June 28/European banks close down despite rise in other equities/USA 10 yr bond yield remains lower bound and thus nobody is buying today’s rally/Gold open interest continues to remain high/July open interest for gold also remains extremely high/Raid on gold and silver due to options expiry /

Good evening Ladies and Gentlemen:

Gold:  $1,315.30 DOWN $7.20    (comex closing time)

Silver 17.84  UP 10 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 40 notices filed last night, for 4000 oz to be served upon today.  The total number of notices filed in the first 18 days is enormous at 15,521 for 1,552,100 oz.  (48.276 tonnes)

ii) in silver we had 1 notice filed for 5,000 oz..  Total number of notices served  in the 18 days: 616 for 3,080,000 oz

 

Today, the June gold and silver contract go off the board. Interestingly the options on the comex gold and silver expired yesterday so our bankers did not do too good and could not do their normal raids because of the power behind BREXIT.  However, the bankers do have the much bigger OTC/London LBMA options to look forward to, and they expire Thursday at noon. Thus the boys will go all out to make up for lost  opportunity and raid for the next few days.

 

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 281.79 tonnes for a loss of 21 tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest fell by a considerable 3,951 contracts down to 213,495, BUT STILL CLOSE TO AN  ALL TIME RECORD DESPITE THE FACT THAT  THE  PRICE OF SILVER WAS DOWN BY ONLY 5 CENTS with respect to YESTERDAY’S trading.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.067 BILLION TO BE EXACT or 153% of annual global silver production (ex Russia &ex China)

In silver we had 1 notice served upon for 5,000 oz.

In gold, the total comex gold OI FELL by a TINY 333 contracts DOWN to 619,264 as the price of gold was UP $2.30 with YESTERDAY’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 13.067 tonnes into the gold inventory/ (and with gold only up by 2.50 yesterday???

Total gold inventory: 947.38 tonnes

SLV

No change in 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 3,951 contracts down to 213,495  DESPITE THE FACT THAT THE price of silver was DOWN BY ONLY 5 CENTS with YESTERDAY’S trading. The gold open interest FELL by a TINY 333  contracts DOWN to 619,264 despite the fact that the price of gold rose by $2.30 YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

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

 none today

b) REPORT ON CHINA

i)Late  MONDAY night/ TUESDAY morning: Shanghai closed UP 16.85 POINTS OR 0.58% / /Hang Sang closed DOWN 54.94 OR 0.27%. The Nikkei closed UP 13.93 POINTS OR 0.09% Australia’s all ordinaires  CLOSED DOWN 0.66% Chinese yuan (ONSHORE) closed UP at 6.6453 /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  6.6741 yuan to the dollar vs 6.6453 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS

4. EUROPEAN AFFAIRS

i)This morning Draghi announced the following:

“greater alignment of policies globally to mitigate the spillover risks from ultra-loose monetary measures.“

the world took that as global central bank intervention to save the world.  I do not think so.  I think what he means is that all central banks must meet to figure out what to do now that QE`s globally are not working:

( zero hedge)

ii)My goodness: EU officials are to unveil a blueprint for a huge European super state. England got out just in time:

( zero hedge)

iii)With England now preparing for its BREXIT, Italy is trying to take advantage of the situation by asking for a 40 billion euro bailout for its banking system.  One problem: direct intervention by the European central bank is not allowed by their rules

( zero hedge)

iv)Nigel Farage speaks to the EU parliament who are now sitting on an emergency meeting to discuss the BREXIT.  Farage states that it is only sensible for both parties to come to some sort of trade deal between them due to the huge trade both encompass!

( zero hedge)

v)The GBP after initially rising to 1.34 fell to 133.10 to the USA dollar when Corbyn loses a vote of non confidence:

( zero hedge)

 

vi)At the end of European trading session, the dead cat bounce died: big banks ended lower led by Unicredit (Italy), RBS, Credit Suisse, and UBS (Switzerland):

( zero hedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

none today

7.OIL ISSUES

none today

8.EMERGING MARKETS

BRAZIL

It is not safe in Rio as the police have not been paid in weeks.  Just look at the signs:

(courtesy zero hedge)

9. PHYSICAL STORIES

i)A must read:  gold will have its revenge against the powers to be:

( Egon Von Greyerz:Kingworldnews)

ii)A good one today from Avery Goodman.  He states that the bankers already knew by June 23 that the vote would be a BREXIT.  They manipulated the markets to try and soften the blow. He states that Europe will punish England for voting to leave!(courtesy Avery Goodman: GATA)

iii)Bloomberg refuses to ask Greenspan about gold manipulation by central banks:

( Greenspan: Bloomberg: GATA: Chris Powell)

iv)James Turk believes that gold and silver will be the huge beneficiary with respect to the noise on BREXIT

a must read..

( James Turk: Kingworldnews)

iv)Demand for gold is certainly strong as witnessed by the huge runup in inventory at both the gold COMEX and the GLD ETF.

I am pretty sure that the comex gold increase is not real but paper and I am also quite confident that the GLD is nothing but paper.  And yes, demand is higher .

(courtesy Steve St Angelo/SRSRocco report)

 

v)A very important commentary today from Julia LaRoche as she covers a discussion with two extremely intelligent individuals : Raoul Pal and Grant Williams.  They state correctly that something is not right when we see both gold and the USA dollar rise together!

( Julia LaRoche/Yahoo Finance)

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

i)Bellwether stock Dow Chemical fires 2,500 workers:

( zero hedge)

ii)Final GDP for first quarter comes in at 1.1% a little higher than expected. However the all important personal consumption was the worst in over two years:

( BEA: zero hedge)

iii)The Richmond Mfg Fed index plummets again from last month`s bounce:

( zero hedge)

 

iv)With all the bad news coming today from the USA and Europe, it seems that in September odds are increasing for a rate cut and possible NIRP

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 619,264 for a SMALL LOSS of 333 contracts DESPITE THE FACT THAT THE PRICE OF GOLD ROSE $2.30 with respect to YESTERDAY’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 SMALL LOSE IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI FALL to 307 for a loss of 113 contracts. We had 41 notices filed YESTERDAY, SO WE LOST 82  contracts or 8,200 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI FELL by a GOOD SIZED 274 contracts DOWN to 5,110.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 by much . In ounces, FOR THE FRONT MONTH OF JULY, we have 511,000 oz or 15.89 tonnes STAND FOR DELIVERY.  The next big active contract month is August and here the OI FELL by 6,049 contracts DOWN to 441,375. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was GOOD at 224,151. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was very good at 279,337 contracts. The comex is not in backwardation.

Today we had 40 notices filed for 4000 oz in gold.

 

And now for the wild silver comex results. Silver OI FELL by A CONSIDERABLE 3,951 contracts from 217,446 to 213,495, BUT STILL CLOSE TO THE NEW ALL TIME RECORD HIGH FOR SILVER OPEN INTEREST.   The front month of June saw it’s OI fall by 31 contracts reducing to 1 . We had 31 notices filed YESTERDAY , so we neither gained nor lost any silver ounces standing for metal in this non active delivery month of June.    The next big delivery month is July and here the OI fell BY 15,481 contracts down to 29,455. We have less than  1  week to go before first day notice on June 30. The June contract month goes off the board today. The volume on the comex today (just comex) came in at 116,630 which IS huge. The confirmed volume YESTERDAY (comex + globex) was HUGE at  124,278. Silver is not in backwardation . London is in backwardation for several months.
 
We had 1 notice filed for 5,000 oz.
 

JUNE contract month:

INITIAL standings for JUNE

June 28.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil  2219.550 OZ

SCOTIA,MANFRA

HSBC

Deposits to the Dealer Inventory in oz 25,432.0000OZ

???

BRINKS

Deposits to the Customer Inventory, in oz   68,110.53 OZ

SCOTIA,MANFRA

BRINKS

 

No of oz served (contracts) today 40 contracts
(4000 oz)
No of oz to be served (notices) 267 contracts

26,700 oz

Total monthly oz gold served (contracts) so far this month 15,521 contracts (1,552,100 oz)

(48.276 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  259,121.9 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  EXACTLY 25,432.000  oz ???

