August 4/England surprises markets with additional QE on top of cutting it’s interest rate to .25%/gold and silver rebound with the news from England/Japan is now entertaining wage controls: they wish to force employers to raise wage rates/The jobs report tomorrow and thus extremely volatility in the gold/silver market is expected/

Gold:1361.00 up $4.80

Silver 20.41  down 3 cents

In the access market 5:15 pm

 

Gold: 1362.00

Silver: 20.34

.

For the August gold contract month,  we had a large 205 notices served upon for 20,500 ounces. The total number of notices filed so far for delivery:  9862 for 986,200 oz or  tonnes or 30.674 tonnes

In silver we had 6 notices served upon for 30,000 oz. The total number of notices filed so far this month:  146 for 730,000 oz.

 

Tomorrow is the FOMC report on the job gains in the uSA for last month.  Even though the report has  fraudulent data in it, many hedge funds have their eyes glued ready to sell or buy within seconds of its release especially gold and silver.So you are warned: gold and silver will be quite volatile tomorrow. The last jobs report was awful and I do not think that they will have two consecutive bad reports. They love putting lipstick on this economic pig

 

Today England joined Japan and the ECB with massive QE. England also lowered its interest rate to a tiny .25% heading towards zero bound. The message is clear:  the global economy is in one complete mess!  Gold and silver responded in kind.

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest FELL BY A SMALLISH 1398 contracts DOWN to 223,142 AND CLOSE AN ALL TIME NEW ALL TIME RECORD AS THE  PRICE OF SILVER FELL  BY 22 CENTS WITH YESTERDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.116 BILLION TO BE EXACT or 159% of annual global silver production (ex Russia &ex China).

In silver we had 6 notices served upon for 30,000 oz

In gold, the total comex gold ROSE BY A CONSIDERABLE 1700 contracts despite the fact that the price of gold FELL by $8.30 yesterday. The total gold OI stands at 583,911 contracts.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

we had no changes,to our gold inventory at the GLD . /

Total gold inventory rest tonight at: 969.65 tonnes

SLV

we had no changes in the SLV, the SILVER INVENTORY AT THE SLV

rests at 350.815 million oz.

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

1. Today, we had the open interest in silver fell by 1398 contracts down to 223,142 as the price of silver FELL BY 22 cents with YESTERDAY’S trading.The gold open interest ROSE by A large 1700 contracts UP to 583,911 as the price of gold FELL by $8.30 WITH YESTERDAY’S TRADING.

(report Harvey).

 

2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge

 

3. ASIAN AFFAIRS

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 3.97 POINTS OR 0.13%/ /Hang Sang closed UP 93.11 points or 0.43%. The Nikkei closed UP 171.78 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.18% Chinese yuan (ONSHORE) closed DOWN at 6.6443/Oil rose to 40.63 dollars per barrel for WTI and 42.62 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.6506 yuan to the dollar vs 6.6443 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS CHINA TRIES TO STOP MORE USA DOLLARS LEAVING THEIR SHORES  

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

I have now seen everything!! Japan proposes its style of “wage controls”: forcing higher wages on its people: there goes corporate profits.

( zero hedge)

b) REPORT ON CHINA

none today

4 EUROPEAN AFFAIRS

i)England: the decision:

cut by 25 basis points to a record low.25% plus additional QE ot 60 billion pounds.  To be included is corporate bonds.  The British gilt yields crashed!

( zero hedge)

ii)The reaction to the cut in British rates: the pound plummets and bond yields crash!

( zero hedge)

iii)Then the English rally fizzled.  Both bonds and gold rose:

(courtesy zero hedge)

iv)A great commentary discussing the huge problems facing all of Europes banks

(Casey Research)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

none today

7.OIL ISSUES

Oil spikes 6% higher on a positive contango.  The higher contango means one can store oil on ships for longer as they make money on rollovers to the next month.

(courtesy zero hedge)

8.EMERGING MARKETS

none today

9.PHYSICAL STORIES

i)Chris Powell interviewed by the Real Money show

( Gata/Chris Powell)

ii)Bill Gross favours gold and real estate instead of bonds:

( Bill Gross/Bloomberg)

iii)Chris Powell takes on Steve Saville.  Saville believes that the Fed does not meddle with futures or ETFs:

(COURTESY CHRIS POWELL/GATA)

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

i)Orders for Class 8 trucks were abysmal

In a nutshell:  Too many trucks [are] chasing too little freight.”

( zero hedge)

ii)More garbage numbers from the BLS.  The jobless numbers totally diverge from the Challenger layoffs:

( zero hedge)

iii)Factory orders plunge for the 20th consecutive month:  the longest streak in USA history:

( zerohedge)

 

iv)The Challenger, Christmas Gray layoff report shows a huge rise in July of 45,346 poor souls losing their jobs mainly in the energy sector:

( CNBC/Tom DiChristopher

Let us head over to the comex:

The total gold comex open interest ROSE TO AN OI level of 583,911 for a GAIN of 1700 contracts despite the fact that THE PRICE OF GOLD FELL BY $8.30 with YESTERDAY’S TRADING..   We are now in the active month of AUGUST. As I stated : “Somebody big is continually standing for the gold metal despite the fact that July is  generally a poor delivery month. We  again witnessed the same scenario as in May  June and July whereby the front delivery month increases in OI standing for metal or a slight contraction We will no doubt see the same modus operandi in August.  The  big active contract month of August saw it’s OI FELL by 886 contracts down to 3268,  We had 732 notices filed upon yesterday so we lost 154 contracts or an additional 15,400 oz will not stand for delivery in August. The next contract month of Sept saw it’s OI fall by 261 contracts down to 9,361.The September contract remains extremely elevated and we may have another of those high deliveries rare for a non active month.The next active delivery month is October and here the OI ROSE by 701 contracts up to 46,685. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was good at 235,702. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was FAIR at 161,431 contracts.The comex is not in backwardation.
Today, we had  205 notices filed for 20,500 oz in gold
And now for the wild silver comex results. Total silver OI FELL by ONLY 1398 contracts from 224,540 UP TO 223,142.  We are now close to an all time record high for silver open interest set ON Wednesday AUGUST 3: (224,540). The  non active month of August saw it’s OI FALL by 14 contracts down to 289. We had 19 notices served yesterday so we gained 5 contracts or an additional 25,000 oz will  stand in this non active delivery month of August. The next big active month is September and here the OI fell by 1,473 contracts down to 148,544. The volume on the comex today (just comex) came in at 73,022 which is huge. The confirmed volume yesterday (comex + globex) was excellent at 51,257 with tiny rollovers.. Silver is not in backwardation. London is in backwardation for several months.
We had 6 notices filed for today for 30,000 oz
INITIAL standings for AUGUST
 August 4.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
4436.829  oz
HSBC
Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz 
NIL
160,754.500 OZ
HSBC,SCOTIA
5,000 KILOBARS
No of oz served (contracts) today
205 notices 
20,500 oz
No of oz to be served (notices)
3,063 contracts
306,300 oz
Total monthly oz gold served (contracts) so far this month
9862 contracts (986,200 oz)
(30.674 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    6,397.9 OZ
Today:  HUGE activity at the gold comex
Today we had 0 dealer DEPOSITS
total dealer deposit:NIL    0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 2 customer deposits:
i) Into HSBC:  144,679.500 oz  (4,500 kilobars)
ii) Into Scotia:  16,075.000 oz
Total customer deposits:160,754.500 oz  5000 kilobars)
Today we had 1 tiny customer withdrawals:????
 i) Out of HSBC:  4436.829 oz
Total customer withdrawals  4436.829 OZ ??
Today we had 1 adjustment:
i) Out of Delaware:  383.820 oz was adjusted out of the customer and this landed into the dealer account of Delaware
Note: If anybody is holding any gold at the comex, you must be out of your mind!!!
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 205 contracts of which 7 notices was stopped (received) by JPMorgan dealer and 95 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the AUGUST  contract month, we take the total number of notices filed so far for the month (9862) x 100 oz  or 986,200 oz , to which we  add the difference between the open interest for the front month of AUGUST  (3268 CONTRACTS) minus the number of notices served upon today (205) x 100 oz   x 100 oz per contract equals 1,292,500 oz, the number of ounces standing in this active month. 
 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (9862) x 100 oz  or ounces + {OI for the front month (3268) minus the number of  notices served upon today (205) x 100 oz which equals 1,307,900 oz standing in this non  active delivery month of AUGUST  (40.202 tonnes).
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 +  21.452 TONNES FOR JULY + 12.3917 + 40.202 tonnes Aug +  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 1778 tonnes, JULY 28 .089 TONNES / JULY 29 .128 TONNES/ THEREFORE 91.586 tonnes still standing against 72.04 tonnes available.
 Total dealer inventor 2,315,744.413 oz or 72.04 tonnes
Total gold inventory (dealer and customer) =11,149,531.36 or 346.797 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 346.797 tonnes for a  gain of 44  tonnes over that period. 
 

THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD AND FRAUDULENT!!

To me, the only thing that makes sense is the fact that “kilobars” are entries or hypothecated gold sent to other jurisdictions so that they will not be short in their derivatives like in England.  This would be similar to the gold used by Jon Corzine. If this is the case, this would be the greatest fraud perpetrated on USA soil.

 

 
 end
And now for silver
 
AUGUST INITIAL standings
 august 4.2016
Silver
Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
780,768.552 oz
BRINKS
CNT
DELAWARE
SCOTIA
Deposits to the Dealer Inventory
 NIL OZ
Deposits to the Customer Inventory
593,868.520 oz
DELAWARE
No of oz served today (contracts)
6 CONTRACTS 
(30,000 OZ)
No of oz to be served (notices)
283 contracts
1,415,000 oz)
Total monthly oz silver served (contracts) 146 contracts (730,000 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  3,572,149.9 oz
today we had 0 deposit into the dealer account:
total dealer deposit NIL  oz
we had 0 dealer withdrawal:
:
total dealer withdrawals:  NIL oz
we had 4 customer withdrawals:
i)OUT OF BRINKS:  320,339.300 OZ
ii) Out of CNT:  2731.400 oz
iii) Out of Delaware: 455,750.682 oz
iv) Out of Scotia: 1974.170 oz
Total customer withdrawals: 780,768.552 oz
We had 1 customer deposit:
i) Into DELAWARE: 593,868.520 oz
total customer deposits:  593,868.520  oz
 
 
 
 we had 0 adjustments
The total number of notices filed today for the AUGUST contract month is represented by 6 contracts for 30,000  oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at (146) x 5,000 oz  = 730,000 oz to which we add the difference between the open interest for the front month of AUGUST (289) and the number of notices served upon today (6) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the AUGUST contract month:  146(notices served so far)x 5000 oz +(289 OI for front month of AUGUST ) -number of notices served upon today (6)x 5000 oz  equals  2,145,000 oz  of silver standing for the AUGUST contract month.
we gained 5 contracts or an additional 25,000 oz will  stand for delivery in this non active month of August.
 
Total dealer silver:  26.975 million (close to record low inventory  
Total number of dealer and customer silver:   153.265 million oz (close to a record low)
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  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.
END
And now the Gold inventory at the GLD
August 4/no change in inventory at the GLD/Inventory rests at 969.65 tonnes
August 3/a big deposit of 5.62 tonnes of paper gold/Inventory rests at 969.65 tonnes
August 2/no change in gold inventory at the GLD/Inventory rests at 964.03 tonnes
August 1/we had a huge paper deposit of 5.94 tonnes of gold into the GLD/Inventory rests at 964.03 tonnes
July 29/ we had a huge deposit of 3.86 tonnes into the GLD/inventory rests at 958.09 tonnes
July 28/no changes in gold inventory at the GLD/Inventory rests at 954.23 tonnes
July 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 954.23 TONNES
jULY 26./ANOTHER HUGE PAPER WITHDRAWAL OF 4.46 TONNES FROM THE GLD/INVENTORY RESTS AT 954.23 TONNES
JULY 25/ A HUGE PAPER WITHDRAWAL OF 4.45 TONNES FROM THE GLD/INVENTORY RESTS AT 958.69 TONNES
July 22/ no change in gold inventory at the GLD/Inventory rests at 963.14 tonnes
July 21/ a large withdrawal of gold inventory to the tune of 2.08 tonnes/Inventory rests at 963.14 tonnes
July 20./no changes in gold inventory at the GLD/Inventory rests at 965.22 tonese
July 19/no change in gold inventory at the GLD/Inventory rests at 965.22 tonnes
July 18./ a good sized deposit of 2.37 tonnes of gld into GLD/this is a paper gold entry/inventory rests at 965.22 tonnese
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
August 4/ Inventory rests tonight at 969.65  tonnes

end

Now the SLV Inventory
August 4/no change in silver inventory at the SLV/inventory rests at 350.815 million oz
August 3/no change in silver inventory/inventory rests at 350.815 million oz
August 2/ we had a tiny withdrawal of 40,000 oz of silver/Inventory rests at 350.815 million oz
August 1/we had a huge paper deposit of 1.235 million oz into the SLV/Inventory rests at 350.955 million oz
July 29/we had no change in silver inventory/inventory rests at 349.720 million oz
July 28/we had 1.14 million oz of additional silver added to the SLV/Inventory rests at 349.720 million oz
July 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.580 MILLION OZ
jULY 26/NO CHANGE IN SILVER INVENTORY AT THE slv/INVENTORY RESTS AT 348.580 MILLION OZ
JULY 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.580 MILLION OZ
July 22/we had no change in silver inventory at the SLV.Inventory rests at 348.580 million oz/
July 21/no change in silver inventory at the SLV/Inventory rests at 348.580 million oz
July 20/no change in silver inventory at the SLV/Inventory rests at 348.580 million oz
July 19/no change in silver inventory at the SLV/Inventory rests at 348.580 million oz
July 18/no change in silver inventory at he SLV/inventory restss at 348.580 million oz
.
August 4.2016: Inventory 350.815 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 3.3 percent to NAV usa funds and Negative 3.2% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 59.2%
Percentage of fund in silver:39.6%
cash .+1.2%( August 4/2016).
2. Sprott silver fund (PSLV): Premium rises  to +1.35%!!!! NAV (august 4/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  1.09% to NAV  ( august 4/2016)
Note: Sprott silver trust back  into POSITIVE territory at +1.35% /Sprott physical gold trust is back into positive territory at 1.09%/Central fund of Canada’s is still in jail.
 
 
 

end

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

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

Buy Gold and “Real Assets” Says the ‘Bond King’

Buy gold and “real assets” and not bonds is the financial advice of the “Bond King”, Bill Gross in his latest must read newsletter which covers everything from his favoured assets to sex.

bill_gross‘Bond King’ Bill Gross (Bloomberg)

Gross, the founder of and ex boss of the largest bond fund in the world PIMCO, now manager of the Janus Global Unconstrained Bond Fund, says buy gold and warns of the risks in the bond market. He favours allocating funds to physical assets such as gold and real estate and he explained why in interviews on CNBC and Bloomberg yesterday.

He is warning that there will be a new global financial crisis and that “our credit-based financial system” is likely to “break down”. Current conditions, with global central banks keeping interest rates low and the fact that there is more than $11 trillion in sovereign debt is now carrying negative yields, presents severe challenges to investors, markets and the very financial system itself.

“I think we should be investing in real assets as opposed to financial assets,” Gross told CNBC yesterday afternoon.

Earlier in the day, Gross released a letter to investors, warning them off stocks and bonds and advising them to buy gold and look elsewhere for return.

“I don’t like bonds, I don’t like most stocks; I don’t like private equity. Real assets such as land, gold, and tangible plant and equipment at a discount are favored asset categories.”

Gross also amusingly writes in the newsletter about sex and his mother asking him if he knew where little kittens come from.

Gross did not specify whether he favours gold ETFs or physical gold bullion but given his express preference for “real assets” and “hard assets” including land, it is highly likely that he favours actual physical bullion and not paper or digital proxies with their significant levels of indemnification and counterparty risk.

7RealRisksBanner

Gold ETFs have significant unappreciated risks as we have outlined from their introduction. Risks from these created financial instruments include liquidity, valuations, counter-party risks as well as liabilities and responsibilities of the market participants such as the auditors, custodians and sub custodians.

Physical gold bullion coins and bars are almost unique among asset classes. Gold and silver bullion are asset classes not dependent on the performance of auditors, management, corporations, financial institutions, banks, politicians and governments. Nor are gold coins and bars dependent on the performance of trustees, custodians and or sub custodians or the viability of the financial system itself.

Gold ETFs are quite high risk financial products while gold bullion is a proven hedging instrument and safe haven asset. Actual coins and bars are the safest way to buy gold. For the majority of investors and pensions, gold ETFs should not be invested in. They should not be confused with owning physical gold coins or bars in allocated and segregated accounts.

