JUNE 23/Late tonight Nigel Farage admits defeat/ exit polls indicate 52% remain to 48% leave: thus a divided country/Mexico on the brink of a revolution/Chicago’s important national activity index falters again/

Good evening Ladies and Gentlemen:

Gold:  $1,261.20 DOWN $6.80    (comex closing time)

Silver 17.35  up a tiny 4 cents

 

In the access market 5:15 pm

Gold: 1257.00

Silver: 17.25

We have now entered options expiry week for the comex and LBMA. As always expect gold and silver to be depressed until the first of July.

.

The June gold contract is an active contract. Last  night we had a fair sized 21 notices filed last night, for 2100 oz to be served upon today.  The total number of notices filed in the first 16 days is enormous at 15,416 for 1,541,600 oz.  (47.950 tonnes)

ii) in silver we had 2 notices filed for 10,000 oz..  Total number of notices served  in the 16 days: 491 for 2,455,000 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 275.27 tonnes for a loss of 28 tonnes over that period

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In silver, the total open interest ROSE by A WHOPPING  7,382 contracts UP to 213,000, AGAIN A NEW ALL TIME RECORD DESPITE THE FACT THAT  THE  PRICE OF SILVER WAS UNCHANGED with respect to YESTERDAY’S trading.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.065 BILLION TO BE EXACT or 152% of annual global silver production (ex Russia &ex China)

In silver we had 2 notices served upon for 10,000 oz.

In gold, the total comex gold OI fell by a HUGE 4998 contracts down to 566,569 as the price of gold was DOWN $2.50 with YESTERDAY’S trading (at comex closing). The bankers were overjoyed with the fall in gold OI but not silver which is giving them nothing but fits

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

No changes in gold inventory.

Total gold inventory: 915.90 tonnes

SLV

No change in SLV inventory

Inventory rests at 333.069 million oz.

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

1. Today, we had the open interest in silver ROSE by 7,382 contracts UP to 213,000  DESPITE THE FACT THAT THE price of silver was unchanged with YESTERDAY’S trading. The gold open interest FELL by a CONSIDERABLE 4,948 contracts DOWN to 566,569 as the price of gold was DOWN $2.50  YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  WEDNESDAY night/ THURSDAY morning: Shanghai closed DOWN 13.59 POINTS OR 0.47% / /Hang Sang closed UP 73.72 OR 0.35%. The Nikkei closed UP 172.63 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.17% Chinese yuan (ONSHORE) closed UP at 6.57774 /Oil ROSE to 49.77 dollars per barrel for WTI and 50.66 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5820 yuan to the dollar vs 6.5774 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

 

b) REPORT ON CHINA

China issues a stern warning that they are the wrong opponent to play games with.

I wonder what China will do at the comex??

( zero hedge)

4. EUROPEAN AFFAIRS

i) a.The daily newspapers sums up the divide in England:

( zero hedge/all the UK newspapers)

i)b Martin Armstrong weighs in on the BREXIT vote:  Basically he states that the EU is nothing without Britain:

( Martin Armstrong)

ii)EU planning a “social security” tax for robots under a new EU proposal. I have now seen everything!

( Mish Shedlock/Mishtalk)

iii)Why huge volatility on FX markets today!:

( zero hedge)

iv)And at 5:15 pm early indications that the remain edge out the leaves by 52% to 48%

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

Mexico on the brink of a revolution as people there are fed up with corruption:

(courtesy AntiMedia.Org)

7.OIL ISSUES

option traders are now most bearish on oil since 2010:

( zero hedge)

8.EMERGING MARKETS

none today

9. PHYSICAL STORIES

i)Craig Hemke puts his two cents worth on the British vote today:

( Craig Hemke/TFMetals)

ii)Steve St Angelo discusses the huge leverage on dealer (registered) silver and now it is more leveraged than gold

( SRSRocco report/Steve St Angelo)

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

i)Conflicting data: so what else is new:  initial jobless claims plunge to 42 yr lows.

( zero hedge)

ii)This is a biggy!  The Chicago Fed’s National Activity index (manufacturing) plunged to negative .51 from +.05.  Expectations were +.11.  Looks like Janet has missed her opportunity to raise rates

( zero hedge)

iii)the flash PMi rebounds in June but still domestic demand remains very weak:

( USA Manufacturing PMI/zero hedge)

 

iv)A good indicator as to what is going on inside the USA economic scene:  new home sales plunge the most in 8 months. Also previous months have seen a downward revision. Also median home prices are tumbling which is also not a good sign;

( zero hedge)

 

v)Dave Kranzler states that BREXIT is really a non issue.  The real issue is the collapsing USA economy:

( Dave Kranzler IRD)

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 566,569 for a HUGE LOSS of 4,948 contracts as  THE PRICE OF GOLD WAS DOWN $2.50 with respect to YESTERDAY’S TRADING.OUR BANKERS WERE OVERJOYED WITH THE FALL IN TOTAL OI. JUNE IS  THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR AND IS A VERY ACTIVE MONTH FOR GOLD DELIVERIES. 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 . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. 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 347 for a loss of 181  contracts. We had 175 notices filed YESTERDAY, so we lost a tiny 6 contracts or 600 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a GOOD SIZED 176 contracts up to 5,089.This no doubt will be troublesome for our bankers as the front July contract month open interest is extremely high for a non active month and it also refuses to shrivel. In ounces, we have 508900 oz or 15.828 tonnes  The next big active contract month is August and here the OI FELL by 5,672 contracts DOWN to 407,247. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was FAIR at 180,941. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was POOR at 140,175 contracts. The comex is not in backwardation.

Today we had 21 notices filed for 2100 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by A WHOPPING 7,382 contracts from 205,618 UP to 213,000. The OI DRAMATICALLY ROSE IN OPPOSITION TO THE PRICE OF SILVER   BEING UNCHANGED with YESTERDAY’S TRADING. The front month of June saw it’s OI RISE by 0 contracts REMAINING AT 96. We had 0 notices filed YESTERDAY , so we NEITHER GAINED NOR LOST ANY SILVER OUNCES STANDING  . The next big delivery month is July and here the OI fell BY 9,602 contracts down to 57.465. We have  1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at66,353 which IS EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was HUGE at  92,251. Silver is not in backwardation . London is in backwardation for several months.
 
We had 2 notices filed for 10,000 oz.
 

JUNE contract month:

INITIAL standings for JUNE

June 23.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil  9645.000 OZ

300 KILOBARS

SCOTIA

Deposits to the Dealer Inventory in oz 2,314.48 OZ

BRINKS

Deposits to the Customer Inventory, in oz   16,179.400 OZ

SCOTIA

No of oz served (contracts) today 21 contracts
(2100 oz)
No of oz to be served (notices) 326 contracts

32,600 oz

Total monthly oz gold served (contracts) so far this month 15,416 contracts (1,541,600 oz)

(47.950 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  160,087.8 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  2314.48 oz

total dealer deposit:  2314.48  0z

 

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

 

Today we had 1 customer deposits:

i) Into Scotia: 16,179.400 oz

Total customer deposits; 16,179.400   OZ

Today we had 1 customer withdrawal:

i) out of Scotia: 9645.000 oz (300 kilobars)

total customer withdrawals:  9645.000 oz

Today we had 2 adjustments:

i) Out of HSBC:  964.53 oz or 351 kilobars were transferred out of the dealer and into the customer HSBC.  (we will deem this a settlement)

ii) Out of Scotia:  608.479  were transferred out of the dealer and into the customer. of Scotia. We will deem this a settlement. Total in tonnage: .0489 tones

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 21 contracts of which 9 notices was stopped (received) by JPMorgan dealer and 12 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 (15,416) x 100 oz  or 1,541,600 oz , to which we  add the difference between the open interest for the front month of JUNE (347 CONTRACTS) minus the number of notices served upon today (21) x 100 oz   x 100 oz per contract equals 1,574,200 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 WE HAVE NOW WITNESSED THE SAME RESULT FOR JUNE.
 
Thus the INITIAL standings for gold for the JUNE. contract month:
No of notices served so far (15,416) x 100 oz  or ounces + {OI for the front month (347) minus the number of  notices served upon today (21) x 100 oz which equals 1,575,800 oz standing in this   active delivery month of JUNE (48.964 tonnes).
INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE MOSTLY GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (48.964 TONNES) .
WE LOST 6 contracts or an additional 600 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat.
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 48.964 tonnes of gold standing for JUNE and 53.26 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 + 48.964 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 / June 22:0.48 tonnes /June 23: 0489 tonnes = 65.077 tonnes still standing against 53.26 tonnes available.
 Total dealer inventor 1,711,666.742 tonnes or 53.26 tonnes
Total gold inventory (dealer and customer) =8,850,060.381 or 275.27 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 275.27 tonnes for a loss of 28 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
GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX
And now for silver
 

June initial standings

 June 23.2016

Silver
Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory  948,196.886 oz

CNT

BRINKS

Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory  610,906.100  oz

JPM,BRINKS

No of oz served today (contracts) 2 CONTRACTS 

(10,000 OZ)

No of oz to be served (notices) 94 contracts

450,000 oz

Total monthly oz silver served (contracts) 491 contracts (2,455,000 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  24,188,599.1 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 2 customer deposits:

i) Into JPMorgan:  605,868.000 oz ??? how could we have an exact deposit???

ii) Into Brinks: 5038.100 oz

Total customer deposits: 610,906.100 oz

everyday for the past few weeks, JPMorgan has been bringing in at least 600,000 oz into the silver comex and today they deposited again the same like quantity.

