Jan 10/Gold rises a bit but silver shines, up 17 cents/Both of Turkish lira and the Mexican peso plummet/Russ and Pam Martens explains why Trump is picking Goldman Sachs alumni to help him run the country/the repeal of Obamacare is now back on!!!/

Gold at (1:30 am est) $1184.20 UP $0.70

silver  at $16.80:  UP 17 cents

Access market prices:

Gold: $1188.00

Silver: $16.84

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:

TUESDAY gold fix Shanghai

Shanghai morning fix Jan 10/17 (10:15 pm est last night): $  1203.90

NY ACCESS PRICE: $1185.20 (AT THE EXACT SAME TIME)/premium $18.70

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1205.96

NY ACCESS PRICE: $1186.60 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD 2ND FIX TODAY!!:  $19.36

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Jan 10/2017: 5:30 am est:  $.1183.20   (NY: same time:  $1183.90    5:30AM)

London Second fix Jan 10.2017: 10 am est:  $1189.50 (NY same time: $1188.90  (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:  23 NOTICE(S) FOR 2300 OZ.  TOTAL NOTICES SO FAR: 1046 FOR 104,600 OZ    (3.2534 TONNES)

For silver:

 NOTICES FOR JANUARY CONTRACT MONTH FOR SILVER: 124 NOTICE(s) FOR 620,000  OZ. TOTAL NUMBER OF NOTICES FILED SO FAR; 432 FOR 2,160,000 OZ

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by 410  contracts UP to 165,347 with respect to YESTERDAY’S TRADING  (short covering by the banks).    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .828 BILLION TO BE EXACT or 118% of annual global silver production (ex Russia & ex China).

FOR THE JANUARY FRONT MONTH IN SILVER:  124 NOTICES FILED FOR 620,000  OZ.

In gold, the total comex gold ROSE BY 11,098 contracts WITH THE RISE IN  THE PRICE GOLD ($11.60 with YESTERDAY’S trading ). The total gold OI stands at 440,398 contracts.

we had 23 notice(s) filed upon for 2300 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

We had no  change in tonnes of gold at 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 ROSE by 410 contracts UP to 165,347 AS SILVER ROSE by  $0.17 with YESTERDAY’S trading. The gold open interest ROSE by 11,098 contracts UP to 440,398 AS THE  PRICE OF GOLD ROSE BY $11.60 WITH YESTERDAY’S TRADING

(report Harvey).

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

 i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 9.57 POINTS OR 0.30%/ /Hang Sang closed UP 186.16 OR 0.83%. The Nikkei closed DOWN 152.89 POINTS OR .79% /Australia’s all ordinaires  CLOSED DOWN 0.76%/Chinese yuan (ONSHORE) closed WELL UP at 6.9255/Oil FELL to 52.10 dollars per barrel for WTI and 55.01 for Brent. Stocks in Europe: ALL MIXED. Offshore yuan trades  6.90200 yuan to the dollar vs 6.9255  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS AGAIN AS  DOLLARS ATTEMPT TO  LEAVE CHINA’S SHORES /

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

 none today

c) REPORT ON CHINA

none today

4 EUROPEAN AFFAIRS

none today

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

The Turkish lira falters to 3.78 to the dollar.  It even touched 4 to one yesterday. This nation is in trouble financially due to its huge external debts in dollars and the constant militant attacks on its soil by ISIS and/or PKK

( zero hedge)

6.GLOBAL ISSUES

After spending 4 billion USA defending the Peso, it is crashing again to record lows:

( zero hedge)

7. OIL ISSUES

i)Iraq is becoming very aggressive in its production output.  It was suppose to cut not increase its production:

( zero hedge)

ii)More inventory builds in crude:

( zero hedge)

8. EMERGING MARKETS

Venezuela hikes the minimum wage by 50% equivalent to 12 dollars USA per month. This nation is in serious trouble despite having the greatest amount of oil reserves in the ground

( zero hedge)

9.   PHYSICAL MARKETS

i)John Embry correctly states that the big problem facing the world is the huge overhanging debt.  Globally total debt is 225 trillion dollars and this can never be repaid.

( John Embry/Kingworldnews)

ii)A terrific commentary from Ronan Manly.  He explains that most sovereign gold is not owned by central banks but by governments which hold the gold for its citizens.  Yet the central banks  do not disclose what is happening to citizens gold through swaps, hypothecation etc.

( Ronan Manly/Bullionstar)

iii)This is just the beginning as we see foreign exchange cartel members face USA rigging charges.  Trust me on this:  it will morph into charges of collusion etc with respect to silver and gold manipulation

( Bloomberg/GATA)

10.USA STORIES

i)The following is a biggy:  we all wondered why Trump hired a huge number of Goldman Sachs former alumni and/or current members of the firm.  Now you will find out why!!!

