Nov 8/USA Election results tonight/Many voting irregularities/A Massive 46 billion USA leaves Chinese shores as the yuan weakens: probably it will be higher as many dollars also leave via the POBC FX moves/Egypt turns her back against Saudi Arabia and the USA and turns to Russia,China and Iran/

Gold closed at $1273.40 down $4.90

silver closed at $18.33:  UP 20 cents.

Access market prices:

Gold: 1275.70

Silver: 18.40

THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON

.

The Shanghai fix is at 10:15 pm est and 2:15 am est

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

Shanghai morning fix Nov 8 (10:15 pm est last night): $  1287.06

NY ACCESS PRICE: $1284.00 (AT THE EXACT SAME TIME)

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1290.17

NY ACCESS PRICE: 1284.95 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD TODAY!!  5 dollars

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Nov 8: 5:30 am est:  $1284.00   (NY: same time:  $1284.00:    5:30AM)

London Second fix Nov 8: 10 am est:  $1282.35 (NY same time: $1282.20 ,    10 AM)

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

end

For comex gold: 

 NOTICES FILINGS FOR NOVEMBER CONTRACT MONTH:  0 NOTICES FOR nil OZ  TONES

For silver:

 NOTICES FOR NOVEMBER CONTRACT MONTH FOR SILVER: 0 NOTICES OR nil OZ

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Let us have a look at the data for today

.

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In silver, the total open interest FELL by 3034 contracts DOWN to 192,218 as we got a partial mission accomplished from our criminal banker-commercials as they caused a liquidation of longs. The open interest FELL AS the silver price was DOWN 25 cents in yesterday’s trading.In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .961 BILLION TO BE EXACT or 137% of annual global silver production (ex Russia &ex China).

In November, in silver, 0 notice(s) filings: FOR 10,000 OZ

I

In gold, the total comex gold FELL by 10,962 contracts WITH THE fall in price of gold ($25.00 YESTERDAY) . The total gold OI stands at 532,245 contracts.

In gold: we had 0 notices filed for nil oz

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

GLD:  Strange after two whack job days:

TODAY WE HAD NO CHANGES AT THE GLD/

Total gold inventory rests tonight at: 949.69 tonnes of gold

SLV

we had no changes at the SLV/

THE SLV Inventory rests at: 358.435 million oz

.

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

1. Today, we had the open interest in silver FELL by 3034 contracts DOWN to 192,218 as  the price of silver FELL by 21 cents with YESTERDAY’S trading.The gold open interest FELL by 10,962 contracts DOWN to 532,245 as the price of gold FELL $25.00 in YESTERDAY’S TRADING.

(report Harvey).

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 14.55 POINTS OR 0.46%/ /Hang Sang closed UP 108.03  OR 0.47%. The Nikkei closed DOWN 5.83 POINTS OR 0.03%/ Australia’s all ordinaires  CLOSED UP 0.21% /Chinese yuan (ONSHORE) closed DOWN at 6.788050/Oil FELL to 44.78 dollars per barrel for WTI and 45.98 for Brent. Stocks in Europe: ALL IN THE RED EXCEPT LONDON   Offshore yuan trades  6.7973 yuan to the dollar vs 6.7880  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS QUITE A BIT AS MORE USA DOLLARS  LEAVE CHINA’S SHORES / CHINA SENDS A MESSAGE TO THE USA TO NOT RAISE RATES IN DECEMBER.

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

i)China reported dismal trade data and this is very bad for the global economy. Their exports have declined 7.3% year over year.

( zero hedge)

ii)The official Chinese capital outflow triples last month from 19 billion up to 46 billion. However China engages in what we call the “POBC’s F/X position” and their true loss may be around 1/2 trillion dollars down to 2.7 trillion. If Clinton wins, there will surely be a rate hike in December which would cause the  dollar/yuan cross to exceed 6.8 which would cause more dollars to leave Chinese shores

( zero hedge)

iii)If Clinton wins, no doubt that the USA dollar will rise which will send the USA/CNY above the 6.80 mark. The fear then is that this will escalate the huge movement of dollars out of China.

( zero hedge)

4 EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

EGYPT/SAUDI ARABIA/RUSSIA/CHINA/IRAN

The following is very important as we are witnessing a huge shift in alliances as Egypt turns toward Russia and China.  After making a deal with Russian in October, the Saudi’s were very angry and they now have cut off oil supplies to Cairo.  So what does Egpyt do:  they turn to Saudi Arabia’s key enemy:  Iran

( zero hedge)

6.GLOBAL ISSUES

War on cash commences in India with the removal of the rupee 500 note and the 1,000 note as well at ATM limited withdrawals of the rupee 2,000 note

( zero hedge)

7.OIL ISSUES

i)The fight between Saudi Arabia and Iran will prevent any OPEC deal from formulating

( Paraskova/OilPrice.com)

ii)WTI rises on a big drawdown in gasoline and distillate  inventories

( zero hedge)

8.EMERGING MARKETS

none today

9.PHYSICAL STORIES

i)Chinese investors are still in love with the USA dollar denominated bonds

( Bloomberg/GATA)

ii)A good commentary tonight from Hug.  International reserves are falling due to problems with deficits on emerging nations.

( Hugo Salinas Price/GATA)

iii)Islamic finance is near its final standard for gold based products according to Sharia law. This should boost demand for this sector of the global economy

(courtesy Reuters/Vizcaino/GATA

iv)With China reporting dismal exports, one has to wonder why copper has been up for 12 days in a row:

( zero hedge)

v)Does it matter who wins the election for gold and silver?

Dave Kranzler states no!

( Dave Kranzler/IRD)

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

i)The next President must deal with the huge debt accumulated especially over these past 8 years.  The CBO states that interest rates must normalize.  Impossible as that would blow up our banking derivatives.

( zero hedge)

ii)Car rental revenues huge miss, plus increase depreciation costs hurt Hertz

( zero hedge)

iii)Another former darling on the NYSE gets clobbered today after warning of more harmful surprises:

( zero hedge)

iv) Hilary: established leader of the free hold! She hires al Qaeda mercenaries for the night of the Benghazi attack:

Martin Walsh/Conservative Daily Post/TV/Fox news)

v)Here is another favourite indicator for Janet:  hirings/job openings.  In this latest report we see hirings are well below 2014 despite the rising job openings

( zero hedge)

vi)Voting machine irregularities:

( zero hedge

Let us head over to the comex:

The total gold comex open interest FELL BY 10,962 CONTRACTS to an OI level of 533,245 as the price of gold FELL $25.00 with YESTERDAY’S trading. In the front month of November we had 22 notices standing for a GAIN of 1 contract.  We had 4 notices served yesterday so we GAINED 5 contracts or 500 ADDITIONAL oz will stand for delivery in November. The next contract month and the biggest of the year is December and here this month showed a decrease of 23,696 contracts down to 343,547. The December contract month is still highly elevated compared to a year ago.  On Monday Nov 9/2015 comex reading day, we had a total of 247,319 contracts standing ( a loss of 9775 contracts from Nov 6/2015) It certainly emphasizes the huge demand for physical gold.

