Jan 9/Gold and silver rise/ Despite the rise in gold: 8.87 tonnes of gold withdrawn from GLD/ No silver leaves SLV/China crackdown on bitcoin/Chinese foreign exchanges reserves fall below $3.0 trillion/Offshore yuan crashes to 6.87/In Italy youth unemployment rises to 39.4%/Turkish lira plummets as Turkey’s economy falters with ISIS (or PKK) attacks/Top executive in the USA for Volkswagen charged criminally with conspiracy defraud/Russian counsul found dead in Athens with authorities saying death was due to “abnormal causes”/

Gold at (1:30 am est) $1183.50 UP $11.60

silver  at $16.63:  UP 17 cents

Access market prices:

Gold: $1181.20

Silver: $16.58

THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON

.

The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning

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:

MONDAY gold fix Shanghai

Shanghai morning fix Jan 9/17 (10:15 pm est last night): $  1193.79

NY ACCESS PRICE: $1174.95 (AT THE EXACT SAME TIME)/premium $18.75

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1192.97

NY ACCESS PRICE: $1174.25 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD 2ND FIX TODAY!!:  $18.72

China rejects NY pricing of gold  as a fraud/arbitrage will now commence fully

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Jan 9/2017: 5:30 am est:  $.1176.100   (NY: same time:  $1176.10    5:30AM)

London Second fix Jan 9.2017: 10 am est:  $1178.50 (NY same time: $1178.50  (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 JANUARY CONTRACT MONTH:  0 NOTICE(S) FOR nil OZ.  TOTAL NOTICES SO FAR: 1023 FOR 102,300 OZ    (3.1819 TONNES)

For silver:

 NOTICES FOR JANUARY CONTRACT MONTH FOR SILVER: 0 NOTICE(s) FOR 0  OZ. TOTAL NUMBER OF NOTICES FILED SO FAR; 307 FOR 1,535,000 OZ

Let us have a look at the data for today

.

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In silver, the total open interest FELL by 600  contracts DOWN to 164,937 with respect to FRIDAY’S TRADING  (short covering by the banks).    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .825 BILLION TO BE EXACT or 117% of annual global silver production (ex Russia & ex China).

FOR THE JANUARY FRONT MONTH IN SILVER:  0 NOTICES FILED FOR 0  OZ.

In gold, the total comex gold FELL BY 2523 contracts WITH THE FALL IN  THE PRICE GOLD ($7.80 with FRIDAY’S trading ). The total gold OI stands at 429,300 contracts.

we had 0 notice(s) filed upon for 0 oz of gold.

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

GLD:

We had A HUGE  change in tonnes of gold at the GLD/  A WITHDRAWAL OF 8.87 TONNES OF GOLD FROM THE GLD/

Inventory rests tonight: 805.00 tonnes

.

SLV

we had no changes in silver into the SLV

THE SLV Inventory rests at: 341.199 million oz

.

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

1. Today, we had the open interest in silver FELL by 600 contracts DOWN to 164,937 AS SILVER FELL by  $0.12 with FRIDAY’S trading. The gold open interest FELL by 2523 contracts DOWN to 429,300 AS THE  PRICE OF GOLD FELL BY $7.80 WITH FRIDAY’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  SUNDAY night/MONDAY morning: Shanghai closed UP 14.32 POINTS OR 0.54%/ /Hang Sang closed UP 55.68 OR 0.25%. The Nikkei closed /Australia’s all ordinaires  CLOSED UP 0.84%/Chinese yuan (ONSHORE) closed WELL DOWN at 6.9380/Oil FELL to 53.00 dollars per barrel for WTI and 55.96 for Brent. Stocks in Europe: ALL IN THE RED. Offshore yuan trades  6.8740 yuan to the dollar vs 6.9380  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS  DOLLARS  LEAVE CHINA’S SHORES /

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)China launches a crackdown on Bitcoin with the beneficiary gold:

( zero hedge)

ii)In the latest figures China reports that 41 billion USA left the shores of China. It now looks like their entire foreign reserves are below 3.0 trillion.  The danger point is 2.8 trillion without controls and 1.7 trillion with controls (and China has initiated controls)

( zero hedge)

iii)Last night:  the offshore and onshore yuan crashed. The offshore yuan traveled from 6.8 down to 6.87 to the dollar:

( zero hedge)

iv)China is angry at Trump’s move to closer ties with Taiwan.  Mainland China is threatening to “take revenge” if Trump follows through negating the “one China policy”

( zero hedge)

4 EUROPEAN AFFAIRS

i)ITALY

Not good:  the unemployment rate in Italy rises to 11.9% even though the consensus was 11.6%.  Italy found 19,000 more jobs but the huge influx of migrants caused the rise in joblessness.  The youth unemployment skyrockets to 39.4% .  The youth unemployment is getting to look like Greece!

( zero hedge)

ii)Volkswagen/Germany

It goes from bad to worse for Volkswagen as an executive with the company is charged with conspiracy to defraud the USA over the emissions scandal:

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Turkey

The Turkish lira plummets by over 2% to 3.73 to the dollar as this nation is certainly having its problems. The daily attacks on its country from both ISIS sympathizers or PKK, it is certainly having a devastating effect on their economy

( zero hedge)

ii)USA: Iran

Iranian vessels come within 900 yards of a US destroyer accompanying two ships. The situation with respect to relations with Iran is faltering terribly:

( zero hedge)

iii) Russia consul in Greece

Russian consul in Athens found dead.  They said “abnormal causes”

must be going around..

( zero hedge)

6.GLOBAL ISSUES

Mexico

Mexico spent 4 billion trying to defend the Peso but it did not help.  The Peso remains at its nadir of 21.3 peso to the dollar

( zero hedge)

7. OIL ISSUES

i)The USA is selling 8 million barrels of oil from its strategic reserves and the reason is to pay for maintenance.

( zero hedge)

iiTwo good reasons why oil is slumping today:

Kuwait hints at non compliance and Nigeria’s production jumps

(courtesy zero hedge)

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)Ed Steer’s gold and silver letter is posted in the clear at Goldseek

( Ed Steer/GATA)

ii)There is no limit as to how much gold Indians can own and it surely beats ownership of rupees

( zero hedge)

iii)It is interesting that new documents proved that bullion dealers colluded with the USA to suppress to price of gold.  However ownership of those dealers have now changed:

( lawrence williams/Sharp’s Pixley)

iv)It is interesting that new documents proved that bullion dealers colluded with the USA to suppress to price of gold.  However ownership of those dealers have now changed:

( lawrence williams/Sharp’s Pixley)

v) Bill Holter interviewed by Greg Hunter of USAWatchdog

10.USA STORIES

i)Trump is on a roll:  He thanks Fiat Chrysler as they are going to invest 1 billion USA in a new plant in Ohio:

( zero hedge)

ib)Both Alibaba and Toyota plan to invest mega dollars to create millions of USA jobs

( zero hedge)
ii)The Fed’s own Labour Market Condition Index drops another .3% and it is now down 5.8% year over year, the biggest plunge in 6 years.  This generally indicates recession

(courtesy zerohedge)

iii) Student and car loans rise by another 11 billion dollars as we are now at a record 2.758 trillion

( zero hedge)

iv)Then late this evening: we hear that Trump is set to label China a currency manipulator.  This will not have an immediate effect but it will certainly strain relations.  Trump want to get China to the negotiating table so more jobs are created in the USA

(courtesy zero hedge)

end

Let us head over to the comex:

The total gold comex open interest FELL BY 2523 CONTRACTS UP to an OI level of 429,300 AS THE  PRICE OF GOLD FELL $7.80 with FRIDAY’S trading. We are now in the contract month of JANUARY and it is one of the poorest deliveries of the year.

With the front month of January we had a LOSS of 5 contracts DOWN to 165.  We had 0 notices filed so we LOST 5 contracts or AN ADDITIONAL 500 oz WILL NOT STAND for gold in this non active delivery month of January. For the next big active delivery month of February we had a LOSS of 10,561 contracts DOWN to 266,706. March had a gain of 9 contracts as it’s OI is now 285.

We had 0 notice(s) filed upon today for nil oz

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And now for the wild silver comex results.  Total silver OI FELL by 600 contracts FROM 165,537 DOWN TO 164,937 AS the price of silver FELL BY $0.12 with FRIDAY’S trading.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540).

We are now in the non active delivery month of January and here the OI FELL by 0 contracts REMAINING AT  355. We had 0 notice(s) filed on yesterday so we NEITHER GAINED NOR LOST ANY SILVER CONTRACTS standing for delivery.  The next non active month of February saw the OI FALL by 5 contract(s) DOWN to 199.

The next big active delivery month is March and here the OI FELL by 778 contracts DOWN to 133,559 contracts.

We had 0 notice(s) filed for 0 oz for the January contract.

VOLUMES: for the gold comex

Today the estimated volume was 197,262  contracts which is fair.

Yesterday’s confirmed volume was 254,516 contracts  which is good

Initial standings for january
 Jan 9/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 5626.75
SCOTIA
175 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
0 notice(s)
nil oz
No of oz to be served (notices)
165 contracts
16,500 oz
Total monthly oz gold served (contracts) so far this month
1023 notices
102,300 oz
3.1819 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     4,555,679.2 oz
Today we HAD 1 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil oz
We had 1 customer withdrawal(s)
i) Out of Scotia: 5626.25 oz
(175 kilobars)
total customer withdrawal: 5626.25 oz
We had 2  adjustment(s)
i) Out of Brinks; 43,522.800 oz was adjusted from the dealer and this entered into the customer account of Brinks
ii) Out of HSBC:  65,308.590 oz was adjusted out of the dealer account and this landed into the customer account of HSBC:
total removal from dealer: 108,831.900 oz
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

For January:

Today, 0 notice(s) 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(s)  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 JANUARY. contract month, we take the total number of notices filed so far for the month (1023) x 100 oz or 101,000 oz, to which we add the difference between the open interest for the front month of JANUARY (165 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 118,800 oz, the number of ounces standing in this non  active month of JANUARY.
 
Thus the INITIAL standings for gold for the JANUARY contract month:
No of notices served so far (1023) x 100 oz  or ounces + {OI for the front month (165) minus the number of  notices served upon today (0) x 100 oz which equals 118,800 oz standing in this non active delivery month of JANUARY  (3.6951 tonnes)
On first day notice for January 2016, we had .9642 tonnes of gold standing. At the conclusion of the month we had only .5349 tonnes standing so you can visualize the increasing demand for physical gold a t the comex.
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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 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
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.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.6951 tonnes
total for the 13 months;  226.086 tonnes
average 17.391 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
Total dealer inventor 1,452,913.516 or 45.191 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,104,221.823 or 283.17 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 283.17 tonnes for a  loss of 20  tonnes over that period.  Since August 8/2016 we have lost 71 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

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 4 1/2 MONTHS  71 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE DECEMBER DELIVERY MONTH
JANUARY INITIAL standings
 Jan 9. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 964,969.431 0z
Scotia
CNT
Deposits to the Dealer Inventory
 nil
Deposits to the Customer Inventory 
964,539.821 oz
JPM
No of oz served today (contracts)
0 CONTRACT(S)
(0 OZ)
No of oz to be served (notices)
355 contracts
(1,775,000  oz)
Total monthly oz silver served (contracts) 307 contracts (1,535,000 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  9,855,909.5 oz
 END
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: NIL oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of CNT:  605,000.160 oz
ii) Out of Scotia:  359,969.271 oz
TOTAL CUSTOMER WITHDRAWALS: 964,969.431 oz
 we had 1 customer deposit(s):
i) Into JPMorgan:  964,539.821 oz
total customer deposits;  964,539.821   oz
 
 
 we had 0  adjustment(s)
The total number of notices filed today for the JANUARY. contract month is represented by 0 contract(s) for 0 oz. To calculate the number of silver ounces that will stand for delivery in JANUARY., we take the total number of notices filed for the month so far at  307 x 5,000 oz  = 1,535,000 oz to which we add the difference between the open interest for the front month of JAN (355) 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 JANUARY contract month:  307(notices served so far)x 5000 oz +(355) OI for front month of JAN. ) -number of notices served upon today (0)x 5000 oz  equals  3,315,000 oz  of silver standing for the JAN contract month. This is  STILL huge for a non active delivery month in silver. We neither lost nor gained any silver contracts (oz) standing for January.
At first day notice for the January/2016 silver contract month we had 1,845,000 oz standing for delivery.  By the conclusion of the delivery month we had only 575,000 oz stand.
Volumes: for silver comex
Today the estimated volume was 48,981 which is very good
YESTERDAY’S  confirmed volume was 70,558 contracts  which is excellent.
 