Gold and Silver Bullion – News and Commentary

Gold dips on firmer dollar after U.S. jobs data (Reuters)

Gold Drops for Second Day as Investors Count Down to Jobs Data (Bloomberg)

India’s Gold Imports Said to Slide in July After Climb in Prices (Bloomberg)

Bitcoin worth $72 million stolen from Bitfinex exchange in Hong Kong (Reuters)

Growth at U.S. Services Industries Cools From Seven-Month High (Bloomberg)

7RealRisksBlogBanner

Investing in gold: Big players put money into the precious metal (CNBC)

“Bond King” Answers “Honestly” What Happens When The Financial System Breaks Down (Zerohedge)

‘Sell everything,’ DoubleLine’s Gundlach says (CNBC)

U.S. GDP Calculations Are Questioned (FXStreet)

31 Incredible Facts About Gold (Goldseek)

Gold Prices (LBMA AM)

04Aug: USD 1,351.15, GBP 1,016.60 & EUR 1,213.87 per ounce
03Aug: USD 1,364.40, GBP 1,023.16 & EUR 1,218.96 per ounce
02Aug: USD 1,358.15, GBP 1,025.13 & EUR 1,213.10 per ounce
01Aug: USD 1,348.85, GBP 1,022.97 & EUR 1,207.76 per ounce
29July: USD 1,332.50, GBP 1,012.03 & EUR 1,200.18 per ounce
28July: USD 1,341.30, GBP 1,017.64 & EUR 1,208.78 per ounce
27July: USD 1,320.80, GBP 1,077.77 & EUR 1,200.21 per ounce

Silver Prices (LBMA)

04Aug: USD 20.16, GBP 15.24 & EUR 18.11 per ounce
03Aug: USD 20.59, GBP 15.43 & EUR 18.39 per ounce
02Aug: USD 20.71, GBP 15.65 & EUR 18.51 per ounce
01Aug: USD 20.51, GBP 15.56 & EUR 18.37 per ounce
29July: USD 20.40, GBP 15.20 & EUR 18.03 per ounce
28July: USD 20.41, GBP 15.51 & EUR 18.41 per ounce
27July: USD 19.58, GBP 14.95 & EUR 17.81 per ounce


Recent Market Updates

– Gold Bullion – The Ultimate Monetary Solution
– Silver Kangaroo Coins – Sales Surge To Over 10 Million
– Trump, Clinton, “Ugliest” Election Coming – Gold’s “Summer Doldrums” Prior To Resumption of Bull Market
– Marc Faber: Invest 25% Of Investment Portfolios In Gold Bullion
– “Could Not Invent A More Bullish Story For Gold Bullion”
– Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money
– Is Gold Set To Hit $1,500 Per Ounce?
– Why Italy’s bank crisis could be a ‘ticking time bomb’
– Gold Holds Near Two-Week Low as Risk Appetite Rises on U.S. Data
– IMF Scraps Forecast for Global-Growth Pickup on Brexit Fallout
– Gold, Trump and Rates: Bank That Foresaw Rally Flags $1,500
– Gold Lower After Central Bank’s Surprise Move
– “We Are On the Cusp of an Explosion in the Silver Price”

Mark O’Byrne
Executive Director

end

Chris Powell interviewed by the Real Money show

(courtesy Gata/Chris Powell)

‘Real Money Show’ interviews GATA secretary on gold market rigging

Section:

8:19a ET Wednesday, August 3, 2016

Dear Friend of GATA and Gold:

“The Real Money Show” on Toronto’s 50,000-watt talk radio station, CFMJ, interviewed your secretary/treasurer last Saturday about market rigging by central banks, its impairment of human progress around the world, and gold’s prospects for breaking free and restoring free markets and defeating totalitarianism. The segment with your secretary/treasurer is about 25 minutes long and begins at the 12:08 mark here:

http://omnyapp.com/shows/640-toronto/real-money-show-july-30th-2016

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

END

Bill Gross favours gold and real estate instead of bonds:

(courtesy Bill Gross/Bloomberg)

Bond king Gross favors gold and real estate now

Section:

Gross Says ‘I Don’t Like Bonds, Most Stocks,’ Favors Real Assets

By John Gittelsohn
Bloomberg News
Wednesday, August 3, 2016

Money manager Bill Gross says investors should favor gold and real estate while avoiding most stocks and bonds trading at inflated prices.

“I don’t like bonds. I don’t like most stocks. I don’t like private equity,” Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, wrote in his monthly investment outlook Wednesday. “Real assets such as land, gold, and tangible plant and equipment at a discount are favored asset categories.” …

… For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-08-03/gross-says-i-don-t-lik…

END

Chris Powell takes on Steve Saville.  Saville believes that the Fed does not meddle with futures or ETFs:

(COURTESY CHRIS POWELL/GATA)

No one can be sure that Fed doesn’t meddle with futures or ETFs

Section:

8:03p ET Wednesday, August 3, 2016

Dear Friend of GATA and Gold:

Financial letter writer and technical analyst Steve Saville contends today that the Federal Reserve couldn’t possibly be intervening directly in the stock market by purchasing stock index futures or exchange-traded funds because evidence of such transactions would show up on the Fed’s public books:

http://tsi-blog.com/2016/08/does-the-fed-support-the-stock-market/

There are a few problems with this assertion, quite apart from Saville’s failure ever to put a critical question to a central bank.

1) First is that Saville’s proposition is misleading. Saville acknowledges that the Fed could seek to support equity prices through “monetary policy and ‘jawboning.'” But the Fed also could undertake futures and ETF purchases through intermediaries, just as the Treasury Department could undertake such purchases through its Exchange Stabilization Fund or through intermediaries.

 2) Contrary to Saville’s suggestion, not all important Federal Reserve records and transactions are public. The Federal Reserve Bank of New York operates a massive trading room executing transactions for itself and the Treasury Department that are not individually disclosed.

3) Most of the Fed’s gold transaction records are secret, as established in 2009 by GATA’s partially successful freedom-of-information litigation against the Fed, litigation that extracted an acknowledgment from a member of the Fed’s Board of Governors that the Fed has secret gold swap arrangements with foreign banks:

http://www.gata.org/node/9917

Just a few months ago the president of the Federal Reserve Bank of New York, William Dudley, taking questions after a presentation to a group of economists meeting at the Virginia Military Institute, clumsily evaded a question about those gold swaps, and his publicist at the New York Fed refused even to acknowledge a follow-up question about the swaps:

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

So what are the Fed and its partner central banks and other banks doing with the swapped gold? Are they just filling gaps in their collection of refiner hallmarks? Or are they facilitating secret interventions by each other in the markets? Saville hasn’t asked and doesn’t seem to want to know.

4) The ESF is fully authorized by law, the Gold Reserve Act of 1934 as amended in the 1970s, to trade secretly in any market, domestically and around the world:

https://www.treasury.gov/resource-center/international/ESF/Pages/esf-ind…

The New York Fed well may execute ESF trades but they would belong to the ESF and not necessarily appear on the Fed’s public books. Indeed, New York Fed President Dudley purported not to be able to answer the gold swap question at the Virginia Military Institute because it involved “individual customer transactions,” though it didn’t. The question was simply whether the Fed is involved with gold swaps.

5) According to documents filed with the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, some governments and central banks have at least prepared themselves to trade all U.S. futures contracts in secret — not just financial futures but commodity futures as well — by arranging volume discounts for their trading with the operator all the major futures exchanges in the United States, CME Group:

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

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

The Fed or the Treasury could be undertaking such trades directly or through intermediaries.

6) The Fed undertakes frequent transactions with at least 23 investment banks designated as primary dealers in U.S. government securities. These transactions effectively direct money in various directions that are not all formally specified in public. The investment banks have a huge interest in deploying the Fed’s money in ways that will please the Fed and keep the money flowing to the investment banks. The primary dealers are required to “participate consistently in open market operations to carry out U.S. monetary policy pursuant to the direction of the Federal Open Market Committee and provide the New York Fed’s trading desk with market information and analysis helpful in the formulation and implementation of monetary policy”:

https://www.newyorkfed.org/markets/pridealers_current.html

Is Saville privy to all that communication and the market activity to which it leads? He is not listed as a primary dealer.

7) The chairman of the Federal Reserve, Janet Yellen, and New York Fed President Dudley are members of the Board of Directors of the Bank for International Settlements in Basle, Switzerland, the central bank of the central banks:

https://www.bis.org/about/board.htm?m=1%7C2%7C2

According to its annual report, the BIS regularly undertakes secret transactions in various markets for its member central banks:

https://www.bis.org/publ/arpdf/ar2016e_ec.pdf

In 2008 the BIS actually advertised to potential new central bank members that its services include secret interventions in the currency and gold markets and “off-balance-sheet” asset management:

http://www.gata.org/node/11012

Is Saville privy to that stuff too?

One way Saville could test his confidence that the Fed isn’t involved, directly or indirectly, with index futures or ETFs would be to try to attend a meeting of its Board of Governors or Federal Open Market Committee. Of course anyone who did that would be arrested, but maybe something like that would be the only antidote to Saville’s credulity — if it is credulity and not just another contrived defense of financial newsletters that provide technical analysis of markets that were commandeered by the government long ago.

