July 15/Military coup in Turkey/Turkish lira crashes/Shots fired!/Gold rises by 10 dollars immediately on the news!/The open interest surprisingly rises today despite the whack yesterday/USA industrial production falters/New York empire manufacturing index falls badly/ Business inventories to sales shoots up to 1.40 indicating severe USA recession/

Gold:1328.30 DOWN $3.00

Silver 20.10  DOWN 18 cents


In the access market 5:15 pm

Gold: 1337.25  (Turkish military)

Silver: 20.22


And now for the July contract month

For the July gold contract month,  we had another monstrous  352 notices served upon for 35,200 ounces.  The total number of notices filed so far for delivery:  5032 for 503,200 oz or 15.6576 tonnes

In silver we had 190 notices served upon for 950,000 oz.  The total number of notices filed so far this month for delivery:  1780 for 8,900,000 oz

The following is what I said yesterday and it fully pertains to events today:

“The crooks will now do anything to orchestrate a sell off in our precious metals.  They are very concerned about silver as they lean on gold hoping to generate a waterfall in price.  The bankers are massively short comex paper and need lower prices so as to cover and ameliorate those losses.”

Everyday that statement seems to be true.  Central bankers do not have any above ground supplies of silver like they do with respect to gold.  This is their Achilles heal and it will bring them down!”

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 305.20 tonnes for a gain of 2  tonnes over that period


In silver, the total open interest ROSE BY 840 contracts UP to 217,216, AND STILL CLOSE TO AN  ALL TIME RECORD. THE OI ROSE IN CONTRAST TO THE  PRICE OF SILVER WHICH FELL BY 9 CENTS IN YESTERDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.086 BILLION TO BE EXACT or 155% of annual global silver production (ex Russia &ex China).

In silver we had 190 notices served upon for 950,000 oz.

In gold, the total comex gold FELL BY A HUMONGOUS 12,815 contracts despite gold’s FALL in price YESTERDAY to the tune of $11.30. The total gold OI stands at 609,352 contracts. The bankers are to be congratulated for doing another fine criminal job in fleecing unsuspecting GOLD longs. BUT NOT SO FAST WITH RESPECT TO SILVER


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


we had no  changes in gold inventory./


the GLD is a massive fraud and a massive farce on investors!

Total gold inventory rest tonight at: 962.85 tonnes


we had no changes into the SILVER INVENTORY TO THE SLV

Inventory rests at 348.580 million oz.

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

1. Today, we had the open interest in silver ROSE by 840 contracts UP to 217,216 as the price of silver FELL BY 9 cents with YESTERDAY’S trading. The gold open interest fell by 12,815 contracts down to 609,352 as  the price of gold FELL by $11.10 YESTERDAY.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge


i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 0.278 POINTS OR 0.01%/ /Hang Sang closed UP 98.19 OR 0.46%. The Nikkei closed UP 111.96 POINTS OR 0.68% Australia’s all ordinaires  CLOSED UP 0.33% Chinese yuan (ONSHORE) closed UP at 6.6831 /Oil FELL to 45.40 dollars per barrel for WTI and 47.20 for Brent. Stocks in Europe ALL IN THE RED. Offshore yuan trades  6.6925 yuan to the dollar vs 6.6831 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHTLY AS A LITTLE MORE USA DOLLARS LEAVES THEIR SHORES. 




i)China even after a huge influx of cash in June, and a big devaluation of about 10% from the start of the year, saw their economy just muddling along:

a) Chinese GDP rose to 6.7% from expected 6.6%

b)Retail sales better than expected at 10.6%

c) Industrial Production beat at 6.2%

take these figures with a grain of salt!

( zero hedge)

ii)How did China grow? The added a huge amount of cash to stimulate their economy. This will not last

( zero hedge)


i)Horrific event in Nice France last night:

Two commentaries

( zero hedge)

ii)Look who is lining up to be first in order to pass a trade deal with the UK. You will see almost all countries rush to make deals.  The BREXIT will have no effect on England and will only benefit them as I have outlined to you.

( zerohedge)


Oh my goodness! We have just got a military coup in Turkey: Martial law declared

(courtesy zero hedge)


Global corporate defaults hit 100 and is on a pace to surpass its financial crisis record:

( zero hedge)


(courtesy zero hedge)


none today


i)John Hathaway writes that gold is underowned . We are in a period of extreme global problems and now is the time to accumulate gold.

( John Hathaway/GATA)

ii)After 8 months the gold monetization scheme yields just 3 tonnes.  Actually I am even surprised that they received that quantity.  Indians know better not to receive paper gold for their treasures.

( Times of India/GATA)

iii)This is the story that has propelled markets around the world for the past 4 days: the introduction of helicopter money.  Generally this should be good for gold but the bankers have other thoughts for us:

( Bloomberg/GATA)

iv)Despite massive manipulation in gold and silver, this correlation is quite fascinating.The current TIPS yield is now close to zero at  only 3 basis points.

Here is the chart correlation:

(courtesy zero hedge/Gavekal)


i)Retail sales jump but the rise was mainly on a downward revision in the previous month. Still at recessionary levels;

( zerohedge)


ii)Yesterday we had surging PPI: today a surging CPI as the core jumps to a near 4 yr high as rent rises along with education and medical care.

The Fed has a problem..

( zero hedge)


iii)The all important New York, Empire manufacturing index drops as new orders tumble and worse: labour conditions fall apart..big problems in the New York mfg area:

( Empire /NY mfg index/zero hedge)

iiib)this is a biggy!!

USA industrial production declines for the 10th straight month.It is always manufacturing that carries a country and thus the USA is faltering!

( zero hedge)

iiic) another biggy!

The following is one of my favourite indicators predicting the health of the USA economy. The higher the Business inventories/sales ratio, the greater the chance for a severe recession.  The ratio just hit a high of 1.40 signifying a deep recession is forthcoming

( zero hedge)

iii d) The University of Michigan Consumer Expectations or consumer confidence falls to a two yr low:

( zero hedge)

iv)The credit manager’s report shows it’s index crashing to 7 yr lows as new credit is not forthcoming.

( zero hedge)

v)Russia is reportedly set to release Clinton’s intercepted emails through Wikileaks:

Let us head over to the comex:

The total gold comex open interest FELL TO AN OI level of 609,352 for a  LOSS of 12,815 contracts DESPITE  THE FACT THAT THE PRICE OF GOLD FELL BY $11.10 with respect to YESTERDAY’S TRADING. We are now in the non active month of July. Somebody big is continually standing for the gold metal as July is generally a poor delivery month. The open interest for the front July contract stands at 420 for a LOSS of 2 contracts. We had 3 notices filed on yesterday, so we gained 1 contract or an additional 100 gold ounces that will stand for delivery in this non active month of July. We  are again witnessing the same scenario as in May and June whereby the front delivery month increases in OI standing for metal or a slight contraction.  The next big active contract month is August and here the OI fell by 28,440 contracts down to 321,133  as this month continues its wind down until first day notice for the August contract, Friday,July 29/2016: 2 weeks away.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was  GOOD at 231,209. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was excellent at 304,515 contracts.The comex is not in backwardation.
Today, we had 352 notices filed for 35,200 oz in gold
And now for the wild silver comex results. Total silver OI ROSE by 840 contracts from 216,376 UP TO 217,216.  We are still close to the new all time record high for silver open interest set on June 24. The front active delivery month is July and here the OI fell BY 173 contracts down to 927. We had 207 notices served on YESTERDAY so we gained 34 contracts or 170,000 additional silver ounces that will stand for delivery.The next non active month of August saw it’s OI rose by 18 contracts up to 508. The next big active month is September and here the OI ROSE by 411 contracts UP to 157,573.   The volume on the comex today (just comex) came in at 42,244 which is very good. The confirmed volume yesterday (comex + globex) was EXCELLENT at 67,877. Silver is not in backwardation. London is in backwardation for several months.
We had 190 notices filed for 950,000 oz. in silver JULY contract month
:INITIAL standings for JULY
July 15.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
nil oz
Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz 
 95,863.347 oz
No of oz served (contracts) today
352 notices 
35,200 oz
No of oz to be served (notices)
68 contracts
6800 oz
Total monthly oz gold served (contracts) so far this month
5032 contracts (5,032,000 oz)
(15.6576 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month   226,500.6 OZ

Today we had 0 dealer DEPOSIT
total dealer deposit: NIL   0z
Today we had 0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had one customer deposit:
i) Into HSBC: 95,863.347 oz
Total customer deposit: 95,863.347 oz
Today we had 0 customer withdrawal:
Total customer withdrawals  nil   oz
Today we had 0  adjustments:
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 352 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 209 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the JULY contract month, we take the total number of notices filed so far for the month (5032) x 100 oz  or 503,200 oz , to which we  add the difference between the open interest for the front month of JULY (420 CONTRACTS) minus the number of notices served upon today (352) x 100 oz   x 100 oz per contract equals 510,000 oz, the number of ounces standing in this active month. 
Thus the INITIAL standings for gold for the JULY. contract month:
No of notices served so far (5032) x 100 oz  or ounces + {OI for the front month (420) minus the number of  notices served upon today (352) x 100 oz which equals 509900 oz standing in this non   active delivery month of JULY  (15.863 tonnes).
We  gained 100 gold ounces that will stand for metal in this non active month of July.
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 now have partial evidence of gold settling for last months deliveries We now have  +  6.889 TONNES FOR MAY + 49.09 TONNES FOR JUNE +  15,866 TONNES FOR JULY + 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; june 29 .036 tonnes; JUNE 30 2.49 /july 1 17.78 tonnes = 45.718 tonnes still standing against 46.653 tonnes available.
 Total dealer inventor 1,532,061.922 tonnes or 47.653 tonnes
Total gold inventory (dealer and customer) =9812,213.768 or 305.20 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 305.20 tonnes for a  gain of 2  tonnes over that period. 