Today, we had 0 notice(s) filed for NIL oz of gold.
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And now for the wild silver comex results.  Total silver OI fell by 3034 contracts from 195,252 down to 192,218 as the price of silver FELL to the tune of 21 cents with yesterday’s trading. We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The front month of November had an OI of 61 and thus a gain of 6 contracts. We had 0 notices filed yesterday so we gained 6 contracts or an additional 30,000 oz will stand for delivery.  The next major delivery month is December and here it FELL BY 8210 contracts DOWN to 123,017. The December contract month is also highly elevated compared to a year ago.  On Nov 9/2015 reporting day, we had a level of 95,144 contracts having lost 2892 contracts on the day).

In silver had 0 notices filed for nil oz

VOLUMES: for the gold comex

Today the estimated volume was 219,564  contracts which is good.

Yesterday’s confirmed volume was 264,717  which is very  good

today we had 20 notices filed for 2000 oz of gold:

INITIAL standings for NOVEMBER
 Nov 8.
Gold Ounces
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
64,621.500 oz
Scotia
2010kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
0 notices 
nil oz
No of oz to be served (notices)
22 contracts
 2200
oz
Total monthly oz gold served (contracts) so far this month
1369 contracts
136,900 oz
4.2581 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil oz
Total accumulative withdrawal of gold from the Customer inventory this month     146,050.4 oz
Today we had 1 kilobar transactions
Today we had 0 deposit into the dealer:
total dealer deposits:  nil  oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
.
We had 0 customer deposit;
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i) out of  brinks:  64,621.500 oz  (2010 kilobars..very suspect!!)
total customer withdrawal: 64,621.500   oz
We had 0  adjustment(s)
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Total dealer inventor 2,167,869.424 or 67.429 tonnes
Total gold inventory (dealer and customer) =10,514,444.732 or 327.04 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 327.05 tonnes for a  gain of 24  tonnes over that period.  Since August 8 we have lost 27 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
For November:

Today, 0 notices were 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 0 contract  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the NOV. contract month, we take the total number of notices filed so far for the month (1369) x 100 oz or 136,900 oz, to which we add the difference between the open interest for the front month of NOV (22 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 139,100 oz, the number of ounces standing in this non  active month of November.
 
Thus the INITIAL standings for gold for the Nov contract month:
No of notices served so far (1369) x 100 oz  or ounces + {OI for the front month (22) minus the number of  notices served upon today (0) x 100 oz which equals 139,100 oz standing in this non active delivery month of Nov  (4.3265 tonnes).
we GAINED 5 contracts or an additional 500 oz will  stand for delivery.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 12 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for 2016:
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2015:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2015: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    4.3265 tonnes.
total for the 11 months;  187.7715 tonnes
average 17.065 tonnes per month vs last yr 51 tonnes total for 12 months or 4.25 tonnes average per month. From May 2016 until Nov 2016 we have had: 164.481 tonnes per the 7 months or 23.497 tonnes per month (which includes the non delivery months of May, June and Sept).  In essence the demand for gold is skyrocketing.
Something big is going on inside the gold comex.
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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 of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST TWO MONTHS  24 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
 
NOV INITIAL standings
 Nov 8. 2016
Silver Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
710,828.93 oz
Brinks
Deposits to the Dealer Inventory
nil  OZ
Deposits to the Customer Inventory 
 927,957.05 oz
Delaware
JPMorgan
No of oz served today (contracts)
0 CONTRACT(S)
(nil OZ)
No of oz to be served (notices)
61 contracts
(305,000 oz)
Total monthly oz silver served (contracts) 352 contracts (1,760,000 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  3,554,687.1 oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
 total dealer withdrawals: nil oz
we had 1 customer withdrawal:
i) Out of brinks:  710,828.93 oz
Total customer withdrawals: 710,828.93  oz
We had 2 customer deposit(s):
i) Into Delaware:  535,405.45 oz
ii) Into JPMorgan: 395,551.600
total customer deposits; 927,957.05 oz
 
 
 we had 1 adjustment(s)
i) Into Scotia:  addition 59,872.700 oz
(counting error???)
.
Volumes: for silver comex
Today the estimated volume was 93,055 which is huge.
YESTERDAY’S  confirmed volume was 88,344 which is excellent
The total number of notices filed today for the Nov. contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in Nov., we take the total number of notices filed for the month so far at  352 x 5,000 oz  = 1,760,000 oz to which we add the difference between the open interest for the front month of NOV (61) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the NOV contract month:  352(notices served so far)x 5000 oz +(61) OI for front month of NOV. ) -number of notices served upon today (0)x 5000 oz  equals  2,065,000 oz  of silver standing for the NOV contract month.
we gained 6 contracts or an additional 30,000 oz will stand for delivery in this non active month of November..
 
Total dealer silver:  29.840 million (close to record low inventory  
Total number of dealer and customer silver:   173.538 million oz
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
Nov 8/no change in gold inventory at the GLD/Inventory rests tonight at 949.69 tonnes
Nov 7/no changes in the gold inventory at the GLD/Inventory rests  tonight at 949.69 tonnes.
Nov 4/NO CHANGES IN THE GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 949.69 TONNES/
NOV 3/ a huge deposit of 4.43 tonnes of gold into the GLD/Inventory rests at 949.69 tonnes
NOV 2/ A DEPOSIT OF 2.67 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 945.26 TONNES
Nov 1/no change in gold inventory at the GLD/inventory rests at 942.59 tonnes
Oct 31/no changes at the GLD/Inventory rests at 942.59 tonnes
Oct 28/no changes at the GLD/Inventory remains at 942.59 tonnes
OCT 27/NO CHANGES AT THE GLD/INVENTORY REMAINS AT 942.59 TONNES
Oct 26/a massive 14.24 tonnes of gold leave the GLD and I am sure this is a paper transaction/this “paper gold” was used in the whacking of gold today/Inventory rests at 942.59 tonnes
OCT 25/A HUGE ADDITION OF 3.27 TONNES INTO THE GLD/INVENTORY RESTS AT 956.83 TONNES
OCT 24/NO CHANGES AT THE GLD/INVENTORY RESTS AT 953.56 TONNES
OCT 21/A MONSTROUS CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 16.61 TONNES FROM THE GLD/INVENTORY RESTS AT 953.56 TONNES
OCT 20/A HUGE CHANGE IN GOLD INVENTORY AT THE GLD OF 2.94 TONNES/INVENTORY RESTS AT 970.17 TONNES
OCT 19/no change in gold inventory at the GLD inventory/inventory rests at 967.21 tonnes
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Nov 8/ Inventory rests tonight at 949.69 tonnes
*IN LAST 27 DAYS: 0.5 TONNES REMOVED FROM THE GLD

