley said to advise African tech firm on disposal, Polish e-commerce site said to be worth up to $3 billion
  • Lufthansa Shares Fall as ‘Well-Regarded’ CFO Makes Surprise Exit: Finance chief Simone Menne to leave Aug. 31 to pursue other career options
  • UniCredit Board Said to Meet on CEO Search That Could Take Weeks: Company’s succession process said to possibly take weeks
  • Zurich Insurance to Create Simpler Structure Under CEO Greco: Heads of regions to report directly to new CEO Mario Greco
  • Tesco Dumps Turkish Unit at Huge Discount to Market Value: Sale of 95.5% Kipa stake to yield proceeds of $43.4 million
  • Axel Springer Buys EMarketer, Extending U.S., Digital Push: To buy market researcher EMarketer at an enterprise value of ~$250m
  • Europe Stocks Could Plunge 24% in Brexit, Stress Study Shows: Risk-modeling firm Axioma Inc. found that stocks would take the hardest hit among asset classes when it simulated the effects of a “Leave” vote on a hypothetical portfolio
  • Brexit Debate Sees Johnson Attacked for Leadership Ambitions

In FX, the Bloomberg Dollar Spot Index rose for a second day, adding 0.2 percent after rallying 0.4 percent on Thursday. The gauge is headed for a second straight weekly decline, down 0.2 percent. The Fed decision June 15, while the BOJ convenes the following day. The MSCI Emerging Markets Currency Index dropped 0.3 percent. The regional currency gauge is still up 1.4 percent this week, the best performance in two months. Sterling headed for its second weekly decline versus the dollar before the U.K. votes on June 23 on whether to remain in the EU. Implied volatility for one-month options on the pound versus the dollar rose to 23.5 percent, the highest since January 2009, and more than double the level at the end of April. Expectations for price swings have climbed every week since the period ended April 29, the longest streak of increases since late February. Russia’s ruble fell for a second day, dropping 0.6 percent, before a central bank rate decision. While economists are split on whether policy makers will cut or leave their key rate unchanged, forward-rate agreements are signaling a reduction over three months.

In commodities, the Bloomberg Commodity Index is down for a second day, the first two-day decline since May 24. It’s still heading for a fifth weekly advance, the longest rally in more than two years.
West Texas Intermediate crude fell 1.3 percent to $49.89 a barrel, trimming its fourth weekly advance in five to 2.7 percent. U.S. inventories fell by 3.23 million barrels last week to a two-month low, the third straight drop, government data showed Wednesday. Wildfires in Canada curtailed oil-sands production, with lost output estimated at less than 1 million barrels a day. Copper for delivery in three months extended a weekly decline by 0.4 percent to $4,497 a ton after stockpiles on the London Metal Exchange posted the biggest weekly increase in more than a decade. Metal registered to the London Metal Exchange jumped 37 percent, the most in more than a decade as falling premiums for physically delivered metal and warehouse incentives saw metal diverted to locations in Singapore and South Korea.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities trade lower ahead of the US open with softness in energy prices and weakness in financial names guiding sentiment
  • Some moderate moves in FX but all very tight/range bound as yet while, bond yields hitting record lows
  • Looking ahead, highlights include the Canadian jobs report, Uni. Of Michigan and US monthly budget statement
  • Treasuries rallied in overnight trading and global bond yields drop to record lows as concern over growth and Brexit increase risk-off sentiment. 10Y government notes in Japan, Germany and the U.K. all posted record-low yields over last 24 hours.
  • Trader expectations for price swings in the pound climbed for a sixth week to a fresh seven-year high as anxiety about a potential British exit from the European Union gripped investors
  • An influential adviser to Prime Minister Shinzo Abe said the BOJ should bolster monetary stimulus as soon as next week, but stick to its main tool of government-bond purchases for now rather than opt for a more-negative benchmark interest rates
  • The European Central Bank has pledged enough stimulus to return euro-area inflation to its goal, policy maker Bostjan Jazbec said, in a sign that officials may sit tight over the summer months
  • Spain is heading for its second election in six months on June 26 after party leaders failed to piece together a governing majority from the deadlocked parliament
  • The world’s biggest banks have argued for years that capital rules punish them for handling clients’ derivatives trades. All that lobbying is starting to pay off

* * *

DB’s Jim Reid concludes the overnight wrap

Lower yields certainly weren’t just unique to the UK yesterday as global bond markets rallied in what was a much more risk-off day all round. Indeed 10y Treasuries closed below 1.7% at 1.688% after dropping a couple of basis points in yield. That took them to the lowest level since February and alot of the chatter is how they’ve now broken the downside of the recent tight trading range with February’s low mark of 1.659% now well within sight. Meanwhile 10y Bunds continue to set new dizzying lows. They finished a couple of basis points lower yesterday at 0.031% and touched an intraday low of 0.022% mid-way through the afternoon. Yesterday’s move actually meant Bund yields were 41% tighter on the day and is the third time in five days that yields have tightened by over 40%! Bloomberg’s global developed sovereign bond index is now yielding just 0.601%, the lowest on record after starting the year at 1.021%.

There didn’t appear to be one obvious trigger to set off the rally in bonds yesterday or safe haven trades for that matter. The decline in Chinese CPI and surprise Bank of Korea easing early on may have been partly to blame while WTI Oil (-1.31%) could have also been a factor after paring some of the big rally of late. Metals also had a rougher day with Copper and Aluminium down over 1%. A lot of the chatter was that the moves were just more reflective of position squaring as we edge another day closer to the Brexit vote with a general feel of caution clearly evident in the market at the moment. Reports surfacing out of the WSJ suggesting that George Soros has been recently buying Gold and Gold stocks perhaps helping while later on in the day we also heard Bill Gross warn that the current $10tn of negative yielding bonds is a ‘supernova that will explode one day’.

