jUNE 27/Comex gold open interest rises by a huge 10% up to 619,597 contracts/Gold OI for june rises by another 129 contracts/ A huge 5384 contracts still standing for July or 16.5 tonnes of gold/Huge devaluation in the yuan adds to the turmoil in global markets/European stocks plummet as well as European bank shares/Contagion travels to NY where USA banks whacked/gold shines!./No gold leaves the FRBNY for Germany/

Good evening Ladies and Gentlemen:

Today’s quote from Martin Schulz, President of the European Parliament…

Schulz: The British have violated the rules. It is not the EU philosophy that the crowd can decide its fate“.

Gold:  $1,322.50 UP $2.30    (comex closing time)

Silver 17.74  down 5 cents

In the access market 5:15 pm

Gold: 1325.00

Silver: 17.76

.

The June gold contract is an active contract. Last  night we had a fair sized 41 notices filed last night, for 4100 oz to be served upon today.  The total number of notices filed in the first 17 days is enormous at 15,481 for 1,548,100 oz.  (48.15 tonnes)

ii) in silver we had 31 notices filed for 155,000 oz..  Total number of notices served  in the 17 days: 615 for 3,075,000 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 278.966 tonnes for a loss of 24 tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest fell by a considerable 1,533 contracts down to 217466, AND NOW CLOSE TO A  ALL TIME RECORD DESPITE THE FACT THAT  THE  PRICE OF SILVER WAS UP 44 CENTS with respect to FRIDAY’S trading.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.087 BILLION TO BE EXACT or 155% of annual global silver production (ex Russia &ex China)

In silver we had 31 notices served upon for 155,000 oz.

In gold, the total comex gold OI ROSE by a HUGE 50,091 contracts UP to 619,597 as the price of gold was UP $58.80 with FRIDAY’S trading (at comex closing). 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

 

GLD

A huge changes in gold inventory. a massive deposit of 18.415 tonnes into the gold inventory/

Total gold inventory: 934.313 tonnes

SLV

A tiny 570,000 oz enters the SLV inventory

Inventory rests at 332.784 million oz.

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

 

1. Today, we had the open interest in silver fell by 1533 contracts down to 217,446  DESPITE THE FACT THAT THE price of silver was UP 44 CENTS with FRIDAY’S trading. The gold open interest ROSE by a CONSIDERABLE 50,091  contracts UP to 619,597 as the price of gold was SKYROCKETED NORTHBOUND BY $58.80  ON FRIDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

2c) FRBNY gold inventory movement report:

(Harvey)

3. ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed UP 41.42 POINTS OR 1.45% / /Hang Sang closed DOWN 31.30 OR 0.16%. The Nikkei closed UP 357.19 POINTS OR 2.39% Australia’s all ordinaires  CLOSED UP 0.458% Chinese yuan (ONSHORE) closed DOWN at 6.6508 /Oil FELL to 47.33 dollars per barrel for WTI and 48.10 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.6810 yuan to the dollar vs 6.6508 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS MASSIVE USA DOLLARS DISAPPEARS FROM CHINESE SHORES

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

b) REPORT ON CHINA

 

Sunday night:  China devalues the yuan the most in 10 months on the fix

i) onshore yuan  (CNY) 6.6218

ii) offshore yuan (CNH  6.6530)

thus the spread widens and causes huge amounts of USA dollars to leave China.

Then trading began:

CNH: 6.6509

CNY:  6.6810

and then turmoil ruled the day!

iii) Euro/uSA swaps plummets as dollars disappear.

this adds to the turmoil of the pound plummeting.  Late Sunday night, the pound started trading at 1.3361 and ended early morning at 1.3197

( zero hedge)

4. EUROPEAN AFFAIRS

i)Saturday morning:  Newspaper headlines around England: a country divided!

( zero hedge)

ii)Friday night:  Scotland and Norther Ireland may have BREXIT veto rights.  This will then create such a FX mess that gold will skyrocket!

( zero hedge)

iii)Saturday morning:  Sure enough Scotland threatens to veto the BREXIT as they want to stay in the Euro.  Thus, it is possible to see Scotland break with England and adopt the Euro and also the reunification of Northern Ireland with the Republican of Ireland.

again gold will go skyrocketing:

( zero hedge)

iv)Sunday morning:

Adding to the confusion,  the EU, as sore losers are telling England to hurry up with article 50 and abandon the European union.  Yet Germany correctly states that there is no need to rush. Why? Germany has always been the net benefactor  of the union;
( zero hedge)

v)The world’s 400 richest people lose 127 billion from the BREXIT vote:

( zero hedge)

vi)Pro Government newspaper Akit gloats over the fact that the “crusader union is falling apart”. If the EU supports Turkey’s admission into the EU then votes for an exit from each country would prevail. Then Turkey will unleash allof those migrants onto European shores.

a real mess…

( zero hedge)

vii)And now onto Spain’s election Sunday night:

actual results were a little better for the PP party than anticipated.  The actual results are similar to the voting in December and thus the election was futile

( zero hedge)

viii)Sunday morning:

UK Labour Party revolt as a 12th shadow cabinet member resigns as Corbyn refuses to step down

( zero hedge)

ix) Trading today from Europe:

 

a)The pound plummets to new lows; the 10 yr British bond yield slides to under 1% and two British banks are halted;  (Barclays and Royal Bank of Scotland) after crashing.  Deutsche bank also crashed and is trading at its lowest point ever at 12.30 euros.

b) And now closing from trading in Europe:  Bank stocks collapse; Deutsche bank trading at its all time lows/Italian banks close down 20-25%; Euro/dollar swaps collapse signifying huge demand for scarce USA dollars as derivatives blow up; UK default risk rises to 3 year high

 

x)At the end of the day, S and P downgrades Great Britain

( S and P /zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

( zero hedge)

6.GLOBAL ISSUES

GLOBAL MARKETS:

The JPMorgan Quant specialists now target a huge 5o to 10% downdraft in markets :a total of up to 300 billion form all program selling; and a 5- 10% selling in the S and P.  The speed of this downdraft will put many of our derivative players completely offside.  We must watch Deutsche bank to seek if smoke is billowing from its chimney:

(courtesy JPMorgan/Quant specialists/zero hedge)

7.OIL ISSUES

8.EMERGING MARKETS

Venezuela

Armed guards are now guarding food trucks and stores in Venezuela

(courtesy Michael Snyder)

9. PHYSICAL STORIES

i)And now Ambrose Evans Pritchard of the UKTelegraph, which backed a BREXIT, gives his take on the vote:

( zero hedge)

ii)Craig Hemke..gives a detailed look at the comex with respect to   probable OI for Monday with respect to Friday’s trading.  The CME gives a projected OI reading for Monday late Friday night.  It generally is not even close to accurate.  However the CME stated that probable OI rose by 60,000 contracts.  Craig discusses the fraud initiated by the banks and how they get away with it

( Craig Hemke/TFMetals/GATA)

 

iii)Greenspan warns that a crisis is imminent and urges a return to the gold standard or else hyperinflation will grip all nations:

( CNBC/Greenspan

 

iv)Bill Holter interview/Holter and SGT report)

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

i)Any chance for a rate hike is now in tatters!!  This was the big stumbling block for gold. Now it is clear sailing northbound!

( zero hedge)

Harvey: David Stockman/brexit

ii)Something is up if both Yellen and Carney pull out of an ECB banking forum in portugal:

(courtesy zero hedge)

iii)The dominant sector in the USA economy is the service sector.  With the latest service PMI printing a flat 51.3 on expectations of a rise to 52.00. The USA economy is going nowhere!

(courtesy zero hedge)

 

iv)Bank of America and Citibank are crashing in the USA as contagion is spreading to the USA

( zero hedge)

v)Dallas Fed states that we are in recession.  It’s data suggestion contraction for 18 straight months;( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 619,597 for a HUGE GAIN of 50,091 contracts AS  THE PRICE OF GOLD SKYROCKETED NORTHBOUND with respect to FRIDAY’S TRADING. 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 progressesIN 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 GOOD GAIN IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI RISE to 420 for a loss of 129 contracts. We had 24 notices filed ON FRIDAY, so we GAINED a HUGE 153 contracts or 15,300 additional oz  WILL  STAND FOR METAL. The next active contract month is July and here we saw it’s OI ROSE by a GOOD SIZED 348 contracts up to 5,384.This level is still very high and 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, FOR THE FRONT MONTH OF JULY, we have 538,400 oz or 16.74 tonnes STAND FOR DELIVERY.  The next big active contract month is August and here the OI ROSE by 39,937 contracts up to 447,424. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was A HUGE at 307,606. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was HUGE at 629,499 contracts. The comex is not in backwardation. I  cannot wait until tomorrow to see the new  OI figures.

Today we had 41 notices filed for 4100 oz in gold.

 

And now for the wild silver comex results. Silver OI FELL by A CONSIDERABLE 1,533 contracts from 218,479 to 217,446 AND CLOSE NEW ALL TIME RECORD HIGH FOR SILVER OPEN INTEREST. The OI fell despite the huge rise in the price of silver.  The banksters are getting nervous. The front month of June saw it’s OI fall by 58 contracts reducing to 32 . We had 93 notices filed YESTERDAY , so we  GAINED 35 SILVER CONTRACTS AND THUS 175,000 ADDITIONAL  OUNCES STANDING FOR DELIVERY IN THIS NON ACTIVE CONTRACT MONTH FOR JUNE.  The next big delivery month is July and here the OI fell BY 4,294 contracts down to 44,936. We have less than  1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at 109,211 which IS huge. The confirmed volume YESTERDAY (comex + globex) was HUGE at  116,396. Silver is not in backwardation . London is in backwardation for several months.
 
We had 31 notices filed for 155,000 oz.
 

JUNE contract month:

INITIAL standings for JUNE

June 27.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil  NIL

SCOTIA

Deposits to the Dealer Inventory in oz 1736.100 OZ

54 KILOBARS

BRINKS

Deposits to the Customer Inventory, in oz   112,528.000 OZ

SCOTIA.,HSBC

3500 KILOBARS

No of oz served (contracts) today 41 contracts
(4100 oz)
No of oz to be served (notices) 379 contracts

37,900 oz

Total monthly oz gold served (contracts) so far this month 15,481 contracts (1,548,100 oz)

(48.150 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  256,902.3 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  1736.100 oz

(54 KILOBARS)

total dealer deposit:  1736.100  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 2 customer deposits:

i) Into Scotia: 16,075.000 oz (500 KILOBARS)

ii) INTO HSBC  96,453.000   (3,000 KILOBARS  ALMOST)

Total customer deposits; 112,528.000   OZ  3500 KILOBARS

Today we had 0 customer withdrawal:

 

total customer withdrawals:  NIL oz

Today we had 1 adjustments:

i) Out of Delaware:  385.800 oz oz were transferred out of the customer and into the dealer Delaware.(12 kilobars)

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 41 contracts of which 11 notices was stopped (received) by JPMorgan dealer and 3 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 (15,481) x 100 oz  or 1,548,100 oz , to which we  add the difference between the open interest for the front month of JUNE (420 CONTRACTS) minus the number of notices served upon today (41) x 100 oz   x 100 oz per contract equals 1,586,000 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 (15,481) x 100 oz  or ounces + {OI for the front month (420) minus the number of  notices served upon today (41) x 100 oz which equals 1,586,000 oz standing in this   active delivery month of JUNE (49.331 tonnes).
INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE  GAINED BACK  ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (49.331 TONNES) .
WE GAINED 153 contracts or an additional 15300 oz will  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. SOMEBODY TODAY WAS IN URGENT NEED OF  PHYSICAL GOLD
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
 