end

Now the SLV Inventory
Nov 8/no changes in silver inventory at the SLV/inventory rests at 358.435 million oz
Nov 7/no changes in silver inventory at the SLV/Inventory rests at 358.435 million oz
Nov 4/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 358.435 MILLION OZ
NOV 3/ a huge withdrawal of 2.807 million oz leaves the SLV: somebody was badly in need of silver/inventory rests at 358.435 million oz
NOV 2/ A DEPOSIT OF 569,000 OZ INTO THE SLV/INVENTORY RESTS AT 361.242
Nov 1/no change in silver inventory at the SLV/inventory rests at 360.673 million oz/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 360.673 million oz/
Oct 28/NO CHANGE IN SILVER INVENTORY AT THE SLV/iNVENTORY RESTS AT 360.673 MILLION OZ
OCT 27/A MONSTROUS WITHDRAWAL OF 5.987 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 360.673 MILLION OZ  (AND YET NO CHANGE IN THE SILVER PRICE???)
Oct 26/NO CHANGES AT THE SLV/INVENTORY RESTS AT 366.366 MILLION OZ/
OCT 25/NO CHANGES AT THE SLV INVENTORY/INVENTORY RESTS AT 366.366 MILLION OZ
OCT 24/NO CHANGES AT THE SLV INVENTORY/INVENTORY RESTS AT 366.366 MILLION OZ
OCT 21/A HUGE CHANGES IN SILVER INVENTORY AT THE SLV/: A DEPOSIT OF 3.226 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 366.366 MILLION OZ
oCT 20/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 363.140 MILLION OZ
oCT 19/a good sized change at the SLV inventory: a deposit of 855,000 oz/rests at 363.140 million oz/
.
Nov 8.2016: Inventory 358.435 million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.9 percent to NAV usa funds and Negative 3.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.3%
Percentage of fund in silver:38.8%
cash .+0.9%( Nov 8/2016)
.
2. Sprott silver fund (PSLV): Premium FALLS to +0.55%!!!! NAV (Nov 8/2016) 
3. Sprott gold fund (PHYS): premium to NAV  RISES TO + 1.03% to NAV  ( Nov 8/2016)
Note: Sprott silver trust back  into POSITIVE territory at 0.55% /Sprott physical gold trust is back into positive territory at+ 1.03%/Central fund of Canada’s is still in jail.
 
 
 

END

Major gold/silver stories for MONDAY

Early morning gold/silver trading/Goldcore

An uncertain election outcome looks good for gold

Uncertain Election Outcome and Uncertainty After Bodes Well For Gold

  • Polls suggest Clinton to win but as with Brexit is chance of surprise
  • PredictWise gives Clinton an 89% chance of becoming President-elect, giving just Trump just an 11% chance.
  • Gold price may move about 1.8% to 4% if result is uncertain
  • Demand for gold and silver is up this week by a factor of 25 percent
  • Sales of American Eagle gold coins have climbed 23%
  • Gold to benefit from ‘Punch and Judy’ election

uncertain-election-outcomeLatest Punch and Judy U.S. Election – Image from Wikipedia

A lot of us were looking forward to today, it signals the last day of election-mania and we might all be able to get on with our lives, whatever that means under whoever wins.

The problem is, today might not be the last day of uncertainty. Trump has already said that he will keep us in suspense as to whether or not he will accept a Clinton win, this has been followed by many cries of ‘rigged’ from both Trump and his cohort. The other factor is that the election might be so close that it is too close to call and we see another Bush-Gore debacle.

Should there be an unclear winner tomorrow, or if Trump wins, then what will this mean for gold?

Is there still expected to be an uncertain outcome?

The most obvious answer is that this will be good for the gold price. As we have seen in the month of October, gold thrives in an uncertain environment. Yesterday, it dropped seemingly on the news that the FBI had dropped the investigation into Hilary Clinton and, therefore, some assumed this meant she was once again the likely winner and putting rest to uncertainty.

However, the polls are still extremely close whilst the betting markets suggest otherwise.

Yesterday, PredictWise gave Clinton an 89% chance of becoming President-elect, giving just Trump just an 11% chance. Yet in a Wall Street Journal/NBC News Poll results showed “44% of likely voters support Clinton, while 40% support Trump,” showing Clinton’s lead to have fallen by over 60%.

Much of the fall in Clinton’s ratings are down to Trump gaining support amongst his own party, rather than Clinton losing votes, this puts him on a closer par with the Democrats’ support for their candidate.

The increasing popularity of Trump may well make this a tight election, and one that may not serve an outcome straight away, or a satisfactory one for one particular candidate.

It is worth remembering how badly wrong the polls, pundits and markets were regarding the Brexit vote.

Uncertainty – how much of a boost for the gold price?

Joseph Innace of S&P Global Platts, spoke to MarketWatchyesterday, and outlined how a contested or uncertain election will impact the gold price.

Looking back at the 40-day Bush Gore ‘battle,’ Innace finds that surprisingly the gold price did not move at the extent many expected, “about 1.8% to 4% depending on what date is chosen as the end of the time frame.”

On election day Nov. 7, 2000, gold settled little changed at roughly $264.30 an ounce on Comex and later that night, Gore was projected to be the winner, recalled Innace.

The next day, Bush looked to be the winner, and gold prices edged up. But with a narrow lead of less than couple of thousands votes in Florida, a recount was called. A complicated legal battle ensued, effectively ending with a controversial Supreme Court decision on Dec. 12. In televised speeches on Dec. 13, Gore conceded and Bush accepted the presidency.

Innace said that gold prices moved “steadily but modestly higher” from Dec. 14, the day after Bush’s acceptance speech, to Dec. 27, when it reached a peak for the period of $275.20 an ounce.

gold-price-movement

So throughout that time frame, the change from Nov. 7 to the peak on Dec. 27 was just 4.1%, said Innace.

The gain is even smaller if you compare the Nov. 7 settlement to the $269 an ounce gold ended at the day after Bush’s speech. That’s a difference of roughly 1.8%, Innace said.

Short-term we may not see much of a spike in the price of gold, however the idea of either candidate winning is enough to see a long-term climb in the gold price, as we reported on Friday.

This has been enough to drive up gold demand in the US, ahead of time.

Gold rose in the 8 years of the Bush Presidency and we expect similar gains for gold in the four years of the next U.S. President.

Uncertainty has boosted gold demand

Yesterday Reuters reported that US dealers have reported a jump in sales, ahead of the US election and the expected rate rise in December.

Investors have been actively buying gold and silver all year through exchange-traded funds (ETFs).

gold-coin-sales-in-us-climb-high

Holdings of the eight gold ETFs followed by Reuters reached the highest in more than three years late last month, while the holdings of the six silver ETFs tracked by Reuters reached a record high at the end of October.