So unsurprisingly it was risk assets which lost out yesterday. European equities shed around 1% generally although losses in the US were a lot more modest by comparison. The S&P 500 finished just -0.17% lower and continues the theme that we’ve seen of late with moves either way being fairly subdued. With a number of big events still to come this month it still feels like there’s a bit of a waiting on the sideline approach at the moment.

This morning in Asia and with little else to guide markets, it looks like that risk off theme is continuing for the most part with bourses edging lower. While markets in China are still closed, the Hang Seng (-0.73%) has reopened in the red, while the Nikkei (-0.85%), Kospi (-0.49%) and ASX (-0.99%) are also down. The move lower in bond yields yesterday is also being mirrored in the JGB market where the 10y has struck a new record low of -0.152%. In fact as we type the 15y maturity of the JGB has just turned negative for the first time ever. It’s getting to the stage where these sorts of headlines are almost becoming commonplace.

Moving on. The economic data didn’t add a huge amount to the debate yesterday. Early on in Europe we saw Germany print a larger than expected trade surplus in April with exports flat MoM after the consensus had been for a decline (-0.8% expected). Meanwhile in the US we saw initial jobless claims nudge down slightly last week. Claims printed at 264k (vs. 270k expected) which is down 4k from the week prior, while the four-week average was down 7k to 270k. Elsewhere we learned that wholesale inventories rose more than expected in April (+0.6% mom vs. +0.1% expected), while trade sales (+1.0% mom vs. +1.1% expected) were more or less in line. The Atlanta Fed left their Q2 GDP forecast of 2.5% unchanged post that report.

Away from the data, there was also some focus on the comments from ECB President Draghi yesterday when he warned about the cost of delaying reforms in Europe. Draghi said that ‘we cannot avoid the fact that, over time, the inherent speed limits resulting from the euro area’s unfavourable demographics will start to bite’ and that the cost from delaying the implementation of reforms is ‘simply too high’.
Looking at today’s calendar, this morning in Europe the early focus should be on Germany shortly after we go to print with the final revision to the May CPI report (no change to the +0.3% mom expected). In France and Italy we’ll get the latest industrial production reports too. This afternoon in the US the release of note will be the first take of the University of Michigan consumer sentiment reading for June where expectations are for a 0.7pt decline to 94.0. Later on this evening we’ll get the Monthly Budget Statement for May.

Before we wrap up, first thing Monday morning will see the release of the final batch of economic indicators out of China including retail sales, industrial production and fixed asset investment, so expect that to set the tone on Monday.

end

ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN 13.06 POINTS OR .41%/ /Hang Sang closed DOWN 255.24 OR 1.20%. The Nikkei closed DOWN 162.51 POINTS OR 0.97% Australia’s all ordinaires  CLOSED DOWN 0.92% Chinese yuan (ONSHORE) closed DOWN at 6.5626 /Oil FELL to 49.94 dollars per barrel for WTI and 51.37 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.5932 yuan to the dollar vs 6.5624 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS USA DOLLARS LEAVES CHINA 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

The big story of the day:  Japanese 10 yr bond yields fall to a record low of -.14%

(courtesy Mogi/Bloomberg)

Japan 10-Year Yield Falls to Record Low as Bonds Rally Globally

Japan’s benchmark 10-year government bond yield fell to a record low, driven by rallies in U.S. and European bonds amid concern about the outlook for the global economy.

The 10-year JGB yield fell 1.5 basis points to minus 0.140 percent as of 10:20 a.m. in Tokyo Friday, exceeding the previous record low of minus 0.135 percent. The U.K.’s 10-year gilt yield reached an all-time low on Thursday, while the U.S. Treasury 10-year benchmark yield extended its decline in Asian trading, falling one basis point to 1.68 percent.

Bonds have rallied after the weakest payrolls data in almost six years damped expectations that the Federal Reserve will raise interest rates anytime soon. Concerns about the health of the world’s biggest economy and its impact globally were highlighted when the Wall Street Journal reported that billionaire investor George Soros is concerned that large market shifts may be at hand.

“The Japanese bond yield is getting tailwinds from overseas bond rallies,” said Mari Iwashita, chief market economist at SMBC Friend Securities Co. in Tokyo. “Investors are probably feeling more comfortable buying bonds than stocks. Soros’s reported views on the global economy may also be a factor underpinning this sentiment.”

 

end

 

The big giant brokerage firm Nomura announces that they are equity the European equity business: why? they did not make a cent in the years they were in Europe

(courtesy zero hedge)

A Day In The Life Of Several Hundred Laid Off Nomura Traders

Back in April, Japan’s largest brokerage, Nomura, announced that it was quitting the European equity business. The decision was a cost cutting measure, and was made easier by the fact that the European operation hadn’t made a profit since 2010.

Nomura isn’t alone, Investment banks across the globe are cutting equity traders as a result of the current trading environment.

The following is what it was like for a group of London traders the day Nomura made the announcement that their services were no longer required, as chronicled by Bloomberg.

* * *

The fact that the division had only made one annual pretax profit since being bought from bankrupt Lehman Brothers Holdings in 2008 created an environment where traders would have to filter out the rumors of impending cuts quite frequently. However on April 11, it wasn’t business as usual.

At One Angel Lane, Nomura’s stylish, eco-friendly European headquarters, employees have learned to filter out rumors of impending cuts. The division has only made an annual pretax profit once since it was bought from bankrupt Lehman Brothers Holdings Inc. in October 2008 — a fact so often mentioned one half-expects it to be printed on employees’ business cards.