We thus have 49.331 tonnes of gold standing for JUNE and 53.43 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 + 48.855 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, June 24..018 = 65.426 tonnes still standing against 53.36 tonnes available.
 Total dealer inventor 1,717,805.872 tonnes or 53.43 tonnes
Total gold inventory (dealer and customer) =8,968,352.761 or 278.966 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.966 tonnes for a loss of 24 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 27.2016

Silver
Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory  49,083.495 oz

CNT

HSBC

Deposits to the Dealer Inventory NIL

 

Deposits to the Customer Inventory  750,813.400  oz

JPM,SCOTIA

No of oz served today (contracts) 31 CONTRACTS 

(155,000 OZ)

No of oz to be served (notices) 1 contracts

5,000 oz

Total monthly oz silver served (contracts) 615 contracts (3,075,000 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  24,237,682.6 oz

today we had 0 deposit into the dealer account

 

total dealer deposit:NIL oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 2 customer deposits:

i) Into JPMorgan:  150,596.100 oz

 

iii) Into Scotia: 600,117.300 OZ

Total customer deposits: 750,813.400 oz

everyday for the past few weeks, JPMorgan has been bringing in CONSIDERABLE  AMOUNT OF SILVER

 

We had 0 customer withdrawals

:

total customer withdrawals:  nil  oz

 
 

 

 we had 1 adjustment

i) Out of CNT: 150,821.49 oz was withdrawn from the customer and this landed into the dealer account of CNT

The total number of notices filed today for the JUNE contract month is represented by 31 contracts for 155,000 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 (615) x 5,000 oz  = 3,075,000 oz to which we add the difference between the open interest for the front month of JUNE (32) and the number of notices served upon today (31) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JUNE contract month:  615 (notices served so far)x 5000 oz +{32 OI for front month of JUNE ) -number of notices served upon today (31)x 5000 oz  equals  3,080,000  of silver standing for the JUNE contract month. (TERRIFIC FOR A NON ACTIVE MONTH)
We GAINED 35 SILVER CONTRACTS OR 175,000 ADDITIONAL  SILVER OUNCES WILL STAND FOR DELIVERY  IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.
 
Total dealer silver:  23.961 million  (RECORD LOW INVENTORY)
Total number of dealer and customer silver:   151.469 million oz
The total open interest on silver is NOW NEAR its all time high with the record of 218,979 being set June 24.2016.  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
And now the Gold inventory at the GLD
June 27/a huge deposit of 18.415 tonnes into the GLD inventory/the new inventory rests at 934.313 tonnes.  The addition was a paper addition and not physical
june 24./strange!! no additions to gold with its huge 58 dollar advance??
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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
june 27/ Inventory rests tonight at 934.313 tonnes

end

Now the SLV Inventory
June 27/ a small deposit of 570,000 oz in the SLV inventory/Inventory rests at 332.784 million oz
June 24/This makes no sense!! 855,000 oz of silver leaves the SLV headed straight to Shanghai/Inventory rests at 332.214 million oz
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 27.2016: Inventory 332.784 million oz
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.3 percent to NAV usa funds and Negative 2.6% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 61.5%
Percentage of fund in silver:37.2%
cash .+1.3%( June 27/2016). /
2. Sprott silver fund (PSLV): Premium FALLS  to +0.82%!!!! NAV (June 27/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO +0.36% to NAV  ( June 27/2016)
Note: Sprott silver trust back  into POSITIVE territory at +36% /Sprott physical gold trust is back into positive territory at +0.82%/Central fund of Canada’s is still in jail.
 
 
 

END

 

Greenspan warns that a crisis is imminent and urges a return to the gold standard or else hyperinflation will grip all nations:

(courtesy CNBC/Greenspan)

Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard

On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen.

“This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say.”

Strangely enough, he was not refering to the British exodus but to America’s own economic troubles.

Today, Greenspan was on Bloomberg Surveillance where in an extensive, 30 minutes interview he was urged to give his take on the British referendum outcome. According to Greenspan, David Cameron miscalculated and made a “terrible mistake” in holding a referendum. That decision led to a “terrible outcome in all respects,” Greenspan said. “It didn’t have to happen.” Greenspan then noted that as a result of Brexit, “we are in very early days a crisis which has got a way to go”, and point to Scotland which he said will likely have another referendum on its own, predicting the vote would be successful, and Northern Ireland would “probably” go the same way.

His remarks then centered on the Eurozone which he defined as a truly “vulnerable institution,” primarily due to Greece’s inclusion in its structure. “Get Greece out. They’re a toxic liability sitting in the middle of a very important economic zone.” Ironically, the same Eurozone has spent countless hours doing everything in its power to show just how unbreakable the union is by preserving Greece, while it took the UK just one overnight session to break away. Luckily the UK was not part of the monetary union or else it would be game over.

But speaking of crises, Greenspan warned that fundamentally it is not so much an issue of immigration, or even economics, but unsustainable welfare spending, or as Greenspan puts it, “entitlements.”

The issue is essentially that entitlements are legal issues.  They have nothing to do with economics.  You reach a certain age or you are ill or something of that nature and you are entitled to certain expenditures out of the budget without any reference to how it’s going to be funded.  Where the productivity levels are now, we are lucky to get something even close to two percent annual growth rate.  That annual growth rate of two percent is not adequate to finance the existing needs.

 

I don’t know how it’s going to resolve, but there’s going to be a crisis.

 

This is one of the great problems of democracy.  It goes back to the founding fathers.  How do you handle a situation like this?  And it’s very troublesome, but eventually you get things like Margaret Thatcher showing up in Britain.  Their situation is far worse than ours.  And what she did is she turned it all around essentially by, as I remember it, the miners were going to strike and she decided – she knew they were going to strike.  Since at that point, the government owned these coal mines, she built up a huge inventory so that when they went on strike, there was enough coal in Britain so that eventually the whole union structure collapsed.  She fundamentally changed Britain to this day.  The fact that we are doing so well in the E.U. is not altogether clear that it is the E.U. or whether it was Margaret Thatcher.

When asked if “we need an accident of history” to address this, Greenspan replied “Probably. In the United States, social benefits, which is the more generic term, or entitlements, are considered the third rail of American politics.  You touch them and you lose.  Now, that is a general view.  Republicans don’t want to touch it.  Democrats don’t want to touch it.  They don’t even want to talk about.  This is what the election should be all about in the United States.  You will never hear one word from either side.  ”

This is the same entitlements crisis that Stanley Druckenmiller has also been raging about for years, most recently in his “The Endgamepresentation delivered at the Ira Sohn conference.

Greenspan then went on to bash the false “recovery” narrative, warning that “the fundamental issue is the fact that productivity growth has ground to a halt.” 

 We are running out of people.  In other words, everyone is very pleased at the fact that the employment rate is rising.  Well, statistics tell us that we need more and more people to produce less and less.  That is not a prescription for a viable political system.  And so what we have at this stage is stagnation.  I don’t think that there is anything out there which suggests that there is a recession, but I don’t know that.  What I do know is that the money supply, and too, which has always been a critical indicator of inflation, is for the first time going up remarkably steadily 6 percent, 7 percent, almost a straight line.  It’s tilted up in the last several months.  It’s added a percentage point or two.  The thing that we should be worrying about now, which we have actually given no thought to whatsoever, is that this type of economic environment ends with inflation.  Historically, fiat money has always ended up that way.

And here we get to the heart of the matter, because in not so many words, Greenspan effectively says that hyperinflation is coming:

I know if you look at human history, there are times and times again where we thought that there was no inflation and everything was just going fine.  And I just basically say, wait.  This is not the way this thing ordinarily comes up.  I don’t know.  I cannot say I see it on the horizon.  In fact, commodity prices are soggy.  The oil prices has had a terrific impact on global inflation.  It’s not about to emerge quickly, but I would not be surprised to see the next unexpected move to be on the inflation side.  You don’t have inflation now.  And you don’t have it until it happens.

Of course, Greenspan ignores his own role in the creation of the boom-bust cycle which has doomed the world to series of ever more destructive bubbles and ultimately, hyperinflation which will likely be unlashed once the helicopter money inevitably arrives. In retrospect, the 90-year-old, who clearly is looking forward not backward, has a simple solution: the gold standard.

If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 1913, we’d be fine.  Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard.  I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?

Why indeed. And of course, that’s rhetorical.

* * *

His full interview is below.

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

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

Gold Surges 20% In GBP To Over £1,012/oz

Gold has surged over 10% in euro terms in the last two trading days due to the fallout of the UK’s monumental decision to leave the European Union. Gold has extended the biggest price gains since 2008 as market turmoil and sharp falls in stocks globally and especially bank stocks led to safe haven demand for bullion coins and bars, especially in the UK and Ireland.
gold_GBP_270616

Gold in GBP – 1 Year

Gold has surged in all currencies – especially in sterling and euros. Gold has risen over one hundred euros per ounce from €1,091/oz to over €1,210/oz. Gold has risen over one hundred and sixty pounds per ounce or 20%, from £847.55/oz to over £1,012/oz and gold has risen over eighty dollars per ounce or 6.5%, from $1,251/oz to over $1,331/oz in two trading days.

Bullion rose for a second day as the pound extended a record selloff and European equities and especially banks fell to the lowest since February. Gold closed 4.7 percent  higher on Friday in dollars as the referendum result caused turmoil across global markets, spurring a $4.3 billion surge in holdings in gold ETFs, the most in four years according to Bloomberg.

Gold and Silver News
Gold Surges for a Second Day as Investors Seek Brexit Havens (Bloomberg)
Pound slump deepens amid Brexit turmoil as gold gains with yen (Fin24)
Spot gold climbs 1.5 pct, investors seek safe-haven after ‘Brexit’ vote (Reuters)
Hedge Funds Win World-Beating Rally With Record Gold Holdings (Bloomberg)
Gold Rally Isn’t Over as Traders See Lasting Brexit Gain: Survey (Bloomberg)

Gold Helps One of UK’s Richest Man – “I May Be the Winner” (Reuters)
Soros Wins Big With Gold From Brexit (Independent)
BREXIT Impacts World Economy – Crash Coming – Casey (FMT)
Sky has not fallen after Brexit but we face years of hard labour – AEP (Telegraph)
Gold Acts as Portfolio Insurance and Protection Again Human Error (Smauldgld)
Goldman Tells Clients To Start Buying Gold; Raises Price Target By $100 (Zero Hedge)
Read More Here

Gold Prices (LBMA AM)
27 June: USD 1,324.60, EUR 1,200.49 & GBP 996.36 per ounce
24 June: USD 1,313.85, EUR 1,181.28 & GBP 945.58 per ounce
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

Silver Prices (LBMA)
27 June: USD 17.70, EUR 16.06 & GBP 13.40 per ounce
24 June: USD 18.04, EUR 16.32 & GBP 13.18 per ounce
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

Please share our research with family, friends and colleagues who you believe will benefit from being informed by it.

www.GoldCore.com

end

No gold leaves Federal Reserve Bank of New York and no doubt Germany is quite angry!

(courtesy Harvey)

Federal Reserve Bank of New York, gold inventory movements out of the Bank:

June 26.2016:

Last month the reading from the FRBNY was 7,951.00 USA dollars worth of gold inventory valued at 42.22 dollars per oz.

This month the reading from the FRBNY is:  7951.00.00 USA dollars worth of gold inventory valued at 42.22 dollars per oz

Thus 0 dollars worth of gold and 0 ounces left the FRBNY.