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

END

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

 
 

:

1 Chinese yuan vs USA dollar/yuan SLIGHTLY DOWN to 6.6443 (  SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.65060) / Shanghai bourse  up 3.97 OR 0.13%   / HANG SANG CLOSED UP 93.11 or 0.43%

2 Nikkei closed UP 171.78  OR 1.07% /USA: YEN rises TO 101.39

3. Europe stocks opened ALL IN THE GREEN    /USA dollar index up to 95.83/Euro down to 1.1127

3b Japan 10 year bond yield: RISES TO  -.075%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 101.39

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  40.73  and Brent: 42.62

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./“HELICOPTER MONEY” ON THE TABLE 

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to -.077%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 7.99%/: 

3j Greek 10 year bond yield FALL to  : 8.31%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1359.15/silver $20.38(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 12/100 in  roubles/dollar) 66.35-

3m oil into the 40 dollar handle for WTI and 42 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 DEVALUATION UPWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 101.37 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9732 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0828 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -0.077%

/German 10+ year rate BASICALLY  negative%!!!

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

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

4. USA 10 year treasury bond at 1.511% early this morning. Thirty year rate  at 2.265% /POLICY ERROR)

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

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

HELICOPTER MONEY STILL ON THE TABLE/JAPANESE STIMULUS PLAN DISAPPOINTS

S&P Futures Flat As Europe, Asia Lifted By Banks, Yen; All Eyes On The Bank Of England

In a mostly quiet session, European and Asian stocks rose, pushed higher by financial stocks and the USDJPY which initially dipped on some hawkish comments by BOJ deputy governor Iwata, only to rebound later in the session, lifting the Nikkei 1.1%, while the Stoxx 600 rose 0.4% led higher by the banking sector. S&P futures are unchnaged after yesterday’s last hour ramp. The key event is the BOE decision due in half an hour, which saw the pound dip initially only for cable to regain all losses in recent trading, despite a 100% price in expectation that Mark Carny will deliver the first interest rate cut in seven years.

Ahead of the BOE Super Thursday, currency traders are bracing for the BOE to provoke share price swings: a measure of overnight volatility for sterling against the dollar was near the highest since Britain voted to leave the European Union in June according to a Bloomberg report. After holding fire last month, the BOE is expected to cut rates amid mounting evidence that the prospect of Brexit is already hurting economic growth. There are a suite of other measures, including an expansion of its bond-purchase program, which the BOE may also adopt to tackle the fallout, and which would weigh on the pound.

“I think a cut plus 100 billion pounds in new quantitative easing is probably the barrier (to more falls),” said Richard Benson, co-head of portfolio investment at currency fund Millennium Global in London.

“There is quite a lot of speculation regarding what the BOE might do today, so the short-term volatility is to be expected,” said Mark Dowding, a London-based partner and money manager at BlueBay Asset Management LLP. “We doubt the BOE would be opposed to the idea of the pound falling further as it would support the growth outlook, which is deteriorating markedly. We see the pound falling to $1.20 or lower by the end of the year.”

The Stoxx 600 advanced 0.4 percent in London, after falling 1.9 percent in the first three days of the week. Gauges of lenders and oil companies rallied at least 1.4 percent.  Banks led the Stoxx Europe 600 Index higher, while mining shares and energy producers drove the Asian index up from its lowest level since June 24. U.S. crude held above $40 a barrel after the steepest drop in gasoline supplies since April soothed concern over a glut. Industrial metals fell as maintenance-related disruptions in China’s stainless-steel production decreased demand for the raw materials. Siemens AG rose 4.1 percent after increasing its profit outlook for the second time this year. Societe BIC SA jumped 5.6 percent as the maker of pens said sales rose in the second quarter. Aviva Plc advanced 5.1 percent as the British insurer reported a gain in profit and increased its dividend. Randgold Resources Ltd. tumbled 9.5 percent, pacing declines on a measure of Stoxx 600 miners, as a decline in gold output arising from disruptions at two of its African operations led to lower profit.

The MSCI Emerging Markets Index climbed 0.7 percent, after sliding 1.6 percent in the previous two days. Benchmarks in Russia, Dubai and the Philippines gained at least 0.8 percent. S&P 500 futures were little changed, after U.S. equities Wednesday snapped a two-day losing streak amid the rally in oil prices. The index is trading near its highest multiple in more than a decade. Still, investors are looking for clear signs of economic progress after last week’s disappointing growth report, and will asses releases on jobless claims and factory orders due Thursday for clues on the strength of the U.S. economy.  The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.3 percent, rebounding from the biggest drop in four weeks. The Shanghai Composite Index ended the day up 0.1 percent, after falling as much as 0.7 percent.

Treasuries were little changed, with yields on notes due in a decade steady at 1.55 percent. Ten-year rates jumped at the start of this week, as the record-setting rally in global bonds appeared to falter. Yields on German 10-year bunds lost 1 basis point to minus 0.05 percent.

After yesterday’s torrid rally, WTI fell back under $41, slipping 0.5 percent to $40.50 per barrel, after Wednesday’s 3.3 percent rebound that came when U.S. government data showed gasoline stockpiles fell by 3.26 million barrels last week, the most since April. Brent crude dropped 0.7 percent to $42.82 a barrel.

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2157
  • Stoxx 600 up 0.5% to 337
  • FTSE 100 up less than 0.1% to 6638
  • DAX up 0.7% to 10237
  • German 10Yr yield down 1bp to -0.05%
  • Italian 10Yr yield down 3bps to 1.19%
  • Spanish 10Yr yield down 2bps to 1.07%
  • S&P GSCI Index down 0.3% to 335.9
  • MSCI Asia Pacific up 0.7% to 135
  • Nikkei 225 up 1.1% to 16255
  • Hang Seng up 0.4% to 21832
  • Shanghai Composite up 0.1% to 2982
  • S&P/ASX 200 up 0.2% to 5476
  • U.S. 10-yr yield up less than 1bp to 1.55%
  • Dollar Index up 0.13% to 95.69
  • WTI Crude futures down 0.8% to $40.50
  • Brent Futures down 0.9% to $42.60
  • Gold spot down 0.5% to $1,351
  • Silver spot down 1% to $20.20

Top Headline News

  • What to Watch as Carney Kicks Off Defense Against Brexit Fallout: Most economists predict reduction in key rate to 0.25%
  • Berkshire Said to Draw Fed Scrutiny Over Wells Fargo Investment: Agencies weigh whether insider-credit limits exceeded at bank
  • New York State to Require Hearing on Proposed Anthem-Cigna Deal: Regulator says purchase would reduce competition, hurt firms
  • This Time, 3D Printer Makers Think They’ve Found a Sweet Spot: HP says new device cheaper, works 10 times faster than rivals’
  • Goldman Employees to Pull $350m From Och-Ziff Fund: Setback for Och as clients pull assets, U.S. probe continues
  • Tesla Forecasts Ease Sting as Quarterly Loss Trails Estimate: Loss was $1.06-share on added engineering costs for Model 3
  • Musk Declares Tesla Free From Factory Hell With Targets Intact: Assembly of electric semi, bus could begin in a few years
  • MetLife Profit Falls 90% on Review of Annuities Slated for Exit: CEO cites progress in plan to separate business
  • Fox Profit Tops Estimates as Broadcast TV Registers Gain: Film earnings slump on marketing costs for big summer pictures
  • Allstate 2Q Adj. EPS, Revenue Top Estimates: Net investment down $27m y/y
  • Ackman’s Pershing Square Sells Position in Canadian Pacific: Move comes after transformation of Canadian railway firm

* * *

Looking at regional markets, Asia traded mostly positive, tracking the US oil inspired gains where WTI rose above USD 41/bbl and the Dow snapped a 7-day losing streak. ASX 200 (+0.2%) was underpinned by the gains in energy after oil’s 3% surge whilst mining names also supported the advances in Australia. Nikkei 225 (+1.1%) saw choppy trade with fluctuations in JPY driving price action. Chinese markets were mixed with bargain-buying observed in the Hang Seng (+0.5%), while the Shanghai Comp (+0.1%) underperformed following a reserved liquidity injection and after yesterday’s NDRC comments regarding lower rates and RRR were retracted from the statement. 10yr JGBs resumed its post-BoJ downtrend with demand dampened as participants awaited a 10yr inflation-linked auction, which was relatively mixed with the lowest accepted price falling from prior, although b/c slightly improved and there was a lower portion of bids allotted at the bottom price.

Top Asian News

  • Offshore Yuan Forwards Signal Depreciation Bets at Two-Year Low: Bears surrendering, getting out of short trades, Mizuho says
  • $75b Stock Binge Looms After Japan Pension Whales’ Losses: Pension funds combined managed $1.9t as of March
  • Toyota Cuts Net Forecast as Yen Gains, Americans Snub Cars: Stronger yen drags on earnings after 3-year tailwind
  • SunEdison India Sale Said to Draw Khazanah, Hinduja Brothers: U.S. clean-energy giant selling $700m of India projects
  • Yum! Brands, McDonald’s Look for Buyers as Chinese Tastes Shift: Both eye spinoffs of their China operations
  • BOJ Seen Buying More Often to Reach $59b ETF Target: Bank boosts daily purchase amount only slightly this month

European equities have seen some modest upside this morning (Euro Stoxx: +0.5%) with earnings yet again dictating the latest state of play, while the FTSE 100 underperforms relative to its counterparts with pressure from mining and energy names. Financials lead the pack as analysts and traders look to the BoE’s Super Thursday (full preview posted here). Fixed income markets are also relatively quiet ahead of the key risk event of the BoE and with Spanish and French supply now absorbed by the market. Heading into 1200BST Gilts will likely take focus amid speculation that asset purchasing could be re-introduced by the BoE.