We had 2 customer withdrawals

i) Out of CNT:  150,695.996 oz

ii) Out of Brinks; 150,695.996 oz

:

total customer withdrawals:  948,196.886  oz

 
 

 

 we had 0 adjustment

 

Looks to me like we have our good old fashioned run on silver at the comex/

today 948,106.886 oz leaves the silver comex.

The total number of notices filed today for the JUNE contract month is represented by 2 contracts for 10,000 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 (491) x 5,000 oz  = 2,455,000 oz to which we add the difference between the open interest for the front month of JUNE (96) and the number of notices served upon today (2) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JUNE contract month:  491 (notices served so far)x 5000 oz +{96 OI for front month of JUNE ) -number of notices served upon today (2)x 5000 oz  equals  2,925,000 of silver standing for the JUNE contract month.
We NEITHER GAINED NOR LOST ANY SILVER OUNCES STANDING IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.
 
Total dealer silver:  23.346 million  (RECORD LOW INVENTORY)
Total number of dealer and customer silver:   149,051 million oz
The total open interest on silver is NOW at its all time high with the record of 213,000 being set June 23.2016.  The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels 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
Steve St Angelo discusses the huge leverage on dealer (registered) silver and now it is more leveraged than gold
(courtesy SRSRocco report/Steve St Angelo)

COMEX Registered Silver Now More Leveraged Than Gold

by on June 23, 2016

While the world awaits the BREXIT vote, the COMEX Registered Silver Inventories reached a new record as it pertains to leverage.  Matter- a-fact, the number of owners per ounce of Registered Silver is higher than gold.  In the beginning of the year, COMEX Gold Registered inventory owners per ounce spiked to over 500 to 1.

However, the situation for COMEX Registered Gold has calmed down quite a bit as its inventories have risen to 1.7 million oz (Moz) from the low of a 89,000 oz in a little more than six months:

COMEX-Registered-Gold-Owners-Per-Oz

Registered Gold owners per ounce have fallen from over 500/1, to 33/1 currently.  On the other hand, the situation in COMEX Registered Silver shows a much different picture:

COMEX-Registered-Open-Interest-&- Stocks-062216

While owners per oz of Registered Gold have dropped dramatically,Registered Silver Inventories have hit a new record of 44 owners per ounce.  This is nearly three times the rise since the latter part of 2015.

So, why have Registered Silver Inventories continued to decline, while Registered Gold Inventories move significantly higher??  What is even more interesting is that when the price of silver increased from its lows in 2009 to a high of $49 in 2011, the Registered Silver Inventories fell to a low of 26.4 Moz.

Speculation was at the time that industry and investors were acquiring at lot of silver, thus depleting the Registered Silver stocks.  However, something is totally different this time around.  As we can see in the chart above, theRegistered Silver Inventories are at the lowest level in more than a decade at 23.3 Moz… but the price is only at $17.

This next chart compares the Registered Silver Inventories during the peak price in 2011 and today:

Leverage-Of-COMEX-Registered-Silver- Contracts

In April 2011, total Registered Silver Inventories fell to a low of 26.4 Moz as total open interest was approximately 750 Moz.  To get the total open interest in ounces, we multiply the open interest by 5,000 oz (a single contract equals 5,000 oz).  Now, if we look at what is taking place today, the leverage is even higher.

With the Registered Silver Inventories at 23.3 Moz, the total open interest is a staggering 1,028 Moz.  This is why the Owners Per Oz is now at 44/1…. another new record.

So, why would Registered Silver Inventories continue to decline since the beginning of the year while Registered Gold Inventories move up much higher?  Well, part of the reason may be due to the Chinese who are now stockpiling silver.  As I stated in previous articles, silver inventories at the Shanghai Futures Exchange increased from a low of 7.5 Moz in August 2015 to over 60 Moz currently.

Furthermore, if industrial silver demand is weaker, why hasn’t the COMEX Registered Silver Inventories increased?  This was the case after the price of silver peaked and fell to $14 at the end of 2015.  Thus, as the price of silver fell from $49 in April 2011, to a low of $14 in 2015, Registered Silver Inventories grew from 26.4 Moz to over 70 Moz last year.

But, something changed in 2015.  Even though the price of silver did not rise all that much, we had the huge spike in Retail Silver Investment starting in June.  This caused Registered Silver Inventories to fall as Indians and North Americans were buying record silver bullion.

Lastly, I am hearing through several sources that Chinese are not only acquiring a lot of silver for industry, they are now buying silver for investment.  It will be interesting to see how things unfold this year, but if the Chinese start really buying and trading silver… we could see serious fireworks in the silver market.

-END-

And now the Gold inventory at the GLD
june 23/no change in gold inventory tonight/rests at 915.90 tonnese
June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes
June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes
June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory.
rests at 908.77 tonnes.
June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes
JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes.
June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!!
June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES
JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES
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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
june 23/ Inventory rests tonight at 915.90 tonnes

end

Now the SLV Inventory
June 23/ no change in silver inventory/rests tonight at 333.069 million oz
June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/
June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz
June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495
June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz
JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz
June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz
June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ
JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ
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
.
June 23.2016: Inventory 333.069 million oz
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.1 percent to NAV usa funds and Negative 2.4% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 60.9%
Percentage of fund in silver:37.7%
cash .+1.4%( June 23/2016). /
2. Sprott silver fund (PSLV): Premium RISES  to +0.25%!!!! NAV (June 23/2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO +0.64% to NAV  ( June 23/2016)
Note: Sprott silver trust back  into POSITIVE territory at +25% /Sprott physical gold trust is back into positive territory at +0.36%/Central fund of Canada’s is still in jail.
 
 
 

END

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

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

BREXIT Day – Markets Becalmed – Gold Panic Prelude – Trading Hours

Note:  Due to increased inquiries and demand, our trading desk will be open until 1900 BST today and resume trading from 0700 BST tomorrow.

BREXIT Day and the UK EU referendum is upon us today and investors are expecting more choppy trading in financial markets in the coming hours. The City of London is bracing itself for potentially the most volatile night since the sterling devaluation on Black Wednesday.

BREXIT_Gold_GBP_230616Gold in GBP – 5 Years

This morning, as British voters headed to the polls, sterling hit a 2016 high versus the dollar and gold in sterling terms fell to £844 per ounce, down 10% from a high of £928.85 per ounce just 5 trading days ago on June 16.

While the gold market is on the surface becalmed, there has been very significant high net worth and institutional demand in recent weeks and this is leading to an, as of yet, unacknowledged and unappreciated “panic” in the interbank gold market due to unprecedented conditions and “supply issues” as we revealed yesterday.

Gold and silver may come under further selling pressure in the short term, especially if the remain side wins the referendum. However, any weakness is likely to be short term  due to the increasing risks of a global recession, risks posed by negative interest rates and bail-ins and many geo-political threats throughout the world. Illiquidity and supply issues in the London Good Delivery inter bank gold market also bode very well for gold.

A vote to stay could be considered priced in to markets now. In the event of a leave vote, stock markets will sell off sharply and safe haven gold and silver will likely rally especially against the euro and sterling.

World stocks remain very buoyant despite the risks and have climbed for a fifth day running. Risk appetite remains high and markets appears somewhat complacent about the still real risks of a vote to leave the EU and indeed other global risks.

Despite the most recent polls clearly showing the result is set to be extremely close, markets are very much pricing in a vote to remain. This creates the real risk that a vote to leave leads to dislocations, sharp corrections and potentially crashes in stock markets. A Brexit vote would likely lead to a very sharp correction, with the FTSE 100 plummeting. Swiss bank UBS has warned of sharp falls to levels of between 4,900 and 5,500, wiping off around £350 billion from the market.

The official result is not expected until 0600 GMT or later on Friday morning. The markets will begin to react, potentially very rapidly, from when the first results are announced in or around 0100 GMT, especially if they are showing the leave camp in the lead.

Some hedge funds have commissioned their own exit polls in order to get vital intelligence ahead of the market. Thus, sharp moves ahead of the official results may be perceived as certain market participants having advance knowledge of the result. Market manipulation and the usual trading ‘shenanigans’ are to be expected. Another reason to avoid the short term noise and focus on the long term and the importance of owning quality, value assets in a diversified portfolio.

Our trading desk will be open until 1900 BST today and from 0700 BST tomorrow morning (Friday 24th), if you need to buy or sell precious metals.