Germany must be mad. Also the boys must be having great difficulty in finding the necessary gold to sent to Frankfurt.

end

And now Ambrose Evans Pritchard of the UKTelegraph, which backed a BREXIT, gives his take on the vote:

(courtesy zero hedge)

Ambrose Evans-Pritchard: The sky has not fallen after Brexit but we face years of hard labor

* * *

By Ambrose Evans-Pritchard
The Telegraph, London
Friday, June 24, 2016

It is time for Project Grit. We warned over the final weeks of the campaign that a vote to leave the European Union would be traumatic, and that is what the country now faces as markets shudder and Westminster is thrown into turmoil. …

The stunning upset last night marks a point of rupture for the post-war European order. It will be a Herculean task to extract Britain from the EU after 43 years enmeshed in a far-reaching legal and constitutional structure. Scotland and Northern Ireland will now be ejected from the EU against their will, a ghastly state of affairs that could all too easily lead to the internal fragmentation of the Kingdom unless handled with extreme care. …

end

Craig Hemke..gives a detailed look at the comex with respect to   probable OI for Monday with respect to Friday’s trading.  The CME gives a projected OI reading for Monday late Friday night.  It generally is not even close to accurate.  However the CME stated that probable OI rose by 60,000 contracts.  Craig discusses the fraud initiated by the banks and how they get away with it

(courtesy Craig Hemke/TFMetals/GATA)

TF Metals Report: Onward toward bullion bank collapse

Section:

7:48p ET Saturday, June 25, 2016

Dear Friend of GATA and Gold:

A lot of imaginary gold was created and sold Friday to keep the monetary metal’s price under control in futures contracts on the New York Commodities Exchange following the United Kingdom’s declaration of independence from the European Union, the TF Metals Report’s Turd Ferguson writes today. Ferguson attributes it to the “doubling down” of investment banks on their short position in gold futures.

But your secretary/treasurer has to wonder whether the gold shorting was actually done by governments and central banks using the investment banks as fronts. After all, records on file at the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission show that governments and central banks are surreptitiously trading all major U.S. futures contracts —

http://www.gata.org/node/14385

http://www.gata.org/node/14411

— and the major central banks announced on the eve of the Brexit referendum that they were prepared to intervene in the markets as necessary to control prices:

http://www.gata.org/node/16518

Fortunately for governments and central banks, mainstream financial news organizations will never inquire into this, having made themselves crucial participants in market rigging.

Ferguson’s analysis is headlined “Onward toward Bullion Bank Collapse” and it’s posted at the TF Metals Report here:

http://www.tfmetalsreport.com/blog/7700/onward-toward-bullion-bank-colla…

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

and here is his commentary in full!

Onward Toward Bullion Bank Collapse

The events of Friday not only speed the eventual collapse of the Bullion Bank Paper Derivative Pricing Scheme, they also highlight the fraud of this current system and shine light upon the utter desperation of these Banks to maintain it.

We’ve written about this countless times over the past six years. Here are just two recent examples:

In short, as a measure of controlling the paper prices of gold and silver, The Bullion Banks that operate on The Comex act as de facto market makers of the paper derivative, Comex futures contract. This gives them the nearly unlimited ability to simply conjure up new contracts from thin air whenever demand for these contracts exceeds available supply and, almost without exception, these Banks issue new contracts by taking the short side of the trade versus a Spec long buyer. Never do these Banks put up actual collateral of physical metal when issuing these paper derivative contracts. Instead, they simply take the risk that their “deep pockets” will allow them to outlast the Spec longs and, without the risk of having to make physical delivery, The Banks almost always win. Eventually, an event like the runup to the Brexit vote or all of the Fed Goon jawboning of May will spook The Specs into selling and this Spec selling is used by The Banks to buy back (cover) their ill-gotten naked shorts and lower total open interest back down. (If you’re confused by this, please click the second link listed above for a more detailed explanation of this process.)

How this influences price is simple. If the supply of the paper derivative futures contract was held constant on a daily basis, then price would have to rise or fall based upon simple supply/demand dynamics. When the amount of buyers exceeded sellers, price would have to rise to a point at which existing owners would be willing to sell. But this is NOT how the Comex futures market operates! Because the market-making Banks have the ability to create new contracts from whole cloth, they can instead flood the “market” with new supply whenever it’s necessary. This mutes potential upside moves by imparting fresh new supply for the Spec buyers to devour. Price DOES NOT have to rise to a new, natural equilibrium. Instead, price equilibrium is found where demand meets this new supply.

As a case in point, simply study the “market” impact on gold “prices” in the hours that followed the Brexit decision in the UK. As turmoil shook the global markets, gold shot higher and, at one point, was up nearly $100. However, within hours it had given back nearly half of those gains and then spent the remainder of the day in am unusual and very tight trading range while virtually every other “market” was rocked with volatility throughout the trading day. See below:

The all-important question of the day is: How and why was this done? 

First, the “how”. At the end of each trading day, the CME Group issues an update that details total open interest changes for both gold and silver. Friday’s preliminary totals can be found here:http://www.cmegroup.com/trading/metals/precious/gold_quotes_volume_voi.html  What does the data show? On Friday, with global markets in turmoil and precious metals markets rallying significantly, The Bullion Banks on the Comex issued brand new supply of nearly 60,000 new paper gold contracts! At 100 paper gold ounces per contract, this represents a potential future obligation to deliver almost 6,000,000 ounces of gold, should the Spec long buyers ever stand for delivery (which they won’t). So, ask yourself these questions:

  • Did the world’s gold producers all suddenly decide to forward sell and hedge 186 metric tonnes of future production yesterday, just as the most significant economic event in eight years was beginning to unfold?

OR

  • Did the Bullion Banks suddenly put up a few million ounces of their own gold and then lever it up a few times and issue 60,000 new contracts based upon this collateral deposit?

Obviously, the answer to both questions is a big, bold NO! Instead, the market-making and price manipulating Banks simply played their usual game, writ large. In a desperate attempt to contain price, they simply issued these 60,000 new contracts and fed them to the Spec buyers. So next, ask yourself these vital questions:

  1. Without this added supply…which grew total open interest by over 10% in one day!…how much further would the paper price of gold have risen yesterday?
  2. If a natural equilibrium was forced to be found between buyers and sellers of existing contracts, would price have settled even higher?
  3. And how much higher? Gold was up nearly $60 yesterday. But without the paper derivative supply increase of 10%, would it have risen $100? $200??

So now let’s address the more important part of the question: “why”.

Simply put, these Banks are desperate and on the run. However, in their arrogance, they are still flailing away and attempting to postpone their demise. The minimal amount of physical gold that they do hold and utilize to backstop the paper derivative market is shrinking rapidly as investors and institutions around the globe seek gold as a safe haven against the financial devastation of negative interest rates.

But not only are The Banks attempting to reverse this trend that is rapidly deleveraging their system, they are also desperate to protect their established NET short positions from additional paper losses. Recall that the CFTC generates something that it calls The Bank Participation Report every month and we write about this report almost every month, too. Here’s the latest:http://www.tfmetalsreport.com/blog/7675/latest-bank-participation-report

So let’s cut to the chase…

With gold at $1060 back on December 1, 2015, the 24 Banks covered by this report were NET short just 30,757 Comex gold contracts. After running this NET short position all the way to 195,262 contracts on May 3, 2016, the report for June showed a NET short position of 133,396 contracts. However, data for this latest report was surveyed on June 7, with price at $1247 and total Comex open interest of 496,330 contracts. By this past Tuesday, in the days before the Brexit total were announced, price had risen to $1318 and then fallen back to $1270. However, total Comex open interest had risen to 571,517 contracts and, by analyzing the latest CFTC-generated Commitment of Traders Report, we can safely estimate that The Banks were likely NET short at least 180,000 Comex gold contracts.

Putting this all together, while price rose from $1060 to $1270, these 24 Banks added about 150,000 contracts of NET short liability to their Comex trading operations. So, with a NET position of 180,000 contracts short and with every contract representing 100 ounces of paper gold, the paper losses to these Banks for every $10 move in the gold price amounts to about $180,000,000. Multiplying that out…When gold was up nearly $100 early Friday, these Banks were on the losing side of a $1,800,000,000 move. Even for the likes of JPM et al, that’s a lot of fiat!

So, what did they do? Like any arrogant and addicted gambler, they doubled-down! They put “good money after bad” and, in doing so, likely increased their NET short position to nearly 250,000 contracts! All of this in order to suppress price and get it back under their control. This also allows them to somewhat control the message gold was sending. Can you even imagine the headlines if gold was up $200 yesterday? By holding the gains to just $50, The Banks hope to:

  • Manage the increased physical demand these higher prices are causing AND
  • Mitigate their paper losses. All of those new shorts lowered price by nearly $50 and nearly cut their one-day paper losses in half.

In the end, what’s the point of this post? First and foremost, it’s simply the latest installment of our efforts to shine the light of truth upon the incredible fraud and sham that is the current paper derivative pricing scheme. The Comex-derived price is not at all related to the price/value of true physical gold. Rather, the price discovered on Comex is simply the price of the derivative, itself, with the price of this derivative determined by changes of supply and demand of the derivative. Barely any physical metal ever exchanges hands on Comex so it is entirely inaccurate to say that the price discovered there has any connection at all to the underlying physical.

That said, though, we’ll leave you with one last link that you simply must read. Mark O’Byrne at Goldcore is closely-connected on the ground in London. In all of the hubbub of the Thursday and Friday, you may missed his daily report. If Mark and his sources are correct, we may be rapidly approaching the demise and destruction of these criminal Bullion Banks and their fraudulent pricing scheme. Demand for unencumbered, true physical gold is the key to ending this system and finding justice for gold holders, miners and producers around the globe…and this link may prompt you to think that we are closer to The End than at any other time in the past 40 years: http://www.goldcore.com/us/gold-blog/gold-lower-despite-panic-due-to-supply-issues-in-inter-bank-gold-market/

Friday’s Brexit vote truly was a game-changer and the single most important financial event since 2008. That it might accelerate the death throes of the Bullion Bank Paper Derivative Pricing Scheme is not something that is fully appreciated by the global gold “community”. Hopefully, this post has helped you to understand where we are at present, the reasons behind the price action of Friday and the significance of global physical supply/demand versus paper price going forward.

TF

www.tfmetalsreport.com/subscribe

end

Bill Holter and Sean of SGT discuss the BREXIT and the huge number of body bags taken to the morgue:

BREXIT BODY COUNT — Bill Holter

BREXIT: Does it signal a tidal wave of rising sentiment against the international criminal banking syndicate and…

end

Your early MONDAY 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  DOWN to 6.6220 ( MASSIVE DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.6810) / Shanghai bourse  UP 41.42 OR 1.45%   / HANG SANG CLOSED DOWN 31.30 OR 0.16%

2 Nikkei closed UP 357.19 OR 2.39% /USA: YEN RISES TO 101.53

3. Europe stocks opened ALL IN THE RED  /USA dollar index UP to 96.31/Euro DOWN to 1.1007

3b Japan 10 year bond yield: FALLS  TO -.190%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 101.53

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  47.36  and Brent: 48.10

3f Gold UP  /Yen UP

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

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

3h Oil DOWN for WTI andDOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to -.107%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 9.34%/: 

3j Greek 10 year bond yield FALL to  : 8.670%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1328.60/silver $17.76(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 0 & 09 in  roubles/dollar) 65.05-

3m oil into the 47 dollar handle for WTI and 48 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/GOT a huge devaluation  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 VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -.107%

/German 10 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 1.471% early this morning. Thirty year rate  at 2.3000% /POLICY ERROR)

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

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

European Stocks, US Futures Extend Slide On UK Chaos, Pound Carnage

With global asset correlations once again approaching 1, overnight stocks have been trading in broadly “risk off” mode, following every twist of pound sterling and the rapidly deteriorating British financial situation as “chaos infects” virtually all markets, from China, to European banks, to US equity futures.  As a result of ongoing aftershocks from the Brexit vote, coupled with the sudden political chaos in UK politics, where both parties now seem in disarray, with the pound has extended its selloff to a fresh 31-year low dropping below the Friday lows while European equities are dropping to levels last seen in February. Asian shares rebound, as oil, gold advance and steel prices surge in Shanghai.