Top European News

  • Siemens Raises Outlook After Quarterly Profit Beats Estimate: 3Q industrial operations profit rises 20%
  • Anheuser-Busch InBev to Dominate Combined Brewer’s Leaders: Board to include 1 executive from SABMiller
  • Merck KGaA Quarterly Profit Beats Estimates: Forecast raised
  • Nokia Raises Merger Savings Target as Sales Trail Estimates: CEO Suri promises more cut costs after Alcatel-Lucent deal
  • London Stock Exchange Says Brexit May Erode Trading Volume: Work on regulatory consent for Deutsche Boerse deal underway
  • Adidas’s North America Sales Jump 26% After Outlook Raised: Greater China is fastest-growing region with 30% growth
  • Samsung Said in Talks to Buy Assets of Fiat Auto-Parts Unit: Company most interested in lighting, entertainment, telematics

In FX, sterling declined 0.2 percent to $1.3295 in early trading as swaps pricing showed a 100 percent chance of a rate reduction. The BOE is forecast to cut its benchmark from a record low of 0.5 percent and may boost an asset purchase program that stands at 375 billion pounds ($500 billion).The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was up 0.1 percent after rising 0.3 percent on Wednesday, when emerging-market currencies led declines. Chicago Federal Reserve President Charles Evans told reporters Wednesday that a U.S. rate hike “could be appropriate this year.” Odds on the Fed boosting benchmark borrowing costs in 2016 have dropped to 39 percent, with last week’s weaker-than-expected U.S. growth data damping prospects for tightening. The yen weakened 0.3 percent to 101.54 per dollar, adding to its 0.4 percent slide on Wednesday. Japan’s currency has gained about 0.5 percent this week, as traders weigh the BOJ’s decision last Friday to only bolster purchases of exchange-traded funds, as well as a fiscal package flagged Tuesday by Prime Minister Shinzo Abe.

In commodities, WTI crude slipped 0.3% to $40.72 per barrel, after Wednesday’s 3.3% reboundthat came when U.S. government data showed gasoline stockpiles fell by 3.26 million barrels last week, the most since April. Brent crude dropped 0.7 percent to $42.82 a barrel. WTI is still down more than 1 percent this week, after the commodity sold off on Monday and Tuesday amid resurgent concern over a global glut. Citigroup Inc. to Bank of America Merrill Lynch predicted the slump would be short-lived, while Societe Generale SA said the price correction would be limited due to a better balance between supply and demand. “We’re seeing rebalancing,” Scott Darling, regional head of oil and gas at JPMorgan Chase & Co., said in a Bloomberg TV interview. “We think in the near-term, oil will be under pressure because demand is moderating.” Gold for immediate delivery dropped 0.5 percent to $1,351.47 an ounce, after declining 0.4 percent on Wednesday. Last session’s retreat halted the precious metal’s longest rally in a month. Copper dropped 1.2 percent on the London Metal Exchange and nickel fell 2.2 percent. Wheat added 1.3 percent to $415.50 a bushel as use of the crop to feed cows, chickens and pigs is set to rise to the highest level since 2007 after heavy rains in France left crops unfit for human consumption. Noble Group Ltd. rebounded as much as 16 percent in Singapore as the company’s new rights shares began trading on the exchange, extending a roller-coaster ride ahead of quarterly results next week that’ll shed light on the commodity trader’s performance, funding and plans for asset sales.

On today’s calendar, the key event is the aforementioned BoE monetary policy meeting outcome followed by Governor Carney’s press conference. Away from that, in the US we’ll firstly get the latest initial jobless claims numbers, shortly followed by June factory orders data where headline orders are expected to have fallen -1.9% mom. We’ll also get confirmation of any final revisions to the June durable and capital goods orders data. Away from the data the Fed’s Kaplan is due to speak this morning in Shanghai while the IMF’s Lagarde will speak this afternoon in Brazil. There will be more corporate earnings released too with 28 S&P 500 companies scheduled including Kraft Heinz. In Europe we’ll get numbers from Adidas, Nokia and Siemens.

* * *

Headline Summary Bulletin from RanSquawk and Bloomberg

  • European equities trade modestly higher heading into the North American crossover with some participants choosing to sit on the sidelines ahead of the BoE rate decision at 1200BST
  • FX markets have also seen a relatively tame start to the session with markets pricing in a 25bps cut by the BoE later today
  • Looking ahead, highlights include BoE rate decision, minutes, QIR and press conference, US Factory Orders, Durable Goods and Initial Jobless Claims, Fed’s Kaplan
  • Treasuries steady in overnight trading as global equities rally, oil and gold drop ahead of this morning’s BOE announcement.
    When the BOE publishes their first full assessment of what the Brexit vote means for the economy and their defensive plan, almost all economists in a Bloomberg survey believe the benchmark rate will be reduced to a record low
  • Negative rates “won’t happen at this meeting” but “I certainly don’t rule it out,” former Bank of England policy maker Danny Blanchflower said on BBC Radio’s Today program
  • U.S. regulators are examining whether Berkshire’s stake in one of its biggest holdings, Wells Fargo, violates rules for how much credit banks can extend to corporate insiders, according to two people familiar with the review
  • The BOJ doubled its exchange-traded fund purchases, suggesting it’s opting to increase the daily amount from now on rather than how often it buys. Investors are watching how the bank will reach its new target as Japanese equities struggle in 2016
  • Kozo Yamamoto hasn’t wasted any time pushing his policy prescriptions since Japanese PM Abe brought him into his cabinet. “I think it might be necessary to encourage a discussion throughout all ministries about a wage target policy,” Yamamoto told reporters
  • Six weeks since U.K. voters rebuked Europe’s political elite by choosing to leave the EU, the region’s establishment has reacted by carrying on as before. The revolving door of former policy makers joining the finance industry has spun again

Economic Event Calendar

  • 6:15am: Fed’s Kaplan speaks in Shanghai
  • 7am: Bank of England Bank Rate, est. 0.25% (prior 0.50%)
  • 7:30am: Challenger Job Cuts y/y, July (prior -14.1%)
  • 8:30am: Initial Jobless Claims, July 30, est. 265k (prior 266k)
  • 9:45am: Bloomberg Consumer Comfort, July 31 (prior 42.9)
  • 10am: Factory Orders, June, est. -1.9% (prior -1%)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural-gas storage changes

DB’s Jim Reid concludes the overnight wrap

As many Olympians will tell you over the next couple of weeks, records are there to be broken and another one is likely to fall in financial markets today. The Bank of England is widely expected to cut rates by 25bps and this will place them as fresh 322 year lows from the original inception of the BoE. At this stage I’d normally quote the latest hot off the press piece from our UK economist George Buckley. However George had his first child last week and is on paternity leave. If he’s anything like me 11 months ago he currently won’t know what’s hit him.

Before he left he reaffirmed his view of a 25bps cut and that they will leave all other policy levers untouched for now. In September, as the economic news deteriorates more forcefully in response to Brexit, he expects the Bank to supplement that with another cut in the Bank Rate to the lowest he thinks they are willing to go: to 0.10%. But this further 15bps easing is likely to be insufficient, and thus he expects it to be accompanied by a restart of the QE programme (£50bn or £75bn of purchases over the following three months). So lots of easing to come.

We’ll also get the latest Inflation Report and new macroeconomic forecasts from the BoE which will be released alongside the outcome of the monetary policy meeting. It would be hard to imagine that the BoE won’t downgrade its growth forecasts in light of Brexit although the extent to which will be interesting. The inflation numbers will also be important given the big 10% drop in Sterling post the vote. What will be interesting here is how long the BoE believes that deprecation gets passed through to consumer prices.

One of George’s reasons justifying the BoE holding last month and instead waiting for today’s meeting is the benefit of seeing more post-Brexit data. Yesterday we got final confirmation of the July PMI’s and there was no change to the UK’s weak 47.4 services reading which is the lowest reading since March 2009. It meant the composite ended up at 47.5 (revised down another 0.2pts) which is a 5pt drop from June. Believe it or not the Citigroup economic surprise index has done nothing but rise post Brexit. In fact, with the reading at 58.8 it is up some 56pts post the referendum and at the highest since 2013. The current UK reading is actually well ahead of similar readings for the US and Euro area however this more than likely reflects beats on much lower expectations and also the still relatively limited post Brexit survey releases. So while interesting, probably not worth reading into that much.