On April 11, though, the noise was louder than usual. A senior executive had let slip to a colleague at a barbecue that he was dreading the following week because the bank was shutting down equities. By the time media reports of unspecified job cuts in the U.S. and Europe appeared at lunchtime, all semblance of work had ground to a halt. Desk heads asked their managers what was going on. According to one of those doing the asking, they were told there was nothing to worry about.

That changed early the next morning when e-mails went round ordering staff to attend a compulsory meeting. Research analysts and salespeople caught the elevators up to the 11th floor; traders congregated on the third. By 9 a.m., it was official. Everyone was given an “at risk” letter, in which the firm offered to help them find alternative roles over the next 45 days, but they knew it was typically just a formality.

After listening to speeches by senior managers and human resources personnel, everyone was told to gather their belongings, leave key cards at reception, and exit the building. Most made their way to All Bar One and The Folly, the only pubs open in the city of London at that hour, to have a pint, and perhaps even to express a sigh of relief that there was no longer a daily worry about whether or not a job would be there the next morning.

The Folly, a pub operated by Drake and Morgan Bars and Restaurants

They made their way in dribs and drabs. Hundreds of displaced bankers, shuffling up Suffolk Lane to All Bar One and along Upper Thames Street toward the Folly, the only pubs in the City of London open that early on an overcast Tuesday morning.

The shell-shocked men and women sipping pints and consoling each other had become part of a growing population. Faced with a toxic blend of zero-interest rates, stiffer capital requirements and a collapse in trading revenue, banks including Barclays Plc, Deutsche Bank AG and Credit Suisse Group AG have announced large cuts to their European operations in recent months. Even U.S. firms, with higher profitability, are trimming staff.

Among the bankers who stayed in the pubs until late in the evening, seemingly attempting to stave off the inevitable by remaining in the financial district, there were at least some expressions of relief. Nomura had already conducted one round of restructuring, in 2012, following the appointment of Koji Nagai as chief executive officer. Unlike his predecessor, Nagai was openly skeptical about Nomura’s place in a saturated and tightly regulated European market. The whiff of insecurity pervaded the trading floor.

The bank went on a cost-cutting drive and, under the direction of a new compliance team hired from UBS Group AG, started to clamp down on even minor breaches to company rules. Staff members were chastised for sending presentations to their personal e-mail accounts to work on over the weekend. One group of traders was threatened with dismissal after being caught on closed-circuit TV stealing candy from a vending machine.

Knowing their fate was one thing, however one important question remained unanswered: would those that were let go still receive a bonus. Figuring that the financial year finished prior to being let go, many assumed that a bonus would still be provided – sadly, they were wrong.

For the newly unemployed, one question loomed large: Would they still get a bonus? Nomura’s financial year finished at the end of March — well before any decision was announced regarding job cuts. Some traders and bankers assumed that, since they’d worked a full year, they would still receive an award.

They were wrong. On May 9, Nomura wrote to staff notifying them they would get nothing. Discretionary bonuses, the letters pointed out, were based on factors including future value to the company. Some bankers are now considering challenging the decision, citing a 2000 case in which a departing Nomura prop trader successfully sued the firm for 1.35 million pounds ($2 million). Nomura declined to comment on the bonus decision.

To top everything off, in addition to being fired and told no bonus would be paid out, some traders were summoned back to the office to face a disciplinary hearing. In trying to prepare for a future job search, they forwarded themselves documents they felt may be needed in the future, such as research reports, excel models, and even in one case, even a list of clients. Not only did the bank clamp down on those cases, which as a result will inevitably make it more difficult to find work in the future for those involved, the bank has yet to respond to those that simply asked for some work documents that may help in a future job search, even though Nomura had pulled out of Europe.

A second letter landed on the doorsteps of a handful of employees later that month, summoning them back to the office for a disciplinary hearing. In the hours before the cuts were announced, about five analysts had forwarded themselves documents they might need if they lost their jobs: research reports, Excel models and, in at least one case, a list of clients.

Nomura, like most banks, prohibits employees from forwarding any work documents to personal e-mail accounts. In tense meetings, the individuals explained themselves and asked for leniency. The bank is now considering what action, if any, to take. Possibilities include firing them for gross misconduct, thereby depriving them of severance pay and making it hard to find a job elsewhere; or handing out written warnings that will show up in a reference to a prospective employer. The analysts, who range from a junior associate to an industry veteran, fear that any measures will hamper their efforts to find alternative positions at a time when the industry is retrenching. Nomura declined to comment on the situation.

Separately, several former employees have asked the company to provide them with work documents they say will help them find roles elsewhere, such as their proprietary models and databases. They argue there is no reason for Nomura to refuse since it will no longer be competing in Europe. So far, no decision has been reached.

In the rush to leave One Angel Lane, many employees didn’t have time to grab all of their belongings. Old family photographs, items of clothing and professional mementos lie in storage awaiting collection,a reminder of the human cost when a business fails.

end

b) REPORT ON CHINA

New tensions arise in the East China seas were the Senkaku islands are located (Chinese call these islands Diaoyu) as China sends in a Chinese warship.To add to the tension a Russian frigate was located in the same waters.  Remember that China and Russia are joined at the hip in policy matters.

(courtesy zero hedge)

New Tensions Erupt In The East China Sea, This Time With A Russian Twist

In the latest round of tensions to erupt in the East China Sea, Japanese officials say a Chinese warship was spotted for the first time near disputed islands that Japan claims control over.