NOT DIVISIBLE BY 32.15 OZ AND THEREFORE NOT KILOBARS

 

total dealer deposit:  25,432.000  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 3 customer deposits:

i) Into Scotia: 32,096.18 OZ

ii) INTO MANFRA: 207.38 OZ

iii) Into Scotia: 32,096.18 oz

Total customer deposits; 68,110.53   OZ

 

Today we had 3 customer withdrawals:

i) Out of HSBC: 1064.521 oz

ii) Out of Manfra: 64.30 oz (2 kilobars)

iii) Out of Scotia; 1090.729 oz

 

total customer withdrawals:  2219.55 oz

Today we had 1 adjustments:

i) Out of HSBC:  96,453.000 oz were transferred out of the customer and into the dealer HSBC.  this is exact weight and not divisible by 32.15 and therefore not 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 40 contracts of which 12 notices was stopped (received) by JPMorgan dealer and 4 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 (15,521) x 100 oz  or 1,552,100 oz , to which we  add the difference between the open interest for the front month of JUNE (307 CONTRACTS) minus the number of notices served upon today (40) x 100 oz   x 100 oz per contract equals 1,578,800 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 (15,521) x 100 oz  or ounces + {OI for the front month (307) minus the number of  notices served upon today (40) x 100 oz which equals 1,578,800 oz standing in this   active delivery month of JUNE (49.107 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 (49.107 TONNES) .
WE LOST 82 contracts or an additional 8200 oz will NOT  stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat.
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
 
We thus have 49.107 tonnes of gold standing for JUNE and 57.22 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing.
We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.107 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 = 65.202 tonnes still standing against 57.22 tonnes available.
 Total dealer inventor 1,839,690.872 tonnes or 57.22 tonnes
Total gold inventory (dealer and customer) =9,059,675.741 or 281.79 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 281.79 tonnes for a loss of 21 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 AND FRAUDULENT!!

 

 
 end
GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX
And now for silver
 

June initial standings

 June 28.2016

Silver
Ounces
Withdrawals from Dealers Inventory 602,11012 oz

BRINKS

Withdrawals from Customer Inventory  597,680/920oz

DELAWARE

JPM

Deposits to the Dealer Inventory NIL
Deposits to the Customer Inventory  990,353.196  oz

SCOTIA, BRINKS

DELAWARE

 

No of oz served today (contracts) 1 CONTRACTS 

(5,000 OZ)

No of oz to be served (notices) 0 contracts

NIL oz

Total monthly oz silver served (contracts) 616 contracts (3,080,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month 602,110.12 oz
Total accumulative withdrawal  of silver from the Customer inventory this month  24,835,362.5 oz

today we had 0 deposit into the dealer account

total dealer deposit:NIL oz

we had 1 dealer withdrawal:

i)Out of Brinks:  602,110.12 oz

:

total dealer withdrawals:  602,110.12 oz

we had 3 customer deposits:

i) Into Brinks:  675,499.920 oz

iii) Into Scotia: 299,645.35 OZ

iii) Into Delaware:  15,207.926

Total customer deposits: 990,353.196 oz

 

We had 2 customer withdrawals

i) Out of Delaware: 1992.800 oz

ii) Out of JPMorgan: 595,688.120

:

total customer withdrawals:  597,680.920  oz

 
 

 

 we had 0 adjustment

 

The total number of notices filed today for the JUNE contract month is represented by 1 contract for 5,000 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 (616) x 5,000 oz  = 3,080,000 oz to which we add the difference between the open interest for the front month of JUNE (1) and the number of notices served upon today (1) 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 +{1 OI for front month of JUNE ) -number of notices served upon today (1)x 5000 oz  equals  3,080,000  of silver standing for the JUNE contract month. (TERRIFIC FOR A NON ACTIVE MONTH)
We NEITHER GAINED NOR LOST ANY SILVER OUNCES THAT  WILL STAND FOR DELIVERY  IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.
 
Total dealer silver:  23.359 million  (RECORD LOW INVENTORY)
Total number of dealer and customer silver:   151.260 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 28/ a huge deposit of 13.067 tonnes into inventory/new inventory rests so far at 947.38 tonnes.  This was a paper addition
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 28/ Inventory rests tonight at 947.38 tonnes

end

Now the SLV Inventory
June 28/no change in silver inventory/rests tonight at 332.784 million oz
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 28.2016: Inventory 332.784 million oz
end

NPV for Sprott and Central Fund of Canada

I will pick up Sprott’s NAV later tonight

1. Central Fund of Canada: traded at Negative 2.9 percent to NAV usa funds and Negative 3.1% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 61.4%
Percentage of fund in silver:37.3%
cash .+1.3%( June 28/2016). /
2. Sprott silver fund (PSLV): Premium FALLS  to +0.82%!!!! NAV (June 28/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO +0.36% to NAV  ( June 28/2016)
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

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

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

Greenspan Warns “Early Days Of A Crisis,” Inflation Coming and Urges Return To Gold Standard

Alan Greenspan, the former Chairman of the Federal Reserve has warned that Brexit was a “terrible outcome in all respects” and that we are in the “early days of a crisis.” U.K. policy makers miscalculated and made a “terrible mistake” in holding a referendum on whether to quit the European Union, Greenspan said.

gold_GBP_270616Gold in GBP – 1 Year

That decision led to a “terrible outcome in all respects,” Greenspan, said in an interview with Bloomberg Surveillance yesterday in Washington.

“It didn’t have to happen,” Greenspan said. He warned that it is now likely that Scotland, whose majority of voters wanted to stay in the EU, will have another referendum on its own independence. He predicted such a vote would be successful, and Northern Ireland would “probably” go the same way.

He also warned about the massive entitlements and unfunded liabilities in the U.S. and western world. The U.S. national debt is heading rapidly towards $19 trillion but the U.S. also has unfunded liabilities estimated to be between $100 trillion and $200 trillion.

“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.”

He warns that the crisis will likely lead to inflation:

“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.”

Finally, Greenspan advocates a return to the gold standard as a way to create financial, economic and monetary stability:

“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?”

Gold Prices (LBMA AM)
28 June: USD 1,312.00, EUR 1,185.79 & GBP 985.84 per ounce
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

Silver Prices (LBMA)
28 June: USD 17.70, EUR 16.06 & GBP 13.40 per ounce
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


Gold News and Commentary
Gold rose yesterday to €1,205/oz, Climbed 10% in 2 trading days (Irish Examiner)
UK stripped of final ‘AAA’ rating and FTSE 350 surrenders £140bn in Brexit aftermath (Telegraph)
Gold holds steady as global stocks weaken after Brexit vote (Reuters)
Retail gold buyers take profits in bullion after Brexit price surge (Reuters)
Gold Holdings in Biggest One-Day Surge Since ‘12 on Brexit Vote (Bloomberg)

Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard (Zero Hedge)
Greenspan Calls Brexit a ‘Terrible Outcome’ (Bloomberg Video)
Gold Continues To Shine (FX Street)
Onward Toward Bullion Bank Collapse (Gold Seek)
Gold Veteran Says Brexit May Be Start of ‘Major Bull Market’ (Bloomberg Video)
Read More Here

Recent Market Updates
– BREXIT Day – Markets Becalmed – Gold Panic Prelude – Trading Hours
– Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market
– Gold Slips Despite UK Gold Demand Surging – Investors “Seek Stability”
– Gold Prices Surge to Highest in Nearly Two Years On FED and Brexit Haven Demand
– Gold Bullion Has Little Downside, Brexit Or Not, Says HSBC
– Central Bank of Ireland Warns Risks are Debt, Brexit, Geopolitical Tensions and Migration
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

Mark O’Byrne
Executive Director
END
A very important commentary today from Julia LaRoche as she covers a discussion with two extremely intelligent individuals : Raoul Pal and Grant Williams.  They state correctly that something is not right when we see both gold and the USA dollar rise together!
(courtesy Julia LaRoche/Yahoo Finance)

Gold is sending a dark sign that ‘almost everything has changed’ in the market

Investors need to be paying attention to the move in gold and the US dollar, Raoul Pal and Grant Williams, cofounders of Real Vision Television, both said.

golden man
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View photo

A man who gave his name as “The Golden Child” remains motionless until people put a tip in his basket in the subway in the Manhattan borough of New York October 27, 2014. “The Golden Child” is from Boston, has been posing for tips for 2 years and is painted from head to toe in gold paint.

Gold and the US dollar are no longer behaving normally and it’s crucial that investors pay attention to this move, Raoul Pal and Grant Williams said during a discussion about the Brexit on Real Vision Television—a subscription financial news service they cofounded.

Gold is widely considered a hedge against the US dollar. When the dollar falls in value, gold prices often rise. However, this relationship has been breaking down.

Pal, a former macro fund manager and author of the research letter “The Global Macro Investor,”recently said that a dollar rally along with a gold rally is “a sure sign that almost everything has changed.”

Williams, the author the research letter “Things That Make You Go Hmmm,” agreed that it’s a “sign that there’s some move toward an end game of sorts.”

Following the stunning Brexit vote last week, investors simultaneously piled into gold and the US dollar, which are both considered safe-haven assets in the international financial markets. Both gold and the dollar have rallied.

For gold and the dollar to move in the same direction is not normal. It’s actually a sign of uncertainty or financial stress.

View photo

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Raoul Pal and Grant Williams discuss the Brexit and what happens next on Real Vision TV.

Raoul Pal and Grant Williams discuss the Brexit and what happens next on Real Vision TV.