Gold Prices (LBMA AM)

23 June: USD 1,265.75, EUR 1,112.22 & GBP 850.96 per ounce
22 June: USD 1,265.00, EUR 1,122.31 & GBP 862.98 per ounce
21 June: USD 1,280.80, EUR 1,129.67 & GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 & GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 & GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 & GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 & GBP 903.04 per ounce

Silver Prices (LBMA)
23 June: USD 17.29, EUR 15.16 & GBP 11.61 per ounce
22 June: USD 17.20, EUR 15.23 & GBP 11.72 per ounce
21 June: USD 17.36, EUR 15.34 & GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 & GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 & GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 & GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 & GBP 12.26 per ounce


Gold News and Commentary
Gold Edges Higher as Decision Day in U.K. Puts Markets ‘All on Edge’ (Bloomberg)
Gold touches two-week low as Britain gears up for EU vote (Reuters)
Gold ETF Investors Look Past Brexit, Lift Assets to 2-Year High (Bloomberg)
Brexit gold rush: Scared Brits stockpile bars & coins, just in case (RT.com)
Britons queue to exchange pounds ahead of referendum (FT via Zero Hedge)

FACTBOX – How will Britain’s EU referendum vote count work on the night? (Reuters)
Nervy global investors revisit 1930s playbook (Reuters)
Ten reasons why I’m voting to leave the EU – Frisby (Money Week)
Brexit hoopla diverted our attention from real problems – Edwards ( Business Insider)
George Soros wrong on Brexit and UK economy, says City economist (Guardian)
Silver Options Traders Follow Gold To Longest Bullish Bet Since 2009 (Zero Hedge)
Why gold could ‘brenefit’ regardless of Brexit vote outcome (CNBC)
Read More Here

Recent Market Updates
– Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market
– Gold Slips Despite UK Gold Demand Surging – Investors “Seek Stability”
– Gold Prices Surge to Highest in Nearly Two Years On FED and Brexit Haven Demand
– Gold Bullion Has Little Downside, Brexit Or Not, Says HSBC
– Central Bank of Ireland Warns Risks are Debt, Brexit, Geopolitical Tensions and Migration
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– 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

Mark O’Byrne
Executive Director
end
Craig Hemke puts his two cents worth on the British vote today:
(courtesy Craig Hemke/TFMetals)

THURSDAY Brexit Vote

With the Brexit vote coming up tomorrow, today we should take a moment to consider what should happen with gold following the outcome.

The first thing you need to know is that this is NOT a done deal. The assumption since last Thursday is that Brexit will fail…and it likely will. The City of London almost always gets what The City of London wants. To think that the hoi polloi will be allowed to advance an agenda that is NOT in The City’s interests is almost unfathomable, sort of like those believing that a new Glass-Steagall will be passed one day in the U.S.. The Financial-Political Complex overpowers everything through bribery, greed and corruption so to think that popular opinion would be allowed to override them?…Well, it’s a longshot.

That said, the polls remain close and be sure to check this from ZH. As you know, ole Turd knows a little about bookmaking so, to me, this makes perfect sense. Essentially, the bookmaker simply desires equal amounts of money on each side of the wager. The amount of individual bets tells you something about the supposed “smart money” but it can be misleading. What this ZH post shows is that there is a huge amount of individual bets on Brexit but an equally huge amount of money…in much larger chunks…on Bremain. Now why would that be? Does the “smart money” know something that the “squares” do not? Or is someone attempting to influence opinion by placing big bets in order to drive the odds toward Bremain. This is an interesting question to consider in the remaining hours before the vote. http://www.zerohedge.com/news/2016-06-22/something-strange-emerges-when-looking-behind-brexit-bookie-odds

And here’s yet another major English newspaper coming out with an endorsement of Brexit:http://www.dailymail.co.uk/debate/article-3653385/Lies-greedy-elites-divided-dying-Europe-Britain-great-future-outside-broken-EU.html

And don’t forget who reads newspapers and which is the most likely demographic to turn out in large numbers…old(er) people. And which group is most likely to reject the EU in favor of British “patriotism”? Old(er) people. Just sayin’.

So, again, this is far from a done deal, regardless of The City’s desires. Sit tight and be ready. Tomorrow will be fun!

To that end, let’s now talk about gold and the impact of the vote on paper gold “prices”. It will be easier to discuss this verbally and we’ll attempt to do so in today’s podcast which, God willing, I’ll be able to post before 8:00 pm EDT.

Here’s where ole Turd stands…and this is NOT because “Turd is just a permabull who always says BTFD”. Everything and every scenario says gold is going to rally, NOT plummet. Why? Let’s list a few of the reasons:

  1. How much “Brexit risk premium” was pumped into gold in the first place? Gold was $1213 and down nearly $100 from its highs before the June BLSBS put an end to the Fed Goon Jawboning Parade. After the BLSBS, it closed June 3 at $1243. It then rallied over the next two weeks, anticipating a dovish FOMC and was $1284 when the Fedlines were released one week ago today. How much of that rally was FOMC-related and how much was Brexit-related? Maybe 80/20? Maybe. In fact, Brexit really only entered as a legitimate possibility early last week. So, considering that gold is now $50 off its peak last Thursday, I think the “Brexit risk premium” is already done, gone and out.
  2. So this actually puts gold DOWN $16 or 1.3% since the extremely dovish and dissentless Fedlines of last week! What? That’s crazy!! All this does is once again prove the old adage that, if you want to make money trading the metals, you must always “sell some when everything looks great and buy some when everything looks terrible”.
  3. From an HFT-algo perspective, EITHER vote scenario should be gold bullish. Why? A Brexit vote will dump the euro but surge the yen. This would/could/might blow the USDJPY all the way to and through the 101 target we’ve been discussing. Bond futures will soar worldwide, too, as “investors seek the safe haven of fixed income”. These two combined should drive heavy HFT gold futures buying. But what about Bremain? If this occurs, the Euro will rally…at least it should. And the euro is about 60% of the POSX. A 2-3 point rally in the Euro would drive the POSX back toward 92. After an initial shock, the HFTs and smart human money managers everywhere will begin to focus upon the tumbling Pig and Fed dovishness…as they should have been doing every day since last Wednesday…and you’ll get a quick bounce and recovery from any selling.
  4. And, in the end, simply look at price and history.

“What does that mean Turd? Please elaborate on point #4.” OK, I’ll be glad to.

Recall what happened in May. Gold surged toward the critical $1308 point? What did The Cartel Banks do? They desperately capped and capped and then brazenly used all of the Fed Goon jawboning as an excuse to ram prices back down and, MOST IMPORTANTLY, cover over 100,000 naked shorts BEFORE The Fed actually announced that they were powerless and neutered. So, as price rallied on the actual news of June 3 and June 15, The Banks were able to control price and keep it below $1308 by issuing back out the same old paper that they had issued in April. So, what has the past 4 days been about? It’s the exact same trick/strategy!

The Cartel Banks have used the Bremain sentiment since the Cox assassination as cover to raid price, drive Specs back out and cover shorts. That way, when price begins to rally again regardless of the outcome, they’ll have shorts to issue as they attempt again to keep price below $1308. See how that works? Just yesterday, we saw an overt raid of $20 and an open interest decline of nearly 10,000 contracts…back to 571,000. With prices down a little again today, who knows how many more nervous-nelly Specs are heading to the exits ahead of the vote.

The point is…Just as in May, The Banks KNOW what is going to happen next. The paper price of gold is going to rally in the days and weeks to come, regardless of the outcome of tomorrow’s vote. Therefore, just as in May, they are desperately using any and every opportunity to scare out some Specs and cover some shorts. Got it? See what I mean? Again, we’ll try to make some sense of all this in today’s podcast.

For now, gold is down $5 as I type and, earlier today, came very close to tapping its 50-day MA and the lower band of our channel…which we’ve been mentioning as a likelihood since Sunday evening. What’s my strategy? Sit back, relax and watch the fireworks. If I can remember tonight, I think I’ll even order another shiny ounce of gold from JMB or GoldenEagle. I mean, why not? Get it while you can! Again, I absolutely expect the 50-day to hold and that the hand-crafted/painted double top on the chart to fail. My target next remains $1340.

And one more thing…As the world moves on from “All Brexit, All The Time”, I though that this little tweet was interesting:

Have a great day but be sure to check back much later for a full podcast.

TF

end

Your early THURSDAY 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 6.5774 ( REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.5882) / Shanghai bourse  DOWN 13.59 OR 0.47%   / HANG SANG CLOSED UP 73.72 OR 0.35%

2 Nikkei closed UP 172.63 OR 1.07% /USA: YEN FALLS TO 105.76

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 93.21/Euro UP to 1.1382

3b Japan 10 year bond yield: FALLS  TO -.150%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.62

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  49.76  and Brent: 50.66

3f Gold DOWN  /Yen DOWN

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

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to +.10%   German bunds BASICALLY negative yields from  9 years out

 Greece  sees its 2 year rate FALL to 8.00%/: 

3j Greek 10 year bond yield FALL to  : 7.850%   (YIELD CURVE NOW COMPLETELY FLAT)

3k Gold at $1262.50/silver $17.28(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 79 in  roubles/dollar) 64.04-

3m oil into the 49 dollar handle for WTI and 50 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 104.62 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 .9546 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0877 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 NEW POLLS INDICATES A SWING TO THE BREMAIN.

3r the 9 Year German bund now NEGATIVE territory with the 10 year RISES to  + .100%

/German 9 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

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 1.726% early this morning. Thirty year rate  at 2.541% /POLICY ERROR)

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

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

Voting Begin: Stocks Surge, Sterling Hits 2016 Highs, Futures Flirt With 2100

On the day voting for the UK referendum finally began, what started off as a trading session with a modest upward bias, promptly turned into a buying orgy in painfully illiquid markets shortly after Europe opened as an influx of buy orders pushed European stocks 2% higher, propelled by cable which was above 1.49 for the first time since December and USDJPY climbing over 1.05 in sympathy, following the release of the final Ipsos Mori poll which showed Remain at 52% to 48% for leave.

The final poll breakdown is as follows, and shows a lead for Remain based on phone polls and a slight lead for Leave from online polls.

One look at the chart of cable shows that as far as the FX market is concerned at least the outcome is now sealed.