And now for silver
JULY INITIAL standings
 July 15.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 858,631.546 OZ
Deposits to the Dealer Inventory
519,385.770 oz
Deposits to the Customer Inventory
 1,239,931.479 OZ
No of oz served today (contracts)
(950,000 OZ)
No of oz to be served (notices)
737 contracts
3,685,000 oz)
Total monthly oz silver served (contracts) 1780 contracts (8,900,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  4,552.707.0 oz
today we had 1 deposit into the dealer account
 i) into CNT: 519,385.770 oz
total dealer deposit :519,385.770 oz
we had 0 dealer withdrawal:
total dealer withdrawals:  NIL oz
we had 2 customer deposits:
i) Into CNT: 80,837.709 oz
ii) Into Scotia: 1,159,073.770  oz
Total customer deposit: 1,239,931.479 oz
We had 1 customer withdrawals
i) Out of DELAWARE: 198,126.536 oz
ii) Out of Scotia:  660,505.01 oz
total customer withdrawals:858,631.546. oz
 we had 1 adjustment
i) out of CNT:  154,218.600 oz was adjusted out of the customer and this landed into the dealer account of CNT
The total number of notices filed today for the JULY contract month is represented by 190 contracts for 950,000  oz. To calculate the number of silver ounces that will stand for delivery in JULY., we take the total number of notices filed for the month so far at (1780) x 5,000 oz  = 8,900,000 oz to which we add the difference between the open interest for the front month of JULY (927) and the number of notices served upon today (190) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the JULY contract month:  1780(notices served so far)x 5000 oz +(927 OI for front month of JULY ) -number of notices served upon today (190)x 5000 oz  equals  12,585,000 oz  of silver standing for the JULY contract month.
We gained 34 contracts or 170,000 additional oz that will  stand for delivery in this active month of July.
Total dealer silver:  27.180 million (close to record low inventory  
Total number of dealer and customer silver:   152.701 million oz (close to a record low)
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 NEAR  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.
And now the Gold inventory at the GLD
July 15./no change in gold inventory at the GLD/Inventory rests at 962.85 tonnes
July 14/a good sized withdrawal of 2.37 tonnes from the GLD/this would be a “paper withdrawal”/inventory rests tonight at 962.85 tonnes..
July 13/ we had a huge paper withdrawal of 15.98 tonnes of gold from the GLD/inventory rests at 965.22 tonnes.
July 12/we had no changes in gold inventory at the GLD/Inventory rests at 981.20 tonnes
July 11/no changes in gold inventory at the GLS/Inventory rests at 981.20 tonnes
JULY 8/ A  good sized deposit of 2.91 tonnes into the GLD/Inventory rests at 981.20
July 7/a good sized withdrawal of 4.15 tonnes from the GLD/Inventory rests at 978.29 tonnes (this was nothing but a paper entry/no physical moved)
July 5/no change in inventory/rests tonight at 982.44
July 1/a huge change in the gold inventory/ a deposit of 3.86 tonnes/rests tonight at 953.91 tonnes
JUNE 30/no change in gold inventory /inventory rests tonight at 950.05 tonnes
June 29/ a good sized deposit of 2.67 tonnes/inventory rests at 950.05 tonnes
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
July 15 / Inventory rests tonight at 962.85 tonnes


Now the SLV Inventory
July 15/ no change in  silver inventory at the SLV/Inventory rests at 348.580 million oz
July 14/no changes in silver inventory at the SLV/Inventory rests at 348.580 million oz/
July 13./ a huge addition of 5.187 million oz into silver inventory at the SLV/ this is a paper addition as inventory rests at 348.580 million oz
July 12/ a huge addition of 1.94 million oz into silver inventory at the SLV/a “paper” addition/inventory rests at 343.393 million oz
July 11/no changes in silver inventory/rests tonight at 341.453 million oz
JULY 8/no change in silver inventory/rests tonight at 341.453 million oz
July 7./no change in silver inventory/inventory rests at 341.453 million oz
july 5/no change in silver inventory/inventory rests at 333.554 milllion oz
july 1/no change in silver inventory/inventory rests at 333.544 million oz
JUNE 30/no changes in silver inventory/inventory rests at 333.544 million oz
June 29/ a small deposit of 760,000 oz/Inventory rests tonight at 333.544 million oz/
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
July 15.2016: Inventory 348.580 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 3.5 percent to NAV usa funds and Negative 3.8% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 58.6%
Percentage of fund in silver:40.2%
cash .+1.2%( July 15/2016). 
2. Sprott silver fund (PSLV): Premium falls  to -0.27%!!!! NAV (July15/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.13% to NAV  ( July 15/2016)
Note: Sprott silver trust back  into NEGATIVE territory at -.27% /Sprott physical gold trust is back into positive territory at +0.13%/Central fund of Canada’s is still in jail.



At 3:30 pm we receive the COT report which gives us position levels of our major players.

Let us head over first to our Gold COT:



Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
378,081 80,618 79,128 123,258 448,710 580,467 608,456
Change from Prior Reporting Period
-11,509 6,991 -9,729 -477 -15,232 -21,715 -17,970
202 93 101 56 62 314 214
Small Speculators  
Long Short Open Interest  
52,553 24,564 633,020  
1,764 -1,981 -19,951  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, July 12, 2016

Our Large Speculators:

Those large specs that have been long in gold pitched a huge 11509 contracts from their long side (as they were fleeced by the bankers)

Those large specs that have been short in gold added 6991 contracts from their short side.


Our commercials;

Those commercials that have been long in gold pitched 477 contracts from their long side

Those commercials that have been short in gold covered a huge 15,232 contracts from their short side.


Our small specs:

Those small specs that have been long in gold added 1764 contracts to their long side.

Those small specs that have been short in gold covered 1981 contracts from their short side.


bullish as the commercials go net short by 14,800 contracts.


And now our silver COT


Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
114,376 26,724 19,615 54,035 154,155
3,028 1,130 1,207 -1,683 -331
112 60 40 39 43
Small Speculators Open Interest Total
Long Short 214,617 Long Short
26,591 14,123 188,026 200,494
718 1,264 3,270 2,552 2,006
non reportable positions Positions as of: 171 127
Tuesday, July 12, 2016   © SilverSeek.c

Our large speculators:

Those large specs that have been long in silver added 3028 contracts to their long side

Those large specs that have been short in silver added 1130 contracts to their short side


Our commercials:

Those commercials that have been long in silver pitched 1683 contracts from their long side

Those commercials that have been short in silver covered a tiny 331 contracts from their short side


Our small specs

Those small specs that have been long in silver added 718 contracts to their long side

Those small specs that have been short in silver added 1764 contracts to their short side



commercials go net short by 1300 contracts.  If you compare with gold you can see that the commercials are trapped!






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

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

Gold Falls After Central Bank’s Surprise Move

GoldCore's picture

The  gold price continued to fall overnight after the Bank of England, contrary to expectations, kept interest rates unchanged at yesterday’s meeting.

The market had earlier priced in an over 80 percent chance of a 25-basis point cut in the July meeting, though some had reckoned that the BoE may prefer to wait till August when more data will be available to assess the impact from the Brexit decision.

Gold prices have rallied more than 25% since the beginning of 2016, but is the rally now over, or would it be foolish not to buy gold?

Brexit isn't the only market upset to affect the gold price, with interest rates and currency changes impacting demand

To help answer that question let’s take a look at what has driven the gold price higher in 2016.

One of the key drivers continues to be interest rates.

Demand for gold typically climbs when interest rates are low. Although gold has no yield, it tends to offer investors a better place to park their money when returns from bonds and cash savings are poor – as they are when rates are low.

At the end of last year, it seemed the tide was turning, with the US Federal Reserve increasing rates for the first time in seven years. But the Fed folded on a rate rise in June and expectations for further hikes this year have receded.

Meanwhile, the Bank of England this week dashed expectations that it would slash rates below 0.5pc over fears Brexit could plunge the economy into recession.

An article in The Telegraph looks at this and the 4 other key forces driving the rally in gold.

You can read the full article here 


Gold and Silver Bullion – News and Prices

Gold slips, on track for first weekly decline since May (Reuters)

Gold Heads for First Weekly Loss Since May as Haven Allure Fades (Bloomberg)

Gold marks 5th loss in six sessions (MarketWatch)

Nice terror attack: Lorry driver kills 84 during rampage at Bastille Day celebrations (Telegraph)

Selling spree: Price spike dulls gold’s luster for Indian buyers (Reuters)

The Fundamental Reason The Silver Price Will Explode Much Higher Than Gold (Silverseek.com)

Could Italy Bring Down The Euro? (Zerohedge)

The Bull Market You Haven’t Seen (Bloomberg)

Gold Prices (LBMA AM)

15 July: USD 1,330.15, EUR 1,194.79 & GBP 994.15 per ounce
14 July: USD 1,325.705, EUR 1,192.99 & GBP 1,001.96 per ounce
13 July: USD 1,340.25, EUR 1,211.45 & GBP 1,009.74 per ounce
12 July: USD 1,352.85, EUR 1,217.84 & GBP 1,029.11 per ounce
11 July: USD 1,358.25, EUR 1,231.66 & GBP 1,059.95 per ounce
08 July: USD 1,356.10, EUR 1,224.83 & GBP 1,047.45 per ounce
07 July: USD 1,367.10, EUR 1,233.40 & GBP 1,052.80 per ounce

Silver Prices (LBMA)

15 July: USD 20.14, EUR 18.08& GBP 15.06 per ounce
14 July: USD 20.25, EUR 18.23& GBP 15.15 per ounce
13 July: USD 20.29, EUR 18.31 & GBP 15.25 per ounce
12 July: USD 20.35, EUR 18.35 & GBP 15.47 per ounce
11 July: USD 20.47, EUR 18.53 & GBP 15.78 per ounce
08 July: USD 19.72, EUR 17.82 & GBP 15.20 per ounce
07 July: USD 19.95, EUR 18.00 & GBP 15.31 per ounce

Recent Market Updates

– “We Are On the Cusp of an Explosion in the Silver Price” – John Embry
– Stocks Rally – Is Brexit Systemic Risks Contained?
– Britain has a new prime minister – here’s what that means for you
– Metals Caught Between Global Gloom, U.S. Job Gains as Gold Slips
– Central Bank Resumes Monthly Gold Buying in Bid to Diversify Reserves
– Property Fund Turmoil in the UK has Eerie Echoes of Bear Stearns
– “In Gold We Trust” Annual Report – New Bull Market “Emerging”
– 3 Charts Show “How Precious Brexit Is” for Gold and Silver Bullion
– Gold, Silver Best Performing Assets In H1, 2016 – Up 26% & 38%
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED


John Hathaway writes that gold is underowned . We are in a period of extreme global problems and now is the time to accumulate gold.