Total dealer silver:  28.582 million (close to record low inventory  
Total number of dealer and customer silver:   180.684 million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD

JAN 9/A WITHDRAWAL OF 8.87 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 805.00 TONNES

Jan 6/no changes in gold inventory at the GLD/inventory rests at 813.87 tonnes
Jan 5/no change in gold inventory at the GLD/inventory rests at 813.87 tonnes
Jan 4/no change in inventory/inventory rests at 813.87 tonnes
Jan 3.2017/a huge 9.49 tonnes of gold leaves the GLD/inventory rests at 813.87 tonnes
DEC 30/no changes in gold inventory at the GLD/Inventory rests at 823.36 tonnes
Dec 29/no changes in gold inventory at the GLD/Inventory rests at  823.36 tonnes
Dec 28/no change in gold tonnage at the GLD/inventory rests at 823.36 tonnes
Dec 27/a withdrawal of 1.18 tonnes from the GLD/Inventory rests at 823.36 tonnes
Dec 23/NO CHANGES IN GOLD INVENTORY AT THE GLD/RESTS TONIGHT AT 824.54 TONNES
Dec 22/no change in inventory at the GLD/Inventory rests at 824.54 tonnes
DEC 21/another massive 3.56 tonnes leaves the GLD/Inventory rests at 824.54 tonnes
Dec 20/no changes in gold inventory at the GLD/Inventory rests at 828.10 tonnes
Dec 19/A MASSIVE WITHDRAWAL OF 14.23 TONNES OF GOLD FROM THE GLD (WITH GOLD UP THESE PAST TWO TRADING SESSIONS)/INVENTORY RESTS TONIGHT AT 828.10 TONNES
Dec 16/no changes at the GLD/Inventory rests at 842.33 tonnes
Dec 15/ANOTHER HUGE WITHDRAWAL OF 7.11 TONNES OF GOLD/INVENTORY RESTS AT 842.33 TONNES
DEC 14/another huge withdrawal of 6.82 tonnes from the GLD/Inventory rests at 849.44 tonnes/
DEC 13/no changes in gold inventory at the GLD/Inventory rests at 856.26 tonnes
Dec 12/a withdrawal of 1.19 tonnes of gold from the GLD/Inventory rests at 856.26 tonnes
Dec 9/another huge withdrawal of 3.26 tonnes of gold leaves the GLD vaults on its way to Shanghai/Inventory rests this weekend at 857.45 tonnes
Dec 8/ANOTHER HUGE WITHDRAWAL OF 2.96 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 860.71 TONNES (THIS GOLD IS HEADING TO SHANGHAI)
DEC 7/ a huge change in gold inventory/a withdrawal of 6.23 tonnesas this gold is heading towards Shanghai/inventory rests at 863.67 tonnes
Dec 6/no changes in gold inventory/inventory rests at 869.92 tonnes.
Dec 5./ a tiny withdrawal of .32 tonnes and this is probably to pay for fees/inventory rests tonight at 869.92 tonnes
Dec 2/a huge withdrawal of 13.64 tonnes of gold leaving the GLD vaults/no doubt this is heading to Shanghai taking advantage of the huge premium/inventory rests tonight at 870.22 tonnes
Dec 1/no change in gold inventory at the GLD/Inventory rests at 883.86 tonnes
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Jan 9/2017/ Inventory rests tonight at 805.00 tonnes
*IN LAST 65 TRADING DAYS: 144.81 TONNES REMOVED FROM THE GLD
*LAST 12 TRADING DAYS: 19.54 TONNES HAVE LEFT

end

Now the SLV Inventory
JAN 9/no changes in inventory at the SLV/Inventory rests at 341.199 million oz/
jan 6/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
Jan 5/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
Jan 4/a small withdrawal of 149,000 oz (probably to pay for fees/inventory rests at 341.199 million oz
Jan 3.2017/no changes in silver inventory at the SLV/Inventory rests at 341.348 million oz/
DEC 30/no changes in silver inventory at the SLV/inventory rests at 341.348 million oz/
Dec 29/no changes in silver inventory at the SLV/Inventory rests at 341.348 million oz
Dec 28/no changes in silver inventory at the SLV/Inventory at 341.348 million oz/
Dec 27/a big deposit of 1.138 million oz/Inventory rests at 341.348 million oz
Dec 23/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 340.210 MILLION OZ/
Dec 22/WE HAD A SMALL DEPOSIT OF 948,000 OZ INTO THE SLV/INVENTORY RESTS AT 340.210 MILLION OZ/
DEC 21/no change in silver inventory at the SLV/Inventory rests at 339.262 million oz
Dec 20/a small withdrawal of 758,000 oz/inventory rests at 339.262 tonnes
Dec 19A HUGE DEPOSIT OF 1.327 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 340.020 MILLION OZ
Dec 16/A HUGE WITHDRAWAL OF 2.37 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 338.693 MILLION OZ/
Dec 15/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 341.063 MILLION OZ/
Dec 14.no change in inventory at the SLV/Inventory rests at 341.063 million oz/
DEC 13/ a huge withdrawal of 1.802 million oz from the SLV/Inventory rests at 341.063 million oz
Dec 12/no change in silver inventory/inventory rests at 342.865 million oz/
Dec 9/no change in silver inventory/inventory rests at 342.865 million oz/
Dec 8/a huge withdrawal of 3.09 million oz from the SLV/Inventory rests at 342.865 million oz
DEC7/no changes in silver inventory at the SLV/Inventory rests at 345.995 million oz/
Dec 6/no changes in silver inventory at the SLV/inventory rests at 345.995 million oz
Dec 5/no changes in silver inventory at the SLV/inventory rests at 345.995 million oz/
Dec 2 a tiny withdrawal of 155,000 oz and this is probably to pay for fees/inventory rests at 345.995 million oz/
.
Jan 9.2017: Inventory 341.199  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.2 percent to NAV usa funds and Negative 6.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.1%
Percentage of fund in silver:38.7%
cash .+0.2%( jan 9/2017) 
.
2. Sprott silver fund (PSLV): Premium RISES to +.73%!!!! NAV (Jan 9/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO – 0.49% to NAV  ( Jan 9/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.73% /Sprott physical gold trust is back into NEGATIVE territory at -0.49%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE

2016 Past is 2017 Prologue

With us being just over a week into the New Year, we feel it worthwhile to look back just one last time at 2016. We believe that many of the themes and risks of 2016 continue in 2017 and that they are likely to impact markets in the coming months – especially the precious metal markets.

2016-review_outlook-2017Malcolm McDowell as Alex in A Clockwork Orange. Source: Wikimedia

We always enjoy new perspectives and every year we enjoy the witty, comprehensive and insightful analysis review of the year past by David Collum. His‘2016 Year In Review’ is in the same vein and was missed by many when it was released over the Christmas period.

Collum is a professor of Chemistry and Chemical Biology at Cornell University. In addition to his academic interests, he authors an annual review of the financial, economic and geopolitical year. The review is a must read and includes interesting information about the astute academic’s views on gold – he is “sanguine as ever holding large precious metal positions.”

He continues:

“Despite weakness of late, the case for gold is now in place: European and Chinese banking risks, negative interest rates, a war on cash, and omnipresent risks of a hot war in the borderlands of the Middle East and Europe. Estimates suggest 0.3% of investors’ assets are in gold.77 Traditional portfolio theory recommends 5%, offering a better than 15-fold relative performance en route. (Recall that discussion of “flow” from above.)

Let’s check in on what some of the wingnuts on the fringe of society are chortling about now:

“The world’s central bankers are completely focused on debasing their currencies. If investor’s confidence in central bankers’ judgment continues to weaken, the effect on gold could be very powerful.”
~Paul Singer, Elliott Management Corp

Gillian Tett: “Do you think that gold is currently a good investment?
Greenspan: “Yes. Economists are good at equivocating, and, in this case, I did not equivocate.”

“I can understand why holding gold would seem to be a sensible part of a national portfolio. Because there is clearly a need to take some precautions against an unknowable future.”
~Mervyn King, former head of the Bank of England

“I am not selling gold.”
~Jeff Gundlach, DoubleLine and the new “Bond King”

“The case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder.”
~James Grant, Founder of Grant’s Interest Rate Observer

“Everyone should be in gold.”
~Jose Canseco, expert on performance enhancement

James Grant also went on to say that “gold is like a monetary tonsil,” leading some to speculate that his son, Charley (WSJ), slipped him a pot brownie. Let’s see if we can get the goofs too.

We’ll begin by blowing out a few ideas I do not subscribe to. I keep hearing from smart guys that gold is in short supply in the Comex or Shanghai gold exchange, you name it. These stories almost never play out. I am also a huge fan of Rickards and Maloney, but the saying “gold is money” and the notion that its price is actually the movement of the value of the dollar don’t work for me: prices of everything I buy follow the dollar, not gold, on the currency timescales. On long timescales, their assertion may be correct. Someday their assertion may even be correct on short timescales, but that isn’t right now.

What a year: I got as many electoral delegates as the bottom ten republican candidates combined, ate python, and own as much gold as the Central Bank of Canada. Per the Bank of Canada, it finished selling off all of its gold,78 probably to ensure that the U.S. didn’t attack. You think I jest? A WikiLeaked e-mail by Sid Blumenthal to Hillary Clinton revealed that France whacked Libya to make sure North Africa distanced itself from a gold dinar currency.79,80 Germany supposedly has half of its requested gold repatriated from the U.S. and France,81 which could be bullish or bearish on the half-full/half-empty logic. Venezuela repatriated 100 tons of gold a few years ago and was squeezed to sell it all back in the heat of a currency crisis.82 The Dutch depatriated their gold this year after repatriating it not long ago.83 The reasons are unclear. Alexei Ulyukayev, first deputy chairman of Russia’s central bank, assured us Russia will continue to buy gold (Figure 7), presumably as a defense against interventions from inside the beltway. Of course, the Fed is silent on the “metal whose name shall never be spoken.”