Staying with the data, ahead of the second main risk event of this week – that being Friday’s payrolls – the July ADP employment change reading in the US didn’t spring too many surprises after coming in slightly ahead of estimates at 179k (vs. 170k expected). That compares to 176k in the prior month. The ISM non-manufacturing reading for last month was a bit more interesting though. The headline reading fell 1pt and a little more than expected to 55.5 (vs. 55.9 expected). The focus was on the employment component and having risen from 49.7 in May to 52.7 in June, it was back down to 51.4 in July. As we noted yesterday the series isn’t necessarily a great predictor of immediate monthly changes in payrolls, but it was interesting to see our US economists highlight that the six-month trailing average of the non-manufacturing employment series (51.1) is at its lowest level since October 2010 (50.2). At that time, the six-month trailing average of private service-sector hiring was 115k, well below the 166k average as of June.

So with the two big risk events of the week looming, markets were a bit more muted yesterday although they were helped by a decent rebound for Oil and also a much better session for European Banks. Indeed WTI Oil rallied +3.34% yesterday and is up another +1% or so this morning at slightly north of $41/bbl having actually touched an intraday low of $39.19/bbl yesterday. The trigger for the bounceback appeared to be the latest US inventory data which showed a surprising steep fall in gasoline stockpiles last week. That sent energy stocks soaring and helped the S&P (+0.31%) to its first positive day in August. The Dow (+0.23%) also closed higher and finally brought to an end a run of seven consecutive daily losses.

The rally for Oil came a bit later in the day so European markets missed out on most of it, although European Banks had a much better session following a raft of earnings reports. While the Stoxx 600 (+0.03%) was little changed, the Stoxx 600 Banks index rebounded +1.77%. ING Group (+8.20%) and Societe Generale (+3.16%) rose on better than expected profit numbers, Standard Chartered (+4.19%) surged after loan impairment charges dropped and operating costs fell, while HSBC (+4.47%), despite reporting mixed results, was higher following a share buyback announcement.

In bond markets meanwhile two days of surging bond yields took a pause for breath with government bond markets little changed by the close. Credit was a smidgen tighter (the US outperforming Europe given the moves for Oil) and it was interesting to see UBS come to market with a new USD AT1 bond which according to Bloomberg was Europe’s first sale of bonds in the AT1 market since Brexit.

Turning over to the latest in markets this morning, after initially dropping lower earlier in the session Japanese equities have bounced back in the hour or so as we to print. Having been down as much as half a percent, the Nikkei and Topix are now +0.38% and +0.35% respectively, while JGB yields are unchanged and the Yen is back to flat after initially strengthening. The rest of Asia is also broadly higher, likely reflecting those gains in the energy complex. The Hang Seng (+0.56%), Kospi (+0.19%) and ASX (+0.37%) in particular are up. China is lagging a bit, with the Shanghai Comp currently -0.19%.

In terms of the rest of the data yesterday, the final services PMI in the US was revised up half a point to 51.4 which left the composite at 51.8 (vs. 51.2 in June) and the highest since April. The European session was all about the final PMI revisions. The Euro area services PMI was revised up 0.2pts to 52.9 which left it ever so slightly ahead of June (52.8). The resulting composite print of 53.2 was up from 53.1 in June. Regionally the only country to see a big decline was Spain (composite down 2pts) with the rest of Europe ex UK resilient. Indeed our European economists noted that the July composite reading for the Euro area suggests GDP growth of between 0.3% and 0.4% qoq which is in line with their 0.3% projection.

Away from the data we also heard from one of the more dovish Fed officials in the form of the Chicago Fed’s Evans. He said that one rate hike this year ‘could be appropriate’ given his outlook and improving data in comments at a media briefing. He also said that he would prefer no hikes until ‘we saw inflation much more strongly’. On this, the Minneapolis Fed President Kashkari (who it feels like has spoken every day this week) said that he’s not seeing much inflationary pressure in the data and that we ‘have the luxury of time’ in raising rates.

end

ASIA MARKETS

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 3.97 POINTS OR 0.13%/ /Hang Sang closed UP 93.11 points or 0.43%. The Nikkei closed UP 171.78 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.18% Chinese yuan (ONSHORE) closed DOWN at 6.6443/Oil rose to 40.63 dollars per barrel for WTI and 42.62 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.6506 yuan to the dollar vs 6.6443 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS CHINA TRIES TO STOP MORE USA DOLLARS LEAVING THEIR SHORES  

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

I have now seen everything!! Japan proposes its style of “wage controls”: forcing higher wages on its people: there goes corporate profits.

(courtesy zero hedge)

Japan Proposes “Wage Controls” As Abenomics’ Desperation Measure

One of the main reasons for the failure of Abenomics is that while Abe has been largely successful in boosting import prices as a result of the collapse in the Yen, his policies have been a failure when it comes to achieving the only thing that truly matters for achieving benign inflationary pressures: pushing wages higher. We first pointed this out all the way back in late 2014 in a post titled “The Abenomics Devastation: Japanese Real Wages Decline For Record 16 Consecutive Months.”

Back then we said, somewhat jokingly, that “in other words, when Japan turns to wage controls some time in 2015, a move that is now essentially assured as Japan has gone all in on central planning, it will demand that corporations boost pay to part-timers first, and then force all corporations to hike wages across the board.

Almost two years later, we find that we were both right and wrong. We were wrong in our estimate that Japan’s wage controls would take place in 2015: we were off by about a year, but ultimately we were right that as Japan’s last ditch attempt to boost the economy it would launch a form of wage controls.

Recall that on Wednesday, Abe rotated some key positions in his cabinet, and appointed Kozo Yamamoto, an outspoken lawmaker who advocates firm political oversight of the Bank of Japan, as minister in charge of regional revitalization. Yamamoto has previously called for radical remedies for Japan’s economic ills. After the 2011 earthquake and tsunami, he suggested the central bank underwrite government debt to fund reconstruction. The veteran lawmaker has hosted study groups that helped shape Abe’s economic policy, while continually pushing at the boundaries of debate.

Kozo Yamamoto, Japan’s new minister in charge of regional revitalization

As Bloomberg reported, in a 2015 interview, Yamamoto said he was worried that the BOJ was wavering in its commitment to huge monetary stimulus and that Governor Haruhiko Kuroda might be contending with a “den of conspirators.” His solution: enshrine the 2 percent inflation target in the BOJ law to ensure the current policy continues long after Kuroda’s term ends. “Yamamoto is a mastermind of Abenomics and coming into the cabinet makes him a closer adviser,” said Yuji Shimanaka, chief economist at Mitsubishi UFJ Morgan Stanley. “Monetary policy and the BOJ are his lifework and his beliefs won’t waver at all. Yamamoto will keep paying close attention,” said Shimanaka, who has known Yamamoto for almost two decades.

Well, Yamamoto is back, and he has not wasted any time in pushing his radical policy prescriptions. The key of these is precisely what we said would happen in 2014: wage controls.

“I think it might be necessary to encourage a discussion throughout all ministries about a wage target policy,” Yamamoto told reporters in Tokyo on Thursday morning. The veteran lawmaker, whose formal job description is minister responsible for regional revitalization, has made it clear he won’t be tied down with a narrow focus.

Yamamoto also focused on his favorite topic: politicizing the BOJ and making it a “helicopter money” printing extension of the government. In a press briefing that also covered agricultural competitiveness, jobs and incomes in regional areas, Yamamoto spoke repeatedly about the Bank of Japan. It must strive to meet its 2 percent inflation target as soon as possible, and it has policies at hand to stoke price gains to 1.5 percent-plus by the middle of next fiscal year, he said.

As Bloomberg adds, how much influence he will have remains to be seen, but his role hosting study groups and prodding the boundaries of debate have already helped shape Abe’s economic policy.

The details are familiar to readers, as yet one more story that was widely ignore by the mainstream press suddenly emerges front and center: the biggest failure of Abenomics, namely the lack of wage growth. From Bloomberg:

In pushing the notion of targeting specific increases in wages, Yamamoto, 67, is taking on one the key failings of Abenomics to date. Stagnation in wages is holding back household spending in Japan and undercutting efforts to generate the kind of steady gains in consumer prices needed for a healthy and expanding economy.

* * *

While Japan’s unemployment rate is just 3.1 percent, and the number of job advertisements outnumbers applicants, there is little pressure for higher incomes. An increasing number of workers are employed on part-time and temporary contracts, and have little bargaining power. Meanwhile, many of those in regular, permanent positions are focused on maintaining their job security rather than agitating for pay rises. The latest figures for labor cash earnings are scheduled to be released Friday, with estimates pointing to a 0.3 percent increase in June from a year ago. This follows a 0.1 percent drop in May and no change at all in April.

So while Japan may have won a brief reprieve from being the modern financial system’s “helicopter money” Guinea Pig, it may not avoid being the first developed country to launch wage controls. Naturally, since forced higher wages mean far lower profits, we look forward to Abe’s response when the local stock market (if such a thing still exist) tumbles on that realization, undoing all of Nikkei225’s artificial gains over the past few years, and forcing Abe and the BOJ to implement even more aggressive monetary policies, in what will be the final lap on the race to destroying the Japanese currency.