“It’s going to continue to be a fairly choppy ride,” Michael Hewson, a market analyst at CMC Markets in London told Bloomberg. “Banking stocks will continue to struggle.”

U.S. stock-index futures indicated equities will deepen declines, after the S&P 500’s worst selloff in ten months following Friday’s U.K. referendum. Contracts on the S&P 500 slid 0.5% to 2,009 in early trading. It earlier erased a drop as Asian equities rallied. Dow Jones Industrial Average futures fell 96 points to 17,150.

“We are in for a volatile period but I don’t think it’s one way down,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd., which oversees about $116 billion. “The dust will settle and investors will realize there’s a long way to go for all of this and markets will eventually start to grind higher again.”

The only silver lining overnight was in Spain, where despite initial exit polls suggesting a victory for the left-wing alliance, the final result confirmed a repeat of the December result in which not only alliance will have a majority in parliament, and in fact Rajoy’s PP gained some votes, leading to a rebound in the IBEX, while yields on Spanish 10Y dipped below those of comparable Italian bonds.

Market Snapshot

  • S&P 500 futures down 0.3% to 2012
  • Stoxx 600 down 2% to 316
  • MSCI Asia Pacific up 0.6% to 126
  • Nikkei 225 up 2.4% to 15309
  • Hang Seng down 0.2% to 20227
  • Shanghai Composite up 1.5% to 2896
  • S&P/ASX 200 up 0.5% to 5137
  • US 10-yr yield down 9bps to 1.47%
  • Dollar Index up 0.83% to 96.24
  • WTI Crude futures down less than 0.1% to $47.60
  • Brent Futures up 0.2% to $48.49
  • Gold spot up 0.8% to $1,327
  • Silver spot up 0.3% to $17.78

Top Global News

  • Battered British Government Seeks Unity to Soothe Brexit Nerves: Osborne says Britain has resolve to cope with hit to economy
  • U.K. 10-Year Gilt Yield Drops Below 1% for First Time on Record: yield -9bps to 0.993
  • Brexit Adds $380b to Global Negative-Yielding Bond Pile: investors seek haven debt after U.K. votes to quit EU
  • Bloomberg View: Markets Were Rational, But U.K. Voters Weren’t, Matthew Winkler writes
  • Rajoy Wins as Spain Cleaves to Establishment After Brexit: traditional parties consolidate position as Podemos stumbles
  • Spanish Bonds Surge After Rajoy Wins Election With Bigger Margin: Rajoy’s People’s Party consolidates power as Podemos stalls
  • Italy Weighs $44b Capital Injection in Banks, Fatto Says: Il Fatto Quotidiano cites government, financial sources it doesn’t identify
  • Sanofi, Boehringer Ingelheim Agree to $25b Asset Swap: Boehringer to get animal-health unit, pay EU4.7b

Looking at regional markets, there was some optimism in Asia where some local bourses saw a mild rebound led by the Nikkei 225 (+2.4%) outperforms amid bargain buying following last Friday’s near 8% decline with reports PM Abe instructed Finance Minister Aso to intervene aggressively in response to the market if needed and also instructed the BoJ to ensure liquidity. Furthermore, Japan was also said to consider a JPY 10 trillion fiscal stimulus package in case of excessive JPY strength. Elsewhere, Chinese markets are mixed with the Hang Seng (-0.2%) resuming last Friday’s declines, while the Shanghai Comp (+1.5%) recovered following a firm PBoC liquidity injection and strength in Chinese commodities. Elsewhere, 10yr JGBs trade in positive territory despite the advances in Japanese stocks, as hopes of BoJ easing increased demand for the paper, while the central bank was also in the market for JPY 475b1n in government debt and inflation-linked bonds.

Top Asian News

  • Line Delays Setting IPO Price Range Amid Brexit Turmoil: Japan messaging service plans largest tech IPO of the year
  • China Weakens Yuan Fixing by Most Since August as Dollar Surges: Reference rate weakened by most since aftermath of devaluation
  • Yen Brexit Surge Seen Testing 95 in Threat to BOJ Stimulus Goals: HSBC changes year-end dollar-yen target to 95 from 115
  • HSBC, Nomura Fall in Asia as Brexit May Force Costly London Move: Nomura shares complete biggest two-day drop since March 2011
  • Pimco, JPMorgan See Asian Bond Stability Appealing After Brexit: Reduced supply gives support as dollar bond offerings drop 18%

In Europe the picture has been decidedly uglier. The leader of the EU parliament Martin Schulz said that David Cameron needs to formally begin proceedings to depart the EU, adding he wants the British PM to trigger Article 50 on Tuesday.  German Chancellor Angela Merkel has stated that the EU has “no need to be particularly nasty in any way” in the discussions with Britain about its exit from the bloc. However, German Government Spokesman Siebert states that there can be no informal negotiations will take place with the UK prior to Article 50 being triggered.Spain’s election results saw conservatives Partido Popular (PP) secure 136 of 350 seats, which although short of a majority, saw the party’s leader and acting Spanish PM Rajoy demand the right to govern after election win. In the UK, Moody’s downgraded UK’s Aa1 outlook to negative and stated that UK’s creditworthiness is at a larger risk after the Brexit vote as it faced substantial difficulties on exit negotiations.

Top European News

  • HeidelbergCement Said to Choose Bidders for $1b of Assets: Cimsa Cimento, Cementir among bidders for Belgian business
  • London Broker Foxtons Says Brexit to Prolong Housing Woes: sees lower 2016 rev., profit as decision to quit the EU prolongs uncertainty in London’s residential property market
  • EasyJet Joins IAG in Paring Profit Goal After Brexit Vote: demand for flights set to slide for rest of summer period
  • Nordea CEO Pledges Dividend Growth Amid Capital Shortfall Fears: CEO Casper von Koskull speaks to Bloomberg
  • Wirecard Rises Most in Two Weeks on Report of Alipay Interest: Bild report says Alipay discussing buying 25% stake

In FX, the pound was the worst performing among major currencies, falling to $1.3235 as of 10:27 a.m. London time after Friday’s 8.1 percent plunge. The euro weakened 0.9 percent versus the greenback, after sliding 2.4 percent in the last session, and the Norwegian krone fell 2 percent against the dollar. While protesters angry at the result took to the U.K. streets at the weekend and circulating petitions calling for a fresh vote, the EU’s founding members bolstered pressure on the U.K. to leave the group as soon as possible. Cameron has said he is in no hurry to make the move, indicating he will wait as long as three months before making way for a new leader who will be responsible for negotiating the exit. “People are finding it difficult to comprehend what Brexit implies for the future — we don’t know yet what the magnitude of the shock will be,” said Steven Barrow, head of Group-of-10 strategy at Standard Bank Group Ltd. in London. “So far, in terms of sterling-dollar, we’ve seen half the decline we’re likely to see this year.”

In Asia, the yen strengthened 0.3 percent to 101.96 per dollar. It jumped 3.9 percent in the last session and reached 99.02, the strongest since 2013. Finance Minister Taro Aso told reporters Monday that Prime Minister Shinzo Abe has asked for various measures to stabilize Japanese markets. The comments came after a meeting between officials including Aso, Abe and Bank of Japan Deputy Governor Hiroshi Nakaso. The yuan fell 0.2 percent after China’s central bank weakened the currency’s reference rate by 0.9 percent, the most since the aftermath of August’s devaluation. The move came after the Bloomberg Dollar Spot Index surged on Friday by the most since 2011 following the U.K.’s referendum.

In Commodities,  gold gained 0.8 percent on demand for a haven, set for its highest close since July 2014. West Texas Intermediate crude was little changed, erasing earlier losses. It plunged 4.9 percent on Friday, its biggest drop since February. Copper added 0.3 percent in London, while nickel gained 0.2 percent. “Everything is caught up in Brexit,” said Evan Lucas, a market strategist at IG Ltd. in Melbourne. “The oil fundamentals for the moment will be put to one side as markets try to figure out exactly how this will all work.”

* * *

Bulletin Headline Summary from Bloomberg and RanSquawk

  • Brexit continues to dictate price action with GBP plummeting below 1.3300, UK financials underperforming and Gilt yields falling below 1%.
  • IBEX outperforms in reaction to the Spanish election with leftist Podemos party less likely to gain power.
  • As well as the fallout of the Brexit vote, other highlights include US Advanced Goods Trade Balance, Composite & Services PMIs alongside speeches from ECB’s Draghi and PBoC’s Governor Zhou.
  • Treasuries higher in overnight trading while Asian equities rally, European stocks drop as GBP drops below $1.32 for the first time since 1985 and the USD index strengthens.
    ECB removed Fed Chair Yellen from scheduled list of speakers for Sintra Forum on Wednesday, according to ECB comments
  • The aftershocks of the U.K.’s vote to leave the European Union reverberated across financial markets after a weekend of political turmoil, with the pound extending its selloff and European equities dropping to levels last seen in February
  • U.K. sovereign 10-year yields fell below 1% for the first time amid speculation the nation’s exit from the European Union will push the Bank of England to cut interest rates to a record low as soon as next month
  • Leaders of Britain’s splintered government sought to reassure investors they’ll be able to navigate the fallout from the stunning vote to quit the European Union as the pound extended its drop and international policy makers scrambled to respond
  • George Soros, the billionaire whose 1992 wager against the pound made hedge fund history, was “long” the currency before Britain’s vote to leave the European Union on Friday
  • Spanish government bonds jumped, pushing the yield down by the most in eight months, after Acting PM Mariano Rajoy defied opinion polls to consolidate his position in the country’s general election
  • Italy is considering injecting as much as 40 billion euros ($44 billion) into some lenders after the U.K.’s vote to leave the European Union sparked a selloff among banks already hurt by investor concerns tied to their bad loans
  • China weakened its currency fixing by 0.9% to 6.6375/dollar, the most since last August as global market turmoil spurred by Britain’s vote to leave the European Union sent the dollar surging
  • Asian stocks rebounded from the steepest slump since August as investors are watching for policy action by central banks globally to ease the market turmoil and pump liquidity into financial markets
  • Japan’s 20- and 30-year bond yields dropped to record lows as the U.K.’s decision to leave the European Union reinforced demand for the haven of government debt

DB’s Jim Reid concludes the overnight wrap

As we glance over our screens, the focus in markets this morning is once again in FX where the Pound is down just a shade over 2% versus the US Dollar and hovering at 1.3398 as we type – its yet to have quite breached the early Friday lows however. Sterling is also down -1.14% versus the Euro although interestingly it’s not actually the Pound which is the worst performer, but the Norwegian Krone which has weakened over 3% with the falls in Oil seemingly compounding the pain there. Staying in FX, the PBoC this morning weakened the CNY fix by the most since August (0.9% weaker) in the wake of the surge for the Dollar on Friday.

Meanwhile, equity markets are a little bit more mixed this morning. Following that huge leg lower on Friday, the Nikkei is +1.39% currently while bourses in China (Shanghai Comp +0.65%) are also a touch firmer. The ASX (+0.52%) is also up however the Hang Seng (-0.95%) and Kospi (-0.31%) are both down. FTSE 100 futures are currently -3.60% while US equity index futures are down around half a percent. Elsewhere, credit markets are weaker this morning with iTraxx indices in Asia and Australia between 4bps and 5bps wider.