Figure 7. Russian gold reserves

In a shockingly quiet year given how much gold moved to the upside before the post-election monkey hammering, we probably should finish with some generic goofiness. On a few occasions, gold took the beatings that are familiar—huge futures dumps in the illiquid wee hours of the morning when no price-sensitive investor would ever consider selling. It dropped $30 in seconds late on the day before Thanksgiving when nobody was paying much attention. Another hammering came from a $2.25 billion sale84 and another $1.5 billion sale,85 both of which occurred in under 1 minute. Nanex concluded that the algo “gold spoofer” was at play,86 but the 2016 poundings were transitory and toothless compared with their brethren in 2011–2015. Trouble in the ETF market was revealed when BlackRock was overwhelmed by GLD buying.87 It was forced to create more shares in February than it had in a decade. I retain previously stated convictions that GLD is a scam—fractional-reserve gold banking. Deutsche Bank was overwhelmed by requests for physical gold.88 It tried to shake the hook by demanding that such a request must be made at a participating bank.89 Deutsche Bank, the location of the request, is not a participating bank? I imagine it doesn’t have the gold, consistent with its troubles outlined below. A Swedish precious metal vault got its payment mechanism terminated without explanation.90

We can’t close without talking about gold’s kissing cousin—silver. The silver market gets its share of muggings and sustained bashings, at times spanning several weeks. The silver sellers didn’t get full traction either, however, bringing silver off a 50% gain but leaving it up 15% year to date. Silver market treachery got some attention. The London Silver Fix—truth in advertising—at times deviated markedly from the spot price,91 causing consternation among those attempting to fix the price. Deutsche Bank agreed to settle litigation over allegations it illegally conspired with Scotiabank and HSBC Holdings to fix silver prices at the expense of investors.92 A class action suit against Scotiabank suggested that the conspiracy spanned 15 years.93JPM was cleared of silver manipulation in three lawsuits—all dismissed with prejudice, an altogether different form of “fix.”94The only remaining question is why they are stockpiling huge stashes of physical silver.95

I’m as sanguine as ever holding large precious metal positions. Gold bugs are reminded, however, of what a big victory will feel like:

“Our winnings will come . . . from the people who wake up one morning to find their savings have been devalued or bailed-in. . . . [I]t’s going to come from the pension funds of teachers and firefighters. The irony is that when gold finally pays off, it will not be a cause for celebration.”
~Brent Johnson, Santiago Capital

‘2016 Year In Review – A Clockwork Orange’ can be accessed in full here

Ed Steer’s gold and silver letter is posted in the clear at Goldseek

(courtesy Ed Steer/GATA)

Ed Steer’s gold and silver letter posted in the clear at GoldSeek

Section:

6:25p ET Saturday, January 7, 2017

Dear Friend of GATA and Gold:

Today’s daily gold and silver letter by GATA board member Ed Steer has been posted in the clear at GoldSeek here:

http://news.goldseek.com/GoldSeek/1483891740.php

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

END

 

There is no limit as to how much gold Indians can own and it surely beats ownership of rupees

(courtesy zero hedge)

 

Indians can own as much gold as they want, and it sure beats the rupee

Section:

6:58p ET Saturday, January 7, 2017

Dear Friend of GATA and Gold:

India’s weekly news magazine Outlook today offers a fascinating interview with Somasundaram PR, managing director of the World Gold Council’s Indian office, noting that despite recent suggestions to the contrary, there is really no limit in law or regulation on how much gold Indians can own. The interview also details how Indians consider gold just as much a currency as any other and treat it that way in everyday business transactions.

While the Indian government is constantly hectoring its people to bring their gold into the financial system by paperizing it, the interview suggests that much of their gold is already functioning as both currency and savings. With the Indian rupee depreciating against gold over the last 15 years more than any other currency —

http://www.gata.org/node/17089

— it’s hard to imagine any practical measures by which the government will separate people from their gold.

The interview is headlined “There Is No Limit on Holding Gold: Somasundaram” and it’s posted at Outlook’s internet site here:

http://www.outlookindia.com/website/story/there-is-no-limit-on-holding-g…

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

END

 

It is interesting that new documents proved that bullion dealers colluded with the USA to suppress to price of gold.  However ownership of those dealers have now changed:

(courtesy lawrence williams/Sharp’s Pixley)

Lawrie Williams: Bullion dealers that colluded with U.S. in 1974 have changed ownership

Section:

9:50a ET Sunday, January 8, 2017

Dear Friend of GATA and Gold:

The London bullion dealers that colluded with the U.S. government in establishing the gold futures market for price suppression in 1974 have changed ownership since then, market analyst Lawrie Williams noted yesterday.

Williams, who does commentary for one of the bullion dealers cited in a cable from the U.S. embassy in London detailing that collusion, writes that the cited dealers no longer “exist in their original form nowadays, and, except perhaps for Mocatta’s successor, can no longer be considered part of any grouping that exerts any significant effect on the gold price today.”

GATA’s dispatch last week about the cable is posted here:

http://www.gata.org/node/17081

Williams’ response is posted at his blog here:

https://lawrieongold.com/2017/01/07/sp-article-link-not-working-gata-poi…

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

 

 

END

December’s SGE withdrawals came in rather light at 196 tonnes.  The total for the year: 1970.00 tonnes

LAWRIE WILLIAMS: 2016 SGE gold withdrawals lowest for four years

JAN
07

The Shanghai Gold Exchange (SGE) has now released its final report for the year on monthly gold withdrawals, with the December figure falling back below 200 tonnes (in comparison withdrawals totalled just short of 215 tonnes in November). This brings the total for the year to 1,970.37 tonnes, the first time the figure has been below 2,000 tonnes since 2012, and a fall of 24.1% on last year’s record total of 2,596.37 tonnes – see table below for detailed month by month withdrawal details for the past three years.

Table: Shanghai Gold Exchange Monthly Gold Withdrawals (Tonnes)

Month 2016 2015 2014 % change 2015-2016 % change 2014-2016
January 225.08 255.42 246.00 – 11.8% -8.5%
February* 107.60 156.36 171.67 – 31.2% -37.3%
March 183.24 213.35 146.56 -14.1% +25.0%
April 171.40 195.45 129.59 -12.3% +32.2%
May 147.28 162.15 129.34 -9.2% +13.8%
June 138.51 195.67 128.03 – 29.2% +8.2%
July 117.58 285.50 137.53 – 58.8% -14.4%
August 144.44 265.27 161.95 – 45.6% -10.8%
September 170.90 259.98 202.43 -34.3% -15.6%
October 153.25 176.29 201.11 -13.1% -23.8%
November 214.72 202.71 212.49 +5.9% +1.0%
December 196.37 228.21 235.66 -13.9% -16.7%
Full Year 1,970.37 2,596.37 2,102.36 -24.1% -6.3%

Source: Shanghai Gold Exchange, Lawrieongold.com

There are, and no doubt always will be, some arguments among analysts as to whether SGE gold withdrawals are an accurate representation of total mainland China gold demand. Some – notably Koos Jansen of www.bullionstar.com, who perhaps follows the Chinese gold sector closer than anyone, avers that they are and supports his argument with pointers to Chinese official statistics which would seem to support his analysis. Meanwhile the big precious metals focused consultancies – Metals Focus (which also supplies the data put out by the World Gold Council), GFMS and CPM Group classify consumption in much narrower terms and come up with various – and often differing – reasons why SGE withdrawals should not be equated to total Chinese gold demand. What puzzles us with regard to the figures put forward by the latter organisations is that their demand estimates always seem to fall hugely short of known Chinese gold import figures as published in official data from principal conduits Hong Kong, Switzerland, the UK and Australia, and not including possible gold imports from other gold producing nations which do not publish the breakdown of their gold exports in country-by-country detail. At one time one could point to Hong Kong exports to the mainland alone as a proxy for total mainland gold imports, but that’s no longer the case as 40% or more now looks to be going into the mainland directly, bypassing Hong Kong altogether.

But whatever one’s views on the accuracy of SGE gold withdrawal figures as a true representation of Chinese gold demand, they obviously at the very least demonstrate the overall trend and this shows that total Chinese gold demand slipped sharply in 2016 compared with the years immediately preceding – but it still remains very substantial keeping China at the head of the list of global gold imports. It is also the world’s top gold producer, with annual new mined gold production nearly 70% higher than that of No. 2 miner, Australia – or it could now be Russia in second place, we won’t know until the latest global gold production totals are available. For the last year for which final figures are available – 2015 – China produced some 260 tonnes of gold, Australia 274 tonnes and Russia 269 tonnes – for a full Top 20 listing click on: World’s Top 20 gold mining nations 2015.

What the SGE withdrawals figure for the year does confirm though, is that however one calculates Chinese gold demand it has very definitely slipped sharply in the past year – but if we do equate the SGE total to the total Chinese gold offtake, China still takes in over 60% of global new mined gold output on it own – an d, as Koos Jansen points out in his most recent article on bullionstar.com How The West Has Been Selling Gold Into A Black Hole, what goes into China doesn’t come out again. It is fully absorbed into the Chinese system. As Jansen points out: “China has imported 5,000 tonnes in the past years, which is not allowed to be exported. My hypothesis is that this 5,000 tonnes decline in above ground gold reserves outside of the Chinese domestic market will make gold rally stronger in a future bull market than it did in previous bull markets. To the extent many investors are uninformed about the shrinking volume of troy ounces available outside of China, their ignorance will boost any price rally coming.”

http://news.sharpspixley.com/article/lawrie- williams-2016-sge-gold-withdrawals-lowest-for-four- years/261416/

 

end

 

2017 Trump will be Presiding Over a Bankruptcy- Bill Holter

By Greg Hunter On January 8, 2017 In Market Analysis

(Early Sunday Release 1.9.17)

Financial writer Bill Holter says 2017 will be “the year of the Truth Bomb.” Holter explains, “I have been talking about ‘Truth Bombs’ for about a year and a half. I think what is going to happen in 2017 is that this hologram we’ve been living in, the curtain is going to be pulled back. . . . I want to see the truth come out, and that’s why we do what we do.”

One of the big truths that will explode is about the economy, and this will be one of Trump’s biggest problems. Holter goes on to say, “Trump is a smart guy, and he understands that really what he’s going to be doing is presiding over a bankruptcy. That’s what his main job is going to be, and that’s reorganizing this country.”

What will the end of 2017 look like? Holter says, “I don’t think it will even resemble what today looks like. I think you may see the financial system come down, and it may be by the end of the year that the system is coming back up or coming back on line. We are going to have a bank holiday. We are going to have to have some sort of reset. The reset will include a bank holiday. Your ATM won’t work. Your credit cards won’t work. Distribution is going to fail. It’s all about credit. Everything financial and everything economic relies on credit. I believe that we are going to have a credit crisis this year where credit becomes very scarce or actually dries up completely. In that scenario, it is not good. You are talking about distribution breaking down and people going hungry, riots, martial law, cross default from country to country to country to country, bank to bank to bank and broker to broker to broker. Everything runs and lives on credit, and without credit, it’s almost like caveman days.”

Will big stock market gains save some people from the coming pain of this economic reset? Holter, who has more than two decades of brokerage and stock market experience, contends, “One man’s debt is another man’s asset. The asset values are going to have to be marked down. . . . The point being, those assets that people hold in their portfolio, the numbers they see on their statements are just numbers. When this comes down, that’s not real value. You are not going to be able to call on those assets to live, to eat or to pay bills. It’s an asset collapse because the debt side collapses.”

Holter also says, “If you ask the question, does the average American believe we’re broke, I think deep down, and in the back of their minds, they think we’re broke. We’re living this lifestyle, and they think this lifestyle is not going to change. When the lifestyle does change, and it’s forced to be changed, that’s a gigantic truth bomb.”

Join Greg Hunter as he goes One-on-One with Bill Holter of JSMineset.com.

(There is much more in the video interview.)

Video Link

http://usawatchdog.com/in-2017-trump-will-be-presiding- over-a-bankruptcy-bill

-END-

 

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

 
 

1 Chinese yuan vs USA dollar/yuan UP to 6.9380(SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS HUGELY  TO 6.87401 / Shanghai bourse CLOSED UP 14.32 POINTS OR 0.54%   / HANG SANG CLOSED UP 55.68 OR 0.25% 

2. Nikkei closed   /USA: YEN FALLS TO 116.64

3. Europe stocks opened ALL IN THE RED       ( /USA dollar index RISES TO  102.33/Euro UP to 1.0531`

3b Japan 10 year bond yield: RISES TO    +.059%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 116.64/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  54.17  and Brent: 56.77

3f Gold UP/Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“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 10yr bund RISES TO +.281%/Italian 10 yr bond yield DOWN  to 1.896%    

3j Greek 10 year bond yield FALLS to  : 6.84%   

3k Gold at $1178.40/silver $16.51(8:45 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN   7/100 in  roubles/dollar) 59.69-

3m oil into the 53 dollar handle for WTI and 55 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 BIG   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 116.64 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0177 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0717 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  +.281%

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 2.390% early this morning. Thirty year rate  at 2.976% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

Party Like The Dow Is 19,999: US Futures Dip As Global Currencies Stumble; Oil Down, Gold Up

European, Asian stocks fall and U.S. equity-index futures traded mixed on Monday with fresh memories of the Dow Jones rising to under 1 point of 20,000 on Friday. The dollar has rebounded on fresh geopolitical concerns, while the pound extends its decline from Friday and has slide to 10 week lows on a Sunday interview from Theresa May which suggested a “Hard Brexit” may be in the cards. Oil dropped below $54 a barrel on Iran supply concerns, while gold rose 0.6% to $1,180.