The islands are called Senkaku in Japan, and Diaoyu in China, and while China regularly sends nonmilitary patrol vessels to the area, this was the first time a Chinese warship was spotted. Japan’s Vice Foreign Minister Akitaka Saiki summoned the Chinese ambassador in Tokyo around 2 a.m. to express serious concern over the matter. The warship, a frigate, was spotted less than 24 nautical miles from the uninhabited island chain the NYT reports.

The above islands are known as Senkaku in Japan, and Diaoyu in China

The Chinese frigate entered a band of ocean around the disputed islands that are just beyond exclusive territorial waters in what Japan claims as a “contiguous zone.” Japanese vessels were in contact with the Chinese frigate as it approached the zone and warned it for about two hours to change course before it entered.

“China’s actions unilaterally escalate tensions in the area, and we are seriously concerned” said the Japanese chief cabinet secretary Yoshihide Suga at a news briefing, while adding that Prime Minister Shinzo Abe ordered the Japanese Navy and Coast Guard to be on alert.

China responded in kind, with the Ministry of National Defense saying “We’ve noted the relevant reports. The Diaoyu Islands and affiliated islands are Chinese territory. For China’s military vessels to pass through waters under the country’s own jurisdiction is reasonable and legitimate, and other countries have no right to make irresponsible claims.”

In an interesting twist, Japan said two Russian vessels were also spotted in the islands contiguous zone around the same time, though it was unclear whether their presence was connected with the Chinese frigate. Japanese officials said they did not protest the Russian vessels.

Japanese foreign minister Akitaka Saiki said that “China has its own particular claim, Russia doesn’t, so we distinguish between the Chinese and Russian actions and respond accordingly.”

Of course the situation begs the question whether or not Russia and China were working the East China Sea together in a show of some type of solidarity with one another, or was it purely a “coincidence” that on the heels of all of the US led tension in both China and Russia lately that the two would both be in the same waters just after the US promised to keep its military might in the region for “decades to come.”

*  *  *

The islands have been long disputed between the two nations, recall that back in 2012 anti-Japan sentiment exploded in China when the Japanese government purchased the islands from aprivate owner, something China of course viewed as illegal.

The event spurred riots in China, and the protests got so severe that  Japanese firms with production within China had to shut down, with expatriates urged to stay indoors. The situation further escalated to the point where in late 2013, China unveiled an “Air Defense Identification Zone” in the region, which required that any overflights submit their plans to Beijing in advance.

 

end

 

Then late in the morning: the offshore yuan (CNH) tumbles to over 6.60 to the dollar.  This causes the European stocks to plunge even more.  Message to Janet from China:  “do not raise your interest rate or we will devalue more”

 

“China Is Fixed” Narrative Breaks: Yuan Tumbles To 4-Month Lows, European Stocks Plunge Most Since Feb

For the first time since February 3rd, USDCNH traded over 6.60 as trade data suggests both capital outflows are building (see Hong Kong) and the “China is fixed” narrative is breaking. Whether the Yuan turmoil is responsible – as it has been in the past – for Europe’s weakness (and US) is unclear…

 

But the last two times the Chinese currency markets started to shudder, the ripples didn’t stop until The Fed backed right off

 

Deja Vu all over again?

end

This ought to annoy the USA: China orders 1,000 heavy transport aircraft to carry arms and soldiers over greater distances.  Why did China order these to be built?  Because of the souring relationship between the USA and Russia.

(courtesy zero hedge)

China Orders 1,000 Heavy Transport Aircraft “Based On The Experience Of The United States And Russia”

EUROPEAN AFFAIRS

John Browne states that the BREXIT fears are deliberately overblown.  His most most important point is this; a BREXIT will do far more damage to the EU and than Britain itself and may help in the long run to the UK has more trade deals could be negotiated without the EU

(courtesy John Browne/Euro Pacific Capital)

“Deliberately Overblown” Brexit Fears Backfire

Submitted by John Browne via Euro Pacific Capital,

As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly dire economic consequences that would follow a yes vote by the British people to leave. Voices from London, Brussels, and Washington have all put immense pressure on British voters to bend to the will of the elites.

To listen to their commentary one would think that apocalypse was just around the corner. But is there any substance to their warnings?

The Pro-EU membership camp is led by Prime Minister David Cameron, supported by most of his cabinet, the Bank of England, the BBC and the massive support from the UK and EU governments that have funded enormous advertising campaigns against separation. Given this weight of their power, it is amazing how strong the support for a British exit (BREXIT) has remained.

When Britain first joined the European Economic Community (the precursor to the EU) in 1973, the primary motivation was the hopes of increasing British trade through participation in the world’s largest free-trade zone. However, the hope that the union would simply be a free-trading zone of sovereign countries has morphed into a drive for an EU superstate that has relentlessly pushed for greater regulations on businesses and people and greater control of local laws that have nothing to do with trade.

It has been kept remarkably quiet, for instance, that the EU intends to divide the UK into eleven administrative regions, all reporting directly to Brussels. Although Scotland, Wales and Northern Ireland will remain intact as individual national regions, England will be split into eight regions. Worse still, the coastal counties of England will be teamed with regions in Portugal, France, the Netherlands and Germany, where they will remain in a minority role. Even the English Channel is to be renamed. Very little mention is of the EU proposal for EU-wide ID and tax numbers, likely heralding a heavy EU taxation regime.

Likewise, the proposals to create EU-wide armed forces have been put quietly on the back burner. England has a long and proud history of struggling for its sovereignty. In just the past two centuries she has stood alone against Napoleon and Hitler, before inspiring other nations to join the fray. The presence of French or German armed forces used to support a European police force in the UK will not sit well with the English.