Then again, with all polls largely in the margin of error, predicting a victory for Remain may be premature: ““Some cash is returning to markets, but I would rather stay put until the results. You can’t really rule anything out before tomorrow,” said Thomas Thygesen, SEB AB’s head of cross-asset strategy in Copenhagen. “The issue will be how the outcome is perceived and how the biggest stakeholders react. Even just the absence of bad news may be the start of a risk rally, and markets have been rising in the anticipation of this.

The MSCI All-Country World Index hit a two-week high, rising 0.7% in early trading, with above-average trading in shares on Europe’s benchmark, amid a vote that past opinion polls indicated was too close to call. A gauge of sterling advanced for a second day, while a measure of implied overnight price swings versus the dollar climbed to a record. The U.S. currency weakened versus all of its major peers except the yen. The Mexican peso and Russia’s ruble led gains among oil-exporting nations as crude advanced. The cost of insuring high-yield corporate debt against default fell for a fifth day, the longest run since April. U.S. Treasuries dropped as Spanish and Italian notes rose.

Needless to say, investors have been glued to the U.K.’s debate on EU membership in recent weeks as governments and central banks around the world warned that a vote for a so-called Brexit could hurt global economic growth and destabilize financial markets. As Bloomberg writes, a gauge of expected volatility in U.S. stocks jumped to its highest level since February ahead of the referendum.

The Stoxx Europe 600 Index also rose for a fifth day, surging 1.3 percent, with miners leading a rally of all industry groups. The volume of shares changing hands on the European index was about 29 percent higher than the 30-day average. Britain’s benchmark FTSE 100 Index advanced 1.2 percent. Voters have until 10 p.m. to cast their ballot in the referendum on EU membership. The first results are expected around midnight, while the final ones are due at about 7 a.m. on Friday. Polls published over the last three days suggested the vote will be finely balanced between the two camps. Futures on the S&P 500 added 1.1 percent and were flirting with the 2,100 level.

Aside from the Brexit vote, investors will also look data on jobless claims, manufacturing and new home sales for indications of the health of the world’s biggest economy and the possible trajectory of interest rates.

Market Snapshot

  • S&P 500 futures up 0.9% to 2097
  • Stoxx 50 up 2.0% to 33036
  • FTSE 100 up 1.6%.35 to 6358
  • DAX up 1.9% to 10261
  • German 10Yr yield down less than 1bp to 0.06%
  • Italian 10Yr yield down 3bps to 1.41%
  • Spanish 10Yr yield down 2bps to 1.48%
  • S&P GSCI Index up 0.2% to 377.6
  • MSCI Asia Pacific up 0.8% to 131
  • Nikkei 225 up 1.1% to 16238
  • Hang Seng up 0.4% to 20868
  • Shanghai Composite down 0.5% to 2892
  • S&P/ASX 200 up 0.2% to 5281
  • US 10-yr yield up 2bps to 1.71%
  • Dollar Index down 0.34% to 93.4
  • WTI Crude futures up 0.5% to $49.38
  • Brent Futures up 0.6% to $50.20
  • Gold spot up 0.3% to $1,270
  • Silver spot up 0.9% to $17.43

Top Global News

  • Final Brexit Appeals Made as Polls Diverge on Referendum’s Eve: ComRes survey late Wednesday shows Remain ahead, boosts GBP
  • Pound’s Day of Destiny Arrives as History Shows What’s Possible: Liquidity biggest problem after a leave vote: Insight
  • VW Owners Split for First Time on Diesel Scandal in AGM Vote: Lower Saxony abstains from ratifying executives’ actions
  • House Republicans Leave Town as Democrats Extend Gun Sit-In: Democrats say protest will continue until votes are scheduled
  • Mylan Says Indian Drug Industry Needs More Transparency From FDA: Mylan has ‘moved on’ from Perrigo bid, President Malik says
  • Caesars Creditors to Vote on Plan, But Confirmation Fight Awaits: Company still seeking deal to avoid risky court battle
  • Twilio Raises $150m Pricing IPO Above Marketed Range: San Francisco-based company priced 10m Class A shares at $15 each
  • BofA Said in Talks to Settle With SEC for $400m-$450m: WSJ: Settlement may be announced as soon as Thursday
  • China’s Sanpower Says It Joins Bids for McDonald’s China Rights: Sanpower submitted joint bid with Beijing Tourism Group

* * *

Looking at regional markets, Asia stocks traded mixed as all focus remained on today’s UK referendum. Nikkei 225 (+1.1%) and ASX 200 (+0.2%) were supported at the open, alongside gains in US equity futures after the release of Comres and YouGov polls which showed the Remain campaign jumped ahead. However, gains were capped as cautiousness still persisted and as Chinese markets entered the fray, with the Shanghai Comp (-0.3%) negative on continued debt concerns and after the PBoC reduced the size of its liquidity injections. Finally, 10yr JGBs were pressured as the risk-on sentiment in Japan restricted flows into the safe-haven, although prices were lifted off worst levels following a 20yr bond auction with had a better than prior b/c.

Top Asian News

  • China Is Said to Be Satisfied With Yuan Exchange-Rate Reform: Premier Li visited PBOC, China Construction Bank on Monday
  • Stealth China Stimulus Means Fiscal Gap Over 10%, Economists Say: As private businesses tighten belts, govt is stepping in
  • Japan Negative Rates Drive Biggest Lenders From Overnight Market: 3 of 5 largest say minus rates complicate call funding
  • China’s State Grid Said in Talks to Buy CPFL Energia Stake: Camargo Correa’s stake in CPFL Energia is ~23.6%
  • World’s Biggest Pension Fund Sues Toshiba for Accounting Scandal: Japan’s GPIF is seeking damages of ~900m yen
  • Arora’s Walkout Returns the Focus to Japan Inc. Succession Woes: SoftBank transition hiccup latest of many such cases
  • Toshiba’s President Tsunakawa Warns of Long Road to Recovery: Toshiba is recovering from a multiyear accounting scandal

European equities have traded solidly in the green with little in the way of fundamental newsflow, while in terms of the FTSE 100 that has been led by material names amid the upside in the commodity complex, coupled with strength in Tesco’s (+2.3%) following a firm sales report. Elsewhere, credit markets are relatively flat with the German yield seeing some curve flattening amid the outperformance in the long end. The Stoxx Europe 600 Index also rose for a fifth day, surging 1.3 percent, with miners leading a rally of all industry groups. The volume of shares changing hands on the European index was about 29 percent higher than the 30-day average. Britain’s benchmark FTSE 100 Index advanced 1.2 percent. Voters have until 10 p.m. to cast their ballot in the referendum on EU membership. The first results are expected around midnight, while the final ones are due at about 7 a.m. on Friday. Polls published over the last three days suggested the vote will be finely balanced between the two camps.

Top European News

  • Tesco Turnaround Gains Pace as Lewis Quietens Brand Doubters: Sales increase marks another step in CEO’s turnaround efforts
  • Norway Keeps Rates at Record Low as Oil Crisis Battering Abates: Lifts rate outlook, still sees one more rate cut in 2016
  • When Ports Finally Ditch Fax Machines, Cargotec Plans to Profit: Company bets software will replace outdated technology
  • French Output Declined for First Time in Four Months in June: Private-sector economy shrank for the first time in four months
  • Statoil Saves $292m Cash as Investors Take Scrip Dividend: Analysts predicted a majority if investors would choose shares
  • Credit Suisse Said to Face U.S. Probe on Israel Client Taxes: Probe looking at whether bank helped clients evade U.S. taxes
  • CDC Advises Against Using AstraZeneca’s FluMist Next Season: Panel found not effective enough in last 3 influenza seasons

In FX, the pound rose to over $1.4900, its strongest level since December. The Bloomberg British Pound Index, which tracks sterling against a basket of peers, gained 0.6 percent. The currency has strengthened about 3 percent versus the dollar this week. “Even though it looks as though much of the ‘risk of Brexit’ has been priced out of markets, there remains plenty of scope for volatility on either outcome, albeit very much more on a ‘Leave’ than ‘Remain,’” Ray Attrill, global co-head of foreign-exchange strategy in Sydney at National Bank Australia Ltd., wrote in a note. An overnight measure of pound-dollar volatility surged as traders sought protection from unusual price swings. The gauge, based on option prices, touched 119.7 percent Thursday, the highest since Bloomberg began collecting the data in 1998.

The euro appreciated 0.7 percent, while Sweden’s krona gained 1.1 percent. Mexico’s peso gained 1.3 percent and the ruble climbed 1.1 percent. Taiwan’s dollar rose to its strongest level since August after overseas investors pumped $2.4 billion into the island’s stocks this month. The yen weakened 0.4 percent against the dollar and slid for a fifth day versus the euro, its longest losing streak since March. The Bloomberg Dollar Spot Index dropped 0.5 percent. The MSCI Emerging Markets Currency Index advanced 0.3 percent to a seven-week high. Five days of progress have pushed it up 1.6 percent. Mexico’s peso, South Africa’s rand and Russia’s ruble led gains.

In commodities, West Texas Intermediate for August delivery gained as much as 77 cents to $49.90 a barrel on the New York Mercantile Exchange and was at $49.66 at 10:50 a.m. London time. The contract lost 72 cents to $49.13 on Wednesday. Total volume traded was about 35 percent below the 100-day average. Gold swung between gains and losses near a two-week low, having retreated 2.5 percent over the last three days. Nickel and zinc fell, while copper climbed 0.8 percent.