Top stories include potential candidates to head the Federal Reserve in 2018 suggest they would pursue tighter policy; McDonald’s selling control of China business to Citic, Carlyle; Air Products looking to buy China’s top industrial gas maker.

A key focus for the week will be a news conference on Wednesday at which Donald Trump may give more details of his policies before his Jan. 20 inauguration. Expectations of more economic stimulus from a Trump administration have helped push U.S, stocks and bond yields higher since his victory in the Nov. 8 election.

Political risks have emerged as the week begins, rippling across FX markets with the pound, Turkish lira and South Korean won leading declines, while gold rose on haven demand and Chinese buying.

The dollar edged higher on Monday, boosted by robust U.S. wage growth data strengthening the case for more Federal Reserve interest rate increases, while Britain’s pound fell on Prime Minister Theresa May’s hint at no membership of the EU’s single market. Still, Britain’s blue-chip FTSE 100 index nonetheless hit a record high, continuing its streak of all time highs, as the first full trading week of 2017 on London markets began. The pan-European STOXX 600 index dropped 0.4% in early deals.

Sterling dropped to a 10-week low after the Prime Minister Theresa May indicated she prioritized regaining control of immigration during Brexit negotiations, while tensions between North and South Korea and debates on constitutional changes in Turkey put an index of developing currencies on track for the steepest drop in three weeks. Telecoms and real estate were among the biggest losers in European shares, while oil dropped for the first time in four days. Gold rose as investor holdings posted the first back-to-back increase since the U.S. election.

“The rise in the FTSE is really down to the weakness in sterling, but the Brexit news is not great so I don’t see the FTSE gaining too much,” said Ipek Ozkardeskaya, market strategist at London Capital Group.

The Turkish lira dropped to new record lows after a warning from Moody’s about the country’s bad loan situation, while deputy PM Canikli blamed an “unacceptable campaign” to move interest rates higher.

As Bloomberg notes, currencies, not bonds, have emerged as the preferred way for investors to express displeasure with political developments, because “they are seen as less vulnerable to intervention”, which may be true in most places except China where after this weekend’s report that Chinese reserves dropped by another $41 billion, all eyes are on how Beijing responds to the relentless capital flight. The offshore yuan was down 0.4 percent following Friday’s 0.9 percent retreat. The central bank set the onshore yuan reference rate 0.9 percent weaker against the dollar, though still stronger than some bank models predicted.

Meanwhile, British PM May said Sunday that negotiations on Brexit will be about “getting the right relationship, not about keeping bits of membership.”  A so-called hard Brexit may push the Bank of England to keep rates lower for longer, while weakening the pound and supporting foreign-focused companies in the main stock index, Bloomberg added. As a result, the pound fell to $1.2159, the lowest since Oct. 31, at 11:04 a.m. in London.

“Since October it’s become clear that sterling has a very binary relationship with political news, and anything which suggests a ‘hard Brexit’ sends sterling down, and anything that suggests a ‘soft Brexit’ sends sterling up. That’s been the case since the party conference in October,” said Rabobank currency strategist Jane Foley.

“Politics is a much more important factor these days for currency markets than it used to be,” said Adam Cole, head of global foreign-exchange strategy in London at Royal Bank of Canada. “There is a lot more political uncertainty now.”

In light of the geopolitical uncertainty, after dipping in initial trade, the Bloomberg Dollar Spot Index rebounded from an earlier loss and was up 0.2%.

In Asia, MSCI’s ex-Japan Asia-Pacific shares index was flat on the day, having risen as much as 0.5 percent after posting a rare loss in the previous session. Australia’s S&P/ASX200 rose 0.9 percent while Hong Kong shares rose 0.2%. Trading was light because Japan is shut for a holiday.

In Europe, the Stoxx Europe 600 Index fell 0.5%, on course for its biggest decline in almost four weeks. The main outperformer was the U.K. market, with the FTSE 100 Index heading for a 10th consecutive daily increase, as stronger economic data combined with a declining pound spurred buying.

  • Deutsche Lufthansa AG tumbled as much as 5.6 percent after analysts were underwhelmed by the airline’s guidance update.
  • Swedish bank Svenska Handelsbanken AB dropped after a downgrade at Credit Suisse Group AG.

The S&P 500 futures were little changed. The underlying gauge rose 0.4 percent to a record close of 2,276.98 on Friday in New York.

In rates, German 10-year government bond yields last traded at 0.29%, down 0.5 basis points on the day. It earlier rose close to 0.33 percent, its highest since Dec. 19, after data showed German exports rose 3.9 percent in November, their strongest monthly gain since May 2012 and far ahead of forecast.

* * *

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2271
  • Stoxx 600 down 0.4% to 364
  • FTSE 100 up 0.2% to 7228
  • DAX down 0.4% to 11555
  • German 10Yr yield down less than 1bp to 0.29%
  • Italian 10Yr yield down 6bps to 1.9%
  • Spanish 10Yr yield down 6bps to 1.48%
  • S&P GSCI Index down 0.8% to 395.1
  • MSCI Asia Pacific down 0.2% to 138
  • Hang Seng up 0.2% to 22559
  • Shanghai Composite up 0.5% to 3171
  • S&P/ASX 200 up 0.9% to 5807
  • US 10-yr yield down 2bps to 2.4%
  • Dollar Index up 0.23% to 102.45
  • WTI Crude futures down 1.7% to $53.06
  • Brent Futures down 1.7% to $56.11
  • Gold spot up 0.3% to $1,176
  • Silver spot down less than 0.1% to $16.49

Top Headline News

  • Potential Fed Chairs Suggest They Would Pursue Tighter Policy: potential candidates to head the Fed in 2018 suggested that monetary policy would be tighter if they were in charge
  • McDonald’s Sells Control of China Business to Citic, Carlyle: McDonald’s in agreement to sell 80% of its operations in China and Hong Kong to a consortium including Citic and Carlyle Group
  • Air Products Looks to Buy China’s Top Industrial Gas Maker: target shares jump in Hong Kong trading after intent letter
  • Morgan Stanley, UBS Said to Plan Boosting China JV Stakes: banks plan to boost holdings to regulatory threshold of 49%
  • Frozen in Detroit: Trump Stumps Builders of Cars in Age of SUVs
  • Fiat Chrysler Spends $1 Billion on U.S. Amid Trump Squeeze
  • VW Taps Hippie Heritage With Electric Microbus Amid Revamp
  • Volvo Cars Plans to Export Half of South Carolina Plant’s Output
  • FBI Said to Have Arrested Ex-VW Exec on Conspiracy Charges: NYT
  • ‘Rogue One’ Cruises to Fourth Weekend Atop Box Office

Asian equity markets traded higher after a strong close in the US on Friday, where all 3 major US equities posted gains and DJIA came within 0.37 points of the 20,000 level. ASX 200 (+0.9%) outperformed to trade in the green for the fifth consecutive day, with the IT sector taking the impetus from its US counterparts to lift the index higher after a flat open. However, gains were capped as a slightly stronger AUD, and lower government iron ore demand predictions weighed on mining names. KOSPI (flat) lagged amid uncertainty in the country as the parliamentary committee held its last hearing for the case surrounding impeached President Park, with South Korean heavyweight SK Hynix shares trading higher by over 3% to help keep the index afloat. In China, markets were mixed with Shanghai Comp (+0.5%) boosted by a relatively firmer liquidity operation by the PBoC and Hang Seng (+0.3%) choppy initially as China’s CSRC stated it will increase the importance of risk prevention in the stock market this year, however rallied as the session progressed to conform to the upbeat tone. Nikkei 225 was closed due to the Coming of Age Holiday.

Top Asian News

  • North Korean Nukes Seen Hurting Trump Re-Election Prospects: nation will probably claim with credibility within four years that it can hit U.S. with a nuclear weapon
  • Singapore Demands Hong Kong Return Seized Military Vehicles: City-state yet to open direct dialog with China on carriers
  • Rubber Prices Climb as Deadly Floods Damage Thai Plantations: Inundation set to affect rubber supplies in weeks ahead

European equities (-0.4%) trade broadly lower this morning, with the energy sector the most notable laggard. In terms of a stock specific basis, Volkswagen (+4%) are the best performer in the DAX after reporting FY 2016 brand sales +2.8%. Elsewhere, the FTSE 100 bucks the trend to trade in positive territory (+0.1%), with exporters benefitting from the softness in GBP, with some also talking about whether more monetary easing may be necessary after Theresa May indicated over the weekend that single market membership may not be achievable in Brexit talks.

European Econ data

  • German Nov. Ind. Production Rises 0.4% M/m; Est. +0.6% M/m
  • German November Exports +3.9% M/m; Est. +0.5% M/m
  • Bank of France December Business Sentiment Rises to 102 vs 101
  • Italy Unemployment Rate Rose to 11.9% in November; Est. 11.6%
  • Eurozone January Sentix Investor Confidence 18.2 vs Est. 12.8
  • Eurozone Nov. Unemployment Rate 9.8%; Est. 9.8%

Top European News

  • German Industrial Output Climbs in Sign of Economic Strength: output gained 0.4% in November vs estimated 0.6% increase; Economy Ministry sees solid output growth in winter half
  • May Signals U.K. to Quit Single Market to Curb Immigration: May denies “muddled” thinking, pledges Brexit details in weeks; Pound weakens as May’s comments indicate hard Brexit
  • Christmas Sports Bets Bring Tough End to Year for William Hill: profit will be about 20 million pounds less then expected
  • Euro-Area Unemployment Holds at 7-Year Low as Growth Strengthens: joblessness remains at 9.8%, in line with estimate; unemployment lowest in Germany, highest in Greece and Spain
  • Italian Unemployment Rate Rises to Highest Since June 2015
  • Lufthansa Forecasts ‘Clearly Negative’ Trend in Yields for 2017: shares decline; outlook underwhelming, analysts say
  • Fresenius Medical Care Shares Slump After Patient-Aid Subpoena: shares down the most in almost 2 months
  • Italy Clears Hurdle in Monte Paschi Rescue Without Even Trying: European Commission has to approve application for state aid

In currencies, the pound fell to a 10-week low, or $1.2159, the lowest since Oct. 31, at 11:04 a.m. in London. The Bloomberg Dollar Spot Index rebounded from an earlier loss and was up 0.2 percent. The offshore yuan was down 0.4 percent following Friday’s 0.9 percent retreat. The central bank set the onshore yuan reference rate 0.9 percent weaker against the dollar, though still stronger than some bank models predicted.  The won fell 1.3 percent and the lira 2.2 percent, dragging the MSCI Emerging Markets Currency Index 0.4 percent lower for the biggest drop since Dec. 15. The yen fell 0.2 percent to 117.28 per dollar and the won slid 1.3 percent, the most in two months.

In commodities, West Texas Intermediate crude oil dropped 1.5 percent to $53.16, halting its advance below $54 a barrel as an increase in U.S. drilling offset signs OPEC members are sticking to planned output cuts. Adding to the pressure was the Friday report of a surge in Iranian exports and selling from its offshore inventory, as well as the addition of more rige by US producers.  Gold rose 0.4 percent to $1,176.7 an ounce.

US Government:

  • Senate in session, plans consideration of budget resolution; House in session and could consider bills related to regulations and investing in startups
  • 10am: Supreme Court hears oral arguments
  • 11:30am: HUD Sec. Julian Castro delivers remarks on housing market and protections for HUD-assisted residents

US Event Calendar

  • 9am: Fed’s Rosengren Speaks in Hartford, Connecticut
  • 2pm: Fed’s Lockhart Speaks to the Rotary Club of Atlanta
  • 3pm: Consumer Credit, Nov., est. $18.400b (prior $16.018b)

* * *

DB’s Jim Reid concludes the overnight wrap

As my year starts I wanted to recap for my own benefit the key early moves seen so far in 2017. The most significant have probably been those in rates and FX. 10y Treasury yields are 2.5bps lower compared to where we finished 2016 at 2.420% although that masks what has been an 18.4bps intraday high-to-low range over the week. At 0.294%, 10y Bund yields on the other hand are 9.3bps higher while in the periphery 10y yields in Italy, Spain and Portugal are 14.8bps, 15.7bps and 28.5bps higher respectively. In fact the latter crept over 4% for the first time since last February after the latest ECB PSPP holdings data revealed a much slower than expected rate of purchases in Portugal last month relative to its implied capital key. With the ECB tapering discussion clearly still topical last week’s European data and in particular the inflation numbers were all fairly supportive too. In fact our European economists noted that their SIREN-Momentum and SIREN-Surprise indicators are currently above 85% and 90% of their respective readings over the past decade. Their combined reading stands close to the top two percent of historical observations.