( Russ and Pam Martens/WallStreet on Parade)

ii)November inventories rise more than expected at 1.00% month over month while sales disappointed at .4%.  Thus the inventories to sales ratio climbed back up again ( 3.38 to one) and we are still stubbornly stuck in recessionary territory

( zero hedge)

iii)Janet’s favourite indicator, the JOLTS, seems to be going in the wrong direction for her:

( zero hedge)

iv)Good news at GM which jumped 5% today on higher 2017 profits and strong China sales.  They announced another 5 billion dollar buyback.  Remember that they laid off huge amount of people in 2016.  Also remember that they count sales the moment if leaves GM and not when it is sold to the consumer;

( zero hedge)

v)This does not look good for the uSA economy:  Wal-Mart to cut hundreds of jobs before the end of January:

( zero hedge)

vi)Activists are planning to turn the Trump inauguration into one of the biggest riots in USA history;
( Michael Snyder/EconomicCollapseBlog)
vii) Chaos runs supreme as now Trump has completed backtracked again as the repeal of the Obamacare is on!!
( zero hedge)

viii)The following is an accident waiting to happen:( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 11,098 CONTRACTS UP to an OI level of 440,398 AS THE  PRICE OF GOLD ROSE $11.60 with YESTERDAY’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 4 contracts DOWN to 161.  We had 0 notices filed so we LOST 4 contracts or AN ADDITIONAL 400 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 2,967 contracts DOWN to 263,739. March had a gain of 64 contracts as it’s OI is now 349.

We had 23 notice(s) filed upon today for 2300 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.  Total silver OI ROSE by 410 contracts FROM 164,937 UP TO 165,347 AS the price of silver ROSE BY $0.17 with YESTERDAY’S trading.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540).

We are now in the non active delivery month of January and here the OI ROSE by 3 contracts RISING TO  358. We had 0 notice(s) filed on yesterday so we  GAINED 3   SILVER CONTRACTS or an additional 15,000 oz will stand for delivery.  The next non active month of February saw the OI rise by 4 contract(s) up to 203.

The next big active delivery month is March and here the OI FELL by 321 contracts DOWN to 133,238 contracts.

We had 124 notice(s) filed for 620,000 oz for the January contract.

VOLUMES: for the gold comex

Today the estimated volume was 243,104  contracts which is good.

Yesterday’s confirmed volume was 213,837 contracts  which is good

Initial standings for january
 Jan 10/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 18,533.36
SCOTIA
DELAWARE
BRINKS
INCL 375 kilobars
Deposits to the Dealer Inventory in oz 2300.01 oz

Brinks

Deposits to the Customer Inventory, in oz 
 1607.500 oz
Brinks
50 kilobars
No of oz served (contracts) today
 
23 notice(s)
2300 oz
No of oz to be served (notices)
138 contracts
13,800 oz
Total monthly oz gold served (contracts) so far this month
1046 notices
104,600 oz
3.2534 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     4,574,212.5 oz
Today we HAD 2 kilobar transaction(s)/
Today we had 1 deposit(s) into the dealer:
i) into Brinks:  2300.01 oz   (the xxx.01 oz is to appease me)
total dealer deposits:  2300.01  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1  customer deposit(s):
 i) Into Brinks:  1607.500 oz (50 kilobars)
total customer deposits; 1607.500 oz
We had 3 customer withdrawal(s)
i) Out of Scotia: 12056.25 oz
(375 kilobars)
ii) Out of Delaware:  100.45 oz
iii) Out of Brinks; 6376.660 oz
total customer withdrawal: 18,533.36 oz
We had 0  adjustment(s)
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 23 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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 (1046) x 100 oz or 104,600 oz, to which we add the difference between the open interest for the front month of JANUARY (161 contracts) minus the number of notices served upon today (23) x 100 oz per contract equals 118,400 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 (1046) x 100 oz  or ounces + {OI for the front month (161) minus the number of  notices served upon today (23) x 100 oz which equals 118,400 oz standing in this non active delivery month of JANUARY  (3.6827 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.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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/     3.6851 tonnes
total for the 13 months;  226.073 tonnes
average 17.390 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
Total dealer inventor 1,455,213.516 or 45.263 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,089,595.973 or 282.72 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 282.72 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 10. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 624,100.900 0z
DELAWARE
CNT
Deposits to the Dealer Inventory
574,474.570 oz
CNT
Deposits to the Customer Inventory 
1,261,277.240 oz
JPM
CNT
Scotia
No of oz served today (contracts)
124 CONTRACT(S)
(620,000 OZ)
No of oz to be served (notices)
234 contracts
(1,170,000  oz)
Total monthly oz silver served (contracts) 432 contracts (2,160,000 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  10,480,010.1 oz
 END
today, we had 1 deposit(s) into the dealer account:
 i) Into CNT:  575,474.570 oz
total dealer deposit: 575.474.57 oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of CNT:  613,167.710 oz
ii) Out of DELAWARE:  10,933.200 oz
TOTAL CUSTOMER WITHDRAWALS: 624,100.90 oz
 we had 3 customer deposit(s):
i) Into JPMorgan:  602,006.34 oz
ii) into CNT:  25,979.39 oz
iii) Into Scotia:  633,291.510
total customer deposits;  1,261,277.240   oz
TED BUTLER IS CORRECT:  JPMORGAN IS MASSIVELY ACQUIRING SILVER.
 