(courtesy John Hathaway/GATA)

John Hathaway: A momentous period for gold, weeks where decades happen


10:40a ET Thursday, July 14, 2016

Dear Friend of GATA and Gold:

In his investor letter for the second quarter, Tocqueville Gold Fund manager John Hathaway writes: “We have entered a momentous period for gold: ‘weeks where decades happen.’

“The rewards of gold exposure, in our opinion, promise to be of historic magnitude. At such a moment it would be counterproductive for investors to dwell upon issues of market timing. Gold is extremely underowned, and therefore likely to react dynamically to even modest inflows. Despite strong recent gains, we believe that the current alignment of political and economic factors is unusually compelling. In our view, substantial gains lie ahead.”

Hathaway’s letter is posted at the Tocqueville Internet site here:


CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


After 8 months the gold monetization scheme yields just 3 tonnes.  Actually I am even surprised that they received that quantity.  Indians know better not to receive paper gold for their treasures.

(courtesy Times of India/GATA)

After 8 months India’s government has paperized only 3 tonnes of gold


Government Mobilizes 3.1 Tonnes of Gold under Monetization Scheme

By the Press Trust of India
via The Times of India, Mumbai
Thursday, July 14, 2016

NEW DELHI — Government today said it has netted 3.1 tonnes of idle household and temple gold under the monetization scheme since its launch in November 2015.

“As of now 3.1 tonnes of gold have been deposited under the Gold Monetization Scheme,” the joint secretary in the Finance Ministry, Saurabh Garg, said.

This is much lower than 800-1,000 tonnes of annual gold imports, he said, adding that estimates say 300 tonnes are for investments, while the balance is jewellery.

“We are hoping that the investment part can shift to the Gold Monetisation Scheme,” he added.

Under the scheme, banks are authorized to collect gold for up to 15 years to auction them off or lend to jewellers from time to time.

Depositors will earn up to 2.50 percent interest per annum, a rate lower than savings bank deposits.

Currently, there are 46 assaying and hallmarking centers qualified to act as collection and purity testing centers for handling gold under the scheme.

All gold deposits under the scheme have to be made at centers. Banks can also accept deposits at designated branches, especially from larger depositors.

India imports about 1,000 tonnes of gold every year and the precious metal is the second-highest component of the imports bill after crude oil. An estimated 20,000 tonnes of gold are lying with households and temples.


(courtesy Bloomberg/GATA)

Bernanke recommended ‘helicopter money’ option to Japan


Bernanke Floated Japan Perpetual Debt Idea to Abe Aide Honda

By Toru Fujioka and Keiko Ujikane
Bloomberg News
Thursday, July 14, 2016

Ben S. Bernanke, who met Japanese leaders in Tokyo this week, had floated the idea of perpetual bonds during earlier discussions in Washington with one of Prime Minister Shinzo Abe’s key advisers.

Etsuro Honda, who has emerged as a matchmaker for Abe in corralling foreign economic experts to offer policy guidance, said that during an hour-long discussion with Bernanke in April the former Federal Reserve chief warned there was a risk Japan at any time could return to deflation. He noted that helicopter money — in which the government issues non-marketable perpetual bonds with no maturity date and the Bank of Japan directly buys them — could work as the strongest tool to overcome deflation, according to Honda. Bernanke noted it was an option, he said. …

… For the remainder of the report:



Despite massive manipulation in gold and silver, this correlation is quite fascinating.The current TIPS yield is now close to zero at  only 3 basis points.

Here is the chart correlation:

(courtesy zero hedge/Gavekal)


Is This The Critical Threshold For The Gold Rally To Continue?

Amid Gold’s worst week (-2.3%) in the last seven weeks, Gavekal Capital’s Eric Bush explains what he is looking at to confirm the precious metal rally’s continuation

10-year TIPS yield briefly went negative last week and the current yield is just 3 bps. TIPS yields have fallen around 75 basis points since the beginning of the year. This decline in yield has been accompanied by a rally in gold from $1060 to $1342.

One of the more persistent relationships in the market place since 2003 has been this negative correlation between TIPS yields and gold prices.

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If history is any guide TIPS yields will probably be negative if gold rallies above $1400.

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Source: Gavekal Capital blog


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




2 Nikkei closed UP  111.96 OR 0.68% /USA: YEN RISES TO 105.79

3. Europe stocks opened ALL IN THE RED   /USA dollar index DOWN to 95.96/Euro UP to 1.1137

3b Japan 10 year bond yield: RISES TO -.226%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 105.74

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  45.40  and Brent: 47.20

3f Gold UP  /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 and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to -.023%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 7.41%/: 

3j Greek 10 year bond yield RISE to  : 7.85%   (YIELD CURVE NOW  FLAT)

3k Gold at $1333.55/silver $20.20(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 27/100 in  roubles/dollar) 63.19-

3m oil into the 45 dollar handle for WTI and 47 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 SMALL REvaluation UPWARD from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9788 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0901 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.


3r the 10 Year German bund now NEGATIVE territory with the 10 year RISES to  -.023%

/German 10+ year rate  negative%!!!


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 1.532% early this morning. Thirty year rate  at 2.259% /POLICY ERROR)

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

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


Global Stock Rally Halted In Aftermath Of Latest French Terror Attack

The tremendous rally of the past 4 days that has sent global stocks soaring in recent days has finally been capped and European shares, S&P futures are all modestly lower following a deadly terror attack in Nice, France. Meanwhile Asian stocks rose as Chinese economic data beat estimates, with Q2 GDP rising by 0.1% more than the estimated 6.6% on the back of stronger housing data. European stocks halted this week’s rally as French shares retreated following a deadly terror attack in Nice.

As expected in the aftermath of another tragic terrorist attack on French soil, which killed at least 80 and prompted France to extend a state of emergency, travel and leisure shares were among the worst performers on the Stoxx Europe 600 Index. The MSCI Asia Pacific Index briefly exceeded its highest close of the year as the Hong Kong-listed stocks of Chinese companies extended their biggest weekly gain in four months and Taiwan’s equities entered a bull market. Japan’s Topix index capped its best week since 2009 and the yen slid on prospects for stimulus: Japan’s currency has now seen the biggest weekly drop in the 21st century on the back of rising chatter of helicopter money. The pound strengthened, oil fell and gold was poised for its first weekly loss since May.

The impact of the Nice terror attack on markets is not expected to have a lasting impact: past terror attacks on financial markets has typically proved short-lived and actually led to market rebounds. Multiple attacks in Paris in November that left 130 dead, as well as bombings that killed 191 people on Madrid commuter trains in March 2004 and left more than 50 dead in London in July 2005 spurred selloffs in equities that were erased days or weeks later.

“The attack in Nice is of course truly a horrible accident, but in terms of the market reaction, these kinds of shocks do not last very long,” said Michael Kapler, an equities manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “There are rumors that the Japanese central bank will deliver the next liquidity push to the markets, and we are expecting the Bank of England to ease in August. The focus is there, as well as on the earnings season both in Europe and the U.S.”

More than $4 trillion has been added to the value of global equities since June 27 as the U.S. economy outperforms projections and speculation mounts that policy makers will take steps to limit the fallout from the U.K.’s vote to leave the European Union.

“We’re seeing better-than-expected growth, particularly in the U.S. economy, and we’ve got a higher likelihood of central bank stimulus,” Michael McCarthy, the Sydney-based chief market strategist at CMC Markets, told Bloomberg Radio. “These ideas are opposing, but at the moment they are both supporting equities. At some point there is going to have to be a resolution of that.”

But not yet, and as the chart below shows, global equities are now valued at $64.5 trillion, the highest level of 2016 as central banks around the globe scramble to preserve confidence in capital markets as the social fabric frays around the globe.

In the main economic news overnight, China’s economic growth held at 6.7% in the second quarter, beating the 6.6% consensus expansion forecast. Figures for factory output, retail sales and new lending also topped estimates, while investment slowed. The U.S. also has a data dump coming on Friday, with gauges of household spending, inflation, industrial production and consumer confidence scheduled

The Stoxx Europe 600 Index fell 0.2 percent as of 9:02 a.m. London time, trimming this week’s gain to 3.2 percent. France’s CAC 40 Index lost 0.3 percent as hotel operator Accor SA slid more than 3 percent. Swatch Group AG tumbled 12 percent after the watchmaker said first-half profit plunged 50 percent to 60 percent, the most in at least a decade. The MSCI Asia Pacific Index added 0.4 percent, boosting this week’s gain to more than 4 percent. Taiwan’s Taiex index extended its advance from a three-year low in August to more than 20 percent, meeting the common definition of a bull market. The Hang Seng China Enterprises Index boosted this week’s advance to more than 6 percent and the Shanghai Composite Index held near a three-month high.

Futures on the S&P 500 Index fell 0.1%, after the benchmark ended the last session at a record. Larry Fink, who runs the world’s largest asset manager as chief executive officer of BlackRock Inc., said Thursday that the stock rally is unlikely to be sustained without support from corporate profits. The earnings season got off to a promising start this week, with JPMorgan Chase & Co. and Alcoa Inc. exceeding estimates. Wells Fargo & Co. and Citigroup are among firms posting results on Friday.