Meanwhile in FX the USD index ended the week pretty much unchanged but again with a notable 2.43% range. Indeed there were fairly sizeable daily moves as investors balanced the FOMC minutes with Trump’s appointments and tweets and also the big move for the Chinese Renminbi which saw the offshore currency rally +1.81% last week. More on that shortly. EM currencies on the whole had a fairly decent week (Russian Ruble and Colombia Peso stand out after rallying nearly 3% each) while the MSCI EM equity index returned +2.18% as commodities – and in particular metals – started the year by building on recent highs. Elsewhere credit markets have started positively. In the US CDX IG is 3bps tighter at 64.7bps and close to the recent tights while in Europe the iTraxx Main is 4bps tighter at 69bps with that index also creeping in on last year’s tights.

Financials have also gotten off to a decent start with the iTraxx senior and sub fins indices 7bps and 23bps tighter respectively. The big news in credit though has been the incredible start for primary markets. Indeed the US IG market stands out in particular with total issuance of over $60bn last week, making it one of the biggest weeks on record. Even more impressive is the fact that there was no one or two bumper offerings, unlike other record weeks. Finally, where it’s been a bit quieter is equity markets. That said it’s still been a decent start with the S&P 500 (+1.70%) and Dow (+1.02%) both up (the latter within a whisker of the 20,000 level) following further gains on Friday while the Stoxx 600 turned in a +1.12% return last week. European Banks also rallied to the tune of +3.79%.

The highlight of the upcoming first full week of 2017 might well be President-elect Trump’s first news conference on Wednesday since his election win. His tweets continue to be market moving events for the stocks and sectors it influences and very soon there will be more and more macro consequences of his musings and actual policy decisions. So watch out for things to hot up after Wednesday. Remember also that the inauguration is a week on Friday and we’ll soon be into the well watched first 100 days.

China won’t be far from Mr Trump’s crosshairs in 2017 and as mentioned earlier the big story here so far this year has been the +1.81% strengthening of the offshore RMB last week. At one stage on Friday the currency was as much as +2.78% stronger in 2017 before it gave back some of those gains on Friday. It’s given back another -0.48% this morning too with offshore lending rates also notably lower (CNH Hibor down to a still elevated 14% from 69% on Friday) and in fact it’s now on course for the biggest two-slide since June last year. So China is ruffling a few feathers again at the start of a New Year. It’s worth also noting that the weekend data showed that China’s foreign reserves fell for a six month in a row in December and to a five-year low of $3.01tn, albeit pretty much bang on consensus.

On a related topic, over the weekend our China economists published a report discussing their view of the Dec-31 Decree issued by the PBoC stipulating new reporting regulations regarding large/suspicious financial transactions. They highlight that the Decree could potentially pose a severe hit to “capital flight without cross-border fund flows”. They also note that the Decree is an “infrastructure building” effort with regulatory implications far beyond capital control. Better tracing of large/suspicious financial transactions will not only serve for anti money laundry, but also help with, for instance, regulation of shadow banking activities.

Elsewhere this morning equity markets in Asia are generally off to a decent start to the week. The Shanghai Comp (+0.56%), ASX (+0.93%), Hang Seng (+0.04%) and Kospi (+0.12%) have all edged higher while markets in Japan are closed for a public holiday. There’s been some interesting corporate news too with the announcement that McDonald’s is to sell 80% of its China franchise for about $2bn with Chinese state-backed conglomerate Citic Group to take a 52% stake. Meanwhile Sterling (-0.38%) has weakened following a Sky News interview yesterday with UK PM Theresa May in which she said the eventual exit of the UK from the EU will be about “getting the right relationship” and “not about keeping bits of membership”. May also played down Ivan Rogers’ comments last week when he criticised the government’s “muddled thinking”, while May added that the government “will be setting out some more details in coming weeks as we look ahead to triggering Article 50”.

Moving on. For those that missed it, Friday was all about the final US employment report of 2016. While headline nonfarm payrolls may have appeared a touch disappointing at first glance having come in slightly below consensus (156k vs. 175k expected), there was also a cumulative 19k of net positive revisions to the prior two months. That was a similar story for private payrolls (144k vs. 170k expected) where the November reading in particular was revised up to 198k from 156k at the first reading. Meanwhile the rest of the report was generally supportive. The U-3 unemployment rate ticked up as expected to 4.7% although the broader U-6 rate dropped one-tenth to 9.2% and in doing so hit a new postfinancial crisis low. The labor force participation rate nudged up one-tenth to 62.7% while average weekly hours held steady at 34.3hrs. The report might however be best remembered for the +0.4% mom gain in average hourly earnings (vs. +0.3% expected) which has helped the YoY rate to accelerate to +2.9%  from +2.5% – the highest since June 2009.

As noted earlier US equities took heart from the report, helping the S&P 500 to rise +0.35% while 10y Treasury yields reversed a decent part of the moves in the previous two days to close 7.5bps higher. The  USD index (+0.69%) also rallied back while Gold (-0.63%) nudged lower. The other data in the US on Friday didn’t offer too much to the debate. The November trade balance revealed a further widening in the deficit to $45.2bn from $42.4bn. Finally factory orders weakened a little bit more than expected in November (-2.4% mom vs. -2.3% expected). Following all that the Atlanta Fed left their Q4 GDP forecast unchanged at 2.9% while the NY Fed raised their growth forecast to 1.9% from 1.8%.

There was also some Fedspeak to take stock of on Friday. The Philadelphia Fed’s Harker said that “I’m pencilled in for 3 rate increases” this year. The Dallas Fed’s Kaplan confirmed that the December SEP, which had a median projection of 3 rate hikes this year “gives you a sense of my views” but that the Fed needs to be nimble to revise forecasts as events unfold. Finally the usually dovish Chicago Fed’s Evans confirmed that 2 hikes this year is “not an unreasonable expectation” and that 3 hikes is “not implausible”.

Before we look at the week ahead, for completeness in Germany on Friday the hard data was a little bit disappointing with both November factory orders (-2.5% mom vs. -2.4% expected) and retail sales (-1.8% mom vs. -0.9% expected) declining more than expected. The European Commission’s index of economic sentiment was however reported as rising 1.2pts in December to 107.8 and more than expected.

Moving now to this week’s calendar. We’re kicking off the week in Europe this morning with Germany where the latest industrial production and trade data is due. Business sentiment data in France follows along with the latest house price data in the UK, before we get then get the Sentix investor confidence reading for the Euro area and also the November unemployment rate reading. Over in the US we’ve got the usual post-payrolls lull but the November consumer credit reading will be out this evening. We’re kicking off Tuesday in China where the December CPI and PPI prints will be due. In Europe the only data due out is the latest industrial production numbers in France while in the US the NFIB small business optimism reading is due for last month, along with the November wholesale inventories and trade sales report and also the November JOLTS job openings report. Wednesday kicks off in the UK with the November trade data and also industrial and manufacturing production prints. There’s no data of note in the US on Wednesday. Japan gets things going on Thursday with November trade data. During the European session we’ve got inflation data in France, GDP in Germany and industrial production data for the Euro area all due. Over in the US the data includes initial jobless claims, import price index and the December monthly budget statement. During the Asia session on Friday the highlight is likely the December trade report in China. It’s a quiet end to the week in Europe with no notable releases due. In the US we finish the week with the December PPI report and retail sales, November business inventories and finally a first look at the January University of Michigan consumer sentiment reading.

Away from the data the Fedspeak this week consists of Rosengren and Lockhart today, Harker, Evans, Bullard and Kaplan on Thursday and Fed Chair Yellen early on Friday morning when she is due to host a town hall meeting with educators from across the country. Q&A is however expected. The ECB will also release the minutes from the December policy meeting on Thursday. Meanwhile, this week earnings season will start to kick into gear with JP Morgan, BofA and Wells Fargo all reporting on Friday. Perhaps the most hotly anticipated event this week however will be President-elect Trump’s aforementioned general news conference on Wednesday, the first since his election victory. That will also come one day after President Obama’s televised farewell speech from Chicago.

end

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 14.32 POINTS OR 0.54%/ /Hang Sang closed UP 55.68 OR 0.25%. The Nikkei closed /Australia’s all ordinaires  CLOSED UP 0.84%/Chinese yuan (ONSHORE) closed WELL DOWN at 6.9380/Oil FELL to 53.00 dollars per barrel for WTI and 55.96 for Brent. Stocks in Europe: ALL IN THE RED. Offshore yuan trades  6.8740 yuan to the dollar vs 6.9380  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS  DOLLARS  LEAVE CHINA’S SHORES /

3a)THAILAND/SOUTH KOREA/:

none today

b) REPORT ON JAPAN

c) REPORT ON CHINA

China launches a crackdown on Bitcoin with the beneficiary gold:

(courtesy zero hedge)

China Launches Bitcoin Crackdown: PBOC Will Probe Abnormal Investor Behavior “And Rectify Misbheavior”

Having long been advocates of Bitcoin (ever since Sept. 2015 when it traded at $230) for the simple reason that we were confident the digital currency would eventually become China’s favorite means of circumventing capital controls – precisely as has transpired – two months ago we warned that the unprecedented surge which made bitcoin the best performing asset in the past year with a 5x return, may be ending as “China Prepares To Impose Curbs, “Capital Controls” On Bitcoin.”

Since then, and especially over the past week, China has launched a series of incremental steps designed to do just that, which culminated on Friday when China’s central bank issued a statement calling the changes in the virtual currency “abnormal”, and said authorities have required the trading platform to operate in compliance. They urged the platform to “probe investors’ behavior and to “rectify misbehavior.”

The statement hit shortly after China FX regulators, SAFE, said it would begin scrutinizing fund outflows via Bitcoin, as China sought to close this final gaping capital outflow pathway.

Furthermore, according to China Daily, China’s financial services authorities required major executives of the Shanghai-based bitcoin trading platform BTCC on Friday to “rectify misbehavior in the trading of the virtual currency”, without clarifying precisely what this means, and to raise awareness of risks as the value of bitcoins experienced wild fluctuations.

China’s mass speculators flocked to the bitcoin market in recent days in a bid to gain from its fast appreciation, which rose 200% in 2016. However, after rising in near-exponential fashion over the past few weeks without any corrections, Bitcoin’s value fluctuated by more than 30 percent within the past two weeks as concerns of Chinese interference first emerged and were then confirmed. .The statement said authorities would like to reaffirm that the bitcoin as a virtual currency which cannot and shall not be regarded as currency in circulation.

* * *

It is unclear if the PBOC has successfully burst China’s latest bubble: According to data from the Shanghai-based bitcoin trading exchange, BTCC, more than 100 new investors started trading the virtual currency in the past three days, a fast growth compared to some 20 new investors before October in 2016.

“This trend shows that the bitcoin market’s appeal has been rising to a new level,” said a market review by BTCC dated Jan 4.

Feng Xin’an, 43-year-old sales manager with Shanghai-based Maoxin Trade Ltd, said he invested some 135,000 yuan ($19,515) in the bitcoin market as he regards bitcoin as a “haven asset”.

“The young generation, like my son and his friends, love to pay with digital currencies. Their demand for bitcoin can grow further, as I observe,” he said.

Meanwhile analysts continue to warn that bitcoin is not a tool that “guarantees” yield, and warn new investors who have limited knowledge, that entering the market blindly could be risky.

“Investors should always remember that bitcoin lost more than 75% of its value in 2013. We do not recommend it as a long-term investment tool, particularly because of compliance concerns,” said Zhang Yufang, investment adviser with Shanghai Shangding Investment Consultancy.