All this and many more threats to the British people have been kept largely quiet. Instead, the main activities of the Pro-EU group have been concentrated on the economic and monetary catastrophe that would face the UK if it were to cut itself off from trading with the EU. Some call this, ‘Project Fear’. The actual underlying facts paint a somewhat different picture, one that makes the Pro-EU case appear misleading, even deliberately so.

The basic argument is that with about 50 percent of its current trade with the EU, the UK would face a catastrophic economic and monetary collapse if it left the EU. As a threat, this sounds potentially devastating. Doubtless it has persuaded some. But in the light of reality, a different and far less worrying image emerges.

The UK has the fifth largest national economy in the world, according to 2015 figures compiled by the International Monetary Fund. In its present state of economic stagnation, the EU can ill-afford to lose the UK. According to the March 2016 Statistical Bulletin from the Office for National Statistics, the UK has had a negative trade balance in goods with the EU that has averaged about $8 billion a month this first quarter. If the UK were to leave without being able to negotiate an independent trade deal, the EU economy might shrink by some $96 billion a year. The UK was the second largest net contributor to the EU budget last year. It follows that the 8 English regions (with Scotland, Wales and N. Ireland considered as ‘relatively poor’) may in aggregate be the second largest suppliers of future intra-EU money transfers from the so-called ‘rich’ to the poorer southern and eastern regions of Europe. In that sense, the EU needs the UK more than the other way round.

The Pro-EU camp ignore the trade balance issue completely and threaten, as did President Obama, that the UK would be left out in the cold, like Switzerland, and unable to negotiate its way out of a disaster. Switzerland is not an EU member and has an economy of less than a quarter the size of the UK’s. And yet from 2009-2013 she exported, on average, 4.6 times the value per person to the EU than does the UK (The Truth About Trade Outside the EU, William Dartmouth MEP, June 2015). With a negative EU trade balance, why would the UK be unable to negotiate, from outside, a trade agreement at least as good as that achieved by Switzerland?

[As an aside, over dinner many years ago, my occasional Lords and Commons golfing partner Dennis Thatcher asked me how the UK would survive alone in an era when world power blocks and corporations were getting bigger? I replied, “In the same way as Switzerland.” He retorted while hitting the table hard with his hand, “That’s just what Margaret thinks!”]

Further, the EU negotiates international trade agreements under the auspices of the World Trade Organization (WTO), in the primary interests of the EU, not of the UK. England has flourished by trading globally, especially with the U.S. and the British Commonwealth. The EU has no trade agreements yet with China or Japan. Outside the EU, the UK would be enabled to negotiate freely to trade with the entire world and be unfettered by the EU where it has a muted voice of 1 among 28 members. Furthermore, free of burdensome and costly EU regulations, the British economy likely would be re-energized, particularly among the vital job-creating small business sector.

In addition to economic collapse, the Pro-EU camp postulates that the British pound sterling, still one of the top five global trading currencies, would plummet following a BREXIT. However, many informed observers believe the international monetary system is on the cusp of a major collapse. In these circumstances, the vital interests of the Federal Reserve, European Central Bank, Bank of Japan and even the Bank of China would be to steady the ship to avert a collapse of fiat currency. Unimaginable amounts of central bank money could be deployed to save the pound, rendering it a false scare.

On the other hand, although the UK is not a member of the euro, a BREXIT indirectly could threaten the euro, now the world’s second currency.

Already a number of EU members are experiencing anti-EU sentiments among their people. The United Kingdom Independence Party (UKIP), which forced the BREXIT vote, is not alone. It is part of a sizable block, styled the Europe for Freedom and Direct Democracy (EFDD) group, in the EU parliament. It is comprised of representatives from the UK, France, Sweden, Italy, Poland, Lithuania and the Czech Republic. In addition, countries like Greece, Spain and Portugal are becoming very unhappy about the implications of Eurozone membership. A for BREXIT vote could ignite an implosion within the Eurozone rather than being a threat to Sterling. This may be what worries the international central banking and political elite most. It has led directly to massive global elite support for Cameron’s Project Fear.

If the British public wises up to David Cameron’s game of fear and vote for BREXIT, there will be some short-term shock and disruption in currencies, equities, bonds, precious metals and possibly employment. However, the global central bank and political elites could be expected to move very fast to avoid the development of deeper problems. Negotiations likely would be concluded very quickly to calm things down with minimal damage to the UK economy or its currency.

(courtesy Mish Shedlock)

(courtesy zero hedge)

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

Euro/USA   1.1297 DOWN .0012 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 106.73  DOWN 0.359 (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 1.4419 DOWN.0043 (GREATER THREAT OF BREXIT)

USA/CAN 1.2739 UP  .0009

Early THIS FRIDAY morning in Europe, the Euro FELL by 12 basis points, trading now WELL above the important 1.08 level FALLING to 1.1346; 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 FOR HOLIDAY  / Hang Sang CLOSED DOWN 255.24 OR 1.20%      / AUSTRALIA IS LOWER BY 0.92%/ 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 FRIDAY morning: closed DOWN 67.05 OR 0.40% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 255.24 POINTS OR 1.2% . ,Shanghai CLOSED FOR HOLIDAY  Australia BOURSE IN THE RED: /Nikkei (Japan) CLOSED IN THE RED /India’s Sensex IN THE RED

Gold very early morning trading: $1269.30

silver:$17.31

Early FRIDAY morning USA 10 year bond yield: 1.654% !!! DOWN 3 in basis points from THURSDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.455 DOWN 3 in basis points from THURSDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early FRIDAY morning: 94.19 UP 24 CENTS from THURSDAY’s close.(Now below resistance at a DXY of 100.)