 
 we had 2  adjustment(s)
i) out of the CNT vault:  45,581.650 oz was adjusted out of the customer and this landed into the dealer account of CNY
ii) 1909.600 oz was removed from JPMorgan customer account as an error.
The total number of notices filed today for the JANUARY. contract month is represented by 124 contract(s) for 620,000 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  432 x 5,000 oz  = 2,160,000 oz to which we add the difference between the open interest for the front month of JAN (358) and the number of notices served upon today (124) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JANUARY contract month:  432(notices served so far)x 5000 oz +(358) OI for front month of JAN. ) -number of notices served upon today (124)x 5000 oz  equals  3,330,000 oz  of silver standing for the JAN contract month. This is  STILL huge for a non active delivery month in silver. We  gained 3 silver contracts OR AN ADDITIONAL 15,000 OZ WILL stand 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 73,193 which is huge
YESTERDAY’S  confirmed volume was 53,877 contracts  which is very good.
 
Total dealer silver:  29.202 million (close to record low inventory  
Total number of dealer and customer silver:   181/894 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 10/no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Jan 10/2017/ Inventory rests tonight at 805.00 tonnes
*IN LAST 66 TRADING DAYS: 144.81 TONNES REMOVED FROM THE GLD
*LAST 13 TRADING DAYS: 19.54 TONNES HAVE LEFT

end

Now the SLV Inventory
JAN 10/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
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/
.
Jan 10.2017: Inventory 341.199  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.4 percent to NAV usa funds and Negative 7.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.1%
Percentage of fund in silver:38.7%
cash .+0.2%( jan 10/2017) 
.
2. Sprott silver fund (PSLV): Premium FALLS to +.12%!!!! NAV (Jan 10/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.54% to NAV  ( Jan 10/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.12% /Sprott physical gold trust is back into NEGATIVE territory at -0.54%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE

Gold Price In GBP Up 4% On Brexit and UK Risks

Gold Price In GBP Rises 4% On Brexit and UK Economy Risks

– Pound fell 2% against gold yesterday after Theresa May created Brexit concerns 

– May’s ‘Hard Brexit’ denial does not calm markets growing fears

– Investors concerned about lack of government strategy and uncertainty

– UK Prime Minister bizarrely blames media and “those who print things” for sterling depreciation

– GBP gold builds on 31% gain in 2016 with 4% gain so far in 2017

gold-price-in-gbp-2017Gold in GBP – 1 Year and Timeline (GoldCore)

1. June 24:Brexit: Gold surged 20% in sterling to £1,015/oz in two days after UK votes to leave EU
2. August 4:Bank of England expands QE – launches latest massive money printing experiment
3. October 6:“Flash crash” — pound collapses 5% against gold in just over a minute
4. January 9: Pound falls another 2% against gold as UK PM fails to reassure markets


Gold rose to its highest in over one a month today as fears that the UK will have a ‘Hard Brexit’ with the EU led to safe-haven buying.

The pound fell sharply yesterday and gold in sterling terms rose from £954/oz to £973/oz after weekend comments from British Prime Minister Theresa May sparked concerns that Britain would drastically change trade, immigration and other relations with the EU after Brexit.

Gold has consoidated on those gains today and is over 4% higher in sterling terms so far in 2017 – building on the 31% gains seen in 2016.

The gains being seen are not simply related to Brexit. There are also substantial risks facing the UK economy in terms of the London property bubble (which shows signs of bursting), the very large UK current account deficit and the massive UK national debt.

Spot gold in dollar terms rose another 0.5% today to $1,187.60 an ounce, its highest since Dec. 5 at $1,187.61

There is also strong physical  gold buying in China ahead of the Lunar New Year later in January.