“Demand (for gold and silver) is up this week by a factor of 25 percent across the board from where it was last week,” said Roy Friedman, president of New York-based Manfra, Tordella& Brookes, on Friday.

“The increase in demand … stretches from private investors through institutional investors coming to us looking for gold and silver.”

At the US Mint, sales of American Eagle gold coins have climbed 23% in the month of October, and silver coins more than doubled. The chart above, courtesy of Frank Holmes, shows that gold-coin sales are at their highest since January.

Gold – the only winner?

As we outlined last week, the price of gold has been predicted to benefit from this election no matter the outcome, by a number of analysts. It may be 1% in the coming weeks, or it may shoot to $1,850, depending on which reports you read.

Either way, the uncertainty that either candidate, or a stalemate election will bring will see an increase in safe haven investment demand for gold. However, it is important (as impossible as it may now seem) to look beyond  the US election, and instead the wider, global environment.

Post-US election, we will still be in a world that is witnessing turmoil spreading from the Middle East and up towards Europe. That same world is experiencing considerable uncertainty in regard to the gigantic monetary experiment of ZIRP and NIRP, the poor health of the financial system and a slump in oil prices. Meanwhile voter sentiment regarding immigrants, free trade and closed borders is rapidly becoming the zeitgeist.

question-is

A climb in gold investment numbers, through ETFs, coins and physical bars suggests that more investors are no longer concerned about, the increasingly lower, opportunity cost of holding gold. Instead they are realising that the uncertainty we feel is not in regard to the US election, but how much the uncertainty in the world will remain no matter which titular figure wins this latest ‘punch and judy show’.

Gold and Silver Bullion – News and Commentary

Gold prices hold gains in Asia after China trade data disappoints (Investing.com)

Gold steady ahead of U.S. presidential election (Reuters.com)

U.S. presidential election, interest rate uncertainty spurs gold sales (Reuters.com)

Gold slides as dollar, stocks jump as FBI clears Clinton in email probe (Reuters.com)

People’s Bank of China adds five tons of gold to reserves in September (SmaulGld.com)

7RealRisksBlogBanner

What will gold do if election failes to produce a clear winner (MarketWatch.com)

Gold Investors’ Big Dilemma: Who’s Scarier, Trump or Yellen (Bloomberg.com)

A Reversal in the Trend of International Reserves (Plata.com)

Central Banks Become World’s Biggest Stock Speculators (DollarCollapse.com)

Obama’s Successor Inherits Bond Market at Epic Turning Point (Bloomberg.com)

Gold Prices (LBMA AM)

08 Nov: USD 1,284.00, GBP 1,034.26 & EUR 1,162.02 per ounce
07 Nov: USD 1,286.80, GBP 1,036.13 & EUR 1,162.50 per ounce
04 Nov: USD 1,301.70, GBP 1,042.79 & EUR 1,172.57 per ounce
03 Nov: USD 1,293.00, GBP 1,040.61 & EUR 1,165.90 per ounce
02 Nov: USD 1,295.85, GBP 1,056.51 & EUR 1,169.76 per ounce
01 Nov: USD 1,284.40, GBP 1,048.58 & EUR 1,167.52 per ounce
31 Oct: USD 1,274.20, GBP 1,046.25 & EUR 1,163.22 per ounce

Silver Prices (LBMA)

08 Nov: USD 18.26, GBP 14.72 & EUR 16.54 per ounce
07 Nov: USD 18.22, GBP 14.67 & EUR 16.47 per ounce
04 Nov: USD 18.30, GBP 14.65 & EUR 16.48 per ounce
03 Nov: USD 18.07, GBP 14.50 & EUR 16.32 per ounce
02 Nov: USD 18.54, GBP 15.05 & EUR 16.70 per ounce
01 Nov: USD 18.24, GBP 14.91 & EUR 16.54 per ounce
31 Oct: USD 17.76, GBP 14.59 & EUR 16.22 per ounce


Recent Market Updates

– Ignore past elections, this one’s too uncertain
– Gold may be the only winner in US elections
– The London Gold Market – ripe for take-over by China?
– Diwali, Gold and India – Is Love Affair Over?
– Silver Krugerrands By South African Mint Coming Soon – Massive Clearance Sale on Gold Krugerrands
– Trump “Will Probably Win” and Gold “May Rise $100” Overnight – Rickards
– World Is Out of Weapons
– Gold Is The “Kardashian of Commodities” – Herbert & Keiser Interview Skoyles
– Value of Gold – Unlike Paper Currency Gold Maintained Value Throughout Ages
– Fed Risks Lehman Crisis As US Recession Storm Gathers
– Silver Eagle Demand ‘Returned with a Vengeance’
– Cashless Society – War On Cash to Benefit Gold?
– “Higher Gold Prices” On Global Trade Slowdown – HSBC

janskoyles

END

With China reporting dismal exports, one has to wonder why copper has been up for 12 days in a row:

(courtesy zero hedge)

Copper Soars To 1 Year Highs – Up 12 Days In A Row

Despite lower Chinese imports (for the 7th month in a row) and surging supply, copper prices have just surged to 12-month highs, breaking through March stops in a technical move that has seen an unprecedented 12 days up in a row.

Following 9 straight down days, copper futures have now surged for 12 straight days to one year highs…

But as Bloomberg details, China, the world’s biggest producer and user of refined copper, reduced imports for a seventh month to the lowest level since February 2015, as domestic output climbed.

Purchases of unwrought copper and products fell 15 percent to 290,000 metric tons in October from 340,000 tons a month earlier, and compared with 423,380 tons a year ago, according to Chinese customs data on Tuesday.

China’s productionexpanded 7.2 percent to 725,000 tons in September from a year earlier, taking output to 6.2 million tons in the first nine months, up 8.4 percent from the same period last year, as capacity expanded and ore imports increased.

 

 

END

 

 

 end

 

Does it matter who wins the election for gold and silver?

Dave Kranzler states no!

(courtesy Dave Kranzler/IRD)

Does Gold & Silver Care Who Wins?

Short answer:   No.

A local financial advisor texted me today asking what I thought gold would do if Hillary wins today. Obviously he’s been reading the pedestrian analysis on the topic that has flooded the mainstream media.

But gold doesn’t care who wins.  The United States is beset with unsolvable financial and economic issues that will require a systemic reset.  The amount of funded Treasury debt outstanding since Obama took office has doubled to $20 trillion.  So much for his claim that he reduced the spending deficit.  But the result would have been the same if McCain had won in 2008 or if Romney had won in 2012.

Stocks and bonds are historically overvalued.  While the accounting standards have been substantially liberalized thereby enabling companies to artificially boost earnings with gimmicks, using comparable accounting rules to compare now to any other market top in history would show that current valuation ratios are significantly higher than at any other time in the history of U.S. markets.   The bond argument is easy:  interest rates are at or near all-time lows.  Rates can only go higher which means bond prices can only go lower (unless artificially taken negative by the Fed, which would cause gold to go parabolic) .