This ends early morning numbers FRIDAY MORNING

END

 

And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield:  3.10% UP 3 in basis points from THURSDAY

JAPANESE BOND YIELD: -0.125% DOWN 2 1/2  in   basis points from THURSDAY

SPANISH 10 YR BOND YIELD:1.43%  UP  1 IN basis points from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.38  PAR IN basis points from THURSDAY

the Italian 10 yr bond yield is trading 5 points lower than Spain.

GERMAN 10 YR BOND YIELD: 02% DOWN 2 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

 

Euro/USA 1.1262 DOWN .0041 (Euro =DOWN 41 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 106.70 DOWN .405 (Yen UP 41 basis points )

Great Britain/USA 1.4299 DOWN.0202 ( Pound DOWN 202 basis points/(HUGE BREXIT CONCERN)

USA/Canada 1.2761 UP 0.0031 (Canadian dollar DOWN 31 basis points  AS OIL FELL  (WTI AT $49.02).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 41 basis points to trade at 1.1262

The Yen ROSE to 106.70 for a GAIN of 41 basis points as NIRP is STILL a big failure for the Japanese central bank/

The pound was DOWN 202 basis points, trading at 1.4259( BREXIT FEARS INCREASE DRAMATICALLY )

The Canadian dollar FELL by 31 basis points to 1.2761, WITH WTI OIL AT:  $48.99

The USA/Yuan closed at 6.5624/ CNH OFFSHORE: 6.6010 (SEE STORY ABOVE) 

the 10 yr Japanese bond yield closed at -.140% DOWN  2 IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 5 IN basis points from THURSDAY at 1.630% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.440 DOWN 5 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 94.57 UP 50 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 FRIDAY

London:  CLOSED DOWN 116.13 OR 1.86%
German Dax :CLOSED DOWN 254.25 OR  2.52%
Paris Cac  CLOSED DOWN 98.89  OR 2.24%
Spain IBEX CLOSED DOWN 279.00 OR 3.18%
Italian MIB: CLOSED DOWN 643.72 OR 3.62%

The Dow was DOWN 119.85  points or 0.67%

NASDAQ DOWN 64.07 points or 1.29%
WTI Oil price; 48.99 at 4:30 pm;

Brent Oil: 50.45

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.04 (ROUBLE DOWN 72/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT FELL AND WTI FELL

TODAY THE GERMAN YIELD FALLS TO 0.020%  FOR THE 10 YR BOND

.

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:48.93

BRENT: 50.40

USA 10 YR BOND YIELD: 1.642%

USA DOLLAR INDEX: 94.59 UP 53 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.424 down 2.12

German 10 yr bond yield at 5 pm: .019%

 

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

 

Post-Payrolls Panic-Buying Evaporates As “Bad News Is Bad News” After All

Well that escalated quickly…All-time highs within reach… everything is awesome…wait what…

Quite a week:

  • Gold +5.25% in last 2 weeks – best run in 4 months
  • Silver +5.65% this week – best week since May 2015
  • Copper -4% this week to lowest weekly close since January
  • Sterling -2.5% in last 2 weeks – worst drop in 3 months
  • US Dollar Index +0.6% – up 7 of last 9 weeks
  • 30Y Yields -21bps in last 8 days – best rally in 4 months
  • 2Y Yields -17bps in last 7 days – biggest plunge since Jan 2015
  • Nasdaq -1.51% today – worst day since Feb 8th
  • VIX +3vols in last 2 days – biggest spike since Feb 9th – highest close in 3 months…

 

Bonds were the big news this week – as equities tried to ignore the message from the massive institutionalized buying of fixed income to record low yields…The yield on the Bloomberg Global Developed Sovereign Bond Index dropped to a record 0.601 percent Thursday.

 

In April 2015, with 10Y German bond yields at 5bps, Bill Gross and Jeff Gundlach called Bunds the “short of a lifetime.” Just over a year later – having spiked to over 100bps – 10Y bund yields have crashed since The Fed hiked rates in December and The ECB escalated its bond-buying. Today marked a dramatic moment as Germany almost joined Switzerland (-50bps) and Japan (-17bps) with a 10Y bond yield below zero… as Bunds traded to 0.9bps.

 

And Treasury yields tumbled…and the curve flattened

 

It appears renewed turmoil in Chinese currency markets started rippling through markets…as Yuan hits 4month lows…

 

But Gold and bonds are leading the way post-payrolls, with S&P and WTI lagging…

 

On the week, Nasdaq was the biggest loser…

 

They did try to ramp it in the last 30 – managing to get close to VWAP (but missing out on 2,100 and unch on the week)…

 

And stocks finally caught on to the weak growth, event risk concerns priced into bonds…gold.. and FX carry… Who could have seen this coming?

 

Financials appear to be waking up to the reality of a collapsing yield curve…

 

Today’s weakness started when Europe opened, as it seems “sell the news.. AND EVERY BANK” was the meme, but really accelerated when the Brexit poll hit this afternoon…

 

We’ve been warning about VIX decoupling and it snapped above 17 today…as S&P lost 2100…

 

VIX decoupled…

 

 

FX markets went turbo today following the Brexit poll with USDJPY snapping lower (Yen strength) and Cable plunging (sterling weakness)…

 

Copper crumbled on the week (inventory spike) and crude slid back to almost unchanged as production rose again. Gold and Silver surged…

 

WTI Crude ended the week below the payrolls level with a $48 handle..