* * *

Bulletin Headline summary from Bloomberg and RanSquawk

  • GBP rises to 2016 highs with the latest Polls from YouGov, ComRes and Ipsos Moris showing `remain’ ahead.
  • Equities higher this morning, however newsflow has been somewhat light with focus firmly on the EU referendum.
  • As well as the UK’s EU referendum, today will see the release of US manufacturing PMI, Weekly Jobless Claims and New Home Sales.
  • Treasuries sell off overnight as global equities, commodities, precious metals and the GBP/USD rally; U.K. votes on Brexit, polls open until 5pm NYT with final results due ~2am NYT tomorrow morning.
  • Across Europe, traders and their employers are making preparations for a big night. It promises to be a record- setting evening, whether in terms of trading volatility or in gallons of coffee consumed
  • Bond and currency traders seeking refuge as the U.K. votes on membership in the European Union may find that the world’s financial-market havens aren’t so safe
  • Growth in the euro area’s private sector slowed more than economists predicted in June, with firms expressing concerns about uncertainty ahead of the U.K.’s vote on its European Union membership
  • The European Central Bank reinstated a waiver on Greek debt, allowing the nation’s banks more access to cheaper refinancing lines but stopping short of including such bonds in quantitative easing for now
  • A majority of Japan’s biggest private lenders are still unwilling to borrow from the market for overnight loans almost six months after the Bank of Japan announced its negative interest-rate policy

DB’s Jim Reid concludes the overnight wrap

Let’s take a look at the latest and last polls before the ballot boxes open. On this front it was a good day yesterday for ‘leave’ until the two 10pm polls both showed ‘remain’ in the lead. Opinium released their last poll (online) yesterday afternoon showing ‘leave’ 1% in the lead at 45/44%. That came at the end of the European session and a couple of hours later the TNS poll (online) showed ‘leave’ 2% in the lead at 43/41%. The sample periods for those were June 20th-22nd and June 16th-22nd respectively.

Then after the US close we got the ComRes phone poll (survey period June 17th-22nd) for the Daily Mail and ITV News which showed a 6% lead for ‘remain’ at 48/42%. After accounting for the don’t knows this extended to an 8% lead for ‘remain’ at 54/46%. Finally and a short moment after that ComRes poll, the YouGov online poll for the Times (survey period June 20th-22nd) showed ‘remain’ 2% in the lead at 51/49%. This also adjusted for the don’t knows. The FT’s poll of polls is now sitting at 47% vs. 45% in favour of ‘remain’ after accounting for the 4 polls yesterday.

Up to last night, of the most recent 8 polls, 3 out of 5 online surveys have given ‘leave’ the lead and all 3 phone equivalents have ‘remain’ in front.

Outside of the online/phone polling accuracy debate, the greatest level of intrigue will be to see whether the pollsters generally or bookmakers have been the more accurate in the build-up. As we highlighted last week, there seemed to be either a late swing or error in polling that underestimated the support for the ‘remain’ movement in the Quebec/Scottish referendums. Figure 1 in the PDF today updates that chart for the latest Brexit polling numbers.

After a big wobble last week, markets in our opinion are now more pricing in probabilities closer to the bookmakers assessment. There should be caution in over interpreting the bookmaker numbers as betting odds reflect the weight of money staked rather than a prediction. Clearly there could be some hedging involved here which would distort its predictive powers.

As for the timeline after polls close (2200 BST), the first thing to note is that there will be no official exit poll. An Ipsos Mori telephone poll for the Evening Standard is due to be released at some stage today (possibly before polls open) while a YouGov poll is due to be announced after polls close this evening.

The YouGov sample is exclusively taken from today, with the former compiled earlier in the week.

It is said that several city institutions have commissioned their own private polls so it’ll be interesting to see whether these see the light of day. The trading in Sterling might give clues as to whether notable news has been derived from these polls. Overall I’d imagine the YouGov poll (released on Sky) will get most attention post-2200 tonight although we note it’s an online poll. Next thing to look for is turnout. The number of voters in each area is compiled before counting. So we should get an idea on turnout before the first results (perhaps due at around 0030 Friday – see below). The UK Electoral Commission has estimated that most will come through between 2330-0230.

DB’s George Buckley has argued that the ‘leave’ vote appears more passionate and is likely to be more incentivized to vote. A low turnout number could therefore favour them. The last General Election (May 2015) saw a 66% turnout but the Scottish referendum saw 85%. The 1975 EEC UK referendum saw just under 65%. It’s impossible to work out at what number the pendulum shifts in favour of ‘remain’ (if indeed it does) but maybe last year’s General Election is a baseline figure. Given the phenomenal media interest, on balance I’d be surprised if it wasn’t higher. As George Buckley reminded me yesterday, in 1975 we’d only been a member of the EEC for a couple of years so surely this is a more momentous vote with more at stake either way?

Next are the all important first results and how to handicap them. The first results are expected around 0030 BST (Sunderland first perhaps) with 50% likely available by 0400 and 80% by 0500. Figure 2 in the PDF shows the likely cumulative % declaration by time. In terms of interpreting the results DB’s Jack Di-Lizia has produced an interesting graph (Figure 3 in today’s PDF) showing the likely declaration results timings against level of euroscepticism in that area. The lower this number the greater the level of euroscepticism. This index was compiled using Sky who ranked each area of the country. As a word of warning this was done in March before the recent swing towards ‘leave’ and the regions may not exactly map the count areas. However as can be seen from the moving average, the initial results may favour eurosceptic  areas before it becomes more random as we approach 0200. YouGov has also issued numbers for eurosceptism and DB’s George Buckley has compiled a list of areas that report before 0300 and show similar numbers for Sky and YouGov (to confirm the trend). He sees these as interesting ones to watch.

As we swing over to markets, its FX which has seen the greatest volatility over the past 24 hours or so. Sterling touched an intraday high yesterday in the mid-afternoon at 1.477 (roughly +0.84%) prior to the release of the first two polls which showed ‘leave’ having the advantage. Following those polls that gain was completely wiped out. However, following the release of the two late polls showing ‘remain’ in the lead, the Pound surged +1.30% and touched an intraday high late last night of 1.484. Believe it or not that’s actually the highest level this year (and since December 28th) and while it’s come off a little in Asia, it’s still holding around 1.480 this morning.

Meanwhile the implied probability based on political bookmaker’s odds is sitting at 79.9% this morning. That comes following a slightly greater than 5% range yesterday which saw the probability get as low as 75.5% and as high as 80.9%. As a reminder those odds have been as low as 61% earlier this month and as high 85% back in May.

At the margin, sentiment is probably just about on the positive side in Asia this morning. While bourses in China and Korea are lower, the Nikkei (+0.48%), Hang Seng (+0.38%) and ASX (+0.18%) are all up modestly, while US equity index futures are up half a percent or so and EM currencies are also up a similar amount. Credit markets in Asia and Australia are also 4bps and 2bps tighter respectively.

The moves this morning come after markets finished a little more mixed yesterday. The Stoxx 600 was up as much +1.00% or so an hour out from the close, before paring alot of that to close at +0.38% following the release of the Opinium poll. The FTSE 100 closed +0.56% but had also been up as much +1.40%. That said the FTSE is still up an impressive +6.13% from the intraday lows of last Thursday (which was the lowest level since February). Indeed that has also occurred despite Sterling being up +5.47% in the time frame so the gains would be perhaps even more had it not been for that headwind.

Meanwhile across the pond the S&P 500 was out with an early gain of +0.51% before then mirroring a similar dive lower. The index closed -0.17% by the final whistle with volumes nearly 15% lower than the average. Measures of volatility rose meanwhile. The VSTOXX was up 5% and at 36 is just below the 40 level of a week ago which was the most since August last year. The VIX rose 15% to close above 21. That takes it just above last week’s high although it’s still a way off the high of 28 it made during February.

Elsewhere, there wasn’t too much to report in rates markets. 10y Gilts edged up a few basis points to 1.310%, Bunds were a basis point higher at 0.060% and peripherals were a touch stronger. 10y Treasuries were 2bp lower but have risen by the same amount this morning so continue to hover around 1.707%. In the commodity space Gold (-0.15%) edged down marginally, while Oil (-1.44%) was also weaker after US inventories fell by less than expected last week.

Probably the most interesting non-referendum newsflow came from the ECB and Greece yesterday after the Central Bank announced that it is reinstating the waiver on Greek debt and so allowing them to be used as collateral to access ECB loans. An associated statement from the ECB said that the Governing Council has acknowledged the commitment of the Greek government to implementing the current ESM program and that it expects continued compliance with its conditionality. On a similar subject, a reminder that on Friday we should be getting the details of the first set of data on the take up on TLTROII.
Wrapping up yesterday’s data flow. In the US we learned that existing home sales rose +1.8% mom in May as had been expected. The FHFA house price index revealed a lower than expected +0.2% mom rise in April however (vs. +0.6% expected). Meanwhile, close to home the consumer confidence reading for the Euro area in June weakened a tad to -7.3 from -7.0 in May. Expectations had been for no change

As we turn to the day ahead clearly markets will be firmly fixed on events in the UK. For completeness however, the rest of the day will also see the release of the flash June global PMI’s. In Europe we get the full set of manufacturing, services and composite data while in the US we just get the manufacturing reading. Also due out across the pond is initial jobless claims data, new home sales for May (expected to fall sharply), conference board’s leading indicators (expected at +0.1% mom) and Kansas City Fed’s manufacturing activity index. The Norges Bank monetary policy meeting is also today (no change expected). Clearly all of this is a bit of a side event however.

See you on the other side!!