Global Market Snapshot

  • S&P 500 futures down 0.2% to 2153
  • Stoxx 600 down 0.4% to 337
  • FTSE 100 down 0.4% to 6630
  • DAX down 0.3% to 10038
  • German 10Yr yield up less than 1bp to -0.04%
  • Italian 10Yr yield up less than 1bp to 1.22%
  • Spanish 10Yr yield up less than 1bp to 1.17%
  • S&P GSCI Index down 0.5% to 360.5
  • MSCI Asia Pacific up 0.4% to 134
  • Nikkei 225 up 0.7% to 16498
  • Hang Seng up 0.5% to 21659
  • Shanghai Composite up less than 0.1% to 3054
  • S&P/ASX 200 up 0.3% to 5430
  • US 10-yr yield down less than 1bp to 1.53%
  • Dollar Index down 0.11% to 95.97
  • WTI Crude futures down 1% to $45.21
  • Brent Futures down 1% to $46.88
  • Gold spot down 0.2% to $1,333
  • Silver spot down 0.6% to $20.20

Top Global News

  • Monsanto’s Choice: Live the Dream With BASF, or Just Cash Out: Bayer boosted its bid for Monsanto by $3 a share to $125
  • Blackstone to Purchase 32% Stake in Stockholm Landlord Carnegie: To pay 100 Swedish kronor ($11.8) each
  • Microsoft Wins Protection for E-Mails Stored Outside U.S.: Government warned of loophole in favor of hackers, fraudsters
  • What’s Next for Google as Europe’s Antitrust Complaints Increase: Co. has weeks to appeal but conversations could last years
  • Technology Leaders Call Trump a ‘Disaster’ for U.S. Innovation: Twitter’s Williams, Box’s Levie among 100-plus who sign letter
  • Xerox Said to Reject Merger Deal With R.R. Donnelley: WSJ: Proposal called for deal structured as Reverse Morris Trust
  • Mastercard Seeks to Boost Business in Germany: Reuters: Revenue in Brazil is 5x Germany’s
  • Tesla in Talks for Store in Korea’s Biggest Mall, Shinsegae Says: Starfield Hanam complex covers 70 football fields in area
  • S. Korea FTC May Impose 1t Won Fine on Qualcomm, Maeil Reports: FTC to decide on the size of fine for antitrust violations after final review

* * *

Looking at regional markets, Asian equities were initially buoyed by a plethora of strong Chinese data, in which GDP, Industrial Production and Retail Sales beat expectations. While firm liquidity and lending data releases indicated that tighter liquidity conditions had eased. As such, this has subsequently dictated price action with the ASX 200 (+0.4%), Hang Seng (+0.3%) and Nikkei 225 (+0.6%) all higher despite coming off best levels (some attributing the move to Europe reacting to the terror attacks in Nice) with the latter also supported by a softer JPY as well as index heavyweight Fast Retailing (+18%) hitting limit up following a positive earnings update. The Shanghai Comp (-0.01%) underperformed as the data would reduce the need or likelihood of further easing. JGBs fell overnight amid spill over selling in USTs, coupled with the rise in yields across the curve, although the 10-yr benchmark pulled off worst levels having found support at the 153.00 level.

Chinese Data Recap:

GDP (Q2) Y/Y 6.7% vs. Exp. 6.6% (Prey. 6.7%)

  • GDP SA (Q2) Q/Q 1.8% vs. Exp. 1.6% (Prey. 1.1%, Rev. 1.2%)
  • GDP YTD (Q2) Y/Y 6.7% vs. Exp. 6.6% (Prey. 6.7%)

Industrial Production (Jun) Y/Y 6.2% vs. Exp. 5.9% (Prey. 6.0%)

  • Industrial Production YTD (Jun) Y/Y 6.0% vs. Exp. 5.9% (Prey. 5.9%) 

Retail Sales (Jun) Y/Y 10.6% vs. Exp. 9.9% (Prey. 10.0%)

  • Retail Sales YTD (Jun) Y/Y 10.3% vs. Exp. 10.2% (Prey. 10.2%)

New Yuan Loans (CNY)(Jun) 1.38t1n vs. Exp. 1tIn (Prey. 985.5bIn)

  • Aggregate Financing (CNY)(Jun) 1.63tIn vs. Exp 1.1tIn (Prey. 659.9bIn)
  • Money Supply MO (Jun) Y/Y 7.2% vs. Exp 6.1% (Prey. 6.3%)
  • Money Supply M1 (Jun) Y/Y 24.6% vs. Exp. 22.6% (Prey. 23.7%)
  • Money Supply M2 (Jun) Y/Y 11.8% vs. Exp. 11.4% (Prey. 11.8%)
  • Fixed Assets Ex Rural YTD (Jun) M/M 9.0% vs. Exp. 9.4% (Prey. 9.6%) PBoC to inject CNY

Top Asian News

  • China’s Economy Stabilizes as Consumer Spending Perks Up: Retail sales and factory output beat estimates in June
  • Yen Heads for Biggest Weekly Drop Since 1999 on Stimulus Bets: Currency pivots from June’s best performer to July’s worst
  • Singapore Home Sales Fell in June to Lowest Level in Four Months: Developers sold 536 units last month versus 1,058 in May
  • Infosys Cuts Sales Outlook as Companies Curtail IT Spending: Shares slump as much as ~11% after quarterly sales disappoint
  • Line Shares Send Positive Message at Their Market Debut: Stock soars as much as ~52% in Tokyo
  • Samsung in Talks With BYD on Buying Stake in Electric-Car Maker: BYD says Samsung has been actively pushing talks forward
  • Fast Retailing Surges Most in 7 Years After 3Q Profits Beat Est.: Shares rise as much as 15%, biggest intraday gain since Oct. 2009

European equities enter the North American crossover lower in what has been a relatively choppy start to the session ahead of upcoming data releases from the US with participants also digesting last night’s terror attacks in France. Swiss listed Swatch (-11.1%) are among the worst performers in Europe today after reporting a fall in operating profit and net income for H1. Also underperforming today are Accor (-2.9%) as well as airline names across the board in the wake of the tragic events in France. Fixed income price action has been relatively muted today after the events of yesterday, with Bunds modestly lower today ahead of the key risk events later include a number of speakers, include BoE’s Haldane as well as US data including CPI and retail sales.

Top European News

  • France in Shock as Third Terror Attack Upends Hollande: Bastille Day attack in Nice leaves 84 dead, scores injured
  • Swatch Profit Plunges as Demand Falls Across Europe, Asia: Drop is biggest in operating profit in at least 15 years
  • European June Car Sales Slow as Brexit Vote Cuts Confidence: VW 1H market share lingers at 5-year low, Renault registrations jump the most among top 10 carmakers
  • Carney Brexit Crisis Leadership Morphs to BOE Policy Hesitation: Traders had priced in more than 80% probability of rate cut
  • At Spain’s Undersized Phone Carriers, Years of Deals Beckon: Telecable owner predicts mergers after losing Yoigo auction
  • Husqvarna 2Q Operating Profit Beats Estimates, Sales Miss: Kepler says Gardena a highlight

In FX, the yen slipped 0.4 percent to 105.80 per dollar, headed for a 5 percent weekly loss that would be its steepest slide in 17 years. Ben Bernanke, the former chairman of the Federal Reserve, met Japanese leaders in Tokyo this week and was reported to have previously floated the idea of the nation issuing perpetual bonds. Officials on Wednesday denied a Sankei newspaper report that they’re considering the policy known as helicopter money — which involves direct financing of government spending by the central bank. The pound climbed 0.2 percent, poised for a 3.2 percent weekly advance that would mark its best performance since 2009. The Bank of England kept its benchmark interest rate at a record-low 0.5 percent on Thursday and Theresa May took over as prime minister a day earlier, restoring some calm to U.K. politics after last month’s Brexit vote prompted David Cameron’s resignation. The won rose to its strongest level since April and Taiwan’s dollar climbed to an 11-month high after global funds pumped more than $3 billion into their stock markets this week.

In commodities, crude oil fell 1.2 percent to $45.15 a barrel in New York. Prices almost doubled between January and June, signaling that markets were finally healing as falling U.S. output, rising demand and disruptions from Nigeria to Canada all helped eliminate a global production surplus. Now, as consumption falters and halted supplies return, analysts from BNP Paribas SA and Societe Generale SA warn prices may sink towards $40. Gold fell 0.2 percent, headed for a weekly loss of 2.5 percent. “Gold prices might be further tested if tonight’s data from the U.S., particularly the retail sales data, is better than expected,” said Brian Lan, managing director of Singapore-based GoldSilver Central Pte. “This will again bring out the speculation of a rate hike from the Fed.”

Bulletin Headline Summary from RanSquawk and Bloomberg:

  • European equities trade modestly lower ahead of upcoming data releases with a disappointing update from Swatch weighing on the luxury sector and markets digesting last night’s terror attacks in France
  • BoE’s Haldane has weighed on GBP after eluding to material easing next month from the central bank alongside their QIR
  • Looking ahead, highlights include US Retail Sales, CPI, Empire Manufacturing, Industrial Production, U. of Mich. Sentiment, BoE’s Carney, Fed’s Bullard, Williams & Kashkari

US Event Calendar:

  • 8am: Bank of England’s Carney speaks in Toronto
  • 8:30am: Retail Sales Advance m/m, June, est. 0.1% (prior 0.5%)
  • 8:30am: CPI m/m, June., est. 0.3% (prior 0.2%)
  • 8:30am: Empire Manufacturing, July, est. 5 (prior 6.01)
  • 10am: Business Inventories, May, est. 0.1% (prior 0.1%)
  • 10am: U. of Mich. Sentiment, July P, est. 93.5 (prior 93.5)
  • 1pm: Baker Hughes rig count
  • 1:15pm: Fed’s Kashkari and Bullard speak in St. Louis

DB’s Jim Reid concludes the overnight wrap

We’re straight to the overnight events where firstly there’s some tragic news to report out of France. In what has just been described as a terrorist attack by President Francois Hollande, late last night a truck struck a crowd in Nice celebrating Bastille Day, resulting in a death toll of at least 80 people according to the BBC with many more said to be injured. The driver of the truck was subsequently shot by police, while weapons were discovered inside the truck. The news has dominated the wires overnight and will no doubt influence the European agenda today.