 

and gold broke above $1280…

 

Charts: Bloomberg

Bonus Chart: What Could Go Wrong?

end

Trading today at 3:30 when we got  word of a huge 55% vs 45% split in favour of a BREXIT

(courtesy zero hedge)

 

Stocks Slammed Red Post-Payrolls, Cable Tumbles After Shocking Brexit Poll

Following a shocking report from The Independent indicating a 55% Brexit to 45% Bremain poll, cable and US equities are tumbling to fresh lows as it appears – as Soros warned – Brexit fears are under-priced…

 

 

Smashing all major US equity indices red post-payrolls…

 

As The Independent reports,

The campaign to take Britain out of the EU has opened up a remarkable 10-point lead over the Remain camp, according to an exclusive poll for The Independent.

 

The survey of 2,000 people by ORB found that 55 per cent believe the UK should leave the EU (up four points since our last poll in April), while 45 per cent want it to remain (down four points).

 

These figures are weighted to take account of people’s likelihood to vote. It is by far the biggest lead the Leave camp has enjoyed since ORB began polling the EU issue for The Independent a year ago, when it was Remain who enjoyed a 10-point lead. Now the tables have turned.

And what the banks believe is at stake in a Brexit vote scenario…

  • BBVA: GBP/USD to drop to 1.20; EUR/GBP moves to 0.85-0.90
  • BMO: GBP/USD moves to 1.33 and EUR/GBP moves to 0.83
  • BOFAML: GBP/USD toward mid-1.20 area
  • CITIGROUP: GBP/USD down 5% on the day, as much as 12% over following month
  • CREDIT AGRICOLE: GBP/USD to drop to 1.30 or lower; EUR/GBP to trade close to 0.85 or higher
  • DEUTSCHE BANK: GBP -10% on TWI basis; GBP/USD to 1.15 by year-end; EUR/GBP to 0.90
  • GOLDMAN SACHS: GBP -10% on TWI basis; GBP/USD could move to ~1.15-1.30; EUR/GBP to ~0.90-0.95; EUR/USD to fall ~4%
  • HSBC: GBP/USD to fall ~5-10%
  • INTESA SANPAOLO: GBP/USD to 1.35-1.40; EUR/GBP to 0.80-0.85
  • JPMORGAN: GBP/USD to fall to 1.32; EUR/GBP 0.85
  • MORGAN STANLEY: GBP/USD to 1.30 by yr-end; EUR/USD could fall to 1.00
  • NOMURA: GBP to fall ~10-15% on TWI basis
  • NORDEA: EUR/GBP above 0.85 (+7%); EUR/USD below 1.10
  • RABOBANK: GBP/USD at 1.26 in 1m; EUR/GBP at 0.86 in 1m
  • RBC: GBP/USD to 1.15 by end of June
  • SOCIETE GENERALE: GBP/USD to move through 1.35-1.30
  • UBS: EUR/GBP may go to parity
  • UNICREDIT: More than 10% drop vs USD on multi-week basis
  • WELLS FARGO: GBP trade weighted value may decline as much as 8%-9% in near-term

As we warned overnight, the Brexit fearmongering appears to have backfired.

 

end

 

Both inflation expectations and confidence plunge to record lows.Remember that consumer is 70% of USA GDP

(courtesy zero hedge)

UMich Consumer Inflation Expectations and Confidence Plunge To Record Low

University of Michigan consumer confidence faded modestly in its preliminary June print, despite the exuberance in US equity markets.

 

 

As UMich details,

Consumers were a bit less optimistic in early June due to increased concerns about future economic prospects. The recent data magnified the growing gap between the most favorable assessments of Current Economic Conditions since July 2005, and renewed downward drift of the Expectations Index, which fell by a rather modest 8.6% from the January 2015 peak.

 

The strength recorded in early June was in personal finances, and the weaknesses were in expectations for continued growth in the national economy. Consumers rated their current financial situation at the best levels since the 2007 cyclical peak largely due to wage gains. Prospects for gains in inflation-adjusted incomes in the year ahead were also the most favorable since the 2007 peak, enabled by record low inflation expectations. On the negative side of the ledger, consumers do not think the economy is as strong as it was last year nor do they anticipate the economy will enjoy the same financial health in the year ahead as they anticipated a year ago.

 

A sustained reduction in the pace of job creation could prompt consumers to hold down spending to increase their precautionary savings. Overall, the data still indicate that real consumer expenditures can be expected to rise by 2.5% in 2016 and 2.7% in 2017.

But expectations for future inflation collapsed to record lows…

 

Is this the chart of collapsing Fed credibility?

 

end

 

And now Gallup’s economic confidence:  it tumbles to a 2 yr low:

(courtesy Gallup/zero hedge)

Economic Confidence Tumbles To 2 Year Lows As Democrats Lose Faith

 

Americans’ confidence in the U.S. economy averaged -14 in May according to Gallup, equaling thelowest in two years and considerably lower than the -7 print a year ago…

 

In May, the current conditions score registered -5, one point higher than in April. This was the result of 25% of U.S. adults rating the current economy as “excellent” or “good,” and 30% rating it as “poor.”Meanwhile, the economic outlook score went down one point to -22. This was the result of 37% of U.S. adults saying the economy was “getting better” and 59% saying it was “getting worse.”


 

While Democrats are still the only party group to have net positive views of the economy, the latest score was their lowest since at least Jan 2014.

 

Now that Hillary is ‘the one’, we wonder how long before the Democrat index goes negative?

Source: Gallup

end
Take a look at the following two chart:  home improvement and luxury spending.  Both take a huge plunge.
Home improvements if a proxy for new home sales and new home construction.
Luxury goods are meant for the wealthy and they too have stopped spending:
(courtesy zero hedge)

 

“We Do Not Have An Explanation” – Home Improvement, Luxury Spending Unexpectedly Plunges

One of the main reasons for macroeconomic optimism heading into last Friday’s abysmal jobs report, is that the seasonally-adjusted April retail spending report came far stronger than expected, even as CEOs and CFOs of actual retailers have and continue to lament a dismal consumer spending picture (and as a result have continued to slash guidance). Indeed, the payrolls report confirmed that much if not all of the April retail sales rebound was due to seasonals and other “opportunistic” upward adjustments. Of course, after the May payrolls, all optimism promptly evaporated, and for a brief period “bad news became good news” as suddenly the Fed was seen as being on hold – again – indefinitely.