END

ASIAN AFFAIRS

i)Late  WEDNESDAY night/ THURSDAY morning: Shanghai closed DOWN 13.59 POINTS OR 0.47% / /Hang Sang closed UP 73.72 OR 0.35%. The Nikkei closed UP 172.63 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.17% Chinese yuan (ONSHORE) closed UP at 6.57774 /Oil ROSE to 49.77 dollars per barrel for WTI and 50.66 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5820 yuan to the dollar vs 6.5774 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

b) REPORT ON CHINA

China issues a stern warning that they are the wrong opponent to play games with.

I wonder what China will do at the comex??

(courtesy zero hedge)

China Warns The US That It Is “The Wrong Opponent To Play Games With”

Two US aircraft carriers, the John C. Stennis and Ronald Reagan, began joint operations in the seas just east of the Philippines over the weekend the US Navy announced on Monday. The operations come during a tense time in the region, as China recently announced that it would not adhere to any unfavorable ruling that may come from The Hague regarding the Philippines formal challenge of territorial claims in the South China Sea.

China has been very clear in its position that the US should stay out of the maritime disputes in the region, however the US has already made it clear that it intends to be the policeman in the region for decades to come, so the move comes as no surprise. Admiral John Richardson, the chief of US Naval Operations said that it was not often the US had two carrier strike groups in the same waters and it was a sign of US commitment to regional security.

According to Reuters, Richardson made a correlation between the Asian deployment and the deployment the US recently sent to the Mediterranean Sea in order to send a message to Russia.

“Both here and in the Mediterranean, it’s a signal to everyone in the region that we’re committed, we’re going to be there for our allies, to reassure them and for anyone who wants to destabilize that region.And we hope there’s a deterrent message there as well.”

A US Pacific Command (PACOM) statement quoted Rear Admiral John D. Alexander, commander of the Ronald Reagan carrier group, as saying it was an opportunity to practice techniques needed to prevail in modern naval operations.

The US Navy has flown, sailed and operated throughout the Western Pacific in accordance with international law for decades, and will continue to do so.

One additional piece to this story is that as Reuters points out, the People’s Daily (the official newspaper of China’s ruling Communist Party, which is often used to express foreign policy views), hadthe following to say about the US decision to send carriers in.

Via Google Translate

Conveying a so-called message about security through the exhibition of military might, and furthermore describing the events as an act of deterrence is something that the U.S. has done far too many times. Regardless of how many times it may have gone smoothly in other parts of the world the U.S. has chosen the wrong opponent by selecting China for this type of game. Behind all of this is lack of patience and brassy moves and it also reveals a nature of hegemony beneath the surface.

* * *

It is obvious that China is getting tired of the games that the US is playing in the region, and no matter how many times China has warned that the US should stay out of its affairs, the US remains steadfast in its effort to police the region. It is only a matter of time before a confrontation takes place, intentional or otherwise, and then the world will be undoubtedly pushed to the brink of war – which would be bullish for stocks of course.

end

EUROPEAN AFFAIRS

The daily newspapers sums up the divide in England:

(courtesy zero hedge/all the UK newspapers)

On The Front Covers Of UK Newspapers Today

As Martin Daubney perhaps summarizes it best when looking at the cover pages of two of UK’s most popular tabloids, today’s referendum vote is being spun as one of “Project Hope” vs “Project Fear.”

Here is how the rest of the UK press previews today’s historic vote:

end
Martin Armstrong weighs in on the BREXIT vote:  Basically he states that the EU is nothing without Britain:
(courtesy Martin Armstrong)

Martin Armstrong Rages “The EU Is Nothing Without Britain!”

Submitted by Martin Armstrong via ArmstrongEconomics.com,

The lies being told by Cameron that Britain will suffer are rather astonishing.


It is the EU that has the most to lose on so many fronts it is rather alarming how the press do not tell the truth.

Forget the imports-exports that are just under half of the the trade between the two, which would never stop nor would it be in the EU best interest to cut Britain off. The real key is diplomacy.

Whenever Europe has EVER accomplished something useful, it has always been the UK’ in the driver’s seat.

Any thought that BREXIT would end relations is rather absurd. The EU has nothing without Britain.

The only other country that spends more on its military than the UK is the United States. Germany could not defend Europe nor could France. Without the UK, Europe would have fell to Hitler.

A post-BREXIT that tried to stand on pride in the EU would quickly find itself no longer a  powerful player on the world political stage. Sorry, but the EU is nothing without Britain.

EU planning a “social security” tax for robots under a new EU proposal. I have now seen everything!
(courtesy Mish Shedlock/Mishtalk)

Robots To Pay “Social Security” Under EU Tax Proposal 

Submitted by Michael Shedlock via MishTalk.com,

The EU is studying a proposal that would count robots as people for tax purposes.

Although the proposal is deemed “too early” to implement just yet, rest assured once nannycrats get a bad idea in their heads, it never leaves.

This provides yet another reason to vote in favor of Brexit.

Please consider Europe’s Robots to Become ‘Electronic Persons’ Under Draft Plan.

Europe’s growing army of robot workers could be classed as “electronic persons” and their owners liable to paying social security for them if the European Union adopts a draft plan to address the realities of a new industrial revolution.

Robots are being deployed in ever-greater numbers in factories and also taking on tasks such as personal care or surgery, raising fears over unemployment, wealth inequality and alienation.

Their growing intelligence, pervasiveness and autonomy requires rethinking everything from taxation to legal liability, a draft European Parliament motion, dated May 31, suggests.

The draft motion called on the European Commission to consider “that at least the most sophisticated autonomous robots could be established as having the status of electronic persons with specific rights and obligations”.

It also suggested the creation of a register for smart autonomous robots, which would link each one to funds established to cover its legal liabilities.

The draft motion, drawn up by the European parliament’s committee on legal affairs also said organizations should have to declare savings they made in social security contributions by using robotics instead of people, for tax purposes.

The motion faces an uphill battle to win backing from the various political blocks in European Parliament. Even if it did get enough support to pass, it would be a non-binding resolution as the Parliament lacks the authority to propose legislation.

Nao

Three-Fifths Rule

Like slaves in the US before the Civil War, do robots get Three-Fifths of a pre-programmed representation in the European Parliament?

Law of Bad Ideas

The Law of Bad ideas stipulates that bad ideas never go away, they just get worse over time.

At some point in the future, expect to have to register your robots and pay social security taxes on them as well.

When I first penned the “Law of Bad Ideas” I was shocked to discover nobody had used that phrase.

 
end
Why huge volatility on FX markets today:
(courtesy zero hedge)

As Of This Moment, Barclays Is Not Accepting FX Stop Loss Orders

Anyone wondering why gaps and volatility in FX, and especially cable is reaching on the absured today, with 100 pips swings in minutes the norm, the reason is that there is virtually no liquidity, and a main catalyst for this is that as HFTs conduct their usual stop hunts to stop out proximal limit orders, they simply find no such stops. They can blame banks such as Barclays for this development: as of 600 GMT this morning, Barclays has stopped accepting new stop loss orders as banks, concerned about today’s vote outcome, seek to cap their exposure to the results of Britain’s referendum on EU membership.

As the Barclays letter shown below states, it would not execute such trades, where the bank seeks to close existing positions for clients at a pre-established price, through its machine-trading algorithms. According to Reuters, Barclays’ refusal of all new stop-loss orders, whether over the phone or through messaging or dealing systems, is extremely rare and a measure of the big banks’ concerns that a vote to leave the European Union would spark similar chaos to that after last year’s blowout on the Swiss franc.

Bank of America Merrill Lynch and UBS both issued communications to clients this week, seen by Reuters, which warn of potential gaps in the services they normally provide to major institutional clients.

Arguments over whether banks could have achieved better prices for stop loss orders were at the heart of legal arguments between financial firms over hundreds of millions of dollars in losses caused by the franc’s surge in January of last year.

“Barclays have advised on Monday that they weren’t accepting stop loss orders via Barx algo execution,” a senior trader with one bank in London told Reuters. “Further they are not accepting any stop loss orders from 7am (today).”

The trading restriction will last until 10pm London time on June 24.

Full Barclays announcement:

Order handling for BARX Corporate

Dear Client,

We wanted to highlight that a price dislocation or illiquid conditions (“Disrupted Market Conditions”) could affect the FX markets at any time.  There, in particular,  is a risk of FX markets trading in wide ranges during the period that includes the UK’s EU Referendum, held on June 23rd 2016, and its aftermath (the “EU Referendum Period”).

Both Barclays Electronic Trading Desk and Barclays Voice Spot Trading Desk will endeavour to operate as close to normal levels of service as the Disrupted Market Conditions allow.  However, taking into account the potential Disrupted Market Conditions during the EU Referendum Period, Barclays has decided to impose certain restrictions on its electronic and voice FX Stop Loss order offering during this period and would like to highlight certain matters with respect to Disrupted Market Conditions.

FX Stop Loss Orders

  • Up until June 23rd 7.00am London time Barclays will continue to accept FX Stop Loss orders in BARX Corporate on a case by case basis at Barclays’ discretion, taking into account market conditions among other factors.
  • From June 23rd 7.00am London time Barclays will not accept any new FX Stop Loss Orders until June 24th 10pm London time.