With fiat paper assets at historically overvalued levels, gold and silver are highly undervalued relative to financial assets and in relation to the quantity of paper money, where the quantity paper money is currency issued plus credit outstanding.  The latter is included because debt functions exactly like currency until it’s repaid.  Guess what?  This country has not reduced the cumulative public and private debt outstanding in the post-World War Two period.  The small “blip” indicating overall debt declined in 2010 reflects massive banking sector write-offs and debt-forgiveness, both of which were monetized by the Fed.  As long as the level of debt increases, credit outstanding needs to be included in the money supply.

The bottom line is that gold is going to move much higher in value relative to the dollar regardless of which candidate or which party controls the political process.  The laws of nature and economics remain constant throughout history.   When the Central Bank and Government market intervention eventually fails and these laws reassert their force – which they always do – the “money” that floods out of stocks and bonds will flood into physical gold silver.

Chinese investors are still in love with the USA dollar denominated bonds

(courtesy Bloomberg/GATA)

Chinese investors are in love with U.S. dollar debt

Section:

From Bloomberg News
Sunday, November 6, 2016

Terence Cheng, a fixed-income fund manager based in Hong Kong, has never gotten so many Chinese client inquiries for overseas dollar bonds. Their questions sent over WeChat, the popular Chinese instant-messaging service, even interrupted his beach vacation in Thailand.

“I spent one to two hours on conference calls with mainland clients on WeChat almost every day,” said Cheng, the chief investment officer at HuaAn Asset Management (Hong Kong) Ltd. He was similarly busy working at home when Typhoon Haima shut businesses across the city last month. “Domestic investors’ demand for offshore dollar bonds is really strong.”

The yuan has dropped 4 percent this year against the dollar, the most in Asia, and the prospect of further depreciation has driven Chinese investors to buy assets denominated in the U.S. currency. …

… For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-11-06/wechat-beeping-on-beac…

END

A good commentary tonight from Hug.  International reserves are falling due to problems with deficits on emerging nations.

(courtesy Hugo Salinas Price/GATA)

Hugo Salinas Price: A reversal in the trend of international reserves

Section:

7:53p ET Monday, November 7, 2016

Dear Friend of GATA and Gold:

Hugo Salinas Price, president of the Mexican Civic Association for Silver, reports today that international currency reserves held by central banks continue to decline, likely signaling a deflationary trend, as the developing world sells reserve-currency bonds for cash. This, Salinas Price writes, likely will provoke more money creation by reserve-currency-issuing central banks to finance more government spending in an attempt to avert deflation. Salinas Price’s report is headlined “A Reversal in the Trend of International Reserves” and it’s posted at the association’s internet site, Plata.com, here:

http://plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=299

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

END

Islamic finance is near its final standard for gold based products according to Sharia law. This should boost demand for this sector of the global economy

(courtesy Reuters/Vizcaino/GATA)

Islamic finance nears final standard for gold-based products

Section:

By Bernardo Vizcaino
Reuters
Tuesday, November 8, 2017

Islamic scholars are finalizing work on a sharia standard for gold-based products set to become effective before the end of the year and possibly help kick-start a new wave of product development in Islamic finance.

Gold has been treated mostly as a currency in Islamic finance, limiting its use to spot transactions, while consumer demand for gold in the Middle East has actually fallen in recent years.

Guidance from the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions could address some of the reasons behind the lack of gold products in the industry and the muted demand from the region.

The organization plans to issue its sharia standard on gold and its trading controls in coming weeks, Mohd Daud Bakar, founder and executive chairman of Amanie Group, said at an annual conference held by the organization this week in Manama, Bahrain.

“The sharia standard on gold from my perspective is a game changer given the market conditions, given the preconceived idea that we have — even among the scholars themselves — that gold is very restricted.” …

… For the remainder of the report:

http://www.reuters.com/article/islamic-finance-gold-idUSL8N1D900W

end



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

 
 

:

1 Chinese yuan vs USA dollar/yuan UP to 6.7880( DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.7973 / Shanghai bourse CLOSED UP 14.55 POINTS OR 0.46%   / HANG SANG CLOSED UP 108.03 OR 0.47%

2 Nikkei closed DOWN 5.83 POINTS OR 0.03%  /USA: YEN RISES TO 104.80

3. Europe stocks opened ALL IN THE RED EXCEPT LONDON  ( /USA dollar index UP to 97.78/Euro DOWN to 1.1089

3b Japan 10 year bond yield: LOWERS TO    -.061%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.80/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY.

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  44.78  and Brent:45.98

3f Gold DOWN  /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

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 REMAINS AT +.147%   

3j Greek 10 year bond yield FALLS to  : 7.33%   

3k Gold at $128.40/silver $18.20(7:45 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 19/100 in  roubles/dollar) 63.84-

3m oil into the 44 dollar handle for WTI and 45 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  DEVALUATION DOWNWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.80 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 .9771 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0785 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 POSITIVE territory with the 10 year RISES to  +.147%

/German 9+ 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 1.819% early this morning. Thirty year rate  at 2.586% /POLICY ERROR)

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

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

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE/JAPANESE STIMULUS PLAN DISAPPOINTS

The Day Arrives: Global Stocks Higher, US Futures Lower As America Begins Voting

The day has finally arrived and as of minutes ago voters in eastern states have begun voting for the next US president. Polls are open in eight states, including battlegrounds Virginia and New Hampshire, as well as in New York, where Clinton votes at a public school in Chappaqua, Trump at a public school in Manhattan.

To celebreate, European, Asian shares rise as exchange-rate volatility dies down in the final hours before the U.S. presidential election; S&P 500 index futures fall; oil, gold, silver rise, nickel climbs to one-year high.

RealClearPolitics poll of polls gives Clinton the edge by 3.4% so she is firm(ish) favourite and the FBI news on Sunday night that they have found nothing incriminating in their additional inquiries may give her an additional boost given that Trump seemingly got a boost when they discussed re-opening the case 11 days ago. However in the Brexit poll, which was seen as a similar establishment vs. anti-establishment vote, the last 6 polls showed the stay vote average 51.7% against 48.3% leave (excluding don’t knows) – also a lead of 3.4%. The actually result saw the leave vote win with 51.9% of the vote and a winning margin of 3.8%. So when the numbers are as close as this and when we are seeing an anti-establishment movement that perhaps behaves differently to traditional election voters then the outcome is more uncertain, according to DB’s Jim Reid.