And with the Fed suddenly poised precariously between being the need to hike (so it can ease again shortly thereafter), and having to cut right now, a decision that could be finalized as soon as the June payrolls are reported in three weeks, the most important data point between now and then will again be the retail sales report, this time for May. It will be reported on June 14.

However, in advance of the official government data, courtesy of Bank of America we have the always informative monthly aggregated credit and debit card spending report, which traditionally gives an early look into consumer spending trends. What it reveals is that, not surprisingly, “the BAC aggregated card data decelerated more than the Census Bureau data at the turn of the year, when measured as retail sales ex-autos and gasoline.” But while in recent months there has been a modest pickup at the headline level, if weaker when one excludes gasoline sales which are higher due to rising gase prices, the picture is far less pleasant if broken down by retail sales by high vs low-income consumers. In this case, the slowdown clearly continues for both groups of consumers, something which spells far more pain for not only GDP but for corporate profits as well as employment.

As BofA adds, “for the first time since the recovery, sales among the high and low end consumer cohort are growing at roughly the same pace (2.1% yoy). During the first four years of the recovery, the high end consumer outperformed, which reversed starting in 2014.” We leave it up to readers if the chart below can be spun as “good”:

 

However, what caught our attention is not so much the aggregate spending data, as the detail for what are arguably its two most important constituent components: luxury retailer sales, a proxy for the wealthy consumer, the one whose generosity was so instrument in the early years of Obama’s “recovery”, as well as spending on home improvements and related stores, a direct proxy for home purchasing and renovation, the single biggest component of US GDP, and thus, consumer spending.

It is here that something unexpected is happening.

First, when it comes to luxury retailer spending, BofA had this to say:

  • There has been a decisive slowing in spending on BAC cards at luxury retailers, which we define as high end designer retailers, exclusive of department stores.
  • This slowing has occurred over the past several years after the exceptionally strong growth during the early stages of the recovery.
  • However, the trend took a turn for the worse at the end of last year with the past four months looking particularly dire. In our view, this may have been a function of the poor market performance in January and February

To say that this is a very ugly harbinger of future retail sales, is an understatement.

But what was even more disturbing is what BofA found took place in spending on home improvement stores: spending which traditionally is directly correlated to new home purchases and construction. Instead of stealing BofA’s thunder, this is what it said:

  • The BAC composite for home improvement stores tumbled in May, falling 4.6% mom SA, which pulled down the year-over-year growth rate.
  • However, the BAC home improvement series has been running below the Census Bureau aggregate, suggesting the recent weakness may be overstated by the BAC data.

BofA’s punchline:

We do not have an explanation for this divergence, but given the high correlation between the two series historically, we would expect our data and the Census Bureau figures to converge over time.”

They sure will, but not to the government’s seasonally-adjusted, politically biased, constantly massaged data. And when they do, yet another of the dominos in the fake narrative of “US recovery” lies
will topple.

end

 

USA fertility rate unexpected drops to the lowest on record:  1.30

And the pundits do not understand this??

Millennials are staying at home. You do not need any other explanation.

(courtesy Mish Shedlock)

 

Baby Bust: US Fertility Rate Unexpectedly Drops To Lowest On Record

Submitted by Michael Shedlock via MishTalk.com,

Economists figured the recovery would bring about increased confidence and a rise in the birth rate.

Instead, the rate dropped into a tie with the lowest birth rate on record.

This is yet another surprise for economists to ponder.

Please consider the Wall Street Journal report Behind the Ongoing U.S. Baby Bust.

The newest official tally  from the National Center for Health Statistics showed anunexpected drop in the number of babies born in the U.S. in 2015. The report was a surprise: Demographers had generally expected the number of births to rise in 2015, as it had in 2014. Instead, the U.S. appears to still be stuck in something of an ongoing “baby bust” that started with the recession and housing collapse and has yet to reverse.

Baby Bust

Fertility Rate

Baby Bust by Race

Fertility Rate 2

Baby Bust by Age

Fertility Rate 3

The Wall Street Journal concludes “There’s still good reason to believe the birth rate will pick up in coming years. After slumping for nearly a decade into the 1970s, births picked up in the 1980s and 1990s (giving us the generation known as millennials.) The most common age in America is 24 or 25, meaning there’s a very large cohort of these millennials who are about to hit the years that people are most likely to become parents.”

No Mystery

I fail to see why any economist should be surprised by this. A record number of millennials are living at home.

millennials living at home3

millennials living at home4

This is simply too obvious. So I have two questions:

  1. Do economists read anything or do they just believe in their models?
  2. If they do read, how come they cannot grasp simple, easy to understand ideas?

Economists who could not figure any of this out now place their faith in the fact “a very large cohort of these millennials who are about to hit the years that people are most likely to become parents.

Mish’s Alternate View

Unless the millennials…

  1. Shed student debt
  2. Move out on their own
  3. Get a job that supports raising a family
  4. No longer have to take care of their aging parents
  5. Have a significant change in attitudes about homes, families, debt, and mobility ….

…economists will still be wondering “what happened” years from now.

end

As is my custom:  let us wrap up the week, with this offering from greg Hunter of USAWatchdog
(courtesy Greg Hunter/USAWatchdog)

Well that about does it for tonight

See you Monday night

h

 

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