Then again, we are talking about Chinese bubble blowers: a legendary class of momentum chasers who will take any trend far beyond the level of max pain before allowing it to burst in a spectacular supernova of selling, in which the slowest sellers end up suicidal, either literally and metaphorically, before moving on to the next pre-bubble asset.

Following the PBOC statement, Bitcoin tumbled as low at 5,555 Yuan, or just above $800, before rebounding modestly as a new batch of BTFDers emerged.

4 EUROPEAN AFFAIRS

ITALY

Not good:  the unemployment rate in Italy rises to 11.9% even though the consensus was 11.6%.  Italy found 19,000 more jobs but the huge influx of migrants caused the rise in joblessness.  The youth unemployment skyrockets to 39.4% .  The youth unemployment is getting to look like Greece!

(courtesy zero hedge)

Italy Unemployment Unexpectedly Deteriorates To Highest Since June 2015; Youth Unemployment Jumps To 39.4%

While the rest of Europe’s troubled periphery has been enjoying a slow, if steady, economic improvement in recent years (it is unclear if it would sustain should the ECB’s QE backstop be withdrawn and sovereign interest rates spike), in an unexpected deterioration reported earlier this morning, Italy’s unemployment rate rose to the highest level since June 2015, as the country struggles to regain a solid economic footing.

According to Italy’s statistics agency Istat, the jobless rate jumped to 11.9% in November, up from a revised 11.8% the month before, and well above the 11.6% consensus forecast. Despite the headline deterioration, there were 19,000 more people employed in Italy in November compared with the month before, Bloomberg reports.

Even more troubling, youth unemployment rose to 39.4 percent, up from 37.6% and the highest since October 2015.

The Italian deterioration stood out across a stable European backdrop: the November unemployment rate for broader euro area was 9.8%, the European Union’s statistics office in Luxembourg said later Monday.

While Istat recently said on December 30, that businesses foresee an employment boost for Italy’s manufacturing industry, with a decrease in trade, construction and services, the practical reality is less optimistic especialy after UniCredit SpA, the nation’s largest bank, said last month it plans a 21% reduction of its workforce in Italy by 2019.

The government of new Prime Minister Paolo Gentiloni has been seeking to create more jobs to put the economy on a steady upward path. Growth picked up to 0.3 percent in the three months ended in September from near-stagnation in the previous quarter.

 

 

end

 

Volkswagen/Germany

It goes from bad to worse for Volkswagen as an executive with the company is charged with conspiracy to defraud the USA over the emissions scandal:

(courtesy zero hedge)

FBI Arrests Volkswagen Exec Charged With Conspiracy To Defraud The US

While various other carmakers, such as GM, Ford, Fiat and Toyota, have had their share of headaches in recent weeks worried if and when Trump will tweet about them next, the epicenter of all car scandals over the past two years remains Volkswagen, and sadly for the German carmaker things continue to get worse: according to the NYT, the FBI haed arrested a Volkswagen executive on charges of conspiracy to defraud the United States.

Oliver Schmidt, who headed the company’s regulatory compliance office in the U.S. from 2014 to March 2015, was arrested on Saturday by federal investigators in Florida, the newspaper said, citing people familiar with the matter. Starting in late 2014, Mr. Schmidt and other Volkswagen officials repeatedly cited false technical explanations for the high emissions levels, the state attorneys general said. In 2015, Mr. Schmidt acknowledged the existence of a so-called defeat device that allowed Volkswagen cars to cheat emissions tests.

VW admitted in September 2015 to installing secret software known as “defeat devices” in 475,000 U.S. 2.0-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing. In reality, the vehicles emitted up to 40 times the legally allowable pollution levels.

Schmidt continued to represent Volkswagen after the company admitted in September that cars were programmed to dupe regulators. He appeared before a committee of the British Parliament in January, telling legislators that Volkswagen’s behavior was not illegal in Europe. Schmidt is expected to be brought before court in Detroit on Monday, the NYT said.

“Volkswagen continues to cooperate with the Department of Justice as we work to resolve remaining matters in the United States. It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters,” it said.

Senior VW officials are not attending this year’s Detroit auto show, which is taking place this week.

James Liang, a former Volkswagen engineer who worked for the company in California, pleaded guilty in September to charges that included conspiracy to defraud the federal government and violating the Clean Air Act. But Mr. Schmidt’s arrest brings the investigation into the executive ranks.

The arrest came as Volkswagen and the Justice Department neared a deal to pay more than $2 billion to resolve the criminal investigation into the emissions cheating. The company or one of its corporate entities is expected to plead guilty as part of the deal.

The criminal case against Volkswagen, and the potential guilty plea, set it apart from other recent auto industry investigations. In settlements with General Motors and Toyota over their handling of safety defects, for example, the companies agreed to pay large fines, but did not plead guilty. Volkswagen has already agreed to pay up to nearly $16 billion to resolve civil claims in what has become one of the largest consumer class-action settlements ever in the United States, involving half a million cars.

 

 

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

The Turkish lira plummets by over 2% to 3.73 to the dollar as this nation is certainly having its problems. The daily attacks on its country from both ISIS sympathizers or PKK, it is certainly having a devastating effect on their economy

(courtesy zero hedge)

Turkish Lira Plunges Over 2% To New Record Low, Yields Rise On Moody’s Warning

The collapse in the Turkish Lira, which has been relentless since last summer’s failed coup, has only accelerated in 2017, and especially this morning, when the Turkish currency tumbled more than 2% against the dollar – its single worst day since the July 19 military coup attempt – sliding as low as 3.73, down over 5% so far in 2017, and over 23% in the past 12 months.

While the broader catalyst are familiar, namely a slowing economy, seemignly daily terrorist attacks, a furious crackdown by Erdogan on government dissent and potential rating downgrades, this morning there have been two additional catalysts that have accelerated the selloff.

First Moody’s, which has the country on junk rating as of last September, issued a warning on the country’s banking system saying heightened security risks would weigh down on the economy and heap further pressure on domestic banks. The rating agency warned that Turkish banks’ bad loan ratio was set to rise to 4% this year from 3.24% “driven by the combination of high inflation, lira depreciation and the general worsening of the investment climate because of security issues and geopolitical tensions”. The caution comes as Turkey faces another downgrade to junk from Fitch later in January, which would see its last investment grade rating stripped away, promptly raising its costs of borrowing even more.

Only making matters worse, were comments from Turkey’s deputy PM, Nurettin Canikli, who indicated that Turkey’s head remains stuck deeply in the sand, when he blamed the plunge in the Lira on an unacceptable “campaign” to force interest rates higher.  He also told AHaber TV in an interview that institutions will take whatever measures are needed for economy, that Citizens have no demand for foreign currency (not quite if judging by the plunge in the lira), that the Turkish economy will continue to “resist” such moves as dollarization level very low compared to past, and ultimately blamed the U.S. for its support to Syrian Kurdish PYD/YPG calling it “unacceptable.”

Meanwhile, the market is already pricing in further downgrades, and as of this morning, Turkey’s benchmark 10Y yields jumped another 15 bps near the highest over the past year.

So what is Turkey to do? One suggestion came from ING’s chief EMEA FX and rates strategist Petr Krpata who writes that a “large one-off rate hike could unleash a 10% rally in the lira” adding that “in the absence of capital controls, a large emergency rate hike seems to be the only remedy. If the root cause is domestic, the solution must be domestic too.”

However, he admits that the bar for a large hike is high – especially with Erdogan having made it quite clear such a move is unacceptable – and expects the central bank to continue with its “piecemeal approach and only hike interest rates gradually.”

He concludes that such an approach is unlikely to halt the lira’s slide and suggests further downside; sees 3.90/USD being tested before the case for a large interest increase grows stronger.

At the current rate of collapse, the lira may be there by the end of the week.

 

 

END

 

USA: Iran

Iranian vessels come within 900 yards of a US destroyer accompanying two ships. The situation with respect to relations with Iran is faltering terribly:

(courtesy zero hedge)

US Destroyer Fired Warning Shots At Four Iranian Vessels In Strait Of Hormuz

In the latest dangerously close encounter between US and Iranian navies, Reuters reports that a U.S. Navy destroyer fired three warning shots at four of Iran’s Islamic Revolutionary Guard Corps vessels on Sunday after they closed in at a high rate of speed in the Strait of Hormuz, according to two U.S. defense officials.

The Reuters sources said that the USS Mahan established radio communication with the boats but they did not respond to requests to slow down.

The USS Mahan

The Navy destroyer fired warning flares and a U.S. Navy helicopter also dropped a smoke float.

The Iranian vessels came within 900 yards (800 meters) of the Mahan, which was escorting two other U.S. ships.

The last such encounter in which a US navy ship fired warning shots at Iranian vessels took place last August, when the USS Nitze fired three warning shots after a “harassing” Iranian fast-attack craft approached and circled two U.S. Navy ships and a Kuwaiti vessel in the northern Gulf. The U.S. ship fired the shots into the water after the Iranian ship did not leave after a brief radio conversation.

The Iranian vessels had moved at high speed toward the Nitze, which allegedly was operating in accordance with international law in international waters and ignored maritime “rules of the road” as set out in the 1972 Convention on the International Regulations for Preventing Collisions at Sea. According to the Navy official, the IRGC vessels ignored multiple warnings, creating a dangerous, harassing environment that could have pushed the Nitze to take defensive measures, escalating the situation. At the time, Iran’s defense minister insinuated that the incident occurred inside Iranian territory.

“Naturally these boats constantly monitor the developments and foreign vessels’ movements and naturally this happens in the waters of our own country. If any foreign vessel enters our waters, we will give them a warning and if it is an act of aggression, we will confront them,” he said.

It is unclear if today’s incident took place in international waters.

As a reminder, there are temporarily no US aircraft carriers in the Persian Gulf region at this moment, or anywhere else around the world for that matter.

 

END

 

Russian consul in Athens found dead.  They said “abnormal causes”

must be going around..

(courtesy zero hedge)

 

Russian Consul In Athens Found Dead

According to reports in the Greek press, on Monday the head of the Russian Consular service in Athens was found dead in his apartment in downtown Athens. However, unlike the recent assassination of the Russian ambassador in Ankara, according to preliminary reports the death is not the result of a criminal act.

The 55-year-old Andrei Melanin was found dead on Monday afternoon in his apartment on Herod Atticus Road. Local authorities and a coroner were quickly dispatched to the site.

Russia Zvezda adds that ghe consul did not go to work and did not respond to calls. Alarmed, his colleagues came to his home and with the help of the police opened the door, which was locked from the inside. At the moment, the police is investigating the incident.

A report in Greek To Vima says that the death appears to be the result of “abnormal causes.” However, it adds, the full details of his death will only be known after an autopsy is performed.

6.GLOBAL ISSUES

Mexico spent 4 billion trying to defend the Peso but it did not help.  The Peso remains at its nadir of 21.3 peso to the dollar

(courtesy zero hedge)

Mexico Spent $4 Billion To Defend The Peso Last Week…And This Is What They Got

Mexico’s central bank spent over $4 billion last week in an effort to support the collapsing peso during U.S., Mexico and Asian trading, according to El Economista.

Gabriel Gerzstein, a strategist at BNP Paribas, estimated that opening an episode of dollar sales to “anchor the value of the national currency” could cost about $ 40 billion from the international reserve.

The handling of discretionary dollar auctions, in the context of volatility generated by US protectionist policy, would have to motivate the Exchange Commission to “be much more aggressive and discretionary than in 2015,” he explained.

In August, Banxico used a daily auction mechanism that ended up draining $ 27 billion from the reserve in six months.

So far that $4 billion has not stemmed the tide of selling with the peso down 3%…

We’re gonna need more intervention.

 

 

end

 

If Trump’s tariffs are too high, then Fiat will shut down all of Mexico’s production: this should set off a huge trade war!

( zero hedge)

 

Fiat CEO Warns May Shut All Mexico Production If Trump Tariff Too High

Agree with his proposed policies or not, it’s difficult to argue that Trump is delivering on his promises to the autoworkers of the Midwest who single-handedly voted him into the White House.  Before even taking office, the mere threat of import tariffs has caused Ford to cancel the construction of a $1.6 billion new facility in Mexico, and has automotive CEO’s from Toyota to Chrysler walking on eggshells as they carefully try to flaunt all of the capital investments they’re making in U.S.-based facilities.