Also overnight we’ve seen the latest data dump in China. Most notable is the Q2 GDP report which showed growth as holding steady at +6.7% yoy. Market expectations were for +6.6%. It also keeps China’s economy on track relative to the government’s growth target of 6.5%-7.0%. June activity data was a bit more mixed. Retail sales (+10.6% yoy vs. +9.9% expected) rose six-tenths from the prior month and industrial production (+6.2% mom vs. +5.9% expected) rose two-tenths. However fixed asset investment (+9.0% ytd yoy vs. +9.4% expected) declined six-tenths from May. Meanwhile we’ve also had the latest credit and money aggregate data this morning. M0, M1 and M2 money supply all grew more than expected in June, while aggregate financing (1.63tn yuan vs. 1.10tn expected) and new yuan loans (1.38tn yuan vs. 1.00tn expected) were both more than expected, expanding from 985bn yuan and 660bn yuan respectively.

Chinese equity markets have been choppy since that data and have fluctuated between gains and losses. Bourses are little changed as we got to print (Shanghai Comp +0.08%, CSI 300 +0.03%). Elsewhere markets are generally firmer. The Nikkei (+1.16%) is again leading the way, while the Hang Seng (+0.80%), Kospi (+0.54%) and ASX (+0.58%) are also up. The China sensitive AUD is up +0.34% having traded softish leading into the data, while the Yen (-0.83%) has continued to sell off.

The Yen sell off has been one of the features of the last few days. Indeed Ben Bernanke’s visit this week has sparked a wave of excitement after he was said to have told PM Abe to push through with Abenomics and that there are tools left to support the economy. Special economic advisor Hamada suggested that the possibility of helicopter money may have also been discussed in the talks. Indeed since then the chatter around helicopter money has only really gathered momentum. Yesterday the focus was on one of Abe’s closest and well respected aides, Etsuro Honda, who said that at a meeting with Bernanke in April the former Fed Chief was said to have floated the idea of the government issuing perpetual bonds which the BoJ would then directly buy. The WSJ is also reporting that Honda has suggested that the government should include a minimum of ¥10tn in its planned extra budget in 2016, as well as increasing its asset purchasing target by including new assets, increasing stock purchases and lengthening the maturity on government bonds it buys. Hondo was quoted as saying that ‘if you take those actions, I believe that you can produce effects similar to those than can be generated by what Bernanke refers to as helicopter money’. Despite the exact details still being unclear, expectations for fiscal stimulus are rising by the day at the moment with the BoJ meeting now just two weeks away. Markets have certainly been boosted by the prospect of such with the Nikkei +9.8% this week as we type and the Yen -5.6%.

Talking of fresh stimulus, kudos to DB’s George Buckley who went against the grain and argued why the BoE wouldn’t cut rates yesterday. It’s clear from what the bank said that they would likely ease soon though. The August meeting is only three weeks away and that’s where we’re likely to see fresh stimulus. Interestingly though, new chancellor Hammond yesterday said that he wants to work closely with the BoE and others in preparing an Autumn statement and plan of action for the economy. To us this strikes at co-ordinated action with a chance that the BoE saves some of its powder until the government is ready to act. As we said immediately after the vote, we think Brexit means that the UK will end up with helicopter money in all but name this year. Higher fiscal spending and more QE.

Away from Japan and the tragic events in France, a big focus for markets today – in what is a bumper day for data – is the June US retail sales print this afternoon. Our US economists highlight that retail sales capture approximately 25% of total consumer spending. Over the past three months spending has accelerated to a 5.8% annualized rate which is the quickest rate of advance since the three months ending June 2015. Our colleagues note however that over the last 12 months, retail sales have increased a modest 2.6%. They believe that this is likely to remain the trend because job growth is slowing while wage pressures remain fairly modest. Going forward, relatively subdued income growth, which has been evident in employee tax withholding receipts, is likely to constrain consumer spending on a sequential basis. Our colleagues are projecting real consumption growth of 2.5% this quarter and next, which would produce modest YoY gains of 2.6%. Energy prices will likely also weigh on spending given the recent rebound. In terms of expectations for this afternoon, our colleagues are forecasting -0.2% mom at the headline and +0.2% mom at the core. The market is a little more optimistic at +0.1% and +0.4% respectively.

In terms of markets yesterday, having taken a pause for breath on Wednesday, equities climbed again with US markets in particular recording fresh new record highs. Indeed that was the case for the S&P 500 (+0.53%) and Dow (+0.73%) as banks led the way following the better than expected results out of JP Morgan. Much of that had to do with stronger than expected trading numbers, particularly in fixed income, while loan growth during the quarter was encouragingly strong and broad-based. There’s unsurprisingly going to be alot of focus on how banks’ view the impact of Brexit, although JPM’s CFO downplayed the event to being a ‘political and economic challenge’ rather than any sort of financial crisis, while also suggesting that the impact on global growth and the US economy should be small.

Meanwhile, European equity markets generally held their reasonably strong opening gains with the Stoxx 600 in particular closing up +0.80%. The FTSE MIB also climbed +1.63% and Euro Stoxx Banks rallied +3.11% to be up an impressive 9% so far this week. Sovereign bond markets were weaker in tow with 10y Bund yields another 5bps higher at -0.042% and 10y Treasuries 6bps higher at 1.536%. They are now up nearly 18bps this week. The one standout yesterday was the FTSE 100 (-0.24%) although that largely had to do with the +1.49% rally for Sterling which closed at 1.3343, but did touch 1.3475 immediately post BoE.

Elsewhere, it was a fairly quiet day for data yesterday although over in the US the June PPI readings came in a little higher than expected. Indeed the headline print of +0.5% mom was two-tenths above consensus and so lifted the YoY rate up to +0.3% from -0.1%. The core ex food and energy reading of +0.4% mom (vs. +0.1% expected) was also well above expectations. The only other data yesterday was last week’s initial jobless claims data which came in unchanged at 254k which lowered the four-week average to 259k. At this time of year it’s not too uncommon to get a bit of volatility in the data given the holiday period.

Before we look at the rest of today’s calendar, we also heard from the hawkish Kansas City Fed’s George who reiterated her view that she thinks rates are too low relative to the performance of the economy and that the Fed should resume gradual rate hikes. Atlanta Fed President Lockhart (centrist) said that he can see at least one and possibly two hikes this year and finally overnight Dallas Fed President Kaplan (slightly hawkish leaning) said the Fed is making good progress towards its dual mandate.



i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 0.278 POINTS OR 0.01%/ /Hang Sang closed UP 98.19 OR 0.46%. The Nikkei closed UP 111.96 POINTS OR 0.68% Australia’s all ordinaires  CLOSED UP 0.33% Chinese yuan (ONSHORE) closed UP at 6.6831 /Oil FELL to 45.40 dollars per barrel for WTI and 47.20 for Brent. Stocks in Europe ALL IN THE RED. Offshore yuan trades  6.6925 yuan to the dollar vs 6.6831 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHTLY AS A LITTLE MORE USA DOLLARS LEAVES THEIR SHORES. 




China even after a huge influx of cash in June, and a big devaluation of about 10% from the start of the year, saw their economy just muddling along:

i) Chinese GDP rose to 6.7% from expected 6.6%

ii)Retail sales better than expected at 10.6%

iii) Industrial Production beat at 6.2%

take these figures with a grain of salt!

(courtesy zero hedge)

Fed Loses Another Excuse As China “Super Friday” Data Dump Beats Expectations

China’s ‘Super Friday’ data dump arrived and despite the 10% devaluation in the Renminbi basket over the past year, and an utterly incredible spike in borrowing (new loans spiked again in June!!), China economic data merely muddles through in its centrally-planned goal-seeked way. Earlier ‘researchers’ proclaimed Chinese GDP at around 6.5% but China GDP grew at 6.7% YoY (beating expectations of 6.6%). While Fixed Asset Investment disappointed (+9.0% vs +9.4% exp), Retail Sales (+10.6%) and Industrial Production (+6.2%) beat expectations.

The devaluation against the USD is starting to accelerate as the broad Renminbi basket has now dropped 10% in the last year (against all of China’s major trading partners)…

The search for yield has once again led to Chinese Corporates, which have rallied back to almost record bubble low yields (despite the utter carnage in Chinese balance sheets as leverage rises). Bonds have replaced stocks for now as the bubble-du-jour in China…

Not easily seen in this chart but SHCOMP has actually rallied bak to April levels in recent weeks amid the world’s flood of central bank largesse.

As Bloomberg notes, whenever China’s GDP beat or met market consensus, the country’s stock market fell. Here’s how the Shanghai Composite did following the last four GDP releases:

  • 1Q on April 15, 2016: +6.7%; SHCOMP -0.1%
  • 4Q on Jan. 19, 2016: +6.8%; SHCOMP +3.2%
  • 3Q on Oct. 19, 2015: +6.9%; SHCOMP -0.1%
  • 2Q on July 15, 2015: +7%; SHCOMP -3%

But it has not helped the macro-economic data much…

  • Industrial Production rose 6.2% (acclerating from 6.0% in May) BEATING expectations of a 5.9% rise (5.3 to 6.2% range)
  • Retails Sales printed +10.6% (faster than May’s 10.0%) BEATING expectations of a 9.9% gain (with 40 economists estimating between 9.2 and 10.2% gains)
  • Fixed Assets Investment rose 9.0% YoY (slowing from 9.6% in May) MISSING expectations of 9.4% (between 8.8 and 9.8%) – lowest since 2000.
  • GDP printed +6.7% (flat from May) BEATING expectations of 6.6% YoY rise (6.3 to 6.8% range among 46 economists) – equal lowest since 2009.

And all of this was achieved with another massive surge in credit…

So The Fed loses another excuse – US Jobs – Fixed! BREXIT – handled! China Growth Fears – No Worries!