As we said in the title: a “desperation step”, and one which sadly does not have a happy ending.

b) REPORT ON CHINA

EUROPEAN AFFAIRS

England: the decision:

cut by 25 basis points to a record low.25% plus additional QE ot 60 billion pounds.  To be included is corporate bonds.  The British gilt yields crashed!

(courtesy zero hedge)

BOE Cuts By 25 bps To Record Low 0.25%, Boosts QE By £60 BN Including Corporate Bonds; Gilt Yields Crash

As expected, the Bank of England unanimously cut rates for the first time since the financial crisis by 25 bps to a record low 0.25%. However in a somewhat surprising move, the BOE also expand its QE by £60 billiion to £435 billion in a 6-3 vote, of which up to £10 billion will be in the form of corporate bond purchases, as we previewed last night. Overall a very dovish decision, with Mark Carney providing more monetary stimulus than many had expected, sending sterling plunging and the FTSE100 surging.

To recap the decision:

  • BOE Cuts  Rate to 0.25%; Vote 9-0; Expands QE, Buys Corp Bonds
  • Bank of England says it will buy GBP60 bln gilts over six months.
  • BOE to buy GBP10 bln corporate bonds over 18 months
  • MPC voted 6-3 on QE; Weale, Forbes, McCafferty dissented
  • MPC voted 8-1 on corp. bonds; Forbes dissented
  • BOE announces term-funding scheme to mitigatate impact of low rates on some lenders
  • BOE signals it may cut interest rate to near zero later this year. Says if data come in as expected, ‘a majority of members expect to support a further cut in bank to its effective lower bound”
  • BOE says lower bound is “close to, but a little above, zero”
  • BOE says Brexit has weakened outlook. It cut 2017 GDP forecast to 0.8% v 2.3%, kept 2016 at 2%
  • BOE to look through inflation spike driven by weaker pound. Sees CPI at 2.4% at 2yr horizon
  • BOE estimates that APF, including est. of GBP100 bln via term funding, may expand GBP170 bln
  • BOE sees U.K. economy growing just 0.1% this quarter

The breakdown:

The outlook summary:

  • Bank of England cuts 2017 growth forecast to 0.8% vs 2.3% in May
  • BOE cuts 2018 growth forecast to 1.8% vs 2.3%
  • BOE downgrades are most ever in a single Inflation Report
  • BOE sees inflation at 1.9% in Q3 2017, vs 1.5% forecast in May
  • BOE sees inflation at 2.4% at 2-yr, 3-yr horizons
  • BOE forecasts unemployment will rise to 5.4% in coming year
  • BOE cuts forecasts for consumer spending, business investment, housing investment
  • BOE sees business investment dropping 3.75% in 2016, 2% in 2017

It is notable that while the BOE slashed its GDP forecast for 2017 from 2.3% to 0.8%, this was the biggest downward revision in history but despite Carney’s warning of a technical recession pre-Brexit, it still sees UK economy growing.

The summary table:

The market response is instant, with Sterling crashing 1%, or about 200 pips, to 1.316….

… while 10Y Gilt yields just tumbled to a new record low 0.68%

The full Bank of England statement

end

The reaction to the cut in British rates: the pound plummets and bond yields crash!

(courtesy zero hedge)

Pound Plummets, Gilt Yields Crash To All Time Low After Uberdovish “Kitchen Sink” BOE Announcment

All the speculation that central banks are putting the brakes on unconventional monetary policy and shifting to fiscal stimulus demands, were tossed aside this morning when the BOE launched what was been dubbed a “kitchen sink” response, one in which it not only cut rates for the first time since the financial crisis, by 25 bps to a record low 0.25%, but also boosted QE while announcing it would resume corporate bond purchases.

The market reaction was fast and furious: the pound fell the most in four weeks as traders were caught by surprise by the dovishness of the BOE’s statement: Cable crashed over 1% percent against all of its 16 major peers, with the GBPUSD tumbline to the mid 1.31s, after the nine-member Monetary Policy Committee voted unanimously to lower the benchmark rate by 25 basis points to a record-low 0.25 percent.

U.K. government bonds jumped, pushing the 10-year gilt yield to a record low. Benchmark 10-year gilt yields dropped 16 basis points, or 0.16 percentage point, to 0.65 percent, and touched 0.634 percent. The 2 percent bond due in September 2025 rose 1.44, or 14.40 pounds per 1,000-pound face amount, to 111.92. The nation’s two-year gilt yield fell 11 basis points to 0.09 percent.

30Y Gilts also dropped to a record low 1.5%

The BOE’s decision will “be initially negative for the currency as the pound rejoins the ranks of the funding currencies, but without having the luxury of a current account surplus,” Kamal Sharma, a London-based foreign-exchange and rates strategist at Bank of America Merrill Lynch, said before the announcement. “The worst thing that could happen now is the stimulus does not work, so better to do too much. They should throw the kitchen sink at the problem.”

More importantly, this may not be the end of its as the BOE may join other central banks to lower rates to negative in its upcoming meetings to catch up to European peers.

And so, once again, the biggest winners from Brexit are the “1%” holders of financial assets, as rates on deposits which matter to the rest of the population, were just cut in half.

end

Then the English rally fizzled.  Both bonds and gold rose:

(courtesy zero hedge)

Bank Of England Stock Bounce Fizzles, Bonds & Bullion Bid

“Get back to work Mr. Carney” – it appears the yuuge over-deliver from The Bank of England governor is just not enough to keep the dream alive in equity market land as S&P gives up its QE bounce gains as bonds and bullion remain well bid (amid cable’s weakness)…

 

end

A great commentary discussing the huge problems facing all of Europes banks

(Casey Research)

Why These Huge Bank Stocks Could Go to Zero

Europe’s banking system looks like it’s about to implode.

As you probably know, Europe has serious problems right now. Its economy is growing at its slowest pace in decades. Policymakers are now more desperate than ever and are on the verge of introducing more “stimulus” measures. And Great Britain just voted to leave the European Union (EU).

These are all major concerns. But Europe’s biggest problem is its banking system.

Over the past year, the Euro STOXX Banks Index, which tracks Europe’s biggest banks, has plummeted 46%. Deutsche Bank (DB) and Credit Suisse (CS), two of Europe’s most important banks, are down 63%. Both are trading at all-time lows.

We’ve warned you to stay away from these stocks. As we explained two weeks ago, Europe’s banking system is a complete disaster. And it’s only getting worse by the day

European bank stocks have crashed over the past couple days. Yesterday, every major European bank stock ended the day down. Several fell more than 5%. A few plunged more than 10%.

These are giant declines. Remember, these banks are the pillars of Europe’s financial system.

Today, we’ll explain why this banking crisis could reach you even if you don’t live in Europe. But first, let’s look at why European bank stocks are crashing.

• Europe’s banking system has major problems…

Europe’s economy is barely growing. And negative interest rates are killing European banks.

Regular readers know negative rates are a radical government policy. The European Central Bank (ECB) introduced them in 2014, thinking they would “stimulate” Europe’s economy.

You see, negative rates basically turn your bank account upside down. Instead of earning interest on your money in the bank, you pay the bank to hold your money. The geniuses at the ECB thought they could force people to spend more money by “taxing” their savings.

But Europeans aren’t spending more money right now. They’re pulling cash out of the banking system and sticking it under their mattresses…where negative rates can’t get to it.

• Negative rates are also eating into European bank profits…

Today, the ECB’s key interest rate is at -0.4%. This means European banks must pay €4 for every €1,000 they keep with the ECB.

That might not sound like much. But it’s a big problem for European banks that oversee trillions of euros. According to Bank of America (BAC), European banks could lose as much as €20 billion per year by 2018 if the ECB keeps rates where they are.

• The Euro STOXX Banks Index plunged 2.8% on Monday

Yesterday, it fell another 4.9%. The selloff hit everywhere from Frankfurt to Milan.

Spanish banking giant Santander closed the day down 5%. The Bank of Ireland fell 8%. And Commerzbank AG, one of Germany’s biggest lenders, fell 9% to a record low. Commerzbank’s stock plunged after it said negative rates were eating into its profits.

Meanwhile, Deutsche Bank and Credit Suisse fell 3.7% and 4.7%, respectively. Investors dumped these stocks after learning that both are going to be dropped from the Euro STOXX 50 index, Europe’s version of the Dow Jones Industrial Average.

• Italian stocks fell even harder yesterday…

UniCredit, Italy’s largest bank, fell 7% before trading on its stock was halted. Regulators stopped the stock from trading due to “concerns about its bad loan portfolio.” The stock has plunged 72% over the past year.

Bank Popolare di Milano, another large Italian bank, fell 10%. And Banca Monte dei Paschi di Siena, Italy’s third biggest bank, plummeted 16%. Monte Paschi plunged after a banking watchdog said it was in the worst shape of all European banks. It’s down 85% over the past year.