“It doesn’t happen often, but when it does it’s a sure sign people are nervous—saw it in 2008, saw it in the 30s. It’s a sign we are at a point of critical stress,” Williams told Yahoo Finance in a phone interview.“It is a big deal. It’s a very rare occurrence,” Pal also told Yahoo Finance.

Pal continued: “This never happens…It’s a dark sign. People are forced to buy dollars because of the global carry-trade. They want to own gold because in a negative interest rate environment—if your interest in Germany is -1%, you’re better off to own gold.”

It’s actually what legendary hedge fund manager Stanley Druckenmiller, who historically has never been a really big gold investor, was talking about at the Sohn Conference in May.

“My hint is what is the one asset you did not want to own when I started Duquesne in 1981? It’s traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates. Some regard it was a metal. We regard it was a currency, and it remains our largest currency allocation,” Druckenmiller said.

Pal, a Goldman Sachs alum who also ran GLG’s macro fund, thinks owning both the dollar and gold is “very attractive.” He added that the downside is “very limited” given that traditionally when the dollar goes down, gold goes up. The upside is that they both go up.

Pal also expects that gold and industrial metals will diverge.

Pal and Williams discuss the Brexit in this wide ranging conversation available on Real Vision.


Julia La Roche is a finance reporter at Yahoo Finance.

A must read:  gold will have its revenge against the powers to be:
(courtesy Egon Von GreyerzéKingworldnews)

Gold will have its revenge against the elites, von Greyerz tells KWN

Section:

8p ET Sunday, June 26, 2016

Dear Friend of GATA and Gold:

Gold fund manager Egon von Greyerz tells King World News today that Britain’s declaration of independence from the financial elites is only the beginning of a popular rebellion that will be fatal to those elites and their currencies and that gold will have its revenge against them. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/a-stunning-email-about-brexit-vote-as-elites-pa…

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

END

A good one today from Avery Goodman.  He states that the bankers already knew by June 23 that the vote would be a BREXIT.  They manipulated the markets to try and soften the blow. He states that Europe will punish England for voting to leave!

(courtesy Avery Goodman: GATA)

Avery Goodman: What market manipulators have in mind for the UK and the world

Section:

8:24p ET Sunday, June 26, 2016

Dear Friend of GATA and Gold:

Securities lawyer and market analyst Avery Goodman writes today that governments and investment banks knew very well that Britain was likely to vote to withdraw from the European Union and on the eve of the referendum manipulated markets up (stocks) and gold (down) to dispel fear. Now, Goodman writes, the financial elite will smash the British pound down beyond all reason to punish the country. But, he adds, Britain is leading the world back toward democracy. His commentary is headlined “What Market Manipulators Have in Mind for the U.K. and the World” and it’s posted at his Internet site here:

http://averybgoodman.com/myblog/2016/06/26/what-market-manipulators-have…

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

END

Bloomberg refuses to ask Greenspan about gold manipulation by central banks:

(courtesy Greenspan: Bloomberg: GATA: Chris Powell)

Bloomberg interviews Greenspan but evades the crucial gold question

Section:

2:15p ET Monday, June 27, 2016

Dear Friend of GATA and Gold:

Bloomberg Radio and Television today interviewed former Federal Reserve Chairman Alan Greenspan for more than a half hour —

http://www.bloomberg.com/news/articles/2016-06-27/greenspan-calls-brexit…

— but while at the 18:25 mark he praised the gold standard and called himself a “gold bug,” his questioners declined to ask him the crucial question, the question about surreptitious trading in the gold market by the U.S. government and other governments.

Documentation of that market intervention and its objective of suppressing the gold price has been delivered to Bloomberg by GATA many times and can be found here:

http://www.gata.org/node/14839

A similar question was posed to New York Fed President William Dudley at a public forum in Virginia in March, and he evaded it with a clumsy non-sequitur that would have caught the attention of financial journalism around the world if there was any:

http://www.gata.org/node/16341

So maybe posing the question would have made this one Bloomberg’s last interview with Greenspan.

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

END

James Turk believes that gold and silver will be the huge beneficiary with respect to the noise on BREXIT

a must read..

(courtesy James Turk: Kingworldnews)

Outperformance of tangible assets indicates inflationary pressures, Turk says

Section:

7:30p ET Monday, June 27, 2016

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk, interviewed by King World News today, says inflationary pressures are indicated by the recent outperformance of tangible assets over other assets. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/james-turk-global-market-turmoil-continues-grea…

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

 

END

 

Demand for gold is certainly strong as witnessed by the huge runup in inventory at both the gold COMEX and the GLD ETF.

I am pretty sure that the comex gold increase is not real but paper and I am also quite confident that the GLD is nothing but paper.  And yes, demand is higher .

(courtesy Steve St Angelo/SRSRocco report0

 

 

This Will Push The Gold Market Over The Edge

by SRSrocco on June 27, 2016

This could be the year that the mainstream investor finally pushes the gold market over the edge. While a fraction of investors continue to acquire a lot of physical gold, the mainstream investor is the key to driving the gold market and price going forward.

Why? Because the diehard precious metal investors don’t have the sort of leverage as do the mainstream investors, which account for 99% of the market. I have stated several times in articles and interviews that it will be the surge of gold buying by the mainstream investor that will finally overwhelm the gold market.

This next chart shows just how much leverage the mainstream investor has on the gold market. When the Dow Jones Index fell a lousy 2,000 points during the first quarter of 2016, mainstream investors flooded into Gold ETF’s & Funds. This continued into the second quarter, including the surge in buying after the BREXIT “Leave Vote” this past Friday:

According to the data put out by Nick Laird at Sharelynx.com, total transparent global gold holdings increased nearly 20 million oz (Moz) since the beginning of 2016. Nearly half of that figure, 9.7 Moz (supposedly) went into the GLD ETF. This is an amazing amount of gold as it represents 41% of total global mine supply.

For those investors who don’t trust the amount of gold backing these Gold ETF’s, I don’t either. However, I could care less if the GLD has all the gold it reports. What is more important is the mainstream investor LEVERAGE on the market and price. This is the Key.

This next chart shows the annual net flows of gold into ETF’s & Funds:

The record amount of flows into Gold ETF’s & Funds took place in 2009. The majority of the 645 metric ton (mt) figure took place during the first quarter of 2009 when the broader markets were crashing to their lows. In Q1 2009, a record 465 mt of gold flooded into Gold ETF’s & Funds that quarter, accounting for 72% of the year’s total.

I explain this phenomenon in more detail in my Bullet Report: The Gold Report:Investment Flows.

Something has seriously changed in the gold market this year and I believe that most investors are unaware of how explosive this shift could impact the price of the yellow metal going forward.

The Gold Report: Investment Flows is a digital report that provides up-to-date information on the gold market that is invaluable for analysts and investors to presently understand.

While many precious metals analysts publish articles that focus on individual aspects of the gold industry, this report combines all of the relevant investment flows to show how significant trend changes are now putting serious strain on global gold supply, elevating gold’s average global value.

CLICK HERE to read more about the GOLD REPORT.

However, the first half of 2016 is turning out to be one hell of a strong start as global gold holdings have already increased 622 mt. Part of this amount includes an approximate 68 mt build (2.2 Moz) in the Comex Gold Inventories. As we can see, the mainstream investor Gold ETF & Fund demand has driven flows in the first half of 2016 to 96% of the record 645 mt set in 2009.

And this was on the back of a lousy 15% correction in the broader markets in the first quarter of the year. What happens as the BREXIT contagion continues to spread pushing the broader stock markets lower?

Again, according to the data at Sharelynx.com, an approximate $25 billion of mainstream funds went into Gold ETF’s, Funds and Exchanges in the first half of the year:

While this is most certainly a large surge of mainstream investor demand in Gold ETF’s & Funds, it’s still only a fraction of the overall market. Matter-a- fact, the top 400 World’s Richest people lost $127 billion on Friday after the BREXIT vote to leave the European Union.

Now, what’s even more interesting than that tidbit, is that a ONE DAY loss of $127 billion by the wealthiest people could have purchased ALL of the Global Gold & Silver ETFs and Funds in the entire world.

Currently, all the Gold ETF’s & Funds are valued at $108 billion while the Silver ETF’s & Funds represent a mere $16 billion. Thus, all the Global Gold-Silver ETF’s & Funds equal $124 billion. Basically, the richest of the rich lost more in one day than the entire Gold & Silver ETF and Fund Market.

The British citizens voting to leave the European Union is the straw that finally breaks the CAMEL’s BACK. It doesn’t matter if the politicians force England to stay in the EU, because the MINDSET of the public has been changed. It’s just a matter of time before the inertia grows to a level that finally overwhelms the establishment.

I got a kick out of Zerohedge’s article today, President Of The European Parliament: “It Is Not The EU Philosophy That The Crowd Can Decide Its Fate”. This is the epitome of FASCIST 101, where an UNELECTED Parliament can decide the fate of the British or any other European country.