How did China grow? The added a huge amount of cash to stimulate their economy. This will not last

(courtesy zero hedge)

How Did China’s GDP Beat? By “Shoveling A Stunning Amount Of Cash Into The Economy”

As reported last night, China pleasantly surprised watchers when it reported its latest data dump, including a stronger than expected 6.7% Q2 GDP print and unchanged from the previous quarter, which beat across the board with the exception. The reason for the beat: a buoyant property market and government stimulus boosted demand for factory output. On the other hand, fixed-asset investment, traditionally the biggest driver of Chinese growth, and which includes both infrastructure and manufacturing investment, grew at only 9%, its slowest pace since 2000 in the first six months and down from 9.6 per cent in the year to May.

“The most important data point in today’s release is private investment, which accounts for 62 per cent of total investment but continues to see zero growth in June.” Larry Hu, China economist at Macquarie Securities. “Whether private investment can turn round in the coming months is the key to the Chinese economy in the second half.”

Breaking down the GDP components, we find that investment contributed only 2.5% points to GDP growth in the first half, down from 2.9% last year, while the consumption contribution rose from 4.2% to 4.9%.  This, of course, is a number which can not be indenepdently verified from the traditionally opaque and data-fudging National Bureau of Statistics.

To be sure, as Capital Economics said last night, China GDP should be taken with a grain of salt given the political nature of the data and pressure to meet official 6.5%-7.0% growth target. China’s economy probably only expanded 4.5% in 2Q rather than official figure of 6.7%.

More worrying was that net exports subtracted 0.7%, in yet another confirmation that global trade continues to deteriorate.

Also troubling: China’s industrial economy continues to suffer from rampant overcapacity and deflation. Mining grew 0.1% in the first half, while electricity, heat and water production grew 2.6%.  Facing a bleak demand outlook, privately owned manufacturers have cut spending on new factories, contributing to the sharp slowdown in fixed investment. But a surge in infrastructure investment by state-owned enterprises has taken up the slack, supporting demand for commodities such as steel, copper and cement

* * *

In any case, the take home message, as per the market’s euphoric reaction, is that China’s economy has stopped contracting, if only for the time being. However, as Bloomberg reports, the stabilization comes at a cost, a big one. Instead of tackling a debt pile estimated by Rabobank at a gargantuan 3.5x of the economy’s size, policy makers are only making it worse with a renewed credit binge.

“The amount of cash Beijing is shoveling into the economy is stunning,” said Andrew Collier, an independent analyst in Hong Kong and former president of Bank of China International USA. “Given high fixed-asset investment among state-owned enterprises, it’s likely most of it is being consumed by the inefficient state sector. This is more bad news for structural reform. ”

Our favorite metric of Chinese credit creation, Total Social Financia, the biggest credit creation aggregate, rose 1.63 trillion yuan ($244 billion) in June, topping all 29 analyst forecasts in a Bloomberg survey. That means last month alone saw new credit exceed the 2015 GDP of Chile, Ireland, or Vietnam.

Where is this unprecedented credit deluge going? Sadly, not in productive sectors. Quite the opposite. Instead of funding expansion and hiring among private companies, much of the lending is going into state-owned enterprises, many of which are unprofitable and only kept alive to avoid wide-scale job losses. A reluctance by private companies to invest suggests they aren’t buying into the recovery story, and even worse may be being squeezed out by a bloated and inefficient state sector.

One thing is clear: any promises of reform by China are now dead and buried. As Bloomberg adds, “the credit expansion is at odds with the policy platform President Xi Jinping and Premier Li Keqiang have been articulating. The duo have promised to transform the economic model that has driven China for more than three decades by rebalancing away from manufacturing and investment and towards services and consumption through slashing overcapacity and clearing the way for private enterprise. So far, the evidence suggests that’s progressing slowly at best.”

Actually, so far the evidence suggests precisely the opposite.

“The stabilization in growth has come at a cost, as China’s structural and leverage problems become more severe,” said Bloomberg Intelligence economists Tom Orlik and Fielding Chen. “Credit data for June show expansion in lending continuing to accelerate ahead of growth in the real economy. The reform and deleveraging can is being kicked further down an increasingly bumpy road.”

In a morbid case of irony, China itself warned about the risks of rampant credit growth. In May, state media cited an unnamed official warning that excessive debt was China’s “original sin” and the country can’t borrow its way to long-term economic health.

As we reported a month ago, Goldman Sachs said in a report that China’s debt increase is among the highest in recent history when comparing the magnitude and pace of the increase in China’s debt-to-GDP ratio to those of other countries. The longer reforms are put off, the greater the risks down the road, said Eswar Prasad, a former chief of the International Monetary Fund’s China division and now a professor at Cornell University in Ithaca, New York.

“While there are signs that the Chinese economy has gotten through a particularly rough patch, long-term growth prospects have hardly improved as risks continue to build up and reform momentum has slipped,” Prasad said.

Then there’s the risk of an exogenous shock stemming from a slowdown in big trading partners or from a natural disaster. Weeks of torrential rain across central and southern China have caused the country’s worst flooding since 1998.

Above all, the next six months will be critical for getting the private sector to invest if the economy is to find its feet and cut off the drip of cheap, government supplied credit, said Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong.  “In the near term they’ve won a battle,” Hu said. “But the war is still going on over whether China can find new growth drivers.”

And while China’s mountain of debt seems ever shakier, for now the take home message is that China has dodged a bullet, and markets have reacted accordingly. What they ignore is that, as Kyle Bass said two weeks ago, the coming Chinese financial crisis will shake the world. But that’s a bridge the no-longer forward looking market will cross when it reaches it. And after all, why worry: that’s what central bankers are for.



Horrific event in Nice France last night:

Two commentaries

(courtesy zero hedge)

84 Dead, 100 Injured After Truck Plows Into Crowd In Nice, France In Act Terrorism Feared – Live Feed

In latest European terrorist attack on French soil, moments a truck plowed into the crowd on Promenade des Anglais in Nice, France at the time of a fireworks shows during Bastille Day celebrations.

The truck was seen mounting the pavement and piling into anyone the driver could see, ramming over those who tried to run away. The ‘truck was travelling at 60-70km per hour’ a local Nice Matin journalist on the scene reported:  A witness who gave his name as Antoine cited by Telegraph said: “We were at the Neptune beach and a firework display had just finished. That is when we saw a white lorry. It was going quickly at 60-70 kilometres an hour.”

The deputy prefect of Nice says that “possibly around 30 people dead, 100 injured, hard to say precisely.” The driver of the truck was said to have been killed after a shoot out with the police.

The French government has called the attack an act of terrorism.

An update by France TV has put the total number of dead at up to 60 people.

“It’s total panic,” a witness told the channel by telephone. “We saw a white lorry which drove directly into people on the Promenade des Anglais. A gunman fired into the crowd before being shot by police. Perhaps they are dead, I’m not sure.

“Police are flooding the streets, including anti-terrorism officers.  Nobody knows what to do, except to hide away. Gunmen are meant to be targeting hotels.”

One eyewitness told France’s BFM TV: “Everyone was calling run, run, run there’s an attack run, run, run. We heard some shots. We thought they were fireworks because it’s the 14th of July.

“There was great panic. We were running too because we didn’t want to stick around and we went into a hotel to get to safety. ”


French Terror Suspect Named As Mohamed Lahouaiej Bouhlel, A “Well-Known” Tunisian Criminal

Now that the initial shock of the Nice Bastille Day terror attack which claimed at least 84 lives has passed, and the investigation into the causes and motives behind the latest tragic mass killing has begun. Earlier this morning it was revealed that the driver of the truck used to attack Bastille Day celebrations in Nice has been named in local reports as 31-year-old delivery driver Mohamed Lahouaiej Bouhlel, a Tunisian criminal, who is reported to be a French passport holder, and well-known to the police.

According to newspaper Nice-Matin, quoted by the Telegraph, the identity of the driver of the truck that drove into the crowds Tuesday night has been confirmed.  It is the owner of the identity card that was found in the truck by police. He is from Nice and is of Tunisian origin, aged 31, called Mohamed Lahouaiej Bouhlel. Police raided his apartment in the Nice Nord district this morning. He works as a delivery driver and is known for criminal acts, including violence, but any radicalisation has gone unnoticed. His act seems yet to have been premeditated.

“He was known to the police for violence, and using weapons, but had no direct links with terrorism,” said an investigating source. “His identity car was found in the lorry. He had French and Tunisian nationality.”

He may have hired the truck on on Wednesday in a neighboring town of Nice. The investigators are still is looking for possible accomplices.

The driver reportedly zig-zagged his way through the crowds along the promenade in Nice

The attacker was not known to the intelligence services, suggesting he has not previous background in terrorism offences. The fact he was not on the watch list will be of grave concern as an investigation into last year’s Paris attacks identified multiple failings by France’s intelligence agencies.

Bouhlel is believed to have been a resident of Nice. A search of his vehicle uncovered a pistol, a larger gun, and a number of fake weapons and grenades.

He boarded the truck “in the hills of Nice” before driving down to the promenade, according to CCTV footage, regional president Christian Estrosi said on Friday.

So far there have been no claims of responsibility for the attack, which is being considered an act of terrorism.  Security officials will certainly be looking to see if it was carried out by ISIS. Pro-ISIS Twitter accounts have posted sickening posters celebrating the attacks.

France has been in a state of high alert following a number of terror attacks claimed by ISIS on Paris and other French cities over the past year.

There have also been no claims of accomplices, but Mr Estrosi said the investigation should focus on finding anyone the man worked with.  “Attacks aren’t prepared alone. Attacks are prepared with accomplices,” Mr Estrosi said. “There is a chain of complicity. I expect it to be unveiled, discovered and kept up to date.”

French Interior Minister Bernard Cazeneuve said authorities are working to identify the terrorist – and determine whether or not he had help. He told reporters: “I’d like to say a word about the investigation, not to reveal any details but to say that we are fighting this with all the means the state has to identify the suspect. The identification process is ongoing.

Speaking hours after the attack, Cazeneuve added: “We are in a war with terrorists who want to hurt us at all costs.”

“We will firstly determine if he had help from accomplices or not. And this information is to be shared by the public prosecutor according to what will be verified for sure, to prevent rumours or false information to be carried out.”

A police source has told AFP that the truck “changed route at least once” as it ploughed through crowds. “He clearly sought to make maximum casualties” the source added.