Logistics wise, if we use the 2012 election as a roadmap then the election result was called at 11.38pm EST Tuesday night. Unsurprisingly, determining when we will actually know the outcome really comes down to how quickly the states get their counts done and whether or not those states are in play. As an example, Kentucky and Vermont were called within 5 minutes of polls closing in 2012 but it took 3 days for Florida to be called. Ohio also took nearly 4 hours. In any case, the first polls close at 6pm EST/11pm GMT with results announced from then on. Some of the significant and closer-run state closing times which are worth watching out for include Virginia (7pm EST/12am GMT), North Carolina and Ohio (7.30pm EST/12.30am GMT), Pennsylvania (8pm EST/1am GMT), Colorado (9pm EST/2am GMT), Iowa and and Nevada (10pm EST/3am GMT). The drama should be over by the time Alaska closes (1am EST/6am GMT) but you never know.

For those scoring hole by hole, then as is the tradition, the tiny New Hampshire town of Dixville has already called with Clinton winning by a 4-2 margin over Trump. Apparently an 8th voter was added to the electoral roll at close to midnight which caused some late drama in the town and so just missing their one-minute past midnight call!

The good news is that all those companies who have complained that consumers aren’t buying their products and services due to election uncertainty should see an influx of willing buyers; the bad news is that there are no more excuses if they don’t.

For global markets, today was greeted with more buying of risk assets on the back of yesterday surge in the US stock market, which has been The MSCI All Country World Index extend the last session’s rebound from a three-month low, with European and Asian shares advancing. A gauge of expected exchange-rate swings held at a one-week low and the won was the best performer among major currencies, a sign of investors’ confidence by the market that Trump’s protectionist trade policies will be rejected in the vote, unless of course another “Brexit” outcome is unveiled in a little over 12 hours. Gold gained from its lowest level in a week and nickel climbed to a one-year high.

“The market is adding risk assets again,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “Clinton represents continuity, while Trump represents disruption. But as we’ve seen in the case of Brexit, anything could happen and so there’s still a lot of uncertainty surrounding the elections until we see the actual results.”

As reported yesteday, on websites that take wagers on the election winner, Democratic candidate Clinton’s odds of victory are generally near or above 80 percent, boosted by Sunday’s news that the Federal Bureau of Investigation won’t revisit its decision against seeking criminal charges related to her e-mail practices while Secretary of State. Global equities slumped last week and haven assets rallied after the FBI said on Oct. 28 that it had reopened a probe into her communications.

“Markets are currently in the grip of a risk-seeking mood following the latest FBI news, which is perceived as raising the chances of a Clinton win,” said Imre Speizer, a market strategist at Westpac Banking Corp. in Wellington. “A Trump win would cause a major reversal of the recent moves, so markets will be mostly preoccupied by the election during the day ahead.”

“Although we have seen an improvement in risk appetite over the past 24 hours, markets remain wary of an election shock,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “A dollar-positive reaction is likely on news of a Clinton victory; a likely ‘risk off’ reaction to a Trump victory would mean dollar losses versus yen, Swiss franc and euro but gains elsewhere.”

The election results are expected to be announced as early as 8pm on Tuesday, but can be delayed until well in the evening, offering some prospect of calm on Tuesday as investors digest China trade data for October. Exports from Asia’s biggest economy dropped 7.3 percent from a year earlier in dollar terms, more than the 6 percent decline forecast in a Bloomberg survey.

The first polls close in Indiana, home to Trump running mate Mike Pence, the state’s governor, and Kentucky. Both states are heavily Republican and likely to be carried by Mr Trump. For a complete preview of election night see this post.

Heading into election day, Bloomberg notes that the Stoxx Europe 600 Index was up 0.3% in early trading, with almost two shares climbing for every one that fell. Deutsche Post AG climbed 1.3% after announcing third-quarter profit jumped more than threefold. The MSCI Asia Pacific Index added 0.4 percent, led by gains in raw-materials producers. The Shanghai Composite Index climbed to a 10-month high and Hong Kong’s Hang Seng Index was headed for its best close in a week. Futures on the S&P 500 Index were modestly lower after soaring on Monday in a post-FBI relief rally.

While riskier assets are generally rising before the U.S. election, trading patterns around the U.K.’s referendum over European Union membership provide a cautionary tale. A similar rally in stocks, emerging markets and commodities on the day of the British vote gave way to a slump, and a rebound in haven assets, after the unexpected decision in favor of Brexit. The outlier this time around is the dollar, which is strengthening, having weakened before Britain’s plebiscite.

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where the latest industrial production and trade data for September is due. Shortly after we’ll get trade data in France before the UK releases September industrial and manufacturing production data. Over in the US the early release is the October NFIB small business optimism survey (94.1 expected) while later on this afternoon the September JOLTS job openings report is due out. Away from the data the Fed’s Evans is due to speak this afternoon at 12.45pm GMT and also tonight at 5.20pm GMT, while the BoE’s Haldane also speaks at 5pm GMT in London. Clearly the big focus is away from the data however and on the US Election and which will almost certainly dictate how markets trade over the next 24 hours.

Bulletin headline summary from RanSquawk

  • European equities trade modestly higher with many sat on the sidelines ahead of the upcoming US Presidential election
  • As expected, a tight range bound session in FX, with some very minor moves of note as traders adjust positions into the run in of this much- hyped US election
  • Highlights include US election, US API crude oil inventories and comments from Fed’s Evans & BoE’s Haldane

Market Snapshot

  • S&P 500 futures down 0.2% to 2126
  • Stoxx 600 up less than 0.1% to 334
  • FTSE 100 up less than 0.1% to 6810
  • DAX down 0.2% to 10435
  • German 10Yr yield down less than 1bp to 0.15%
  • Italian 10Yr yield down less than 1bp to 1.7%
  • Spanish 10Yr yield down less than 1bp to 1.24%
  • S&P GSCI Index up 0.6% to 355.1
  • MSCI Asia Pacific up 0.4% to 138
  • Nikkei 225 down less than 0.1% to 17171
  • Hang Seng up 0.5% to 22909
  • Shanghai Composite up 0.5% to 3148
  • S&P/ASX 200 up 0.1% to 5258
  • US 10-yr yield down 2bps to 1.81%
  • Dollar Index down 0.1% to 97.68
  • WTI Crude futures up 0.4% to $45.08
  • Brent Futures up 0.6% to $46.42
  • Gold spot up 0.2% to $1,284
  • Silver spot up 0.6% to $18.31

Global Headline News

  • It’s Finally Time to Vote as Clinton, Trump Make Final Pitch: securing victory requires winning 270 electoral votes
  • Your Hour-by-Hour Guide to Following Obsessively on Election Day: all times are Eastern Standard Time
  • U.S. Election Guide to Markets: What to Watch Once It’s All Over: investors aligned with gamblers, polls on seeing a Clinton win
  • Blackstone Buys Landlord OfficeFirst, Said to Pay $3.7b: according to person familiar with the matter
  • Paschi Gets Cerved Offer for Credit Unit, Fortress Said to Bid: buyer would manage $9.5b of Monte Paschi’s bad loans
  • Tata Said to Avoid Deeper Writedowns With Thyssenkrupp Deal: ousted chief had warned of over $10 billion in impairments

Looking at regional markets, we start in Asia where stocks struggled to hold onto gains despite a positive start, with the Nikkei 225 (flat) opening up 0.5% before eventually slipping into unchanged territory. Risk sentiment was mixed, with much trepidation ahead of the US election and markets /news-flow very quiet. Tier-1 data from China took centre stage in the form of October’s balance of trade and although the headline missed upon expectations, it did show the contraction in imports/exports easing and Chinese bourses outperformed as a result (Shanghai Comp +0.5%, Hang Seng +0.3%). Nothing new election-wise overnight – although the PBoC weakened the CNY band again, ahead of the vote.