We are experiencing the same thing in the United States as Donald Trump goes against the DEMO-PUBLICAN Establishment Cronies.

At some point in time, the DEBT & LEVERAGE in the system will take down the markets in a serious way, quite quickly. If you are the 99% of Americans who believe, “You need to stay in your 401K for the long-term”, you can’t blame Wall Street when you lose it all as you had plenty of chances to WAKE UP.

-END-

Your early TUESDAY 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 ( SLIGHT REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN SLIGHTLY NARROWS TO 6.6741) / Shanghai bourse  UP 16.85 OR 0.58%   / HANG SANG CLOSED DOWN 54.84 OR 0.27%

2 Nikkei closed UP 13.93 OR 0.09% /USA: YEN RISES TO 102.31

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 95.93/Euro UP to 1.1087

3b Japan 10 year bond yield: FALLS  TO -.215%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 102.31

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  47.53  and Brent: 48.31

3f Gold DOWN  /Yen DOWN

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

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

3h Oil 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 RISES to -.091%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 8.81%/: 

3j Greek 10 year bond yield FALL to  : 8.630%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1310.65/silver $17.62(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 84/100 in  roubles/dollar) 64.69-

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 TINY REvaluation UP  from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 102.31 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 .9784 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0851 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 RISES to  -.095%

/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 1.466% early this morning. Thirty year rate  at 2.28% /POLICY ERROR)

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

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

Global Stocks Rebound, US Futures Jump On Expectation Of “Coordinated Intervention By Central Banks”

After a historic two-day selloff, which as shown yesterday slammed European banks by the most on record…

… the wildly oversold conditions, coupled with hopes for yet another global, coordinated central bank intervention, coupled with modest hope that David Cameron’s trip to Brussels today may resolve some of the Article 50 gridlock, have been sufficient to prompt a modest buying scramble among European stocks in early trading, with the pound and commodities all gaining for the first time since the shock Brexit vote.

“Stocks are rebounding on the expectation that there will be a coordinated intervention by central banks,” John Plassard, a senior equity-sales trader in Geneva at Mirabaud Securities told Bloomberg. “What central banks can do is put confidence back in the market by telling everyone that they are here and ready to act. If we don’t get that sort of support, we’ll see further declines.”

Needless to say, there is a way to go to recover recent losses: the following chart courtesy of Jonathan Ferro shows that there is a ways to go:

The Stoxx Europe 600 Index and sterling both rebounded after tumbling 11% in the last two trading sessions. A gauge of the dollar’s strength snapped its steepest rally since 2011 as futures indicated that the next move in U.S. interest rates is now more likely to be a cut. The Bloomberg Commodity Index climbed from an almost four-week low as oil rose to about $47 a barrel and industrial metals gained. Spanish and Italian bonds gained.

As also shown here first over the weekend, any speculation of a Fed rate hike is now dead and buried, and instead the market is now pricing in higher odds of a December rate cut than a rate hike.

And while the BIS has loudly warned that expectations of a major central bank intervention are overblown, for now there is a global relief rally, which has seen European stocks advance, snapping their worst two-day losing streak since 2008. All 19 Stoxx 600 sectors rise, with insurance, banks outperforming and chemicals, oil & gas underperforming. Trading volume was twice the 30-day average. The U.K.’s FTSE 100 advanced 2.3 percent, recovering some of its 5.6 percent slide over the previous two days. Italian banks including Mediobanca SpA were among the biggest gainers after the European Commission said it was in touch with Italian authorities over possible support measures following the recent selloff.

S&P 500 jumped 1.1%, recouping some of the market’s worst loss since March. Shares in Japan were buoyed by a Nikkei newspaper report saying a 20 trillion yen ($196 billion) stimulus proposal has been submitted to Prime Minister Shinzo Abe by a senior official in his party.  The MSCI Emerging Markets Index gained 0.8 percent after falling as much as 0.3 percent. Eastern Europe and Africa led the advance, with benchmarks in Poland, South Africa and Turkey climbing at least 1.3 percent.

EU leaders will gather in Brussels on Tuesday for the start of a two-day European Council summit to discuss Britain’s decision to leave the bloc. U.S. data are forecast to show that consumer confidence held close to a six-month low this month, while China’s central bank Governor Zhou Xiaochuan is due to speak at a forum being hosted by the European Central Bank. Bank of England Governor Mark Carney is scheduled to chair a meeting of financial stability officials.

Global Market Wrap

  • S&P 500 futures up 1.1% to 2007
  • Stoxx 600 up 2.3% to 316
  • FTSE 100 up 2.2% to 6111
  • DAX up 1.9% to 9446
  • German 10Yr yield up 2bps to -0.1%
  • Italian 10Yr yield down 7bps to 1.44%
  • Spanish 10Yr yield down 9bps to 1.37%
  • S&P GSCI Index up 1.3% to 368.7
  • MSCI Asia Pacific down less than 0.1% to 126
  • Nikkei 225 up less than 0.1% to 15323
  • Hang Seng down 0.3% to 20172
  • Shanghai Composite up 0.6% to 2913
  • S&P/ASX 200 down 0.7% to 5103
  • US 10-yr yield up 3bps to 1.46%
  • Dollar Index down 0.47% to 96.09
  • WTI Crude futures up 1.8% to $47.15
  • Brent Futures up 1.5% to $47.89
  • Gold spot down 0.9% to $1,313
  • Silver spot down 0.2% to $17.68

Top Global News

  • Cameron Heads to Last Supper in Brussels Amid Impasse in London: two-day EU summit to consider 1st steps after U.K. vote
  • Pound Heads for First Post-Brexit Gain as Dollar Demand Weakens: Yen lags as Japan officials repeat they are watching markets
  • Carney’s Warnings Ring True on Brexit as BOE Meets on Stability: BOE panel meets as more cheap cash offered to lenders Tuesday
  • Osborne Rules Himself Out of Race to Be Next U.K. Prime Minister: U.K. chancellor writes in the Times newspaper
  • North Sea Oil Faces Worsening Investment Drought After Brexit: 2nd Scottish independence poll “very much on the table”
  • Merkel Says EU Won’t Tolerate Cherry Picking in U.K. Exit Talks: comments in speech in German parliament
  • Draghi Calls for Global Policy Alignment to Lift Economic Growth: ECB president speaks at ECB Forum in Sintra, Portugal
  • Italy Ready for ‘Everything Necessary’ on Banks, Renzi Tells CNN: Italian PM says he’s confident about consumer security prospects in banking sector
  • Rajoy’s Waiting Game Endures as Spanish Rivals Threaten Veto: prospect of 3rd election may boost prime minister’s leverage
  • VW’s U.S. Tab Said to Grow to $15b in Diesel Scandal: $10b for car owners, $5b in fines and investment
  • Nestle Shares Advance as New Outsider CEO Presages Shakeup: shares gain 2.7% as investors welcome Schneider’s appointment
  • Monsanto Earnings to Weigh on Prospect of Higher Bayer Offer: 3Q profit seen falling amid lower farmer spending

Looking at regional markets, Asia equity markets traded mixed amid an improvement in sentiment as the region pauses for breath in the wake of the Brexit fallout. Nikkei 225 (+0.1%) opened negative but then rebounded after finding support at the 15,000 level, while a weaker JPY also underpins as Japanese officials continued to urge for additional stimulus. ASX 200 (-0.7%) is the underperformer in Asia as the Brexit-triggered weakness in Financials and decline in energy prices dragged the index lower. Elsewhere, Chinese markets were cautious although have recovered from worst levels with the Shanghai Comp (+0.6%) relatively flat for much of the session, while Financials in the Hang Seng (+0.3%) remain pressured.

Top Asian News

  • Japan Yields All Drop Below 0.1% First Time in Global Bond Surge: Bond yields in Australia, U.K., Korea drop to record lows
  • South Korea Plans Supplementary Budget, Cuts Growth Forecast: Stimulus package of >20t won ($17b) to cushion risks
  • Japan’s Line Aims for $1.1 Billion IPO Amid Market Tumult: Line will debut in New York and Tokyo in rare dual IPO
  • Hutchison, Tata Motors Bonds Among Asia’s Biggest Brexit Losers: Motherson Sumi Systems among bonds to fall on Europe exposure
  • Brexit Market Meltdown Looks Like Overkill to Yen Guru Gyohten: No signs of Lehman-style credit crunch now, Gyohten says
  • Indonesia Approves Tax Amnesty to Help Fund Widening Budget Gap: Central bank says tax amnesty can draw 560t rupiah

European bourses have calmed so far this morning, in the wake of a volatile few days in the wake of the UK’s EU referendum, with equities sharply rising after a historic selloff. Subsequently, the Euro Stoxx (+2.7%) is in the green led by financials names which has seen a mild reprieve with some of the worst impacted companies from the Brexit vote Lloyds and Barclays seeing gains of 6.5% and 5% respectively. Elsewhere, the FTSE MIB (+4%) has notably outperformed amid the gains in Italian banks with optimism rising on the fact that European institutions could possibly act in order to ensure security of Italian banks. In credit markets, Bunds have seen a pullback from elevated levels with the German yield curve seeing an unwind of its recent bull steepening while the 2y-30yr spread has widened by 4.2bps. While Italian and Spanish bonds rise amid the risk on sentiment with the latter seeing yields falling to its lowest level since April 2015.