Wassim Bouhel told the French TV channel iTele that the lorry zigzagged across the road.

He said: “We almost died. It was like hallucinating … (the lorry) zigzagged – you had no idea where it was going.”

It has also been revealed that the truck was a rented vehicle. The police source told AFP that it was rented “a few days ago” in the South East of France.  “The truck was rented in the last few days in Provence-Alpes-Côte d’Azur,” the source said.




Look who is lining up to be first in order to pass a trade deal with the UK. You will see almost all countries rush to make deals.  The BREXIT will have no effect on England and will only benefit them as I have outlined to you.

(courtesy zerohedge)

The UK Is Now “At The Front Of The Queue” As America Rushes To Pass A Trade Deal

Less than 3 months ago, on April 22, in an address to the British people that may have cost David Cameron his job and led to the ever more rancorous divorce between the UK and the EU, Barack Obama warned that the UK would be at the “back of the queue” in any trade deal with the US if the country chose to leave the EU, as he made an emotional plea to Britons to vote for staying in.

Two months later, a majority of Brits gave Obama the finger and Britain is no longer part of Europe.

But while that story in itself would be quite satisfying, it turns out that Obama lied. Again.

As it turns out, not only is the UK not at the back of the queue, it now finds itself at the very front. As reported by the FT, the Obama administration has begun preliminary discussions with senior UK officialsabout how they might pursue a trade agreement between the two countries following Britain’s exit from the EU, Washington’s top trade official said.

The discussions were revealed on Thursday by Mike Froman, the US trade representative, and coincide with a growing push by Republican Brexit supporters in Congress for President Barack Obama to launch talks on a commercial pact quickly.

So much for yet another typically hollow, worthless threat by the well-spoken, teleprompted golfer in chief. Even the FT is amused by the idiotic diplomacy of the president, which highlights “how quickly the president and his administration have backed away from his warnings before last month’s referendum that Britain would be at the “back of the queue” for any trade deals with the US if it voted to leave the EU.”

So what does Britain’s “most favored nation in the queue” status get it? As the FT explains, “Froman said he had discussed Britain’s plans and a possible bilateral trade pact with a number of senior British officials since the referendum. In the past week alone he spoke with Sajid Javid and Mark Price, the UK’s outgoing business and trade secretaries. He had not yet spoken with Liam Fox, the incoming minister for international trade in the new government of Theresa May, who took over as the UK’s prime minister on Wednesday.

But Mr Froman warned that there was still significant uncertainty surrounding what sort of agreement the US and UK would or could negotiate, primarily because a lot depended on the exit deal and trading relationship with the EU that Mrs May’s government ended up negotiating.  “What precisely they negotiate with their other trading partners will depend in part on what model they develop in their relationship with the EU,” Mr Froman told a breakfast discussion organised by the Christian Science Monitor.

“Will they have sovereignty over tariffs? Will they have sovereignty over regulations? . . . Until you get more clarity around that it’s hard to determine precisely what kind of trade relationship they might be able to negotiate with others.”

What the final deal is, one thing is certain: it will be a better one for the UK than anything it could have done as part of the EU. Recall that members of the EU are not allowed to negotiate their own trade deals with other countries outside the bloc. As such, any UK-only deal will be far more focused and better tuned to the UK’s specific needs.

Confirming that the UK does not need to trigger Article 50 to finalize a trade deal with the US, Froman added that British officials clearly believed that they could have “discussions” with the US and other trading partners while the UK was still in the EU.  “Where discussions end and negotiations begin I think is quite a grey area and I think this is something we are going to have to continue having dialogue about,” he said.

Ironically, the UK may end up getting a far better deal now that if it had remained in the EU:

Among the options being batted around was the idea that the UK might eventually join a TTIP deal once it had worked out its relationship with the EU, he said.

The administration’s preliminary discussions come alongside a groundswell of support from Republicans in Congress for the UK’s move to leave the EU, with many seeing it as an opportunity to strengthen the relationship between London and Washington.

Trade already sits at the centre of that. Kevin Brady, chairman of the influential House ways and means committee, and Orrin Hatch, who chairs the Senate finance committee, introduced a resolution on Wednesday calling for the president to begin discussions over a trade agreement with the UK.

As Hatch trailed off, he said that “the special relationship between our two countries must be fortified as the UK navigates the process of withdrawing from the EU.

Could it be that Brexit is about to be the best thing that ever happened to the UK? With every passing day, it looks more likely that that is precisely the outcome. Then again, it probably should not be a surprise: after all, every single “expert” predicted just the opposite, so it was quite inevitable. Meanwhile, as the UK enjoys its position at the very front of the queue, this is what is going on at the back of the bus.





Oh my goodness! We have just got a military coup in Turkey: Martial law declared

(courtesy zero hedge)

Military Coup: Turkish Army Says It Has Taken Control Of The Country, Martial Law Declared


* * *

Live feed from Sky News


Updatge 7 – The Fight is getting closer to Erdogan as the US tells US citizens on the ground in Turkey to shelter in place


US citizens in should shelter in place & stay indoors. Update family/friends of your status when possible.


Update 6 – The State broadcaster TRT, occupied by military officers, announces that military has taken over the authority all across Turkey. The military just declared martial law.


Update 5 – Chaos continues



Update 4 1657ET -Government responds



Update 3 – its’ getting violent



Update 2 – Erdogan finally got the memo.



Update – The army is now in control.


Full statement:

* * *

Shooting and explosions are being reported in the Turkish capital, Ankara, with military jets and helicopters seen in the sky above the city. According to Reuters, gunfire and explosions could be heard in the capital, where jets have been heard flying overhead, while bridges heading into Istanbul have been currently shut down. 

According to AP, Turkish Prime Minister Binali Yildirim says a group within the military engaged in an attempted coup.

Flashing red Bloomberg headlines confirm as much.


Curiously, the PM refuses to call this coup attempt a coup. Meanwhile president Erdogan is on holiday in the resort town of Bodrum.

As is the norm in Turkey, all social networks Twitter Facebook and YouTube have been shut down, as has the state TV.

As Reuters reported moments ago, Istanbul’s Bosphorus Bridge and Fatih Sultan Mehmet Bridge were both closed on Friday, local television channels reported, without giving a reason. Dogan News Agency footage showed cars and buses being diverted. CNN Turkey showed two military vehicles and a group of soldiers lined up at the entrance of one of the bridges in Turkey’s biggest city. A Turkish official who did not want to be named said soldiers had been deployed in other cities in Turkey, but did not specify which ones. Dogan News Agency reported the national police directorate  summoned all police to duty in Ankara.

The signs were obvious earlier. Gabriel Turner, 23, a management consultant from north London, who was on holiday in Istanbul, described to the Telegraph how there had been heavy police and security presence throughout the day before the military coup got underway after sunset. 

“Earlier today there were police everywhere. I thought that was normal but the two Turkish girls I was with told me  it wasn’t normal. We were walking around the centre of Istanbul, at the Grand Bazaar there were police at every entrance and exit with lots of guns. 

“A police helicopter was flying very low  at sunset, it was about 8pm. It looked like it was searching for something. Later on, at about 10.30 I was in Karakoy, a bar area in the city centre and everyone started looking at their phones. A man who owns the bar told us that the army are taking over everything. 

“Then we walked down towards the a quieter area by the sea. While we were walking, my friend said the army had closed brides across the Bosphorus. We could see army helicopters in the sky.

“We went inside a cafe and everyone was on their phones looking worried, texting. Lots of people were running to catch a ferry – because the bridges were shutting and people wanted to get home. Then policemen came out of the ferries on their walkie talkies, looking very alert.”

* * *

More details:

View image on TwitterView image on TwitterView image on Twitter
Photo published for Yağмυr ❤ Yavυz @mckameymanor

Yağмυr ❤ Yavυz @mckameymanor

köprülerde askerler ankara da f16 genel kurmaydan gelen silah sesleri


* * *

The Lira has crashed to Brexit lows against the USD – down a stunning 14 handles!!

And The MSCI Turkey ETF is crashing 9% after hours…



Global corporate defaults hit 100 and is on a pace to surpass its financial crisis record:

(courtesy zero hedge)

(courtesy zero hedge)


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




USA/CAN 1.2875 DOWN .0033

Early THIS FRIDAY morning in Europe, the Euro ROSE by 31 basis points, trading now JUST above the important 1.08 level RISING to 1.1137; 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 0.278 POINTS OR 0.01%   / Hang Sang CLOSED UP 98.19 PTS OR 0.46% /AUSTRALIA IS HIGHER BY 0.33%/ EUROPEAN BOURSES ARE ALL DEEPLY IN THE RED   as they start their morning

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

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

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

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

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

The NIKKEI: this THURSDAY morning: closed UP 111.96 POINTS OR 0.68% 

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 98.19 OR 0.46%  ,Shanghai CLOSED UP 0.278 OR 0.01%   / Australia BOURSE IN THE GREEN: /Nikkei (Japan) CLOSED IN THE GREEN/India’s Sensex IN THE GREEN  

Gold very early morning trading: $1333.90


Early FRIDAY morning USA 10 year bond yield: 1.532% !!! UP  1/2 in basis points from THURSDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.259 UP 1 in basis points from THURSDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early FRIDAY morning: 95.97 DOWN 13 CENTS from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING


And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield:  3.13% UP 2 in basis points from THURSDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.226% up 3  in   basis points from THURSDAY

SPANISH 10 YR BOND YIELD: 1.23%  UP 6 IN basis points from THURSDAY( this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.26 UP 4 IN basis points from THURSDAY (again totally nuts/)

the Italian 10 yr bond yield is trading 3 points HIGHER than Spain.