While likely secretly hoping for the status quo, Fiat Chrysler’s U.S. CEO, Sergio Marchionne, admitted earlier today that if Trump’s import tariffs are “sufficiently large” he would be forced to shutter all of his manufacturing capacity in Mexico as it would be rendered “uneconomical.”  Per the FT:

Fiat Chrysler may close its Mexican car plants if Donald Trump imposes sufficiently stringent tariffs on vehicles coming into the US, chief executive Sergio Marchionne said on Monday.

 

“It’s possible that if economic tariffs are imposed…and are sufficiently large, it will make production of anything in mexico uneconomical and we would have to withdraw,” he said in Detroit on Monday. “It’s quite possible.”

Sergio

 

As it turns out, purchasing 18mm cars per year, even if those purchases are fueled by a massive subprime auto lending bubble, affords the U.S. some leverage on where those vehicles are manufactured.  And, as Marchionne points out, the manufacturing capacity in Mexico was specifically designed and tooled to manufacture vehicles for the U.S. market which means that attempts to “re-purpose” the facilities for the export market would almost certainly be uneconomical.

Chrysler produces 503,000 vehicles in Mexico a year at two sites and is heavily dependent on exports to the US, with 86 per cent of its cars sold to US or Canada in 2015.

 

Mexico’s car industry has blossomed under the North American Free Trade Agreement, with the industry making 3.4m cars a year and automakers from Ford and GM to Nissan and Volkswagen producing vehicles in the country.

 

But the industry is heavily reliant on access to the US and Canadian markets, accounting for 82 per cent of the country’s 2.7m exports.

 

“The reality is the Mexican auto industry has been tooled up to try and deal with the US market,” said Mr Marchionne at the Detroit Motor Show. “If the US market were not to be there, then the reasons for its existence are on the line.”

 

Some car makers, such as Nissan and Volkswagen, use Mexico as a base to export to Europe or Latin America. But Mr Marchionne said it would be too expensive to repurpose the company’s existing Mexican site to export all over the world.

 

“That transition would be costly and it would be very very uncertain, there is no easy transition, those plants were designed built and purposed at a time when nafta was alive and well,” he said.

According to the Ann Arbor-based Center for Automotive Research, Mexico accounts for one-fifth of all vehicle production in North America and has attracted more than $24 billion in investment since 2010.  As we noted a few months ago, as of right now, this is where all of that money was spent.

 Mexico Production Facilities

 

And with America’s United Auto Workers making just over 7x what comparable workers make to build the same products in Mexico, we suspect car shoppers in the U.S. should get accustomed to pay a little more for their Ford Focus or Chevy Cruze.

Auto Labor

The very prestigious Peterson Institute is banging the table that markets are ignoring the risk of devastating trade wars initiated by Trump;

(DaCosta/Peterson Institute)

Pedro Da Costa Warns “Markets Are Ignoring Risk Of Devastating Trump Trade War”

Are investors so focused on Dow 20,000 that they’ve become complacent about the true risks of Donald Trump’s vows to tear up trade agreements, erect 17 commercial tariffs, and deport millions of immigrants?

So far, markets have focused on the purportedly bullish portion of his broad-brush economic proposals—corporate tax cuts and loose plans for infrastructure spending. But they have largely neglected Trump’s potentially devastating approach to trade, one which scholars at the Peterson Institute for International Economics found could lead to a damaging, protracted trade war.

The September report identified specific industries and localities that would be most deeply affected by a trade war with major US trading partners. And it’s not a pretty picture.

Source: PIIE Briefing 16-6: Assessing Trade Agendas in the US Presidential Campaign

“Millions of American jobs that appear unconnected to international trade—disproportionately lower-skilled and lower-wage jobs—would be at risk,” according to the PIIE study.

But Wall Street’s base case has been to dismiss the prospect of follow-through.

That negligence received something of a reality check over the holidays. A string of appointments, in particular those of anti-China economist Peter Navarro and steel-magnate-turned-protectionist-billionaire Wilbur Ross, confirms that, in keeping with some of his more outrageous campaign stunts (think pre-debate ‘presser’ with ex-Bill Clinton accusers), the president-elect may actually follow through on a lot of what he said he would do during the campaign.

That could include everything from erecting new tariffs, almost universally derided by economic experts as potentially hurting America’s own firms, to starting trade wars with Mexico and China. It also means taking potentially drastic measures on immigration that could be deeply hurtful (link is external) not only to the economy but to the American identity and social fabric, including potential increasing profiling of poor migrants by police.

Relations with Mexico have already come under strain even before Trump takes office because the peso (link is external) has taken a severe hit in the wake of the surprise Republican victory, forcing the central bank to tighten monetary policy.

7. OIL ISSUES

The USA is selling 8 million barrels of oil from its strategic reserves and the reason is to pay for maintenance.

(courtesy zero hedge)

US To Sell 8 Million Barrels Of Oil From The Strategic Petroleum Reserve

Two weeks ago we previewed that the U.S. Department of Energy could begin to sell off some of its strategic petroleum reserve (SPR) as soon as January, the beginning of a multi-year process to shrink the nation’s stockpile of oil. Congress has authorized DOE to sell off $375.4 million worth of oil in its recent budget resolution. The DOE said that such a sale could be held in January 2017.

Part of the motivation to sell crude is to finance upkeep for the SPR itself. The reserves are held in salt caverns in Louisiana and Texas, setup decades ago in the aftermath of the Arab Oil Embargo in 1973. The SPR system can hold more than 700 million barrels of oil, the largest strategic stockpile in the world. The idea is that the SPR holds 90 days’ worth of oil supplies, which could be released in the event of a global outage. A release has only occurred a handful of times, such as the Persian Gulf War, Hurricane Katrina and the Arab Spring.

Some of the storage systems are rusting and corroding after decades of use. In September, the DOE issued a report to Congress, which came to a dire conclusion about the condition of the reserve. “This equipment today is near, at, or beyond the end of its design life,” the report said. The sale “will allow the Department to take necessary steps to increase the integrity and extend the life” of the reserve, a DOE spokesperson said in December after the budget resolution was passed.

In the past, the SPR has been viewed as a cornerstone of US energy security policy. As long as the U.S. had 3 months’ worth of supply, it could weather unexpected disruptions. The International Energy Agency was setup in the 1970s as well, and participating members – in addition to the U.S., the group includes Europe, Japan, Korea, Australia and New Zealand – also have pledged to hold a 90-day supply. However, U.S. policymakers no longer view the SPR is all that important. Even the more hawkish members of Congress have been lulled into a sense of security from the surge in U.S. oil production and the resulting crash in oil prices. The world is awash in oil, so why does the U.S. need to stockpile such a massive volume of oil at great expense? The ostensible reason of selling off oil from the SPR is to finance its maintenance to ensure its existence over the long-term, but if the Congress still truly believed in the importance of the SPR, they would have found funding elsewhere instead of reducing the stockpile.

In any event, the previously previewed sale is about to take place, and according to an announcement by the DOE, the US will offer to sell some 8 million barrels from the petroleum reserve. According to the notice of sale, the Energy Department is accepting bids on sweet crude oil until 2pm CT Jan. 17. The contracts will then awarded by the end of January, with early deliveries expected in February and other deliveries in March, April.

The sale includes:

  • Up to 3m bbl from Bryan Mound
  • Up to 3m bbl from Big Hill
  • Up to 2m bbl from West Hackberry

It is unclear yet if the upcoming sale will pressure oil prices, or whether China – which unlike the US has been aggressively stockpiling oil for its own strategic petroleum reserve over the past year – will be the ultimate buyer.

 

 

end

 

Two good reasons why oil is slumping today:

Kuwait hints at non compliance and Nigeria’s production jumps

(courtesy zero hedge)

Oil Slumps As Nigeria Production Jumps, Kuwait Hints At OPEC Deal “Non-Compliance”, SPR Sale

Having already traded heavy much of the Monday despite pressure on the dollar index which is trading near session lows, oil took out session lows moments ago on what appear to be three most recent catalysts.

First, Kuwait’s oil minister shook some of the market’s conviction that the Vienna OPEC oil production cut is being adhered to, when we said that the announced cuts so far make up just 60-70% of the total decrease pledged by OPEC and other major producers.

Trying to put a positive spin on the news, Kuwait’s Essam Al-Marzouk told reporters in joint conference with OPEC Secretary General Mohammad Barkindo in Kuwait City, that he is confident the remaining countries will comply with promises to cut oil production, even though as he admitted “not all producers have to cut output from Jan. 1” and that one should look at the cut as a phase in process to “average over 6 months.” We can only assume he was referring (mostly) to Russia, which repeatedly warned it will need months to catch up to its promised quota. It would be troubling if other OPEC nations are having “problems” complying with the cuts. Recall that Iraq has already accused its semi-autonomous Kurdish region of oil production that was roughly double what it was afforded per the Vienna quota.

Al-Marzouk also said, or rather hoped, that rising demand would clear some stored oil, and would help return balance in market although it was questionable just how much marginal demands one would see out of China, which has been filling up its SPR at a rate of roughly 1 mmbpd when oil prices were lower, and has warned buying would taper as prices rose, effectively suggesting precisely the opposite of what the Kuwait suggested.

Complicating matters for the oil bulls, was a a second report according to which Nigeria’s oil production in December rose to 1.9mmbpd, up roughly 100kbpd from the November output of 1.8mmbpd, which in turn was a nearly 30 increase from October. In a video posted on his Facebook account, Nigeria Oil Minister Emmanuel Kachikwu his country plans to sell oil blocks in 2017, adding “we are going to be conducting oil blocks allocation and marginal field awards to try and raise money for the government” in hopes of phasing out term contracts for crude this year.

Kachikwu said that “we are going to firm up long-term markets, we must stop the year-to-year crude term contracts” and also added that “you’ve got to find who are your long-term partners, how do you sign 5-, 6-, 7-year strategic relationships? We are going to be working on those to gravitate away from the year-to-year contracts.”

The Nigerian oil minister also said on the Facebook video that he expects “a bullish re-entry” by oil majors to find reserves. “We are going to be seeking to attract investments and complete all the MoUs that we began – the one in China, the one in India, we are looking to do a roadshow to the U.K. for Europe, we’re looking to do a roadshow to the U.S.”

In short: instead of less supply, we are starting off 2017 with additional output from the deal-exempt OPEC nations, while those who should be complying are in no rush to do so.

Finally, topping off the trifecta of negative crude news was the previously reported announcement from the DOE that the US will soon sell 8 million barrels from the Strategic Petroleum Reserve over the next few weeks.

As a result, oil which was down all day, just hit session lows.