Top European News

  • Shawbrook Will Take Charge Tied to Lending Irregularities: co. sees $12m charge; CFO Tom Wood resigns, replaced by Minto
  • Rolls-Royce Sticks to Forecast as No Brexit Ballot Effect Seen: 2016 outlook unchanged, with pickup seen in 2H
  • RWE Split Favored Over EON’s in German Utilities Overhaul: German utilities splitting in riposte to nation’s green policy
  • Adidas Extends China Sports Push in Agreement With Billionaire: to sponsor races and promote soccer
  • RBS CEO Says ‘Day One’ Brexit Plan Worked, Uncertainties Ahead: Ross McEwan comments in memo to staff
  • UBS CEO Says Some Bank Share Prices Are Reason for Concern: says some banks’ market value may be less than their book value
  • Redrow Sees Pretax Beating Ests., Too Early to See Brexit Effect: saw no impact on house sales or visitor levels in run up to Brexit referendum
  • Legal & General Names Treasury’s John Kingman as Group Chairman: Kingman was 2nd permanent secretary at U.K. Treasury

In FX, the pound strengthened as high as $1.3360, rising nearly 200 pips overnight supported by technical indicators that suggested the record two-day loss since Thursday’s vote was excessive. The move comes even after the U.K. was stripped of its top credit grade by S&P Global Ratings. Fitch Ratings also lowered the country’s rank.  “There’s a bit of a temporary reprieve after days of volatile and adverse market moves,” said Viraj Patel, a foreign-exchange strategist at ING Groep NV in London. “Today’s EU talks could provide some new news and hence some direction to markets.” The yen weakened 0.2 percent, after surging more than 4 percent over the last two sessions. The Bloomberg Dollar Spot Index retreated 0.4 percent, following a two-day jump of 2.7 percent. The currencies of commodity-exporting nations rallied, with South Africa’s rand leading gains among 31 major currencies, climbing 1.6 percent. Russia’s ruble and Mexico’s peso advanced at least 1 percent as oil rose.

In commodities, the Bloomberg Commodity Index gained 1.2 percent. Crude oil added 2.2 percent to trade at $47 a barrel in New York, while copper and nickel were up more than 1.5 percent in London. Gold slipped 0.7 percent to $1,314.90 an ounce on speculation that recent gains have been overextended. In the previous two days, prices jumped 5.4 percent, the most since 2009. “Those sorts of spikes tend to be followed by a form of retracement, and that’s what we’re seeing,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “We’re not saying that the uncertainty and the safe-haven aspect of Britain pulling out of the EU is over yet. So there’s still going to be some potentially good upside for gold.”

Looking at the day ahead, the main focus for the market and investors will be the EU leader’s summit in Brussels (a two-day event) where we’ll be awaiting further newsflow with regards to Friday’s referendum result. In the US the third revision to Q1 GDP is due out (which is expected to revised up by two-tenths to +1.0% qoq) along with the S&P/Case-Shiller house price index, consumer confidence reading for June and Richmond Fed manufacturing activity index.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Markets are provided with a post-Brexit reprieve, as profit taking is seen, with GBP/USD back above 1.3300
  • Equity markets also remain calmer today, trading in the green across the board as financials outperform after their recent significant downside
  • Highlights today include final reading of US GDP, API crude oil inventories and comments from ECB’s Draghi, Coeure, Praet and Knot

DB’s Jim Reid concludes the overnight wrap

Risk assets in Europe, after initially opening up relatively OK, declined in a fairly orderly fashion as the day progressed although the closing levels still made for pretty eye opening reading. The FTSE 100 finished -2.55% taking its two day loss to -5.62%. It’s the FTSE 250 mid cap index which has clearly been at the centre of the pain however. That index closed -6.96% yesterday which comes on the back of a -7.19% fall on Friday. The -13.65% two-day loss as a result is the biggest fall since 1987. While Banks in particular have taken the brunt of the pain so far we’re also starting to get the early round of cautious commentary at a corporate level. Indeed yesterday EasyJet (which tumbled 22%) issued a statement citing that second half revenue will likely be ‘down by at least a mid-single digit percentage’. That follows similar comments from IAG on Friday while homebuilders (Barratt -19.42%, Travis Perkins -16.79%, Taylor Wimpey -14.92%) have also been front and centre in the selloff.

Elsewhere, the Stoxx 600 finished -4.11%, the DAX -3.02%, CAC -2.97% and FTSE MIB -3.94%. The Euro Stoxx Banks index plummeted another -6.23% following the staggering 18% fall on Friday. That index is now only a shade above the 2012 lows. Meanwhile across the pond the S&P 500 closed -1.81% and is now at the lowest level since March. All things considered the relative outperformer yesterday was Spain where the IBEX closed ‘just’ -1.83% lower and 10y Spanish yields rallied 17bps (other peripherals were 4bps lower and Bunds were 7bps lower) following those election results from Sunday which we highlighted yesterday. Staying with bonds, 10y Gilts closed below 1% yesterday (at 0.931% to be precise) for the first time ever. The irony was that this also coincided with a double downgrade to UK’s sovereign rating. S&P was the first to act, cutting the rating by two notches to AA (with a negative outlook) before Fitch then cut by one notch also to AA (and also on negative outlook).

Glancing over our screens this morning it’s another relatively mixed session in Asia currently, although the bulk of bourses have crept up off their early intraday lows. The Nikkei is currently -0.33% although did initially fall over 2%, while the ASX is -0.71% and Hang Seng -0.72%. Bourses in China are flat while the Kospi is currently +0.43%. That in part reflects the news out of Korea where a 20tn won fiscal stimulus package is said to be being planned. Meanwhile, the Pound (+0.69%) has rebounded a little this morning and is currently hovering at $1.3316 as we type.

Staying in Asia yesterday our Chief China Economist, Zhiwei Zhang, updated his macro forecasts for China for 2016 and 2017. Zhiwei has cut his GDP forecast to 6.6% in 2016 and 6.5% in 2017, from 6.7% for both previously. The downgrade to growth is mostly driven by domestic concerns. Zhiwei notes that he is particularly worried about the property market where property sales have already peaked. The rebound in the property market has been driven by tier 2 cities more than others which may not justify such rapid rises in land and property prices and a potential slowdown in the property market will likely lead to a negative fiscal shock in Q4 2016 and the first half of 2017. With regards to the policy outlook, Zhiwei continues to expect one more interest rate cut in Q4 2016. He notes that the policy outlook in 2017 faces greater uncertainty. While his baseline call is for no rate cut and a stable exchange rate, if downside risks to his growth outlook rise then he sees a greater chance of further policy easing through rate cuts in 2017.

Moving on. Unsurprisingly the bulk of yesterday’s newsflow was focused on events in the UK. PM David Cameron, speaking in Parliament yesterday, said that ‘the decision must be accepted and the process of implementing the decision in the best way possible must now begin’. Cameron is due to address EU leaders today in Brussels. Meanwhile, German Chancellor Merkel, Italian PM Renzi and French President Hollande confirmed that they will not hold formal or informal talks with the UK until Article 50 is triggered. While Merkel said that she has a certain level of understanding for the UK to analyze things, she also said that ‘we can’t afford an extended waiting game because that would be bad for both sides of the EU’. Hollande added that ‘our responsibility is not to lose time in dealing with the question of the UK’s exit and the questions’.

Also generating a few headlines yesterday was Italy, where the government is said to be considering measures for injecting funds into its domestic banks. After the EU failed to give approval for a bad bank a few months ago, a package of 40bn euros is said to be being considered according to reports on Bloomberg, although that amount is said to be still under discussion.

Wrapping up the price action yesterday, moves in the commodity market largely reflected the poor sentiment all round. WTI finished down -2.75% and back below $47/bbl, with the rest of the energy complex also under pressure. Base metals also edged lower although interestingly iron ore (+6.42%) continues to trade to its own beat. Meanwhile Gold rose another +0.67% to rise to the highest level since July 2014. Elsewhere, there was no hiding in credit markets. In Europe in particular we saw the iTraxx Main and Crossover indices finished 5bps and 26bps wider respectively, while the senior and sub financials indices weakened 10bps and 16bps respectively.

Staying with credit, yesterday we got the latest CSPP holdings data from the ECB (to last Wednesday). The data shows that total holdings now are €4,898m which implies that the latest weekly purchases amounted to €2,650m. As a result that puts the average daily run rate since the CSPP started at €445m.