 Italy is ground zero of Europe’s banking crisis…

Right now, Italy’s banks are sitting on about €360 billion in “bad” loans, or loans that trade for less than book value. That’s almost twice as many bad loans as Italian banks had in 2010.

According to the Financial Times, bad loans now account for 18% of all of Italy’s loans. That’s more than four times as many bad loans as U.S. banks had during the worst of the 2008–2009 financial crisis.

• Policymakers are scrambling to contain the crisis…

Last month, the Italian government said it may pump €40 billion into its banking system to keep it from collapsing. A couple weeks later, Mario Draghi, who runs the ECB, said he would support a public bailout of Italy’s banking system. That’s when the government gives troubled banks money and makes taxpayers pay for it.

We said these emergency measures wouldn’t fix any of Italy’s problems. At best, they’ll buy the government time.

Unfortunately, policymakers will almost certainly “do something” if Europe’s banking system continues to unravel.

The ECB could cut rates again, which would only make it harder for European banks to make money. It could also launch more quantitative easing (QE). That’s when a central bank creates money from nothing and pumps it into the financial system.

Right now, the ECB is already “printing” €80 billion each month. But again, this hasn’t helped Europe’s stagnant economy one bit.

• Whatever the ECB does next, you can bet it will only make things worse…

As we’ve shown you many times, governments don’t fix problems. They only create them or make problems worse.

If you understand this, you can make a lot of money betting that governments will do the wrong thing. Casey Research founder Doug Casey explains:

The bad news is that governments act chaotically, spastically.

The beast jerks to the tugs on its strings held by various puppeteers. But while it’s often hard to predict price movements in the short-term, the long-term is a near certainty. You can bet confidently on the end results of chronic government monetary stupidity.

end

OIL ISSUES

Oil spikes 6% higher on a positive contango.  The higher contango means one can store oil on ships for longer as they make money on rollovers to the next month.

(courtesy zero hedge)

Deja-Vu(lnerable): Oil Spikes 6% On Contango-Crush As “Violent Reversal” Higher Looms

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

Euro/USA   1.1127 DOWN .0023 (STILL  REACTING TO BREXIT/REACTING TO BRITISH CUT IN INTEREST RATE TO .25%

USA/JAPAN YEN 101.39  UP .039(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA HELICOPTER MONEY  ON THE TABLE BUT DISAPPOINTS WITH STIMULUS

GBP/USA 1.3155 DOWN .0172(CARNEY CUTS BR. INTEREST RATES TO .25%)

USA/CAN 1.3073 UP .0002

Early THIS THURSDAY morning in Europe, the Euro FELL by 23 basis points, trading now JUST above the important 1.08 level FALLING to 1.1203; Europe is still reacting to Gr Britain 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 UP 3.97 POINTS OR .13    / Hang Sang CLOSED UP 93.11 POINTS OR 0.43%     /AUSTRALIA IS HIGHER BY .18% / EUROPEAN BOURSES  ALL IN THE GREEN

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 171.78 POINTS OR 1.07%  

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 93.11 OR .43%  ,Shanghai CLOSED UP 3.97 OR .13%    / Australia BOURSE IN THE GREEN: /Nikkei (Japan)CLOSED UP 171.78 OR 1.07%  /INDIA’S SENSEX IN THE GREEN 

Gold very early morning trading: $1358.30

silver:$20.34

Early THURSDAY morning USA 10 year bond yield: 1.511% !!! DOWN 3  in basis points from WEDNESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.265  DOWN 2 in basis points from WEDNESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early THURSDAY morning: 95.83 UP 28 CENTS from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

END

And now your closing THURSDAY NUMBERS

 

Portuguese 10 year bond yield:  2.87% DOWN 7 in basis points from WEDNESDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.074% up 1 in   basis points from WEDNESDAY

SPANISH 10 YR BOND YIELD: 1.02% DOWN 7 IN basis points from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.14 DOWN 8 in basis points from WEDNESDAY (again totally nuts/)

the Italian 10 yr bond yield is trading 12 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -0.095% DOWN 6 IN  BASIS POINTS ON THE DAY

END

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.1129 DOWN .0021 (Euro DOWN 21 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 101.18 DOWN 0.152(Yen DOWN 15 basis points/

Great Britain/USA 1.3119 DOWN 0.0206 ( Pound DOWN 206 basis points/BREXIT DECISION AFFIRMATIVE/QE TO START AGAIN/UK DOWNGRADED/NEW PRIME MINISTER T. MAY/GR BRITAIN LOWERS INTEREST RATES/

USA/Canada 1.3014-DOWN 0.0057 (Canadian dollar UP 57 basis points AS OIL ROSE(WTI AT $41.81). Canada keeps rate at 0.5% and does not cut!

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 21 basis points to trade at 1.1129

The Yen FELL to 101.18 for a LOSS of 15 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 

The POUND was DOWN 206 basis points, trading at 1.3119 AS PRIME MINISTER THERESA MAY TAKES OFFICE/CARNEY CUTS INTEREST RATE TO ONLY  .25%

The Canadian dollar ROSE by 57 basis points to 1.3014, WITH WTI OIL AT:  $41.77

CANADIAN RATES WERE NOT CUT

The USA/Yuan closed at 6.6389

the 10 yr Japanese bond yield closed at -.075% UP 1  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 4 IN basis points from WEDNESDAY at 1.502% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.256 DOWN 4  in basis points on the day /

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

Your closing USA dollar index, 95.75 UP 19 CENTS  ON THE DAY/4 PM 

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

London:  CLOSED UP 105.76 OR 1.59%
German Dax :CLOSED UP 57.65 OR  0.57%
Paris Cac  CLOSED  UP 24.55  OR 0.57%
Spain IBEX CLOSED UP 122.00 OR 1.48%
Italian MIB: CLOSED UP 106.57 OR 0.66%

The Dow was DOWN 2.95 points or 0.02%

NASDAQ  UP 6.51 points or 0.13%
WTI Oil price; 41.78 at 4:30 pm;

Brent Oil: 44.14

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.73 (ROUBLE UP  50/100 ROUBLES PER DOLLAR FROM THURSDAY) 

TODAY THE GERMAN YIELD FALLS TO -.036%  FOR THE 10 YR BOND

END

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

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

WTI CRUDE OIL PRICE 5 PM:41.81

BRENT: 44.18

USA 10 YR BOND YIELD: 1.500% 

USA DOLLAR INDEX: 95.76 UP 21 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.31104 DOWN .02154 or 215 basis pts.(ON NEWS OF A CUT IN INTEREST RATES TO .25% PLUS MORE qe)

German 10 yr bond yield at 5 pm: -.095%

 

END

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

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

Stocks Shrug At Carney Chaos; Bonds, Gold, & Oil Surge

The message was loud and clear from Carney…

 

Post-Carney, Bonds and bullion jumped, cable dumped, and stocks did nothing…

 

The Nasdaq managed small gains on the day but the S&P, Dow and Small Caps all ended practically unch…

 

VIX was pressed back near recent cycle lows again but failed to really spark anything in stocks…

 

Stocks ignored oil’s spike…

 

Financials were weak (lower rates) and energy stocks lagged despite crude’s exuberance…

 

Cable was pounded post-Carney helping the USD Index get green on the week…

 

Bonds rallied notably on the day as Carney’s move sparked a flight to Gilts…

 

Crude managed to get back even on the week, ramping for now good reason for the second day, gold ands silver gained post-Carney…

 

Crude briefly tested $42 before fading back…

 

Charts: Bloomberg

The message was loud and clear from Carney…

 

 

end

 

Orders for Class 8 trucks were abysmal

In a nutshell:  Too many trucks [are] chasing too little freight.”

(courtesy zero hedge)

Class 8 Truck Orders Plunge To Lowest Level Since February 2010

 

More garbage numbers from the BLS.  The jobless numbers totally diverge from the Challenger layoffs:

(courtesy zero hedge)

Initial Jobless Claims Hover At 43 Year Lows, Diverge From Challenger Layoffs

Following Challenger Gray’s 2nd consecutive monthly rise in layoffs, appearing to resume its uptrend from last year, initial jobless claims rose a modest 3k to 269k (slightly worse than the expected 265k), still near 43 year lows…

With payrolls looming, initial jobless claims continue to hover near 43 year lows, comfortably supporting any “everything is awesome” narrative.

Charts: Bloomberg

end

 

 

Factory orders plunge for the 20th consecutive month:  the longest streak in USA history:

(courtesy zerohedge)

(courtesy CNBC/Tom DiChristopher

 

Well that is all for today

I will see you tomorrow night

h

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3 comments

  1. Harvey,
    Once again your blog is gobbledygook, from beginning to end. All one paragraph, with not titles. This happens almost every day now, varying from maybe a 1/3 to completely. Please fix. I’m using Firefox.

    Like

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