Considerations for FX Stop Loss Orders during the EU Referendum Period

  • Barclays endeavours to execute all FX Stop Loss Orders in a reasonable manner so as to minimize market impact.
  • Bid-offer spreads are unlikely to be observable in Disrupted Market Conditions.  Barclays will exercise its reasonable discretion in deciding when and how to execute FX Stop Loss Orders, including whether to execute all or part of the order, in accordance with our governance framework and taking into account Disrupted Market Conditions.
  • Barclays will not provide any guarantees with respect to slippage on FX Stop Loss Orders.
  • Barclays endeavours to provide timely communication to clients on their FX Stop Loss Orders fills, on a best efforts basis, to the extent that the Disrupted Market Conditions allow.

We recommend that our clients carefully consider any outstanding FX Stop Loss Orders that they have in place, or may wish to put in place, over the EU Referendum Period.

During the EU Referendum Period Barclays will endeavour to offer a Call Level service on a best efforts basis, taking into account market conditions and other factors.  While we will aim to communicate to clients in a timely manner when their Call Level has been reached, Disrupted Market Conditions may increase the likelihood that the market has moved significantly away from the Call Level by the time we contact the client.

You may wish to consider whether a Call Level is a suitable alternative to a FX Stop Loss Order.  In order to ensure that Call Levels are directed appropriately, please ensure that your contact details are configured within BARX Corporate.

Potential Impact on BARX Corporate

We recommend that our clients carefully consider any outstanding orders that they have or may wish to put in place on BARX Corporate, over the EU Referendum Period.  As noted above, Barclays will not be offering the ability to leave Stop Loss orders from June 23rd through June 24th.

In the event of Disrupted Market Conditions during the EU Referendum Period:

  • BARX Corporate pricing may only be available at wider bid-offer spreads.
  • Low levels of liquidity could cause delays in order execution.
  • BARX Corporate may also cease streaming prices in some or all currency pairs.

Subject to the restrictions set out above, you may choose to continue to place FX Stop Loss orders in the usual way during the EU Referendum Period, however, please be mindful of the potential consequences of doing so in the event of Disrupted Market Conditions.

Note, as part of regular maintenance and value date roll, the BARX Corporate system will be unavailable at 10pm London time, typically resuming before 10.05pm London time in normal market conditions.

Should you have any questions or like to discuss further, please contact your Barclays’ sales representative.

 

end

GLOBAL ISSUES

MEXICO

Mexico on the brink of a revolution as people there are fed up with corruption:

(courtesy AntiMedia.Org)

 

Fed Up With The Corruption: Mexico On Brink Of Revolution

Via TheAntiMedia.org,

The Mexican government’s deadly crackdown on a teacher’s union protest has rattled the nation in recent days, as 200,000 doctors on Wednesday joined the ongoing national strike against President Enrique Peña Nieto’s neoliberal reforms.

Anti-government sentiment is mounting after police forces opened fire on a teacher protest in Oaxaca on Sunday, killing at least eight.

Since then, two high level government officials from that state, Oaxaca Minister of Indigenous Affairs Adelfo Regino Montes and Secretary of Labor Daniel Gutierrez, have resigned in protest of the “authoritarian actions that repress and kill Oaxacan people who defend their rights and the government’s negligence to any possibility of dialogue,” as Gutierrez put it.

On Wednesday, members of the medical organization Yo Soy Medico 17 from 32 states joined the ongoing strike, stating their opposition to Peña Nieto’s health reforms, which they say are a “disguised way of privatizing health in Mexico,”according to TeleSUR.

Further, the group —which translates to “I’m a Doctor”—has vocally condemned the killings and what they describe as intimidation and repression by authorities and organized crime. “According to doctors,” TeleSUR explains, “as violence has increased in Mexico they have suffered the consequences of crimes like kidnappings, enforced disappearances and killings that have gone unpunished by authorities.”

The dissident Coordinadora Nacional de Trabajadores de la Educación (CNTE) teacher’s union—which largely represents educators in Mexico’s predominantly rural and Indigenous southern states—has been staging dramatic demonstrations and road blockades against new mandated teacher evaluations, which they say ignore the challenges of their region while enabling mass layoffs.

These protests have been met with violent government repression, including the recent arrest of two of the union’s leaders. But members explain that the government’s opposition to the teacher’s union runs far deeper.

A social media post by the Twitter handle @puzzleshifter has been shared widely as a valuable explainer of the forces shaping the current violence.

“Why would [Peña Nieto] want to fire teachers en masse? Because they teach social justice curriculum as guaranteed under gains made in the Revolution,” they write. As the post explains, these teachers, known as “Normalistas,” work at the same “Escuelas Normales” that the 43 disappeared Ayotzinapa students were training to lead.

The post continues:

Normalistas are passionate about their profession and have a strong desire to impact the lives of children in dire rural poverty in Mexico. Many who become teachers, grew up in same communities/conditions as children they seek to teach – about their ability to change conditions.

According to the Mexican Constitution, rural [Indigenous] children have as much right to education as the children of the wealthy.

This is how and why the Escuelas Normales were instituted. However, ever since they were instituted, they have been egregiously underfunded.

This has resulted in teachers who enter the profession, specifically to teach the most left out kids, in Mexico’s society.

For this, over the years, rural teachers have been accused of bringing kids revolutionary ideas. Many say, of course, that’s our job!

So there’s been a constant battle to stay true to the goals of the Revolution to teach rural kids and Central gov to reign them in.

The government violence has also been criticized by the National Indigenous Congress (CNI) and the Zapatista National Liberation Army (EZLN), which issued a joint communique on Monday blasting the “cowardly police attack,” and assuring the teachers, “you are not alone.”

“We condemn the escalation of repression with which the neoliberal capitalist reform, supposedly about ‘education,’ is being imposed across the entire country and principally in the states of Oaxaca, Chiapas, Guerrero, and Michoacán,” the missive states.

“We call on our peoples and on civil society in general to be with the teachers who resist at all times, to recognize ourselves in them,” it continues. “The violence used to dispossess them of their basic work benefits with the goal of privatizing education is a reflection of the violence with which the originary peoples and rural and urban peoples are dispossessed.”

The fight seems to be just beginning as the union is vowing to “stay here until the government is willing to talk.”

As one teacher from Nochixtlán toldDemocracy Now! on Tuesday: “If tomorrow the government is open to dialogue, then the conflict ends. The governor wants what he calls educational reform. And what we want is a dialogue for the kind of change that the people require, the kind that meets their needs.”

The unnamed educator continued: “If you go to our communities, there are many needs. How are the kids doing? The children can’t go to school to learn. All they think about is eating, because they don’t eat. No one can learn if they don’t sleep well, if they walked many miles to go to school. So the government should go and see what happens firsthand. And until there is a dialogue, we will not end our protest demanding educational reform.”

“And who will revive our dead?” they added. “The dialogue won’t bring our dead back to life. And those who are imprisoned, there aren’t just five or 10, there are thousands.”

As Gustavo Esteva, founder of the Universidad de la Tierra in Oaxaca, further explained, “This is a very complex war. It doesn’t—it did not start in Oaxaca. The teachers’ struggle, it is a global struggle. It started in Colombia, in Brazil, in Chile, in the U.S.—everywhere.”

“[W]e are in a war trying to say a very firm no to this kind of education. It is useless instruction,” he added. “And we are saying no very firmly to all the so-called structural reforms that mean basically a change of only ownership. They are selling our land, our territory. The people are resisting. And then we are resisting with them to oppose this kind of operation.”

end

OIL ISSUES

option traders are now most bearish on oil since 2010:

(courtesy zero hedge)

Crude Oil Options Traders “Most Bearish” Since At Least 2010

end

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

Euro/USA   1.1382 UP .0059 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 105.76  UP 1.13 (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 1.4900 UP .0023 (MUCH LESS THREAT OF BREXIT)

USA/CAN 1.2719 DOWN .0094

Early THIS THURSDAY morning in Europe, the Euro ROSE by 59 basis points, trading now WELL above the important 1.08 level RISING to 1.1382; 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 DOWN 13.59 POINTS OR 0.47%   / Hang Sang CLOSED UP 73.72 POINTS  OR 0.35%   AUSTRALIA IS HIGHER BY 0.17%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  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 THURSDAY morning: closed DOWN 103.39 POINTS OR 0.64% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 73.72 POINTS OR 0.35% . ,Shanghai CLOSED DOWN 13.59 POINTS OR 0.47% / Australia BOURSE IN THE GREEN: (RESOURCES UP)/Nikkei (Japan) CLOSED IN THE GREEN/India’s Sensex IN THE GREEN

Gold very early morning trading: $1159.50

silver:$17.23

Early THURSDAY morning USA 10 year bond yield: 1.726% !!! UP 4 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.541 UP 2 in basis points from TUESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early THURSDAY morning: 93.21 DOWN 36 CENTS from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

 

 

 

END

 

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield:  3.09% DOWN 5 in basis points from WEDNESDAY

JAPANESE BOND YIELD: -0.140% PAR  in   basis points from WEDNESDAY

SPANISH 10 YR BOND YIELD:1.47%  DOWN 3 IN basis points from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 1.40  DOWN 4 IN basis points from WEDNESDAY

the Italian 10 yr bond yield is trading 7 points lower than Spain.