Before we look at today’s calendar, the economic data is very much taking a back seat at the moment although in truth there wasn’t too much to report yesterday. In Europe the Euro area M3 money supply print increased by three-tenths in May to +4.9% yoy which was a little more than expected. Across the pond the flash June services PMI was unchanged for this month at 51.3 although that was a little disappointing relative to the consensus expectation for a rise to 52.0. Meanwhile the advance goods trade balance for May revealed a slightly widening in the deficit to $60.6bn (from $57.5bn), while the other data of note was the Dallas Fed manufacturing activity index which improved 2.5pts to -18.3 (vs. -15.0 expected).

Looking at the day ahead, the main focus for the market and investors will be the EU leader’s summit in Brussels (a two-day event) where we’ll be awaiting further newsflow with regards to Friday’s referendum result. As mentioned earlier PM Cameron is due to address various EU figureheads. Datawise, this morning in Europe the notable releases come in Germany – where the import price index is due – and in France and Italy where the latest confidence indicators are due out. This afternoon in the US the third revision to Q1 GDP is due out (which is expected to revised up by two-tenths to +1.0% qoq) along with the S&P/Case-Shiller house price index, consumer confidence reading for June and Richmond Fed manufacturing activity index.

ASIAN AFFAIRS

i)Late  MONDAY night/ TUESDAY morning: Shanghai closed UP16.85 POINTS OR 0.58% / /Hang Sang closed DOWN 54.94 OR 0.27%. The Nikkei closed UP 13.93 POINTS OR 0.09% Australia’s all ordinaires  CLOSED DOWN 0.66% Chinese yuan (ONSHORE) closed UP at 6.6453 /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  6.6741 yuan to the dollar vs 6.6453 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

b) REPORT ON CHINA

EUROPEAN ISSUES

This morning Draghi announced the following:

“greater alignment of policies globally to mitigate the spillover risks from ultra-loose monetary measures.“

the world took that as global central bank intervention to save the world.  I do not think so.  I think what he means is that all central banks must meet to figure out what to do now that QE`s globally are not working:

(courtesy zero hedge)

This Is What Draghi Said To Spark Speculation Of Another Global Central Bank Bailout

(courtesy zero hedge)

EU Officials To Unveil ‘Ultimatum’ Blueprint As Final Solution For European Super-State

It appears The Brits may have dodged more than a bullet in their decision to leave The EU. The foreign ministers of France and Germany are reportedly due to reveal a blueprint to effectively do away with individual member states in what is being described as an “ultimatum.” As The Express reports, the shockingly predictable final solution to Europe’s Brexit-driven existential crisis is an apparently long-held plan to morph the continent’s countries into one giant superstate. The radical proposals mean EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels. According to the Daily Express, the nine-page report has “outraged” some EU leaders.

The plans for ‘a closer European Union’ have been branded an attempt to create a ‘European superstate’, as The Daily Mail reports,

Germany’s foreign minister Frank-Walter Steinmeier and his French counterpart Jean-Marc Ayrault today presented a proposal for closer EU integration based on three key areas – internal and external security, the migrant crisis, and economic cooperation.

But the plans have been described as an ‘ultimatum’ in Poland, with claims it would mean countries transfer their armies, economic systems and border controls to the EU.

Controversially member states would also lose what few controls they have left over their own borders, including the procedure for admitting and relocating refugees.

The Express reports that the plot has sparked fury and panic in Poland – a traditional ally of Britain in the fight against federalism – after being leaked to Polish news channel TVP Info.

The public broadcaster reports that the bombshell proposal will be presented to a meeting of the Visegrad group of countries – made up of Poland, the Czech Republic, Hungary and Slovakia – by German Foreign Minister Frank-Walter Steinmeier later today.

Excerpts of the nine-page report were published today as the leaders of Germany, France and Italy met in Berlin for Brexit crisis talks.

In the preamble to the text the two ministers write: “Our countries share a common destiny and a common set of values ??that give rise to an even closer union between our citizens. We will therefore strive for a political union in Europe and invite the next Europeans to participate in this venture.”

Responding to the plot Polish Foreign Minister Witold Waszczykowski raged: “This is not a good solution, of course, because from the time the EU was invented a lot has changed.

“The mood in European societies is different. Europe and our voters do not want to give the Union over into the hands of technocrats.

“Therefore, I want to talk about this, whether this really is the right recipe right now in the context of a Brexit.”

There are deep divides at the heart of the EU at the moment over how to proceed with the project in light of the Brexit vote.

Some figures have cautioned against trying to force through further political integration, warning that to do so against the wishes of the European people will only fuel further Eurosceptic feeling.

Czech minister Lubomír Zaorálek added that the four eastern members had reservations about the proposed common security policy.

Meanwhile Lorenzo Condign, the former director general of Italy’s treasury, has said it is nearly impossible to see Europe opting for more integration at such a time of upheaval.

He said: “It seems difficult to imagine that the rest of the EU will close ranks and move in the direction of greater integration quickly. Simply, there is no political will.

“Indeed, the risk is exactly the opposite – namely that centrifugal forces will prevail and make integration even more difficult.”

It seems the infamous phrase “never let a crisis go to waste” has not been lost on EU officialdom.

end

With England now preparing for its BREXIT, Italy is trying to take advantage of the situation by asking for a 40 billion euro bailout for its banking system.  One problem: direct intervention by the European central bank is not allowed by their rules

(courtesy zero hedge)

The First Casualty Of Brexit: Italy Prepares €40 Billion Bank Bailout

Barely has the market had time to digest last week’s Brexit vote by the UK, a vote which may never actually be implemented if the “sturm und drang” campaign unleashed by the EU and the ECB on UK capital markets succeeds in changing the mind of enough “Leavers” to the point that the entire referendum is called off and Boris Johnson never triggers the Article 50 clause, and already Europe’s most financially troubled nation, Italy, is using Brexit as a pretext to unleash a €40 billion ($44 billion) bailout of its insolvent banks.

As the WSJ reported earlier, the Italian government is considering a capital injection for the country’s banking system, after Italian lenders were hit by a sharp selloff in banking stocks Friday, triggered by Britain’s vote to leave the European Union. Of course, Brexit has nothing to do with it: instead, as everyone knows by now, Italy’s banks are beset with €360 billion (and rising) in bad loans, some 18% of total bank balance sheets, chronically poor profitability amid record-low interest rates, thin capital buffers and high costs. It was precisely these concerns that the recently created Atlante “bad bank” was supposed to address until it became painfully obvious that its total war chest of €4.25 was woefully inadequate to put even the smallest dent on Italian bank insolvency.

According to Ambrose Evans-Pritchard, the country is the first serious casualty of Brexit contagion and a reminder that the economic destinies of Britain and the rest of Europe are intimately entwined. Morgan Stanley warned in a new report that eurozone GDP would contract by almost as much as British GDP in a “high stress scenario”.  “When Britain sneezes, Italy catches a cold. It is the weakest link in the European chain,” said Lorenzo Codogno, former director-general of the Italian treasury and now at LC Macro Advisors.

So, in the spirit of never letting a Brexit crisis go to waste, Italy has decided to use the British referendum as the scapegoat and demand nearly ten time as much in new capital to be used (and abused) as Italy’s banks see fit. As the Telegraph adds, an Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. “Italy will do everything necessary to reassure people,” said premier Matteo Renzi. “This is the moment of truth we have all been waiting for a long time. We just didn’t know it would be Brexit that set the elephant loose,” said a top Italian banker.

According to the WSJ, the chairman of Lower House’s Finance Commission, Maurizio Bernardo, confirmed that the government is studying options to support the banking sector, including a capital injection, and said a law decree “with measures going in that direction” could be approved by the end of this week. So far no decision has been taken as the government is monitoring how markets respond after Friday’s steep downturn.

They said how such an intervention would be implemented is unclear at this stage.  it is also unclear how such a direct state recapitalization of Italian banks using public funds would be permitted by current EU and ECB regulations, which prohibit state bailouts of insolvent banks, although Europe has a long and illustrious history of finding massive loopholes to that particular prohibition. Last but not least it is unclear how existing stakeholders, shareholders, bondholders and uninsured depositors, would be impaired under such a bailout.

Italian officials are studying a direct state recapitalization of the banks, to be funded by a special bond issue, the Telegraph adds. They also want a moratorium of so-called ‘bail-in’ rules and bondholder write-downs, but these steps are impossible under EU laws. Mr Renzi raised the subject urgently at a meeting with German Chancellor Angela Merkel and French president Francois Hollande at a Brexit summit in Berlin on Monday.  “There has to be a suspension of the bail-in rules and state aid rules at the highest political level in the EU, otherwise I don’t see how this can work,” said Mr Codogno.