Top Asian News

  • Japan 10-Year Bond Sale Draws Strongest Demand Since April 2014: Investors bet BOJ stimulus will cap risk of rise in yield
  • BAT Takes on Philip Morris in Japan With New Tobacco Device: Heated tobacco product will go on sale in Sendai in Dec.
  • China’s Exports Drop for a Seventh Month on Tepid Global Demand: Trade surplus widens to $49.1b
  • Morgan Stanley’s China Brokerage Partner Seeks Backdoor Listing: Shanghai Chinafortune to pay $723m for brokerage stake
  • India Plans to Sell $750 Million of Masala Bonds to Build Roads: Sale a part of efforts to seek cheaper funds overseas
  • Samsung Drawn Into Korean Political Crisis After Offices Raided: Prosecutors seeking evidence of potential illegal gifts

In Europe, markets are trading with caution ahead of the US elections with equities broadly in the green (albeit modestly so) with markets leaning towards a potential Clinton victory. Earnings have boosted European bourses with Credit Agricole trading higher by as much as 6%, ABF (+6%) also reported today and lead the FTSE 100 leader board, with Primark sales up 9% Y/Y. Core fixed income products gapped higher and since have traded in a tight range with bunds flat so far. Italian yields have risen this morning as Italy’s 2017 budget woes continue with tension mounting between Renzi and the EU. EU’s Junker is demanding a deficit reduction to deal with migration and the aftermath of the earthquakes.

Top European News

  • European Profits Down 1% So Far in Earnings Season: JPMorgan equity strategists including Emmanuel Cau and Mislav Matejka write in note
  • German Industrial Output Drops Most in More Than Two Years: production fell 1.8 percent vs estimated 0.5 percent decline
  • U.K. Factory Output Surges as Brexit Pound Impact Downplayed: decline in 3Q production is revised to 0.5%
  • M&S to Shutter Stores at Home and Abroad in Historic Retreat: new CEO plans to close 30 U.K. outlets and exit 10 countries
  • VW Chairman Poetsch Engulfed in Diesel Crisis as Probe Widens: former CFO named as third suspect in market- manipulation probe
  • Altice, SFR Fined $88mn for Jumping Gun on French Mergers: fine for starting to operate with acquired companies before the deals had received regulatory clearance
  • Credit Agricole Jumps as Trading Fuels Surge in Profit: lender books gains on reorganization; revenue climbs 12%
  • Deutsche Post Harvests Online-Shopping Boom With Record Profit: operating profit more than tripled in 3Q
  • Vestas Wind Rallies After Company Raises Full-Year Forecast: adjusted earnings before tax and interest beat estimates
  • AB Foods Forecasts Higher Profits as World Sugar Prices Rise: sugar unit has reached ‘turning point,’ says RBC analyst
  • ArcelorMittal 3Q Ebitda Misses; FY ’16 Cash Flow to Exceed Capex: 3Q Ebitda $1.9b vs est. $1.95b

In currencies, the JPMorgan Global FX Volatility Index was little changed, after falling on Monday by the most since June. The won strengthened 0.7 percent, its biggest gain in three weeks. Mexico’s peso, which tends to gain when Trump has a setback, was steady at about 18.59 a dollar after rallying 4.2 percent over the last three trading sessions. Nomura Holdings Inc. says the currency is likely to sink to 25 by year-end in the event of an election victory for Trump, who has said he will end or renegotiate the North American Free Trade Agreement that governs trade between Mexico and the U.S.  The yen was little changed at 104.46 per dollar, after sliding 1.3 percent in the last session. The Japanese currency would probably strengthen to 99.50 within 24 hours of a Trump victory, and slip to 105.25 if Clinton wins, according to Scott Petruska, a Newton, Massachusetts-based senior adviser at SVB Financial Group.  South Africa’s rand weakened versus all of its major peers, weighed down by political risk. A measure of the currency’s expected volatility over the next three months has risen above that of the Mexican peso as investor attention shifts from the U.S. election to a tussle between South Africa’s president and finance minister for control of the nation’s purse strings.

In commodities, crude oil added 0.2 percent in New York, after climbing 1.9 percent on Monday from its lowest close since September. Russia, the world’s biggest energy producer, is “on board” with an Organization of Petroleum Exporting Countries agreement to limit production to help re-balance the market, according to the group. U.S. government data on Wednesday are forecast to show the nation’s stockpiles expanded by 1.5 million barrels last week. Gold was up 0.2% at $1,285 an ounce, after sliding 1.8 percent from a one-month high in the last session. It surged 2.3 percent last week as opinion polls indicated Clinton’s lead over Trump was narrowing.  Nickel advanced 1.2 percent in London and copper held near a one-year high. The global nickel market faces a second year of shortage in 2017 as contracting ore shipments from the Philippines prompt China to trim output, according to Sumitomo Metal Mining Co., Japan’s top producer. A recent improvement in commodity prices is due to growth in global manufacturing and higher demand from China, according to Adrian Mowat, JPMorgan Chase & Co. analyst. The increase in metals despite dollar strength shows the move is driven by fundamentals, he said.

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where the latest industrial production and trade data for September is due. Shortly after we’ll get trade data in France before the UK releases September industrial and manufacturing production data. Over in the US the early release is the October NFIB small business optimism survey (94.1 expected) while later on this afternoon the September JOLTS job openings report is due out. Away from the data the Fed’s Evans is due to speak this afternoon at 12.45pm GMT and also tonight at 5.20pm GMT, while the BoE’s Haldane also speaks at 5pm GMT in London. Clearly the big focus is away from the data however and on the US Election and which will almost certainly dictate how markets trade over the next 24 hours.