The moves this morning follow what was a huge sell-off for risk assets on Friday. That said moves were relatively orderly in the end with a number of assets rebounding from the late Asia and early European open lows. Unsurprisingly it was the moves for Sterling which were front and centre for most. The Pound ended the session down at 1.3679 which was a loss of just over 8% – the biggest daily fall since data starting from the Bretton Woods collapse. That somewhat masks the fact though that the currency traded in an incredible 13.52% range over 7 hours or so. To put that into some perspective the range (on an intraday basis) for the entire 2016 prior to this was 8.03%.

Looking at performance for equities, the end result for the Stoxx 600 was a -7.03% loss which is the fifth biggest fall of all time for the index (and the largest since 2008). Regionally it was the peripherals which were hardest hit. The IBEX closed -12.35% and the FTSE MIB was -12.48%. The DAX and CAC collapsed -6.82% and -8.04% respectively however the relative outperformer on the day was actually the FTSE 100 which closed -3.15%. It had opened initially over 8% lower but bounced back as the session progressed with a number of USD-sensitive earners benefiting (BP +1.73%, GlaxoSmithKline +3.71%, Shell +1.08%, Astra Zeneca +3.41%). It’s amazing to see that the index also had its first positive week (+1.95%) since May. Across the pond the S&P 500 closed -3.59%.

There was no hiding for banks however. Indeed the Euro Stoxx Banks index tumbled -18.02% and easily the most of all time (the next closest being a -10.26% drop in 2008). Peripheral Banks were down anywhere from 20-30% and even the best performing banks in the index were down high single digits.

The underperformance for Banks was certainly the case for credit markets too. Indeed the iTraxx Main and Crossover indices were 19bps and 71bps wider respectively while the senior and sub financials indices were 32bps and 58bps wider respectively. Even though they rallied from the morning opening lows, these were the biggest moves wider since 2012 and 2014 respectively for those financial indices.
Unsurprisingly then the lone gains on Friday came from those flight-to-safety assets. Core sovereign bond markets were at the centre of that. 10y Bund yields reached a new record low of -0.051% after dropping over 14bps (intraday low was -0.183%), while 10y Gilt yields fell nearly 30bps and at 1.082% reached an all time record low. 10y Treasuries also struck a low of 1.561% after moving nearly 19bps lower. Meanwhile Gold rallied to the tune of +4.69% with other precious metals also up. That was as good as it got for the commodity complex though with Oil in particular down nearly 5% although in the context of some of the huge swings we’ve seen in the energy complex this year that didn’t seem all that eye-opening.

You’d be forgiven for missing the fact that there was actually some economic data released on Friday, although clearly that was very much second fiddle to events in the UK. In Germany we saw the IFO survey for June come in a little ahead of expectations at 108.7 (vs. 107.4 expected) after rising close to 1pt from May. The expectations component rose 1.4pts to 103.1 (vs. 101.2 expected) although you’d have to imagine that Friday’s result will dampen that next month. Meanwhile in the US the latest durable and capital goods orders data was disappointing. Headline durable goods printed at -2.2% mom in May, weaker than the -0.5% expected. Excluding transportation orders were down -0.3% mom although expectations had been for a +0.1% rise. Core capex orders (-0.7% mom vs. +0.4% expected) were also disappointing. The final release on Friday was the last June revision to the University of Michigan consumer sentiment reading which was taken down to 93.5 from 94.3 in the prior print.

Onto this week’s calendar now. It’s a quiet start to the week today (outside of the obvious EU debate) with the only data due out of the European session being the latest M3 money supply data for the Euro area. Across the pond this afternoon we’ll get the flash June services (expected to rise to 51.9 from 51.3) and composite PMI’s, as well as the advance goods trade balance for May and also the Dallas Fed manufacturing activity index. We start in Europe on Tuesday with the various confidence indicators out of France and Italy, as well as CBI sales data in the UK. The main focus in the US on Tuesday will be the third revision for Q1 GDP (expected to be revised up to +1.0% qoq from +0.8%), while we’ll also get consumer confidence data, the Richmond Fed manufacturing index and finally the S&P/Case-Shiller home price index for April. Turning to Wednesday, we’re kicking off in Asia with consumer sentiment data in China and also retail trade data in Japan. Over in Europe we’ll get the June confidence indicators for the Euro area, while German CPI data in June is also due out. The UK will also release the latest money and credit aggregates numbers. In the US on Wednesday we’ll get the PCE core and deflator prints for May (both expected to rise +0.2% mom), as well as personal income and spending data for the same month and finally the latest pending home sales data. We start in Japan again on Thursday where we’ll get the latest housing starts data along with industrial production data. It’s busy in Europe on Thursday. The Euro area CPI print for June will be released, along with French and Italian CPI, UK Q1 GDP (final revision) and also the June unemployment reading in Germany. We’ll also get the latest ECB minutes on Thursday. US data on Thursday consists of initial jobless claims and the Chicago PMI for June. It’s a busy end to the week in Asia on Friday. In China we’ll get the official manufacturing and non-manufacturing PMI’s for June, while in Japan we get CPI for May, manufacturing PMI and also the Q2 Tankan survey. In Europe on Friday we get the final manufacturing PMI numbers in June, while over in the US we’ll be keeping a close eye on the ISM manufacturing print (little change expected), while construction spending data, manufacturing PMI (final June revision) and vehicle sales data for June rounds things off.

Away from the data there will be plenty of focus on the aforementioned two-day EU leaders summit which kicks off tomorrow. Also worth keeping an eye on is the three-day ECB Forum in Portugal which starts today, with Yellen, Draghi and Zhou scheduled to speak. Elsewhere, over at the Fed we’ll hear from Powell on Wednesday and Bullard on Thursday. We’ll also hear from a number of ECB members at the event in Portugal over the next few days. It’s also worth keeping an eye on the release of the second part of the Fed’s stress test results on Wednesday.

END

 

Markets around the globe Sunday night:

 

Markets open in New Zealand:  GBPound/USA tumbles to 1.35 and the USA/Yen back down to 102.00 Gold not yet open until 4 pm est.

(courtesy zero hedge)

Currency Carnage Continues: Cable, USDJPY Tumble As FX Markets Open

The calm is over. FX marksts are open and Cable is currently down another 170 pips, testing 1.3500 once again. USDJPY is also sliding back below 102.00 as the world awaits China’s reaction with its official peg as offshore Yuan plunged on Friday…

Cable testing towards that 1.34 handle…

And USDJPY back under 102…

Remember, China had shut before all this carnage had happened…

Will PBOC devalue The Yuan fix and escalate global turmoil further?

ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed UP 41.42 POINTS OR 1.45% / /Hang Sang closed DOWN 31.30 OR 0.16%. The Nikkei closed UP 357.19 POINTS OR 2.39% Australia’s all ordinaires  CLOSED UP 0.458% Chinese yuan (ONSHORE) closed DOWN at 6.6508 /Oil FELL to 47.33 dollars per barrel for WTI and 48.10 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.6810 yuan to the dollar vs 6.6508 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS MASSIVE USA DOLLARS DISAPPEARS FROM CHINESE SHORES

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

b) REPORT ON CHINA

Sunday night:  China devalues the yuan the most in 10 months on the fix

i) onshore yuan  (CNY) 6.6218

ii) offshore yuan (CNH  6.6530)

thus the spread widens and causes huge amounts of USA dollars to leave China.

Then trading began:

CNH: 6.6509

CNY:  6.6810

and then turmoil ruled the day!

iii) Euro/uSA swaps plummets as dollars disappear.

this adds to the turmoil of the pound plummeting.  Late Sunday night, the pound started trading at 1.3361 and ended early morning at 1.3197

(courtesy zero hedge)

China Devalues Yuan Most In 10 Months As Premier Li Warns Of Brexit “Butterfly Effect” On Financial Markets, Economy

In a somewhat shockingly honest admission of the fragaility of the global financial system, Chinese Premier Li warns that a disillusioned British butterfly has flapped its wings and the entire global financial system could collapse. Responding to the plunge in offshore Yuan since the Brexit vote (down 7 handles to 5-month lows over 6.65), PBOC devalued Yuan fix by 0.9% (6 handles) – the most since the August crash – to Dec 2010 lows. Finally, we note USD liquidity pressures buildingas EUR-USD basis swaps plunge.

Offshore Yuan is 3 handles cheap to onshore Yuan and 9 handles cheap to Friday’s fix…

And so PBOC was somewhat forced to devalue yuugely…

  • *CHINA WEAKENS YUAN FIXING BY 0.9%, MOST SINCE AUGUST
  • *PBOC TO INJECT 270B YUAN WITH 7-DAY REVERSE REPOS: TRADER

While Chinese stocks remain ‘stable’ (despite Goldman suggesting more pain is due – regional cost of equity to rise 50-75bps as risk appetite shrinks after Brexit, equal to 5%-10% index decline), the less managed rest of the world is struggling and China knows it…

Premier Li Keqiang said an increase in instability in a particular country or region could trigger the “Butterfly Effect,” which could, in turn, affect the global economic recovery and financial market stability, according to comments posted on Chinese central govt’s website.

All economies highly dependent on each other and no country can manage alone, Li said during meeting with WEF executive chairman Klaus Schwab in Tianjin.

Li called on all nations to enhance coordination and work together to address difficulties.

The shift in the Yuan Fix (red) seemed clear from the collapse in offshore Yuan… CNH > 6.65 (7 handles weaker than pre-Brexit)

Finally, we note that USD liquidity needs are getting very serious as EUR-USD basis swaps surge lower indicating major USD demand…

 

end

EUROPEAN ISSUES

Saturday morning:  Newspaper headlines around England: a country divided!

(courtesy zero hedge)

“See EU Later” – On The Front Covers Of UK Newspapers Today

(courtesy zero hedge)

Two days ago, when Britain was set to vote for Brexit, we showed the front pages of the local newspapers which fell into two broad camps and could be summarized as follows: “Project Hope” and “Project Fear.” Project Hope won. And just as we did then, here is a snapshot of the newspaper and tabloid covers the local population will see on its European Independence day.

Neddless to say, the split in public opinion persists and can be best seen in the covers of the ideologically opposed Daily Express and The Mirror.

And the rest

end

Why England left, in pictorial form:

Source Ben Garrison

Choosing not to go down in flames…

Source: The Burning Platform

end

Friday night:  Scotland and Norther Ireland may have BREXIT veto rights.  This will then create such a FX mess that gold will skyrocket!
(courtesy zero hedge)

Not So Fast: Scotland And Northern Ireland May Have Brexit Veto Rights

Two days after the shocking Brexit result, the nightmares for the Remain camp – which refuses to accept a democratic reality – will not go away. As a result, it has gotten to the farcical point where disgruntled Remain voters have launched a petition demanding a second EU referendum, having clearly forgotten that it was the dramatically low turnout among their ranks that allowed the Leave vote to have such a knockout victory. To be sure this is a well-known technocrat approach: keep voting andrevoting until the desired outcome is finally achieved.

We doubt this particular approach has any hope of success. We also doubt that a call by Labor MP David Lammy, urging for a vote in Parliament to “stop this madness”, the madness in question being the will of the majority, which clearly is not appreciated by a member of a “democratically” elected institution. One can spend all day analyzing the amusing ironies in that statement.

Wake up. We do not have to do this. We can stop this madness through a vote in Parliament. My statement below

However, while these are merely desperation antics by a group who will do almost anything to hang on to the benefits presented to them by the status quo, regardless of the will of the majority, a curious observation has emerged courtesy of Jim Fitzpatrick, who points out that according to the 28-page government Command Paper laying out “The Process of withdrawing from the European Union“,which goes through the infamous Article 50 of the Treaty on European Union (TEU), the first time in history when Article 50 will be invoked, there may actually be a hurdle to the actual Brexit process, in the form of a Scottish and Northern Irish veto to Britain’s separation from the EU. To wit:

The role of the devolved legislatures in implementing the withdrawal agreement:

We asked Sir David whether he thought the Scottish Parliament would have to give its consent to measures extinguishing the application of EU law in Scotland. He noted that such measures would entail amendment of section 29 of the Scotland Act 1998, which binds the Scottish Parliament to act in a manner compatible with EU law, and he therefore believed that the Scottish Parliament’s consent would be required. He could envisage certain political advantages being drawn from not giving consent.