The new bail-in reform this year has brought matters to a head, catching EU authorities off guard. It was intended to protect taxpayers by ensuring that creditors suffer major losses first if a bank gets into trouble, but was badly designed and has led to a flight from bank shares. The Bank of Italy has called for a complete overhaul of the bail-in rules.

The WSJ adds that the government could invoke an exception to this rule under European law during exceptional market conditions. “I believe the measures could include a mix of public and private funds,” Mr. Bernardo said.

Meanwhile, Italy has certainly picked a great catalyst on which to blame the crisis that has been sweeping its banking system for the better part of the decade. The aftershocks of the U.K.’s vote to leave the EU in a referendum Thursday continued to rattle financial markets Monday, sending European shares sharply lower, with bank and travel stocks leading the declines.

Banca Monte dei Paschi di Siena SpA shares were down 12.2% on Monday, while Intesa Sanpaolo SpA was down 12.5%. Italy’s FTSE MIB lost 12.5% on Friday, with banking stocks the worst hit.

To be sure, yet another bailout would be a welcome move for banks which have been struggling to reduce their massive exposures to soured loans. As reported previously, investors have so far been unwilling to pay the prices banks were asking to sell their bad loans meaning Italian banks are stuck: they can’t mark their bad loan to market without taking a massive hit to capital, and there are no willing buyers at current prices.

How did Italy arrive at the €40 billion numbers? Just like in the case of Neil Kashkari’s “back of the napkin” TARP calculation which estimated US bank needs at $700 billion or 5% of the total $14 trillion in residential and commercial mortgages, so Italy is using a similar rule of thumb.  Consultants have calculated that to bring around €200 billion of bad loans—the gross amount of soured loans where debtors are considered insolvent—closer to market values, the banking system would need a collective write-down of bad loans of about €40 billion. Some estimates place the write-down needed at roughly €30 billion.

And there’s your €40 billion bailout total.

Banks have so far refused to take such a drastic action as they believe the market price of bad loans should be higher, in particular considering the value of collateral backing part of those bad loans. The problem is that in recent weeks most potential hedge fund buyers have balked at these bank offer prices.

For now Italy pretends to be in denial:

“Italian banks have the capacity to face this crisis on their own,” said Giovanni Sabatini, general manager of Italian banking association ABI, commenting on the option of government support to the sector.

However, following the next near-death experience of an Italian bank, the official narrative will quickly change.

Currently, it is practically impossible for Italian banks to raise capital. They are caught in a pincer as the ECB simultaneously demands compliance with tougher capital adequacy buffers, in some case demanding fresh infusions of capital three or four times.  The banking squeeze has become politically explosive in Italy after thousands of small depositors were wiped out at four regional banks late last year. They were classified as junior bondholders, even though most of them were just ordinary savers who did not realize what was being done with their money.

Curiously, according to Codogno, the ECB is “unwittingly destabilizing the banks in an overzealous attempt to make Europe’s banks safer.” It is almost as if Mario Draghi had greenlighted Brexit as the designated “crisis” that would be used to enable the circuitous bailout of Italian banks, the same banks of which Draghi was regulator during his tenure in the Bank of Italy, and whose actions have led to numerous lawsuits questioning the legality of the central bank under Draghi.

Italy is now paralyzed under the existing eurozone structure. Analysts say it desperately needs a US-style bank rescue along the lines of the ‘TARP’ in 2008, which used federal funds to mop up bad assets and stabilize the banks. This is forbidden by the eurozone. The likely outcome is that Italy’s PM Renzi will be “forced” to take matters into his own hands and enact a unilateral sovereign rescue of the Italian banking system in defiance of the EU, unless he wins concessions soon from Brussels. Those who know him say he will not go down in flames for the sake of European ideological purity.

As a result, Brexit will be just the scapegoat used by Renzi and Italy to circumvent any specific eurozone prohibitions. And if it fails, all Renzi has to do is hint at a referendum of his own. Then watch as Merkel scrambles to allow Italy to do whatever it wants, just to avoid the humiliation of a potential “Italeave.”

END

Nigel Farage speaks to the EU parliament who are now sitting on an emergency meeting to discuss the BREXIT.  Farage states that it is only sensible for both parties to come to some sort of trade deal between them due to the huge trade both encompass!

(courtesy zero hedge)

Farage Slams The EU Parliament: “You’re Not Laughing Now Are You?”

In his first appearance in European Parliament since the Brexit vote, UKIP leader Nigel Farage was greeted with raucous jeers and boos (presumably for enabling The Brits to exercise their democratic right to self-determination). Once EU President Martin Schulz had demanded (ironically) that they listen, Farage began his ‘victory’ speech by reminding his so-called peers of their laughter when he first suggested UK should leave The EU –“you’re not laughing now… are you!”

“..and the reason you’re so upset, the reason you’re so angry, the reason you’re not laughing is simple – you as a political project are in denial”

The GBP after initially rising to 1.34 fell to 133.10 to the USA dollar when Corbyn loses a vote of non confidence:

(courtesy zero hedge)

UK Labour Party Leader Corbyn Loses Vote Of No Confidence

Following the resignation of more than 20 members of his shadow cabinet, UK Labour Party Leader Jeremy Corbyn has just lost a vote of no confidence:

  • *U.K.’S CORBYN LOSES LABOUR MOTION BY 172 VOTES TO 40: SKY

Despite his previous statement that he is “not going anywhere” we suspect this will lead to a formal leadership challenge. Notably Cable is weakening on the news as yet another level of uncertainty hits The UK.

end

At the end of European trading session, the dead cat bounce died: big banks ended lower led by Unicredit (Italy), RBS, Credit Suisse, and UBS (Switzerland):

(courtesy zero hedge)

European Dead-Cat-Bounce Dies – Big Banks End Lower

end

 

RUSSIAN AND MIDDLE EASTERN AFFAIRS

Another terrorist attack in Turkey: this time Istanbul’s Ataturk Airport

(courtesy zero hedge)

At Least 10 Killed After Suicide Attackers Set Off Blasts At Istanbul’s Ataturk Airport – Live Feed

Update: in typical fashion for any despotic country, moments ago Turkey’s Anadolu news agency reported that Turkey has issued a gag order on the airport attack. We can only assume that Anadolu was not part of this order…

* * *

Two explosions following heavy gunfire took place moments ago at Ataturk International Aiport in Istanbul, the third busiest airport in Europe. The interior ministry adds that there have been at least 40 inuries and at least 10 people have been confirmed dead.

An eye witness told CNN Turk television that blasts took place shortly after gun fire between police officers and unknown persons near the airport’s car park. The Turkish justice minister says an attacker opened fire with a Kalashnikov rifle. Police fired shots at the suspects at the international terminal’s entry in an attempt to neutralize them, an official cited by Bloomberg said.

Local media reports that both blasts occurred outside as the attackers attempted to enter the terminal. The attackers reportedly detonated the explosive after being fired on by police. Officials say the attackers had not yet gone through the x-ray security checkpoint.

Taxis are reportedly carrying injured people away from the airport. Turkish officials currently suspect that the incident was a suicide attack, and Turkish broadcaster Haberturk reports that roughly 40 people are injured.

Islamist and Kurdish militants have claimed responsibility for several recent bomb attacks in Turkey. The lira trimmed gains after the reports of the explosions and was trading at 1.3 percent higher at 2.9027 per dollar at 10:30 p.m. in Istanbul.

More details from CBS:

Turkish officials say at least two explosions rocked the country’s largest airport in Istanbul on Tuesday, leaving multiple people injured. A Turkish officials says two attackers blew themselves up at the airport after police fired at them.

 

Local media is reporting that gunfire was heard from the car park at Ataturk airport, and that dozens were wounded by the suspected suicide bombing. The airport is a major hub for international travelers.

 

The state-run TRT television said an explosion hit a control point at the international arrival terminal of the airport.

 

Reuters reports the Turkish justice minister as saying there have been several deaths in the incident.

 

ATurkish official said Tuesday it was unclear whether the explosions were caused by bombs or a suicide attack. The official spoke on condition of anonymity in line with government protocol.

 

Taxis were ferrying wounded people from the airport.

 

Turkey has suffered several bombings in recent months linked to Kurdish or Islamic State of Iraq and Syria (ISIS) militants.

 

The attacks have increased in scale and frequency, scaring off tourists and hurting the economy, which relies heavily on tourism revenues.

 

In December, a blast at Istanbul’s Sabiha Gokcen killed one person and wounded another. Both were cleaners. Kurdish rebels later claimed responsibility for the explosion, believed to have been caused by a bomb.

 

EMERGING MARKETS

It is not safe in Rio as the police have not been paid in weeks.  Just look at the signs:

(courtesy zero hedge)

“Welcome To Hell” – Angry Unpaid First Responders Warn “Whoever Comes To Rio Will Not Be Safe”

In May, Brazilian soccer great Rivaldo told tourists to stay away from the Olympics in Rio because of the violence, saying “You’ll be putting your life at risk here.” After that dire warning, the Rio state government declared a state of “public calamity” because it had gone completely broke. The government warned of total total collapse in public security, health, and transport.