* * *

US Event Calendar

  • 6am: NFIB Small Business Optimism, Oct., est. 94.1 (prior 94.1)
  • 7:45am: Fed’s Evans speaks in New York
  • 8am: JOLTS Job Openings, Sept., est. 5.488m (prior 5.443m)
  • 8:55am: Redbook weekly sales
  • 4:30pm: API weekly oil inventories

DB’s Jim Reid concludes the overnight wrap

By this time tomorrow we will probably know who the next US president will be. The most difficult challenge will be to work out the optimum time to set one’s alarm on this side of the Atlantic to have the best combination of sleep and knowing the result at the earliest point. I stayed up all night during the Brexit aftermath and felt like death for about 3 days! RealClearPolitics poll of polls gives Clinton the edge by 3.4% so she is firm(ish) favourite and the FBI news on Sunday night that they have found nothing incriminating in their additional enquiries may give her an additional boost given that Trump seemingly got a boost when they discussed re-opening the case 11 days ago. However in the Brexit poll, which was seen as a similar establishment vs. anti-establishment vote, the last 6 polls showed the stay vote average 51.7% against 48.3% leave (excluding don’t knows) – also a lead of 3.4%. The actually result saw the leave vote win with 51.9% of the vote and a winning margin of 3.8%. So when the numbers are as close as this and when we are seeing an anti-establishment movement that perhaps behaves differently to traditional election voters then the outcome is more uncertain.

Logistics wise then, if we use the 2012 election as a roadmap then the election result was called at 11.38pm EST Tuesday night or 4.38am GMT Wednesday morning in London. Unsurprisingly, determining when we will actually know the outcome really comes down to how quickly the states get their counts done and whether or not those states are in play. As an example, Kentucky and Vermont were called within 5 minutes of polls closing in 2012 but it took 3 days for Florida to be called. Ohio also took nearly 4 hours. In any case, polling stations will open this morning at 6am EST/11am GMT and the first polls close at 6pm EST/11pm GMT with results announced from then on. Some of the significant and closer-run state closing times which are worth watching out for include Virginia (7pm EST/12am GMT), North Carolina and Ohio (7.30pm EST/12.30am GMT), Pennsylvania (8pm EST/1am GMT), Colorado (9pm EST/2am GMT), Iowa and Nevada (10pm EST/3am GMT) and California (11pm EST/4am GMT). The drama should be over by the time Alaska closes (1am EST/6am GMT) but you never know. So if you’re London based, you might want to switch your TV’s on from about 4am GMT. For those scoring hole by hole, then as is the tradition, the tiny New Hampshire town of Dixville has already called with Clinton winning by a 4-2 margin over Trump. Apparently an 8th voter was added to the electoral roll at close to midnight which caused some late drama in the town and so just missing their one-minute past midnight call!

Markets are certainly going into today in a much better mood now after that FBI news on Sunday night saw risk assets claw their way back following a near two-week selloff. In fact, the S&P 500 rallied +2.22% for its best day since March 1st and in the process recouped over two-thirds of that -3.07% nine consecutive day decline. There were also big moves for the Dow (+2.08%), Nasdaq (+2.37%), Stoxx 600 (+1.53%) and DAX (+1.93%). It was much the same for credit markets too with CDX IG rallying 4.5bps and taking it back to the tights of October 27th, prior to when the initial FBI headlines broke. FX markets were headlined by big moves for the high yielders including the Mexican Peso (+2.35%), South African Rand (+1.69%), Brazilian Real (+0.96%) and Aussie Dollar (+0.73%). In commodity markets we also saw WTI Oil recover +1.86% although that is still in the context of that -9.51% plummet last week. The nine-day surge for the VIX also finally came to an end with the index tumbling nearly 19%, the biggest one-day decline since June 28th.

At the other end of the risk spectrum it was the usual safe havens, having outperformed last week, which fell victim to a wave of selling. Gold (-1.31%), the Yen (-1.30%) and the Swiss Franc (-0.61%) stood out while rates markets were also weaker. 10y Treasury yields finished 5bps higher at 1.827% and 10y Bund yields ended 1.9bps higher at 0.151%.

This morning in Asia the broadly positive sentiment has continued although moves are a lot more modest by comparison going into today’s main event. The Hang Seng (+0.36%), Shanghai Comp (+0.61%), Kospi (+0.13%) and ASX (+0.09%) have all edged higher while bourses in Japan are more or less flat. Commodity markets are also fairly unchanged while the Greenback is chopping back and forth between gains and losses. US equity index futures (-0.15%) are trading fairly cautiously too.

There’s also been some focus on the latest China trade data this morning. In US Dollar terms, exports printed at a fairly sluggish -7.3% yoy in October and slightly softer than expected (-6.0% expected) although that did mark an improvement from that sudden -10.0% drop in September. Imports (-1.4% yoy vs. -1.0% expected) also contracted a little more than expected, while the trade surplus has risen to $49bn from $42bn the month prior. It was a similar story in renminbi terms where exports (-3.2% yoy vs. -0.8% expected) were down more than expected, but improved from -5.6% in September. The Aussie Dollar (-0.34%) has been the biggest loser in FX following that data.

Moving on. Last night we saw the latest quarterly Fed Senior Loan Officer Opinion Survey released. The Q3 survey showed that on balance, banks moved closer to more balanced lending standards on commercial and industrial loans in the quarter. For large and mid-sized firms the number of banks tightening/easing was 4.4%/2.9% with 92.6% unchanged. In the previous 4 quarters the number tightening was 9.9%, 10.1%, 11.0% and 8.8% from most recent to least. The shift over the last quarter has largely been from tightening to unchanged with those easing conditions remaining at the low levels it has been over this period. So although this still marks a fifth quarter of tightening conditions, the momentum is more positive. Perhaps the recovery in oil related lending has helped confidence. Interestingly for small firms, the tightening/easing split was 3.0%/4.5% which compares to 10.0%/2.9% in the last survey, so that’s a reasonable swing back in favour of easing.

There was good news also in the latest Fed labour market conditions index where the October reading turned to a positive 0.7 following two negative readings in the two months prior (-0.1 September and -0.3 August). While there were a number of upward revisions to prior months’ data too it’s worth noting though that the 12m rolling average still remains negative at -4.0 having first turned negative in August.
There wasn’t much else to report from the remaining economic data yesterday. The other US data released was the September consumer credit print which came in at $19.3bn (vs. $17.5bn expected) with the increase in credit now +6.3% yoy. In Europe the notable takeaway was the Sentix investor confidence reading for the Euro area this month which rose a much better than expected 4.6pts to 13.1 (vs. 8.6 expected). That is actually the highest reading this year and since December while the expectations reading jumped to 14 this month from 10.8 in October. Elsewhere, retail sales for the Euro area were soft in September (-0.2% mom vs. -0.3% expected) while Germany factors orders for September were disappointing (-0.6% mom vs. +0.2% expected), with volatile heavy transport equipment orders weighing on the data in particular.

Before we look at today’s calendar, yesterday we got the latest CSPP holdings data from the ECB, showing that total holdings as of November 4th now stand at €40.356bn. That implies total net purchases settled last week of €2.541bn or a daily run rate of €508m. That compares to the average daily run rate since the program started of €384m and so suggestive of another strong week with no sign of a slowdown into the US election. In fact, it was the third strongest week since the CSPP started. Also released was the monthly primary/secondary purchase split. During October the share of primary purchases rose to 23.3% from