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


Euro/USA 1.1061 DOWN .0044 (Euro =DOWN 44 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 105.53 UP 0.395(Yen DOWN 40 basis points/HELICOPTER MONEY )


USA/Canada 1.2950-UP 0.0043 (Canadian dollar DOWN 43 basis points AS OIL ROSE (WTI AT $45.92). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was DOWN by 44 basis points to trade at 1.1061

The Yen FELL to 105.53 for a LOSS of 40 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY TO COMMENCE

The POUND was DOWN 145 basis points, trading at 1.3204 AS PRIME MINISTER THERESA MAY TAKES OFFICE

The Canadian dollar FELL by 43 basis points to 1.2950, WITH WTI OIL AT:  $45.90


The USA/Yuan closed at 6.6810

the 10 yr Japanese bond yield closed at -.226% UP 3  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: UP 7 IN basis points from THURSDAY at 1.5920% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.2302 UP 6  in basis points on the day 


Your closing USA dollar index, 96.61 UP 51 CENTS  ON THE DAY/4 PM 

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

London:  CLOSED UP 14.77 OR 0.22%
German Dax :CLOSED DOWN  1.40 OR  0.01%
Paris Cac  CLOSED DOWN 13.01  OR 0.30%
Spain IBEX CLOSED DOWN 21.430 OR 0.25%
Italian MIB: CLOSED DOWN 48.93 OR 0.29%

The Dow was UP 10.14  points or 0.05%

NASDAQ down 4.47 points or 0.07%
WTI Oil price; 45.94 at 4:30 pm;

Brent Oil: 47.55




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:


BRENT: 48.00

USA 10 YR BOND YIELD: 1.5509% 

USA DOLLAR INDEX: 96.58 up 58 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3175 down .0175 or 175 basis pts.

German 10 yr bond yield at 5 pm: +.006%


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



Small Stock Slide Ruins First “Perfect Week” This Century

Does anyone else feel like this is going on behind the scenes?


Quite a week:

  • S&P up 3rd week in a row to record high – best 3-week run in over 4 months
  • Trannies up 3rd week in a row (+4% this week) – biggest week in over 4 months
  • Italian Bank Stocks up 13% this week – best week in 5 years
  • 10Y Yields rose 23bps this week – that’s a 17% rise in yields (yeah we know!) which is the 3rd biggest weekly spike ever.
  • USDJPY spiked over 5% this week – the biggest JPY weeklu Yen weakening since 1998!
  • Cable rose 2% this week – biggest week in over 4 months
  • Copper rose 5.3% this week – the best week in over 4 months
  • Gold fell 2.7% – first down-week in the last 7 weeks
  • Silver dropped 1% – first down week in the last 7 weeks

The “Perfect Week” ended in failure…NOTE – today was rates rising and stocks falling – first time during this ramp

As @RyanDetrick pointed out, the last time S&P saw a “perfect week” – up all five days during the week and all five days were new all-time highs – was March ’98. This has only happened 11 times since 1950.

The only volume seen all week was the post-open selloff in Thursday


“Extreme Greed” Bitches…


Off The February “we must save the world” lows. S&P, Dow are up almosty 20%, Small Caps up 27%…


But since BREXIT, Bonds and Bullion still hold the lead…


Since payrolls, stocks remain the lone winners with crude flat and gold and bonds lower…


On the week, Trannies were best, Nasdaq worst (but still up 1.3%)


Financials strengthened notably on the week… but faded off yesterday’s open…


VIX fell for the 3rd week in a row, closing at 12.5 – its lowest weekly close in a year… (lowest intrday 12.14 this week is lowest since Aug 2015). They crushed VIX into the close to try for a green close but it failed dismally…


Treasury yields were ugly. Despite a brief pause on Wednesday, it was a one-way street higher with 10Y up 23bps on the week…


This is the 3rd biggest percentage surge in 10Y yields (yes we know percentages on yields suck) ever…


The yield curve steepened dramatically – 2s30s +11bps (the biggest absolute spread jump since June 2015, or biggest percentage surge in the curve since Jan 2013


The USD Index ended the week practically unchanged (+0.25% and up today) BUT massive vol in Cable and JPY were the big news…


JPY’s biggest weekly devaluation in 18 years!!


Commodities were all over the place this week, Copper shot higher in early week stimulus hope (then died), crude dipped and ripped, while PMs drifted lower…



Charts: Bloomberg

Bonus Chart: Fundamentals… Industrial Production is so “old economy”



Retail sales jump but the rise was mainly on a downward revision in the previous month. Still at recessionary levels;

(courtesy zerohedge)

Retail Sales Jump On Downward Revisions, Hover At Recessionary Ledge

Having slowed in May after April’s spike, US Retail Sales in June jumped notably by 0.6% (much better than the expected 0.1% rise) but a lot of this was due to a considerable downward revision (from +0.5% to just +0.2%). Year-over-year, headline retail sales rose modestly to +2.7% but continues to hover at the recessionary ledge. Vehicle sales rose very modestly (+0.1%) after a 0.5% MoM decline in May but a slide in clothing sales was offset by a surge in building materials sales.

11 of 13 categories saw sales increase with just food/drinking places (umm – isn’t that where all the jobs are?) and clothing stores (again – isn’t retail where the job creation has been?)

But despite the euphoria, retail sales annual change remains anything but exuberant…

It seems retail sales growth just cannot reach escape velocity.






Yesterday we had surging PPI: today a surging CPI as the core jumps to a near 4 yr high as rent rises along with education and medical care.

The Fed has a problem..

(courtesy zero hedge)

Fed Cornered: Core CPI Jumps Near 4 Year Highs As Rent Rises At Fastest Rate In 9 Years

Just as we warned, the gas price ‘base effect’ is pressuring consumer price indices higher (Energy +1.3% MoM – up for 3rd month in a row) but even Core CPI rose more than expected (+2.3% vs 2.2% exp) back near its highest since April 2012. Shelter costs rose 0.3% MoM (but 3.5% YoY – the highest since July 2007), along with increases in education, medical care, and airline fares also sent consumer prices broadly higher. Between surging PPI and this, The Fed is increasingly cornered (and as we nopted last night, running out of excuses).

“We’re starting to see upward pressure on the inflation numbers,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd., said before the report. “It reinforces the case for the Fed to resume tightening, though they’re highly risk averse right now.”

Core Cpi back near cycle highs…

Rent inflation at its highest in 9 years!!

And fuel costs are on the rise, which, as we detailed previously, the impact of the energy costs base-effect is so pronounced, that as BofA notes, an extreme bearish scenario is needed for inflation to stall. A far less extreme scenario is needed for inflation to jump dramatically. To wit:

Our analysis shows that there is a clear uptrend in CPI ahead, under most reasonable scenarios (Chart 1). CPI would accelerate to 3.5% yoy under our bull case, and rise to 1.6% under our bear case.
Supportive base effects are a key driver. It is only under an extreme
bear case (year-end wholesale gasoline price of $0.88/gallon, or retail
at $1.58/gallon), that we would see CPI inflation flatten out at 1.1%,
all else equal.

As we concluded previously, keep a very close eye on gas prices: over the next few months,
gas prices will become far more important to the Fed’s monteray policy
than even China.

So – to sum up – the base effect in energy is pushing headline higher
while surging rent inflation is now at highest in 9 years… Get back to
work Ms. Yellen!




The all important New York, Empire manufacturing index drops as new orders tumble and worse: labour conditions fall apart..big problems in the New York mfg area:

(courtesy Empire /NY mfg index/zero hedge)


this is a biggy!!

USA industrial production declines for the 10th straight month.It is always manufacturing that carries a country and thus the USA is faltering!

(courtesy zero hedge)

US Industrial Production Declines For 10th Straight Month – Longest Non-Recessionary Streak In History

Following a 0.3% decline in May, Industrial Production rose 0.6% in June (better than the 0.3% rise expected) but year-over-year remains lower (-0.7%) for the 10th straight month. This is the longest non-recessionary streak of industrial production declines in US history. Gains on the month were driven by motor vehicle assembly (which is ironic givenm near-record inventories), but Q2 ended with a decline of 1.0% – the 3rd quarterly decline in a row (also not experienced without a recession).

The 0.7% decline YoY in June is the 10th in a row – the longest streak without a recession in US history…

For the second quarter as a whole, industrial production fell at an annual rate of 1.0 percent, its third consecutive quarterly decline.

Manufacturing output moved up 0.4 percent in June, a gain largely due to an increase in motor vehicle assemblies. The output of manufactured goods other than motor vehicles and parts was unchanged. The index for utilities rose 2.4 percent as a result of warmer weather than is typical for June boosting demand for air conditioning.

The index for business equipment moved up 0.7 percent, as a decrease for information processing equipment was outweighed by gains for transit equipment and for industrial and other equipment. The index for defense and space equipment moved down 0.3 percent. Construction supplies recorded a decrease for a second consecutive month; likewise, the output of business supplies also declined in each of the past two months, though the losses were very small. The production of materials increased 0.6 percent in June, with gains for durable materials and energy materials but a decline for nondurable materials. The improvement in durable materials reflected a sharp advance in the output of consumer parts that resulted from increased output of motor vehicle parts; the other major categories of durable materials recorded decreases.

But none of that matters of course…




The following is one of my favourite indicators predicting the health of the USA economy.  The higher the Business inventories/sales ratio, the greater the chance for a severe recession.  The ratio just hit a high of 1.40 signifying a deep recession is forthcoming

(courtesy zero hedge)

Business Inventories At Highest Level To Sales Since The Crisis

Autos and buidling materials are at their highest levels of inventories relative to sales since the financial crisis leaving overall business inventories-to-sales ratio hovering near cycle highs at 1.40x. A 0.2% rise in inventories (bigger than expected) matched the 0.2% rise in sales MoM but YoY it’s a different picture with sales down 0.3% and inventories up 0.9% (with retailers seeing inventories surging 6.1%).

This will not end well… no matter how high stocks go!


The University of Michigan Consumer Expectations or consumer confidence falls to a two yr low:

(courtesy zero hedge)

The credit manager’s report shows it’s index crashing to 7 yr lows as new credit is not forthcoming.

(courtesy zero hedge)

“This Is Not Encouraging” – Credit Manager Index Crashes To 7 Year Lows



One comment

  1. With the escalation of daily crazy events, I find it hard to believe you couldn’t find a way to include single mention of Nice, France in the title of your post…..even though it’s covered inside the body of the post itself.


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