We note that the European Communities Act is also entrenched in the devolution settlements of Wales and Northern Ireland. Though we have taken no evidence on this specific point, we have no reason to believe that the requirement for legislative consent for its repeal would not apply to all the devolved nations.

To be sure, this is merely an interpretation and not a legalistic prescription. The basis of this opinion is as follows:

In February 2016, the Government published a Command Paper entitled The process for withdrawing from the European Union, the findings of which have been widely challenged by those campaigning to leave the EU. We wanted to have as clear an understanding as possible of the process whereby the UK would withdraw from the EU, should the electorate so decide on 23 June. We therefore held a public evidence session with two experts in the field of EU law: Sir David Edward KCMG, QC, PC, FRSE, a former Judge of the Court of Justice of the European Union and Professor Emeritus at the School of Law, University of Edinburgh; and Professor Derrick Wyatt QC, Emeritus Professor of Law, Oxford University, and also of Brick Court Chambers.

So is one interpretation of Article 50 on the potential stumbling block behind Brexit sufficient to derail the process? We doubt it: David Cameron has already resigned while Europe has activated the machinery for a British separation (even if it means keeping the UK as an “associated member” as Germany desperately needs the UK market to keep its own economy afloat). Then again, anything is possible and we are certain that thousands of lawyers are working feverishly at this moment to preserve any optionality the Remain group may still have before too much time has passed and enough procedures have been implemented making a return to the status quo impossible.

Further complicating matters is the announcement by Scotland’s first minister Nicola Sturgeon who saidthat a second Scottish independence vote ‘highly likely’ adding that it was “democratically unacceptable” that Scotland faced the prospect of being taken out of the EU against its will. She said the Scottish government would begin preparing legislation to enable another independence vote.

Whatever the outcome, it is certain that the status quo elites, who already lost hundreds of billions in equity “value” as a result of Brexit, will stop at nothing to prevent the existing globalized system from being deconstructed before their very eyes due to the “unexpected” arrival of democratic forces which demand real change. This will surely mean spending egregious amounts trying to find legalistic loopholes, and doing everything in their power to delay and prevent any incremental steps.

All of that is perfectly expected. That said we wonder if the same elitist minorities, which have already shown boundless disdain for the voice of the majority, will keep their interventionism within a peaceful framework because the last thing the world needs is for a tiny majority to start yet another global war to distract from their accelerating loss of influence and power. Then again, just like in the 1930s when the world was also squeezed in a global depression, the only thing that can boost the fortunes of the 1% is war.

Why is why war is the inevitable outcome that a world saddled with gargantuan amounts of debt, borrowed from a future that has no growth prospects, will get. We can only hope that Brexit is not the spark to this outcome.

 

end

 

Saturday morning:  Sure enough Scotland threatens to veto the BREXIT as they want to stay in the Euro.  Thus, it is possible to see Scotland break with England and adopt the Euro and also the reunification of Northern Ireland with the Republican of Ireland.

again gold goes skyrocketing:

(courtesy zero hedge)

Scotland Threatens To Veto Brexit

Yesterday we warned that the biggest threat to the UK political process in the aftermath of the Friday referendum is neither an arguably fake petition to hold another referendum (it won’t happen), nor the so-called buyer’s remorse on the side of “Leave” voters, especially with ComRes confirming a negligible 1% of those voters were “Unhappy” with the outcome…

On the EU referendum result:
Happy: 48%
Unhappy: 43%
Indifferent: 7%
(via ComRes)

Vote split // On the result (Remain / Leave):
Happy: 4% / 92%
Unhappy: 88% / 1%
Indifferent: 7% / 5%
(via ComRes)

…but rather a surprising discovery in a UK government Command Paper laying out “The Process of withdrawing from the European Union“, which goes through the process of invoking the infamous Article 50 of the Treaty on European Union, and notes that there may be a rather substantial hurdle to the actual Brexit process: a Scottish and/or Northern Irish veto to Britain’s separation from the EU. To wit:

The role of the devolved legislatures in implementing the withdrawal agreement:

We asked Sir David whether he thought the Scottish Parliament would have to give its consent to measures extinguishing the application of EU law in Scotland. He noted that such measures would entail amendment of section 29 of the Scotland Act 1998, which binds the Scottish Parliament to act in a manner compatible with EU law, and he therefore believed that the Scottish Parliament’s consent would be required. He could envisage certain political advantages being drawn from not giving consent.

We note that the European Communities Act is also entrenched in the devolution settlements of Wales and Northern Ireland. Though we have taken no evidence on this specific point, we have no reason to believe that the requirement for legislative consent for its repeal would not apply to all the devolved nations.

As it turns out, this warning was spot on, because earlier today Scotland’s First Minister Nicola Sturgeon told the BBC that the Scottish Parliament could try to block the UK’s exit from the EU. As a reminder, unlike England where the vote went 52% to 48% in Brexit’s favor, in Scotland the picture was vastly different with 62% backing Remain and 38% wanting to go. And as predicted, the Scottish National Party leader, who went through her own UK independence referendum  two years ago and is now considering yet another referendum, said that “of course” she would ask MSPs to refuse to give their “legislative consent”.

In other words, Scotland’s leader is threatening to break down the very concept of a “Great Britain”, which includes England, Wales and Scotland, and pledge allegiance to the EU, while turning her back on more than half of the English population.

In an interview with the BBC‘s Sunday Politics Scotland program Sturgeon was asked what the Scottish Parliament would do now. Ms Sturgeon, whose party has 63 of the 129 Holyrood seats, said: “The issue you are talking about is would there have to be a legislative consent motion or motions for the legislation that extricates the UK from the European Union?

“Looking at it from a logical perspective, I find it hard to believe that there wouldn’t be that requirement – I suspect that the UK government will take a very different view on that and we’ll have to see where that discussion ends up.” When Sturgeon was asked by presenter Gordon Brewer whether she would consider asking the parliament not to back such a motion of legislative consent she replied “of course”.

She added: “If the Scottish Parliament was judging this on the basis of what’s right for Scotland then the option of saying look we’re not to vote for something that’s against Scotland’s interest, of course that’s got to be on the table.”

* * *

Still, as we also cautioned yesterday, the veto threat may be merely Scotland clutching at straws. Scottish Secretary and Conservative MP David Mundell, who also spoke to the Sunday Politics Scotland program, said: “We have to respect the result on Thursday, even if we don’t like it – it was a UK wide vote – it was a vote by people across the UK.”  Asked about the possibility of Scotland stopping Brexit, he said: “What we need to see is the legal mechanism that we go through to get to a situation of the UK leaving” and then said clearly that “I personally don’t believe the Scottish Parliament is in position to block Brexit, but I haven’t seen the legal documentation that you refer to in your interview with Nicola [Sturgeon].”

* * *

It is unclear what the final legal determination will be on this subject, but if someone Scotland does succeed in scuttling a historic referendum decision by the majority of the UK population, we urge Edinburgh to build a very big and vary tall wall on its southern border (ideally without waiting for Mexico, or the UK, to pay for it).

Meanwhile, as all this takes place, the UK ruling class is in a state of crisis, with both PM Cameron and Chancellor Osborne having disappeared, while the opposition Labour party is undergoing a real time coup attempt, in which as we reported yesterday, party leader Jeremy Corbin has been firing random MPs from the shadow cabinet, in an attempt to foil an ouster. For those eager to follow the drama live, the Telegraph has a good live blog at the following link: “EU referendum Labour crisis: Hilary Benn says Jeremy Corbyn ‘is not a leader’, after he is sacked over post-Brexit coup plot, as six shadow cabinet members quit and more expected to follow

For those still confused, the following tweet by the Telegraph’s Tim Stanley summarizes everything that has transpired in the past few days best:

Last 48 hrs have shown the public’s doubts in the political class were well founded. PM & chancellor disappear. Labour self destructs.

end
In Chart form:
(courtesy zero hedge)

Is Brexit The First Of Many Dominoes? A Few Charts

 

Sunday morning:
Adding to the confusion,  the EU, as sore losers are telling England to hurry up with article 50 and abandon the European union.  Yet Germany correctly states that there is no need to rush. Why? Germany has always been the net benefactor  of the union;
(courtesy zero hedge)

More Confusion: EU Tells Cameron To Hurry Up With Article 50 As Merkel Says No Need To Rush

While the political chaos slamming the UK over the weekend, will be its own chapter in the history books one day, with UK’s dynamic leadership duo of Cameron and Osborne suddenly nowhere to be seen while the Labour party is undergoing a rebellion even as Boris Johnson has yet to make a concerted push to claim the victory the British people unexpectedly handed him, things in Europe are no better. Case in point, Europe’s collective (or rather not so much) on the next major catalyst in the UK’s exit from the Eurozone, which as we explained previously, is the moment Article 50 is triggered, widely expected to take place some time over the next several months if not much sooner.

According to Reuters, the EU is allegedly interested in a quick and clean divorce, reporting that Britain need not send a formal letter to the European Union to trigger a two-year countdown to its exit from the bloc, EU officials said, implying British Prime Minister David Cameron could start the process when he speaks at a summit on Tuesday.

The potential delay in the triggering of Article 50 has been interpreted by some as a case of Buyer’s (or perhaps seller’s) remorse, going so far as to suggest that a Boris Johnson cabinet may never invoke it at all, and instead opt to remain in the EU, openly defying the will of the majority.

“‘Triggering’ … could either be a letter to the president of the European Council or an official statement at a meeting of the European Council duly noted in the official records of the meeting,” a spokesman for the council of EU leaders said.

Why does the EU want a quick response? According to a second EU official cited by Reuters, who noted the mounting frustration among leaders with the British prime minister’s delay in delivering the formal notification required to launch divorce proceedings, “It doesn’t have to be written. He can just say it.” Cameron will brief the other 27 national leaders over dinner at a European Council summit in Brussels on Tuesday on the outcome of Thursday’s referendum at which Britons voted to leave the EU, prompting him to announce he will resign.

On Friday, he said he would leave it to his successor as Conservative party leader and premier to trigger Article 50 of the EU treaty, which sets out a two-year process to quit the bloc. That appeared to be a reversal of a pledge to launch the process immediately after the vote. It has angered EU leaders who want a quick settlement to limit uncertainty. It has also prompted some above mentioned experts to speculate that it is Boris Johnson who is delaying the exit when in reality the balls is, and will remain for a while, in David Cameron’s hands.

What makes things complicated is that some Brexit campaigners have long said that Britain should aim to negotiate a comprehensive new relationship with the EU, seeking access to markets without submitting to EU rules or open migration, before binding itself into the two-year timetable that would be fixed for talks if Article 50 is triggered. Such talk worries EU officials and leaders who fear that a prolonged haggling with London will further increase the risk of a domino effect of nationalist-led demands for exit from other states. They do not see a legal way to force Britain to start the process but have piled political pressure on Cameron to honor his pledge to launch Article 50 negotiations and respect the popular vote.

The chief executive of Britain’s “Vote Leave” campaign called for informal talks before London notifies the EU it wants to leave under the Lisbon Treaty, which provides for two years of divorce proceedings.But German Foreign Minister Frank-Walter Steinmeier, a member of Merkel’s Social Democrat coalition partners, showed a greater sense of urgency.