8. EMERGING MARKETS

end

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

Euro/USA   1.0531 UP .0003/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RAISING RATE

USA/JAPAN YEN 116.64 DOWN 0.254(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 AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2170 DOWN .0095 (Brexit by March 201/UK government loses case/parliament must vote)

USA/CAN 1.3264 UP .0030 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS MONDAY morning in Europe, the Euro ROSE by 3 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0531; 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 Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ AND TODAY MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 14.32 or 0.54%     / Hang Sang  CLOSED UP 55.68 POINTS OR 0.25%  /AUSTRALIA  CLOSED UP 0.84%  / EUROPEAN BOURSES ALL IN THE RED 

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

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

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

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

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

The NIKKEI: this MONDAY morning CLOSED 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 55.68 OR 0.25%  Shanghai CLOSED UP 14.32 POINTS OR 0.54%   / Australia BOURSE CLOSED UP 0.84% /Nikkei (Japan)CLOSED  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1179.20

silver:$16.51

Early MONDAY morning USA 10 year bond yield: 2.390% !!! DOWN 2 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.976, DOWN 2 IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 102.33 UP 10 CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 3.98% down 7  in basis point yield from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.059% par  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.47%  DOWN 7  IN basis point yield from  FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.893  DOWN 7  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 42 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.278% DOWN 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.0566 UP .0040 (Euro UP 40 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 116.20 DOWN: 0.702(Yen UP 72 basis points/ 

Great Britain/USA 1.2163 UP 0.0101( POUND DOWN 101 basis points)

USA/Canada 1.32310 DOWN 0.0024(Canadian dollar  UP 24 basis points AS OIL FELL TO $52.41

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 40 basis points to trade at 1.0566

The Yen ROSE to 116.20 for a GAIN of 70 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL 101  basis points, trading at 1.2163/

The Canadian dollar ROSE by 24 basis points to 1.3210,  WITH WTI OIL FALLING TO :  $52.41

The USA/Yuan closed at 6.9349
the 10 yr Japanese bond yield closed at +.059% PAR IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 5 IN basis points from FRIDAY at 2.385% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.976 DOWN 1  in basis points on the day /

Your closing USA dollar index, 102.02 DOWN 21 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST

London:  CLOSED UP 27.72 OR .38% 
German Dax :CLOSED DOWN 35.02 POINTS OR 0.30%
Paris Cac  CLOSED DOWN 22.27 OR 0.45%
Spain IBEX CLOSED DOWN 23.10 POINTS OR 0.24%
Italian MIB: CLOSED DOWN 327.69 POINTS OR 1.66%

The Dow was DOWN 76.42 POINTS OR .38% 4 PM EST

NASDAQ WAS UP 10.76 POINTS OR .19%  4.00 PM EST
WTI Oil price;  52.41 at 1:00 pm; 

Brent Oil: 55.46  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.86 (ROUBLE DOWN 24/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD FALLS TO +0.278%  FOR THE 10 YR BOND  1:30 EST

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:$51.82

BRENT: $54.75

USA 10 YR BOND YIELD: 2.368%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.961%

EURO/USA DOLLAR CROSS:  1.0573 up .0046

USA/JAPANESE YEN:116.04  down 0.860

USA DOLLAR INDEX: 101.96  down 27  cents (BREAKS AGAIN HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2159 : DOWN 105  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.278%

 

END

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

TRADING IN GRAPH FORM

Crude Crushed, Dollar Dumps As Bonds & Bullion Bounce

 

Chinese currency vol exploding, US labor market deteriorating, and oil tumbling…

 

Bonds and Bullion beating stocks so far this year…

 

But global financial market stress has collapsed to its lowest since just before China devalued the Yuan in August 2015 and sent markets turmoiling…

 

Despite Yuan volatility near record highs…

 

Only the Nasdaq managed gains today (record highs)… stocks closed weak…

 

Healthcare and tech outperformed today with Energy the laggard (and Utes down despite lower rates)

 

Healthcare Sector ETF is up 5 days in a row and just brome abvove its 200DMA…

 

Stocks erased most of the post-payrolls gains as gold leads the way…

 

Nasdaq continues to be the year’s big winner with a new record high today (and Trannies the loser along with Small Caps)…

 

Goldman has gone nowhere in a month…

 

“Most Shorted” stocks seem less under attack than the opening days of the year…

 

Breadth remains unsupportive…

 

VIX briefly tagged 12.00 today before fading lower but ended the day higher overall with 19,900 the new 20,000 for The Dow…

 

As a reminder, SVXY Puts (bearish bets on the inverse VIX – in English – levered bearish bets on stocks) have never been higher…

 

Bonds bounced back notably today with 30Y back below 3.00%… (most of the curve down 4-5bps today)

 

Perhaps not a total surprise given the stunningly one-sided positioning across the bond complex…

 

Notably the entire Treasury curve (even 2Y barely) is now lower on the year…

 

Cable sold off notably on Theresa May comments early on but AUD, JPY, and EUR all rallied against the greenback as US opened, dragging the USD index lower on the day…USD down 6 of the last 8 days

 

Yuan crashed again erasing half of the gains durng the massive short-squeeze last week…

 

And the peso slipped lower amid more chatter of automaker moves…

 

Worst day for WTI Crude since July 2016…

 

Gold is now back above Fed rate-hike levels (though Silver is lagging)…

end

 

Trump is on a roll:  He thanks Fiat Chrysler as they are going to invest 1 billion USA in a new plant in Ohio:

(courtesy zero hedge)

“It Finally Happened”: Trump Thanks Fiat And Ford For Investing In The US, Adding New Jobs

Having succeeded in turning around Ford’s plans to invest $1.6 billion in Mexico last week, and converting it into a US-targeted investment into the US last week, after similar twitter-based confrontations with Toyota and GM also last week, moments ago Trump tweeted his thanks to Fiat which as reported last night, also announced plans to invest $1 billion in Ohio plants, adding some 2,000 jobs.

“It’s finally happening – Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs. This after Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat C!”

It’s finally happening – Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs. This after…

Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat C!

Having used his Twitter “bully pulpit” successfully so far to change corporate capital allocation plans, it is unlikely that Trump will end his “shaming” of pulbic companies now, and will likely double down on his aggressive approach to push more investment in the US.

 

 

end

 

Both Alibaba and Toyota plan to invest mega dollars to create millions of USA jobs

(courtesy zero hedge)

 

Toyota To Invest $10 Billion In America As Jack Ma Meets Trump To Discuss Creation Of 1 Million US Jobs

While there are many questions about the sincerity, not to mention underlying viability of his company (which many skeptical investors have accused of being an accounting shell whose operations raise many questions), moments ago Alibaba’s Jack Ma appeared at the Trump Tower for a meeting with Donald Trump, where according to CNBC, he will discuss plans to create 1 million new U.S. jobs over the next five years.  The Monday meeting will focus on the Chinese e-commerce company’s U.S. expansion plans, according to spokespeople for both Alibaba and Trump.

It is unclear why Beijig would be ok with Ma creating 1 million jobs in the US and not China, but let’s ignore that for now.

While the meeting comes amid tensions between China and the Trump administration as a result of the proposed steep tariffs on trade with China, Trump has shown more tolerance at the micro level in his discussions with prominent Asian businessmen and investors, like SoftBank’s Masayoshi Son, who recently assured Trump he would create 50,000 jobs in the US.

Ma previously told CNBC that he wasn’t worried about anti-China sentiment on the presidential campaign trail. “Somebody has to stand up and say hey, we should not be anti-trade,” said Ma. Alibaba’s wide-ranging set of international businesses, from financial services to e-commerce to logistics, have managed to dominate many of America’s tech companies in China.

A deal with Ma could be adverse news for one of his bigger competitors, Jeff Bezos. Trump also repeatedly been critical of Bezos (who owns the Washington Post) and his internet retail giant Amazon, which like Alibaba, offers cloud services and a marketplace for third-party sellers. Trump has said Amazon will have “such problems” during his presidency, because of their tax structure.

That said, Alibaba has a complicated relationship with U.S. regulators. The company faced an SEC investigation about its accounting methods last year, and its property, Taobao, has been rebuked by American trade officials for allowing sale of counterfeit goods.

* * *

And in separate news, following last week’s Trump-tweeted barb aimed at Toyota, the Japanese car giant said it plans to invest $10 billion in the US over the next 5 years.

Speaking in an interview with Bloomberg TV, Toyota’s North American CEO, Jim Lentz, said that his company “understands what President-elect Trump wants to do.” He noted that Toyota does build Corolla in U.S. as well, adding that Toyota is a “relatively small player in Mexico.”

Hinting that Toyota, like other carmakers, are hoping Trump will postpone draconian emmision regulations enacted by the Obama administration, he said that Toyota “seeks predictability on emissions standards.”

Amusingly, Lentz said that Toyota does best with high consumer confidence, low interest rates… as do 100% of all other companies. Still, it may have been the latest hint to Trump to keep rates as low as possible, which may be problematic if Trump’s fiscal stimulus boost inflation, giving the Fed no other option than hiking faster than expected in an attempt to contain inflation.

 

Trump’s Son-In-Law Kushner Named As Senior Advisor

Following earlier speculation, and concerns over conflicts of interest, NBC News’ Peter Alexander has confirmed that Jared Kushner, President-elect Donald Trump’s son-in-law, will be named senior adviser to the president.

BREAKING: Trump’s son-in-law, Jared Kushner, will be named Senior Advisor to the President, per senior transition official. @NBCNews

As Forbes details,

Jared Kushner plans to step down from his role at Kushner Cos, the firm he took over from his father, as he prepares to be one of the key figures in Donald Trump’s White House.

 

Kushner has been the president-elect’s point man on foreign policy, even acting as the go-between for the outgoing administration to Trump on matters around the globe, the New York Times reports. Kushner and his wife, Ivanka Trump, bought a house in Washington, DC, close to the Obamas’ post-presidency home.

 

The Times also reported that Kushner has been taking meetings with Anbang Insurance Group — the Chinese giant that paid a record price for the Waldorf Astoria Hotel and has been on a major global buying spree — about selling some Kushner assets, including 666 Fifth Ave, the most high-profile property in the company’s expansive portfolio.

 

Trump’s transition team had previously requested security clearance for Kushner, and Trump has publicly identified Kushner, an Orthodox Jew, as someone who would be heavily involved in Middle East diplomacy. Despite Kushner’s personal political pivot, his company remains active, most recently as part of a partnership that paid $345M for a development site in Dumbo, Brooklyn, according to The New York Times.

For a full background on Kushner, see here.

end

 

The Fed’s own Labour Market Condition Index drops another .3% and it is now down 5.8% year over year, the biggest plunge in 6 years.  This generally indicates recession

(courtesy zerohedge)

Fed’s Labor Market Conditions Index Plunges Most In 7 Years

While mainstream media clung to The White House spin of record monthly streak of jobs gains after Friday’s payrolls, The Fed’s own Labor Market Conditions Index (LMCI) paints a very different picture of the health of the American job market. With a 0.3% drop in December, the LMCI is now down 5.8% year-over-year, the biggest plunge since Jan 2010.

We are sure The Fed wishes it never created this index…

As we noted previously, that’s only the eighth time in nearly 40 years the index was down on a year-over-year basis, Deutsche Bank Chief U.S. Economist Joseph LaVorgna wrote in a note to clients today. Of the seven previous occasions, LaVorgna wrote, “four were soon followed by recession.”

(In the three other cases, two were false alarms, in 1986-87 and 1995-96, and in 1981 the recession began shortly before the annual change in the LMCI turned negative.)

LaVorgna said the weakness in the LMCI indicates a rising possibility of recession.

“The upshot is that the economic outlook remains fragile despite the ostensible robustness of the labor market,” he wrote.

One look at the historical revisions (notably the last few months) and it’s clear, however, every effort is being made to improve this data…

Perhaps the economy being handed to Donald Trump is not as ‘awesome’ as some would suggest?

 

 

end

 

Student and car loans rise by another 11 billion dollars as we are now at a record 2.758 trillion

 

(courtesy zero hedge)

Consumer Credit Soars, Driven By Near Record Credit Card-Fueled Spending

After several months of tepid growth in the revolving consumer credit, i.e., credit card, space, the latest monthly report from the Fed revealed that Americans went on a credit card-funded shopping spree in November, when total revolving credit exploded higher by a massive $11 billion, the highest November increase on record, and the second highest of the post crash period.

The credit card spending spike may explain why November, i.e., early holiday sales, were strong only to tumble in the second half of the holiday spending season as various retailers have already complained.

The spike in revolving credit was more than matched by non-revolving credit, which as usual bounced by a solid $13.5 billion, bringing the total monthly increase in consumer credit to $24.5 billion, far above the revised October print of $16.2 billion and also well above the consensus estimate of $18.4 billion.

As noted above, the biggest contributor of November credit was credit card debt, which surged by $11 billion, to a grand total of just under $1 trillion, or $992.4 billion.

At the same time non-revolving credit, or car and student loans, rose to $2.758 trillion, a $13.5 billion jump in the month.

While hardly a surprise, the Fed revised its student and car loan numbers, which as of Sept 30, stood at $1.4 trillion for student loans, and $1.1 trillion for auto loans, both at all time highs.

Finally, for those wondering who remains the biggest source of post-crisis consumer lending, the chart below should answer that question.

 

 

end

 

Well that is all for today

I will see you tomorrow night

h

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