 

GERMAN 10 YR BOND YIELD: +.093% up 3 FULL  BASIS POINTS ON THE DAY

 

END

 

 

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

 

 

 

Euro/USA 1.1353 UP .0028 (Euro =UP 28 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 105.76 UP 1.106 (Yen DOWN 110 basis points )

Great Britain/USA 1.4804 UP.0022 ( Pound UP 32 basis points/WE AWAIT BREXIT DECISION

USA/Canada 1.2791- DOWN 0.0018 (Canadian dollar UP 18 basis points  AS OIL FELL  (WTI AT $49.12).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 28 basis points to trade at 1.1353

The Yen FELL to 105.76 for a LOSS of 110 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 22 basis points, trading at 1.4804

The Canadian dollar ROSE by 18 basis points to 1.2791, WITH WTI OIL AT:  $50.04

The USA/Yuan closed at 6.5740/

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

Your closing 10 yr USA bond yield:UP 7 IN basis points from WEDNESDAY at 1.759% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.557 UP 6 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, 93.53 DOWN 18 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 THURSDAY

London:  CLOSED UP 76.91 OR 1.23%
German Dax :CLOSED UP 185.97 OR  1.85%
Paris Cac  CLOSED UP 85.87  OR 1.96%
Spain IBEX CLOSED UP 183.30 OR 2.11%
Italian MIB: CLOSED UP 642.90 OR 3.71%

The Dow was up 230.24  points or 1.29%

NASDAQ up 76.72 points or 1.59%
WTI Oil price; 50.13 at 4:30 pm;

Brent Oil: 50.85

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.98 (ROUBLE UP 85/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD RISES TO +.093%  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:50.13

BRENT: 51.10

USA 10 YR BOND YIELD: 1.746% 

USA DOLLAR INDEX: 93.07 DOWN 65 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.4981 UP .0202  or 202 basis pts.

German 10 yr bond yield at 5 pm: +.093%

 

 

 

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

‘Traders’ Panic-Buy Illiquid Markets Into Brexit Vote Close

Judging by markets, it’s not a cliffhanger…

In fact, for stocks, it’s inconceivable that The Brits vote Brexit…

 

But not every asset class is so excited… here’s where assets have gone this year… it seems bonds and bullion remain a little more worried about ‘something’ than stocks and sterling…

 

The machines went to town into the close…

 

 

 

Volume was abysmal…

 

The S&P topped 2,100, and ramped into the close with VIX busted back to a 17 handle…

 

Total panic-buy to Dow 18,000…

 

Today’s gains were all at the cash open…and a late meltup…

 

All driven by a 5am spike in stocks (when JPY was pummeled) – Dow is up over 500 points from Jo Cox’s death…

 

Which squeezed shorts at the open and again into the close…

 

Stocks are within 1% of record highs once again… which makes perfect sense…

 

While stocks were more than happy to “price it in”, hedging remains bid…

 

And extremely divergent today…

 

Financials outperformed on the day (best day in 2 months) but the entire gain was at the open – everything was dead after that…

 

but Financials (ahead of stress tests) remain a little more exuberant than the curve…

 

Treasury yields pushed notably higher (30Y +6bps today to 2.56%) with a significant steepening in the curve this week – yields are at highest sicne June 3rd.

 

The USDollar index slipped modestly lower on the day with some EUR and GBP strength, as JPY plunged early this morning to manufacture a positive open…

 

WTF happened into the close…

 

Gold drifted lower despite the weaker USD but silver and copper rose and crude did it’s daft thing…

 

As Crude’s NYMEX Close was banged once again…

 

Charts: Bloomberg

Bonus Chart: Kinda sad really…

 

end

 

Conflicting data: so what else is new:  initial jobless claims plunge to 42 yr lows.

(courtesy zero hedge)

Hawkish Fed Looms As Initial Jobless Claims Plunge Near 42 Year Lows

Who knows best? The Department of Labor  – who is telling the American public that the labor market, based on initial claims, are hovering near the best levels in 42 years; or The Fed – who is warning that labor market conditions are deteriorating at the fastest pace in seven years?

For the 68th straight week, initial claims were below the ‘magic’ 300k level (the longest streak since 1973)…

Initial jobless claims collapsed this week – down 18k to 259k, basically at its lowest levels since 1973!!

So what will Janet do?

Charts: Bloomberg

end

This is a biggy!  The Chicago Fed’s National Activity index (manufacturing) plunged to negative .51 from +.05.  Expectations were +.11.  Looks like Janet has missed her opportunity to raise rates

(courtesy zero hedge)

Fed’s National Activity Index Plunges In May

Against expectations of a rise to +0.11, Chicago Fed’s National Activity Index plunged to -0.51 (from a revised lower +0.05), hovering at its worst level since January 2014… Under the surface, things are ugly with only 28 of the 85 monthly individual indicators made positive contributions, while 57 indicators deteriorated.

Looks like 2014 was the right time to hiking rates Janet… you missed your window!!

Charts: Bloomberg

end

the flash PMi rebounds in June but still domestic demand remains very weak:

(courtesy USA Manufacturing PMI/zero hedge)

US Manufacturing PMI Jumps In June But “Domestic Demand Remains Worryingly Weak”

end

 

A good indicator as to what is going on inside the USA economic scene:  new home sales plunge the most in 8 months. Also previous months have seen a downward revision. Also median home prices are tumbling which is also not a good sign;

(courtesy zero hedge)

New Home Sales Plunge Most In 8 Months Following Sharp Downward Revisions; Median Home Price Tumbles

Despite exuberance in existing home sales, new home sales just printed 551k SAAR – missing expectations for the first time since Oct 2015 – sliding by the most since Sept 2015. With the last 3 months of exuberant increases – to 8 year highs – now revised drastically lower; and median prices tumbling to the lowest since June 2015, the picture of the US housing recovery is considerably less rosy than before… time for a rate-hike?

This is what we said last month when new home sales soared to 8 year highs…

Here is what drove the overall surge: a clearly “goalseeked” number resulting from a massive surge in Northeast sales, one which will be promptly revised lower next month.  

And now this happens!!

With sales dropping the most in 8 months…

Even with prices being slashed to 10 month lows…

Charts: Bloomberg

 

end

 

Dave Kranzler states that BREXIT is really a non issue.  The real issue is the collapsing USA economy:

(courtesy Dave Kranzler IRD)

 

BREXIT Is Being Used To Deflect From The Economic Collapse

I actually could care less about BREXIT.   I have yet to encounter any valid analysis on why the issue matters at all.  What is valid is that the BREXIT theatrical show is being used to deflect scrutiny of the continuous economic reports  showing that the U.S. economy is collapsing.

The Chicago Fed National Activity index released today plunged to -.51 against Wall Street’s expectation of a .11 gain.  Last months data-point was revised lower to barely positive.  The way that this index is calculated, it takes a lot to move the needle.  A drop from a revised lower .05 to -.51 reflects heavy contraction in economic activity across a broad (85 indicators) spectrum of the economy.  The 3-month moving average declined from -.25 – which was revised lower from the original .22 reported – to -.36.

New home sales reported today – for whatever the data series is worth – indicated an 11% plunge from the previously reported number for April, which of course was revised lower. May’s print was down 6% from the revision.  Ironically,  yesterday the National Association of Realtor’s Chief Economic Clown was extolling the virtues of new home construction and sales activity.  Oops.

I suggested yesterday that existing home sales report was highly overstated by the seasonal adjustments imposed on the data collected.  The Census Bureau, which prepares the new homes sales data series, has admitted in the past its estimation and adjustment models tend to overstate sales when actual sales are in a downtrend.  Ergo, the incessant downward revisions of previous reports.  Same with existing home sales, as the NAR uses the same statistical modelling package as the Census Bureau.  The NAR’s report yesterday contained a significant downward revision for April’s report, not coincidentally.

To be sure, there are still some hot pockets of housing activity around the country.  But most of the large economic areas are experiencing falling demand, falling prices and rising inventory, especially in the upper price segment of the market.  The collapse of the current housing bubble will be even more spectacular than the last bubble collapse.

The U.S. economy is collapsing.  In the “inside out” world of U.S. financial media Orwellian propaganda, today’s jobless claims number is being used to substantiate a “tight labor market.”  That’s a complete fairy tale.  The reason jobless claims are historically low right now is that the number of workers as a percentage of the workforce who qualify to apply for benefits when they get fired is at a historical low.  This fact is substantiated by the historically low labor participation rate and the percentage of the workforce that is now part-time.   Part-timers do no qualify for company healthcare or unemployment insurance.  It’s that simple. the  I would question the data if jobless claims were high.

So the entire financial world is focused on what is largely an irrelevant  referendum  on whether or not the UK will remain in the EU.   Meanwhile, the rug is being pulled out from under the entire western economy, including and especially the U.S. economy.

end

 

And on the same theme as above, the all important leading economic index declined badly in May:

 

(courtesy PRNewswire)

 

Conference Board LEI for the U.S. Declined in MayJune 23, 2016 | PRNewswire


The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.2 percent in May to 123.7 (2010 = 100), following a 0.6 percent increase in April, and a 0.1 percent increase in March.

“The US LEI declined in May, primarily due to a sharp increase in initial claims for unemployment insurance. The growth rate of the LEI has moderated over the past year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “While the LEI suggests the economy will continue growing at a moderate pace in the near term, volatility in financial markets and a moderating outlook in labor markets could pose downside risks to growth.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. was unchanged in May, remaining at 113.5 (2010 = 100), following a 0.2 percent increase in April, and no change in March.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in May to 121.9 (2010 = 100), following a 0.2 percent increase in April, and a 0.6 percent increase in March.

 

end

And now your humour event of the day:

(courtesy Hillary Clinton)

Humour: best new song in America!

Speakers on.

Listen to the new #1 song in America.

https://www.youtube.com/embed/MjdPx8cJ27Y

end

 

Well that is all for today

I will see you tomorrow night/quite late

 

Harvey

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