“This process should get under way as soon as possible so that we are not left in limbo but rather can concentrate on the future of Europe,” he said after hosting a meeting with his colleagues from the other five founding members of the EU – France, Italy, the Netherlands, Belgium and Luxembourg.

Putting the heat back on Cameron, Reuters adds that the Council spokesman made clear that leaders cannot simply choose to interpret something Cameron says as the trigger without the prime minister saying clearly he means it to be.

“The notification of Article 50 is a formal act and has to be done by the British government to the European Council,” the spokesman said. It has to be done in an unequivocal manner with the explicit intent to trigger Article 50. Negotiations of leaving and the future relationship can only begin after such a formal notification. If it is indeed the intention of the British government to leave the EU, it is therefore in its interest to notify as soon as possible.”

To be sure, all would be well – all things considered – if Europe could at least present a united front in its treatment of Brexit and Article 50, however even that appears impossible, because elsewhere Reuters writes that German Chancellor Angela Merkel sought to temper pressure from Paris, Brussels and her own government to force Britain into negotiating a quick divorce from the EU, despite warnings that hesitation will let populism take hold.

Almost alone in continental Europe, Merkel tried to slow the rush to get Britain out of the EU door. Europe’s most powerful leader made clear she would not press Cameron after he indicated Britain would not seek formal exit negotiations until October at least.”

Quite honestly, it should not take ages, that is true, but I would not fight now for a short time frame,” Merkel told a news conference.  “The negotiations must take place in a businesslike, good climate,” she said. “Britain will remain a close partner, with which we are linked economically.”

The issue is that with the strongest person in the EU suddenly backtracking on the urgency, it will likely only inflame even more tensions in Europe, where virtually everyone else demands a quick separation. Ironically, Merkel’s position may even help the Euroskeptic camp around Europe.

Eurosceptics in other member states applauded Britons’ decision to leave the European Union in a referendum that sent shockwaves around the world, with far-right demands for a similar vote in Slovakia underlining the risk of a domino effect.

This has promptly led to concerns among Europe’s core: French Foreign Minister Jean-Marc Ayrault warned of the dangers of delay. “We have to give a new sense to Europe, otherwise populism will fill the gap,” he said. They followed European Commission President Jean-Claude Juncker, who said on Friday it made no sense to wait until October to negotiate the terms of a “Brexit”.

European Council President Donald Tusk made a start by appointing Belgian diplomat Didier Seeuws to coordinate negotiations with Britain. Britain’s representative on the EU executive, Financial Services Commissioner Jonathan Hill, resigned on Saturday after campaigning against a British exit.

At the same time, the pressure on the UK is rising: after the referendum decision and Cameron’s resignation, European politicians and institutions felt free to shower demands on Britain over its future outside the world’s largest trading bloc. The European Central Bank said Britain’s financial industry, which employs 2.2 million people, would lose the right to serve clients in the EU unless the country signed up to its single market – anathema to “Leave” campaigners, who are set to lead the next government in London.

But it is not just the splintering of the EU that has grabbed everyone’s attention: as reported earlier, the United Kingdom itself could also now break apart as a result of Scottish First Minister Nicola Sturgeon’s threat that her government was preparing to present legislation allowing a second independence referendum while continuing discussions on its place within the EU. She also warned that her government may veto the Brexit decision.

Amid all this confusion, one thing is clear: with countless variables suddenly emerging and even more path permutations forward, nobody has any clue how any of this will play out, which likely means another bout of global risk off now that the markets have had a chance to catch up to the new post-Brexit reality, which in turn will force even more central bank intervention, just as the Central Bank’s Central Bank, the Bank of International Settlement, warns in its 86th annual review, that “easy-money policies and unprecedented monetary stimulus have started to backfire in global financial markets.”

In short: everyone is praying that someone, somewhere will be successful in kicking the can for at least a few more days/weeks/months.

 

end
The world’s 400 richest people lose 127 billion from the BREXIT vote:
(courtesy zero hedge)

The Real Brexit “Catastrophe”: World’s 400 Richest People Lose $127 Billion

For all the scaremongering and threats of an imminent financial apocalypse should Brexit win, including dire forecasts from the likes of George Soros, the Bank of England, David Cameron (who even invoked war), and even Jacob Rothschild, something “unexpected” happened yesterday: the UK was the best performing European market following the Brexit outcome.

This outcome was just as we expected three days ago for reasons that we penned in “Is Soros Wrong“, where we said “in a world in which central banks rush to devalue their currency at any means necessary just to gain a modest competitive advantage in global trade wars, a GBP collapse is precisely what the BOE should want, if it means kickstarting the UK economy.”

On Friday, the market started to price it in too, and in the process revealed that the biggest sovereign losers from Brexit will not be the UK but Europe.

Not only, though. Because as we noted yesterday in “Who Are The Biggest Losers From Brexit?”, there is an even bigger loser than the EU: Britain and Europe’s wealthiest people.

Britain’s 15 wealthiest citizens had $5.5 billion erased from their collective fortune Friday after the country voted to leave the European Union. Britain’s richest person, Gerald Grosvenor, led the decline with a loss of $1 billion, according to the Bloomberg Billionaires Index. He was followed by Topshop owner Philip Green, fellow land baron Charles Cadogan and Bruno Schroder, majority shareholder of money manager Schroders Plc.

It wasn’t just Britain: as Bloomberg added overnight, the world’s 400 richest people lost $127.4 billion Friday as global equity markets reeled from the news that British voters elected to leave the European Union. The billionaires lost 3.2 percent of their total net worth, bringing the combined sum to $3.9 trillion, according to the Bloomberg Billionaires Index. The biggest decline belonged to Europe’s richest person, Amancio Ortega, who lost more than $6 billion, while nine others dropped more than $1 billion, including Bill Gates, Jeff Bezos and Gerald Cavendish Grosvenor, the wealthiest person in the U.K.

Ironically, it turns out that when George Soros threatened “The Brexit crash will make all of you poorer – be warned“, what he really meant is “it will make me poorer.” And yes, George, the people were warned which is why they voted the way they did.

 

END

Pro Government newspaper Akit gloats over the fact that the “crusader union is falling apart”. If the EU supports Turkey’s admission into the EU then votes for an exit from each country would prevail. Then Turkey will unleash allof those migrants onto European shores.

a real mess…

(courtesy zero hedge)

Turkey Gloats: “The Crusader Union Falls Apart”

Earlier today, we showed the front pages of British newspapers on the first day after the historic Brexit referendum. Just as amusing front pages, however,  abound in Turkey and especially among the pro-government (and thus government-controlled) press, such as the Akit newspaper, which looks at the chaos in the UK and says “the Crusader Union falls apart” (somewhat ironic for the former Ottoman Empire).

As a reminder, many have noted that the Brexit referendum was not about economic issues as much as about immigration, and not one country received more attention than Turkey, whose EU-membership may have been the key variable that sealed the outcome of the referendum vote. Recall that while David Cameron was assuring voters that “Turkey would not join the EU until the year 3,000”, it turned out to be a lie when it was revealed that Europe was actually holding Turkish accession talks as soon on June 30.

For now Turkey may have won the battle…

Headline in  pro-gov’t daily on : “Crusader union falls apart.”

… But it has almost certainly lost the war, as every other European nation will now be terrified of a similar popular uprising and referendum outcome should other countries support Turkey’s EU membership.

Which, of course, is the worst possible news for Angela Merkel, because if and when Erdogan realizes that his latest hope to become part of Europe has again been dashed, he will have no problem with unleashing the millions of Syrian refugees currently held back by Turkish borders, and send them right inside Germany, leading to Europe’s next migrant crisis – likely in the last months of 2016 – which in turn will lead to the full suspension Europe’s customs union, and yet another nail in the coffin of the European “union.”

 

END

 

And now onto Spain’s election Sunday night:

However actual results were a little better for the PP party.  The actual results are similar to the voting in December and thus the election was futile

(courtesy zero hedge)

In Latest Shock To Status Quo, Spanish Left-Wing Parties Set To Win Parliamentary Majority

While the world is focused on the aftermath of the Brexit vote, another surprise to the European status quo was just served thanks to Spain’s parliamentary elections, where according to the just released exit polls...

… the country’s two main progressive parties, the 137-year-old Socialists and the anti-establishment group Podemos, most likely have won a majority of seats in parliament according to early exit polls.

Podemos won 91 to 95 seats compared with 71 at the last vote in December while the Socialists won 81 to 85 seats compared with 90, according to the poll by Sigma Dos published by the state broadcaster. Parties need 176 lawmakers for a majority in the 350-seat chamber. Caretaker Prime Minister Mariano Rajoy’s People’s Party won the most seats with 117 to 121, though the second- and third-placed groups have both ruled out supporting him. The liberals of Ciudadanos fell to 26 to 30 seats compared with 40 last time.

The election is perhaps most notable for the latest confirmation of total apathy: while 37 million people are eligible to participate, barely half of them had voted by 6 p.m. in Madrid, the lowest turnout on record.

As a reminder, this is the second election following a previous one in December when the result was deadlocked, preventing any single party or alliance from claiming a majority.  Opinion polls had suggested the parliament that emerges this time will be just as fragmented as the previous one. Four big parties and six smaller regional ones are likely to win seats in the 350-strong assembly, none of them coming close to a majority.

The center-right People’s Party (PP) looks set to be the biggest party again, with around 120 seats. But its natural coalition partner, the liberal Ciudadanos (“Citizens”), appears likely to win only 30 seats or less, far worse than polls had expected, leaving them well short of the 176 needed for a majority.

In theory, the rise of Unidos Podemos (“Together We Can”), a leftist alliance led by Podemos, could offer a way out. The 90+ seats it is expected to win, combined with around 80 for the Socialist Party (PSOE), would be close to a majority. Support from some of the regional parties could enable them to form a government.

That said, it all depends on the socialists: analysts believe that the 137-year-old Socialist Party would prefer to form a ‘grand coalition’ with the PP, led by the acting prime minister, Mariano Rajoy, or give passive support to a minority PP government, rather than combine with a group that threatens their existence, according to Reuters.

“This is a crucial time for the left. Our time has come. We have an opportunity for change,” said Carlos Martinez, a retired administrative clerk who cast his ballot for Unidos Podemos in the Arganzuela neighborhood, in the south of Madrid. However, the 77-year-old, who voted in December for the former communists of United Left, now part of Unidos Podemos, said the anti-austerity alliance might find it hard to govern because other parties may coalesce to block it.

Ironically, such a scenario would have echoes of Greece, where a long-established center-left party, PASOK, joined a conservative-led government in 2012, only to find itself subsequently humiliated by the rise to power of the far-left Syriza party — which is close to Podemos.

It is not clear what impact the result of the British referendum will have on the Spanish election.

One thing for now appears clear: there is little risk of Spexit, at least in the immediate future. Iglesias, whose core support comes from well-educated young people shut out of the labor market, said the Brexit vote was a sign of the profound reform the EU needs. “Nobody would leave a fair and united Europe,” he said. “We have to change Europe.

Good luck.

 

end

 

And now closing from trading in Europe:  Bank stocks collapse; Deutsche bank trading at its all time lows/Italian banks close down 20-25%; Euro/dollar swaps collapse signifying huge demand for scarce USA dollars as derivatives blow up; UK default risk rises to 3 year highs

 

(courtesy zero hedge)

“It’s a F##king Bloodbath” – European Banking Stocks Collapse As UK Default Risk Spikes

Traders are frantic this morning as George Osborne’s calming words have done nothing to halt the carnage.From Italian bankscrashing over 25% to British banks being halted, trading at record lows, to Deutsche Bank extending its Lehman-esque trend, as one veteran stock market trader in London said, “it’s a f##king bloodbath, not even Draghi can save this one.” The contagion is spreading however as UK default risk has spiked to 3 year highs and USD liquidity needs are surging with funding markets seeing serious distress.