As a result of the declared state of calamity, the federal government was supposed to transfer $860 million to the state but the AP reports that as of yesterday the money hadn’t been received. Rio’s acting governor Francisco Dornelles said that there is a concern that the Olympics will be a big failure if things don’t get back on track quickly. “I’m optimistic about the games, but I have to show reality. We can have a great Olympics, but if some steps aren’t taken, it can be a big failure” Dornelles said.

How are people going to feel protected in a city without security” Dornelles added. Which is an excellent question, because the Rio police force rallied against the non-payment of wages and even the lack of basic supplies on Monday.

At the city’s airport a group of protesters spread banners that read “Welcome to hell. Police and firefighters don’t get paid, whoever comes to Rio De Janeiro will not be safe” – probably not the message the world wants to be seeing just over a month away from the Olympics.

Around 300 officers took to the streets to demand their salaries be paid by the government in full, and to express their anger over lack of basic supplies such as water, ink, and even toilet paper. According to RT, one officer said that he had only received half of his pay last month, and hasn’t been paid for overtime in the last five months either.

At the stations we don’t have paper or ink for the printers, there’s no one to come in to clean and some stations don’t have a water supply anymore so the toilets are not functioningsaid a member of an elite police unit entrusted with providing security at the upcoming olympics.

Seen at the airport in Rio today: First responders welcome toutists. A sign of what’s to come during the Olympics?

If the banners and protesting police weren’t enough to scare those who arrived in Rio, someone even put up a warning on the way out of the airport that there are no hospitals either:

Welcome, we don’t have hospitals! – “Aviso” na estrada do Galeão. (Foto: Tiago Bla)

* * *

We don’t want to scare everyone completely with the realities of how poor the Brazilian economy is doing, and the fact that Rivaldo was probably correct with the warning, so as we reminded everyone last time, the silver lining is that Brazil will always remain rich in natural resources.

 end

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

Euro/USA   1.1087 UP .0075 (STILL  REACTING TO BREXIT)

USA/JAPAN YEN 102.31  UP 0.513 (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 1.3340 UP .0122 ( BREXIT)

USA/CAN 1.3027 DOWN .0038

Early THIS TUESDAY morning in Europe, the Euro ROSE by 75 basis points, trading now JUST above the important 1.08 level FALLING to 1.1087; 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 16.85 POINTS OR 0.58%   / Hang Sang CLOSED DOWN 54.84 POINTS  OR 0.27%   AUSTRALIA IS LOWER BY .66%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  as they start their morning/(RELIEF RALLY)

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 13.93 POINTS OR 0.09% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 54.84 POINTS OR 0.27% . ,Shanghai CLOSED UP 16.85 POINTS OR 0.58% / Australia BOURSE IN THE RED: (RESOURCES DOWN)/Nikkei (Japan) CLOSED  IN THE GREEN/India’s Sensex IN THE GREEN

Gold very early morning trading: $1307.80

silver:$17.52

Early TUESDAY morning USA 10 year bond yield: 1.466% !!! UP 1 in basis points from MONDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.28 UP 1 in basis points from FRIDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early TUESDAY morning: 95.93 DOWN 62 CENTS from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

 

END

 

And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield:  3.15% DOWN 15 in basis points from MONDAY

JAPANESE BOND YIELD: -0.215% DOWN 2  in   basis points from MONDAY

SPANISH 10 YR BOND YIELD:1.31%  DOWN 14 IN basis points from MONDAY

ITALIAN 10 YR BOND YIELD: 1.40  DOWN 9 IN basis points from MONDAY

the Italian 10 yr bond yield is trading 9 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -.112% up 1/2 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

 

Euro/USA 1.1053 UP .0041 (Euro =UP 41 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 102.79 UP .991 (Yen DOWN 99 basis points )

Great Britain/USA 1.3342 UP .0121 ( Pound UP 121 basis points/BREXIT DECISION AFFIRMATIVE

USA/Canada 1.3052- DOWN 0.0012 (Canadian dollar UP 12 basis points  AS OIL ROSE  (WTI AT $47.86).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 41 basis points to trade at 1.1053

The Yen FELL to 102.79 for a LOSS of 99 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 121 basis points, trading at 1.3342

The Canadian dollar ROSE by 12 basis points to 1.3052, WITH WTI OIL AT:  $47.85

The USA/Yuan closed at 6.6450/

the 10 yr Japanese bond yield closed at -.215% DOWN 4  IN BASIS  points in yield/

Your closing 10 yr USA bond yield:DOWN 1/4 IN basis points from MONDAY at 1.459% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.274 DOWN 1/4 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, 96.26 DOWN 27 CENTS  ON THE DAY/4 PM

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

London:  CLOSED UP 158.19 OR 2.64%
German Dax :CLOSED UP 178.62 OR  1.93%
Paris Cac  CLOSED UP 104.13  OR 2.61%
Spain IBEX CLOSED UP 189.50 OR 2.48%
Italian MIB: CLOSED UP 498.04 OR 3.30%

The Dow was UP 269.48  points or 1.57%

NASDAQ UP 97.42 points or 2.12%
WTI Oil price; 47.86 at 4:30 pm;

Brent Oil: 48.54

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  64.26 (ROUBLE UP 1 & 28/100 ROUBLES PER DOLLAR FROM FRIDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD RISES TO -.112%  FOR THE 10 YR BOND

.

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

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

WTI CRUDE OIL PRICE 5 PM:48.04

BRENT: 48.70

USA 10 YR BOND YIELD: 1.459% 

USA DOLLAR INDEX: 96.08 down 29 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3342 down .0118 or 118 basis pts.

German 10 yr bond yield at 5 pm: -.112%

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

 

Brexit Hedge Unwind Sparks Volumeless Dead Cat Brounce

Cheer up Brexit…

 

Somone had to do something… and it appears GBJPY was the momentum igniter du jour to save the world…

 

As hedge-unwinds were misunderstood as a bullish signal… in stocks

 

and FX…

 

Notably VXV/VIX had dropped to its lowest level since August crash – and today’s bounce seems like post-event VIX unwinds…

 

Stocks bounced confidently today.. on low volume

 

On the day, we pefectly retraced yesterday’s drop…

 

But post-Brexit things remain ugly…

 

As US equities decoupled from Cable…

 

Notably the S&P surged up to the opening levels from yesterdsay and faded… while VIX had fallen 7 handles!!!

 

Financials had their best day in over 3 months.. but are still down over 6% from Brexit

 

Some context, post-Brexit…

 

Treasury yields rose modestly on the day by around 2bps, but the curve remains drastically flatter post-Brexit…

 

The USD Index dropped modestly on the day as GBPJPY dominated the action once again…

 

Commodities were mixed with gold down, silver up, and with crude rising on the brexit bounce and Norwegian strike ‘hopes’…

 

Finally, another day, another panic bid at the NYMEX close…

END

 

Bellwether stock Dow Chemical fires 2,500 workers:

(courtesy zero hedge)

The “Synergies” Arrive: Dow Fires 2,500

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3 comments

  1. John Pexton · · Reply

    Harvey
    I read your blog every day and would like to thank you for the compilation of the articles which make for any easy way to catch up on everything that the MSM don’t cover. Your coverage of the COMEX data also saves me having to look in every day, like I used to, on the various data the CME produces. I obviously know that you rail against the data which is produced, in particular the exact amounts to the ounce which are deposited particularly when not divisible by kilos. I believe that I know what’s going on. It’s quite simple I think, the rounded numbers are not physical metal but are in fact shares of GLD or SLV which are being bought and registered as inventory. If the bullion banks are permitted to settle using GLD/SLV then why would they not buy them up front to meet demand as happens every time inventory looks to be overrun by demand for “metal” as has been the case more recently with the big delivery months. Otherwise where does the inventory come from? There is one other alternative and that is they are buying 1 oz coins (unlikely for logistic reasons, transport, storage costs etc.). I also believe that GLD shares are nothing but a fiat creation and apparent increased demand and subsequent increased inventory in these ETFs provides nothing more than an illusion of liquidity. Thus the COMEX will never fail because additional inventory can be created by creating more GLD shares with which the bullion banks can settle their trades. The recipient of the shares might think they are actually getting, gold free of storage costs, but of course unless they are a GLD entity all they will ever get back is fiat in exchange. Thus the bullion banks protect what little real inventory they have. (I think this is largely traded around in a circle jerk as has been pointed out by Craig Hemke, again giving the impression of liquidity of the real thing) Customers pretty much never actually get any gold at all and the fractional reserve weakness of the exchange will never be exposed. The recent increases in GLD inventory (increased number of shares) would also seem to correlate to increased inventory related delivery demand at the COMEX and not with price. Perhaps you might like to look into any possible correlation?
    Cheers
    John

    Like

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