It’s everywhere…European Bank Stocks are down 23% in the last 2 days…

Italian Banks down 20-25%

British Banks bloodbathing….

Deutsche and CS are collapsing…

As a Lehman moment looms…

With Default risk soaring…

As funding markets enter serious distress….

But apart from that – it must be a great time to buy?

 

end

 

 And now on the close with respect to European banks:

S&P Downgrades UK From AAA To AA Due To Brexit: Full Text

end

GLOBAL ISSUES

GLOBAL MARKETS:

The JPMorgan Quant specialists now target a huge 5o to 10% downdraft in markets :a total of up to 300 billion form all program selling; and a 5- 10% selling in the S and P.  The speed of this downdraft will put many of our derivative players completely offside.  We must watch Deutsche bank to seek if smoke is billowing from its chimney:

(courtesy JPMorgan/Quant specialists/zero hedge)

JPM Head Quant: Expect Up To $300 Billion In Program Selling, “5-10% Near-Term Downside To The S&P500”

On Friday, when we described the assessment of UBS derivative strategist Rebecca Cheong, who anticipates as much as $150 billion in program and systematic strategy selling in the next 2-3 days, we wondered if the Friday silence from JPM’s quant guru meant he was willing to hand over the baton of the market’s most prominent prognosticator of quant moves to others. The answer was no, because shortly thereafter Kolanovic chimed in with a note just after the US close, in which he agreed with Cheong and said that the program selling was about to begin, to wit:

As we noted earlier this week, we expected a Brexit outcome to have an asymmetric impact for equities, with downside exacerbated by unwind of long equity investor positioning. In particular, increasing equity volatility would induce systematic strategies (Volatility Targeting, Risk Parity, CTAs) to start deleveraging their high equity exposure, resulting in $100-300 billion of selling.

The reason is simple: few were prepared for a Brexit outcome and “going into this event, long/short equity and macro hedge funds had higher equity exposure than average, while mutual fund cash balances have remained low and retail investor equity exposure were close to 2007 highs.”

Kolanovic adds that “this comes at a time of a weak fundamental backdrop, where corporate earnings are expected to contract for a fourth consecutive quarter (3Q15 to 2Q16E).”

Specifically, regarding the impact of Brexit on fundamentals, Kolanovic believes it will be contained: “Direct impact of Brexit to US corporate profitability will likely be contained, with S&P 500 revenue exposure at ~1% to UK and 6-7% to Europe.”

That’s the good news. Here’s the not so good:

The bigger unknowns, however, are the second order effects, which could manifest themselves through various potential channels. Geopolitical uncertainty around trade and regulatory framework is a risk as it could spill over into business sentiment. Financial contagion could materialize if the banking sector continues to see significant weakness and spread into Eurozone periphery, even though leverage in the system may not be high. In any case, higher volatility from these uncertainties may in itself be enough to induce investors to deleverage and reduce their high equity exposure. While these risks are potential catalysts for a market correction in the short term, it is reasonable to expect these would not precipitate a global recession as central banks globally are expected to intervene and provide liquidity and staunch contagion from spreading. In fact, the Fed noted this morning that it is prepared to offer dollar liquidity through existing swap lines, and the market is expecting a significantly more dovish US rate outlook with no hikes priced in for two years.

Finally, his conclusion: “We see another 5-10% downside to the S&P 500 in the short term as likely, but we maintain our 2016 year-end price target at 2,000.

Earthquakes Cause Giant Natural Gas Field To Cut Production By 44%

Submitted by Dave Forest via OilPrice.com,

Europe just lost a big chunk of production from one of its most critical natural gas fields, and not for any of the usual reasons — technical problems, pipeline constraints, or terrorist disruptions.

These cuts are due to earthquakes.

The development came at the Groningen natgas field in the Netherlands. The largest producing field in Western Europe — and one of the world’s top 10 gas fields by size.

Groningen’s massive size has been an issue lately though, with drawdown from the field having caused seismic events in the areas above and surrounding the field.

Such concerns prompted the Dutch government to take action Friday. With the country’s Economics Minister Henk Kamp saying that regulators will reduce Groningen’s permitted output by 11.1 percent — to 24 billion cubic meters per year (850 billion cubic feet), down from a previous allowance of 27 billion cubic meters.

Minister Kamp also said that the reduced production quota will stay in effect for the next five years.This means that Europe has lost a significant slice of its go-to production for the foreseeable future.

This latest production cut continues a dramatic slide in Groningen’s output over the past 18 months. With the Dutch government deciding in early 2015 to cut production from 42.5 billion cubic feet annually to 39 billion cubic feet — and then further reducing the quota to 33 billion cubic feet just a few months later.

The further cuts announced Friday come after high-level Dutch regulatory body the Council of State ordered the government to take more action in protecting the public. With Minister Kamp saying thatthe new production cap would “reduce safety risks to Groningen’s residents and damage to buildings.”

The Minister did say that production could be increased above the quota in the event of exceptionally cold weather or other instances of strict necessity. But overall it appears that Groningen’s output is going to be 44 percent lower than it was less than two years ago — which could put upward pressure on prices in the European market.

That could have a number of knock-on effects. Including attracting more liquefied natural gas (LNG) to Europe — with countries here having a lot of under-used import capacity right now. Watch for the effects of the Dutch shut-in on prices — and structural changes in this market as a result.

 

end

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

Euro/USA   1.1007 DOWN .0078 (STILL  REACTING TO BREXIT)

USA/JAPAN YEN 101.53  DOWN 2.26 (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 1.3197 DOWN .0464 ( BREXIT)

USA/CAN 1.3029 UP .0033

Early THIS MONDAY morning in Europe, the Euro FELL by 78 basis points, trading now JUST above the important 1.08 level FALLING to 1.1007; Europe is still reacting to BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED UP 41.42 POINTS OR 1.45%   / Hang Sang CLOSED DOWN 31.30 POINTS  OR 0.16%   AUSTRALIA IS HIGHER BY 0.45%/ EUROPEAN BOURSES ARE ALL IN THE RED  as they start their morning/

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

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

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

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

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

The NIKKEI: this MONDAY morning: closed UP 357.19 POINTS OR 2.39% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 31.30 POINTS OR 0.16% . ,Shanghai CLOSED UP 41.42POINTS OR 1.45% / Australia BOURSE IN THE GREEN: (RESOURCES UP)/Nikkei (Japan) CLOSED  IN THE GREEN/India’s Sensex IN THE RED

Gold very early morning trading: $1330.00

silver:$17.79

Early MONDAY morning USA 10 year bond yield: 1.471% !!! DOWN 8.8 in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.3000 DOWN 10 in basis points from FRIDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early MONDAY morning: 96.31 UP 87 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

 

END

 

 

And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield:  3.30% DOWN 6 in basis points from FRIDAY

JAPANESE BOND YIELD: -0.190% DOWN 4  in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD:1.45%  DOWN 18 IN basis points from FRIDAY

ITALIAN 10 YR BOND YIELD: 1.51  DOWN 5 IN basis points from FRIDAY

the Italian 10 yr bond yield is trading 6 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -.116% DOWN 6 FULL  BASIS POINTS ON THE DAY

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1010 DOWN .0075 (Euro =DOWN 75 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 101.92 UP .162 (Yen DOWN 162 basis points )

Great Britain/USA 1.3109DOWN.01133 ( Pound DOWN 113 basis points/BREXIT DECISION AFFIRMATIVE

USA/Canada 1.3109- UP 0.0113 (Canadian dollar DOWN 113 basis points  AS OIL FELL  (WTI AT $46.47).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 75 basis points to trade at 1.1010

The Yen FELL to 101.92 for a LOSS of 16 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was DOWN 480 basis points, trading at 1.3179

The Canadian dollar FELL by 113 basis points to 1.3109, WITH WTI OIL AT:  $46.47

The USA/Yuan closed at 6.648/

the 10 yr Japanese bond yield closed at -.190% DOWN 4  IN BASIS  points in yield/

Your closing 10 yr USA bond yield:DOWN 12 IN basis points from FRIDAY at 1.454% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.277 DOWN 14 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, 96.49 UP 58 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 MONDAY

London:  CLOSED DOWN 156.49 OR 2.55%
German Dax :CLOSED DOWN 288.50 OR  3.02%
Paris Cac  CLOSED DOWN 122.01  OR 2.97%
Spain IBEX CLOSED DOWN 142.20 OR 1.83%
Italian MIB: CLOSED DOWN 620.23 OR 3.94%

The Dow was DOWN 260.51  points or 1.50%

NASDAQ DOWN 113. 54 points or 2.51%
WTI Oil price; 46.46 at 4:30 pm;

Brent Oil: 47.40

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.53 (ROUBLE DOWN 0 & 41/100 ROUBLES PER DOLLAR FROM FRIDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD FALLS TO -.116%  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:46.61

BRENT: 47.45

USA 10 YR BOND YIELD: 1.437% 

USA DOLLAR INDEX: 96.34 up 90 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.32171 down .04426 or 443 basis pts.

German 10 yr bond yield at 5 pm: -.116%

 

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

Bonds & Bullion Bid But Brexit Blowback Batters Banks

 

Seriously… every single fucking day…

 

Charts: Bloomberg

end

 

Any chance for a rate hike is now in tatters!!  This was the big stumbling block for gold. Now it is clear sailing northbound!

(courtesy zero hedge)

The Fed’s Rate Hike Plans Are Now “In Tatters” – What Wall Street Thinks

end

Something is up if both Yellen and Carney pull out of an ECB banking forum in portugal:

(courtesy zero hedge)

Yellen, Carney Pull Out Of ECB Forum In Portugal

end

 

The dominant sector in the USA economy is the service sector.  With the latest service PMI printing a flat 51.3 on expectations of a rise to 52.00. The USA economy is going nowhere!

 

(courtesy zero hedge)

US Services Economy Disappoints As ‘Optimism’ Plunges To Record Lows

The June flash Services PMI printed 51.3, flat to May but below 52.0 bounce expectations with both employment down (3rd monthly drop in a row to lowest since Dec 2014) and optimism tumbling – “service providers indicated another drop in confidence regarding the year-ahead business outlook, with the latest reading the weakest since the survey began in late-2009.

Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said:

The survey data indicate that any rebound in the economy from the weak first quarter was largely confined to April, and that growth has since faded again. The June PMIs, which provide the first insight into national business activity in the second quarter, suggest the underlying rate of growth in the economy is only a meagre 1%.

“Growth continues to be reliant on the service sector, with manufacturing acting as a drag on the economy. However, even the service sector has seen growth weaken in recent months, with firms citing increased uncertainty over the economic and political outlook both at home and abroad.

“Business optimism was the lowest seen since the height of the financial crisis, with firms seeing greater hesitation in spending on services by business and households.

“Uncertainty looks set to intensify in coming months and the UK’s shock vote to exit the EU exacerbates domestic worries about the presidential election.

“Signs of weak economic growth and a sluggish labour market, combined with ‘Brexit’ uncertainty, suggest that already-cautious policymakers will be in no rush to tighten policy.”

So “one-and-done”?

Bank of America and Citibank are crashing in the USA as contagion is spreading to the USA
(courtesy zero hedge)

(courtesy zero hedge)

 

“This Is A Recession” – Dallas Fed Workweek Hits 7-Year Low

end
Well that is all for today
I will see you tomorrow night
h
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2 comments

  1. mediscience · · Reply

    harvey
    present events are fully confusing, as brexit was such a surprise…
    please make a clear synthesis of the present situation at comex from the last days…thank you

    Like

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