Gold looks set to test $1,200 in the short term. In the coming days, attention will turn to U.S. President-elect Donald Trump’s inauguration and the geo-political and economic uncertainty regarding the next four years of his Presidency. This will likely further boost safe haven demand.

http://www.goldcore.com/us/gold-blog/gold-price-gbp-4-brexit-uk-risks/

-END-

John Embry correctly states that the big problem facing the world is the huge overhanging debt.  Globally total debt is 225 trillion dollars and this can never be repaid.

(courtesy John Embry/Kingworldnews)

Debt is the problem and rising rates will be ruinous, Embry tells KWN

Section:

5:45p ET Monday, January 9, 2017

Dear Friend of GATA and Gold:

The huge increase of debt in recent decades is the world’s overwhelming financial problem, Sprott Asset Management’s John Embry tells King World News today, adding that rising interest rates will crash both stocks and bonds. Meanwhile, Embry adds, the monetary metals are cheaper than ever relative to the volumes of money and credit in the world. An excerpt from Embry’s interview is posted at KWN here:

http://kingworldnews.com/the-world-has-never-been-in-a-crisis-like-this-…

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

 

 

END

 

A terrific commentary from Ronan Manly.  He explains that most sovereign gold is not owned by central banks but by governments which hold the gold for its citizens.  Yet the central banks  do not disclose what is happening to citizens gold through swaps, hypothecation etc.

(courtesy Ronan Manly/Bullionstar)

Ronan Manly: Who owns the world’s largest gold hoards? Not central banks

Section:

7:23p ET Monday, January 9, 2017

Dear Friend of GATA and Gold:

The largest gold reserves around the world, gold researcher Ronan Manley writes today, are for the most part not owned by central banks but rather by national governments that happen to vault them with central banks. So, Manley adds, the secrecy woven around the reserves by central banks is arrogant and inappropriate and all data about them should be made public as a matter of form. Manly’s commentary is headlined “Who Owns the World’s Largest Gold Hoards? Not the Central Banks” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/ronan-manly/who-owns-the-worlds-larges…

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

 

 

END

 

This is just the beginning as we see foreign exchange cartel members face USA rigging charges.  Trust me on this:  it will morph into charges of collusion etc with respect to silver and gold manipulation

(courtesy Bloomberg/GATA)

FX ‘cartel’ traders said to face U.S. rigging charges

Section:

By David McLaughlin, Suzi Ring, and Tom Schoenberg
Bloomberg News
Tuesday, January 10, 2017

Prosecutors are poised to charge the currency traders at the heart of one of the biggest U.S. market-rigging investigations, according to people familiar with the matter.

The imminent criminal charges are against members of “The Cartel” chat group, the people said. These traders used instant messages to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, prosecutors have said in antitrust cases that led to guilty pleas by five banks in 2015.

The senior dealers who participated in The Cartel were Richard Usher, formerly of JPMorgan Chase & Co.; Rohan Ramchandani, formerly of Citigroup Inc.; and Chris Ashton, formerly global head of spot trading at Barclays Plc. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders, people familiar with the matter have told Bloomberg News. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-01-10/-cartel-currency-trad.

 

 

END

 

The Attorney generals office officially charged our illustrious three but all three leave outside the USA and only extradition can bring them to face USA charges:

(courtesy zero hedge)

Three “Cartel” FX Traders Criminally Charged With Currency Rigging

Moments ago, U.S. prosecutors charged three traders who made up the infamous “Cartel” currency rigging chat room, and who were at the heart of a criminal investigation that has ensnared the world’s biggest banks over the rigging of currency rates. Richard Usher, formerly head of G10 spot trading at JPMorgan, Rohan Ramchandani, formerly of Citigroup and Chris Ashton, formerly of Barclays, were indicted Tuesday for conspiring to fix prices. They’re all outside the U.S. and will have to be extradited unless they surrender voluntarily.


Richard Usher

As first reported back in 2013 when the FX rigging scandal broke out, the three used an online chatroom they dubbed ‘The Cartel’ to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, according to the U.S. charge. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders, Bloomberg reported earlier.

Citigroup, Barclays, JPMorgan and Royal Bank of Scotland Group Plc pleaded guilty in May 2015 to conspiring to rig currency rates. UBS Group AG received immunity from prosecution, but its conduct breached an earlier agreement over its role in manipulating benchmark interest rates.

The Cartel chatroom ran from at least December 2007 until January 2013, prosecutors have said in court papers. It was limited to specific euro/dollar traders, they said. Many conversations took place just before daily fixes, the brief windows of time when data providers take a snapshot of trading so they can set daily rates.

As Bloomberg noted previously, the charges make good on the government’s long-running promise it would hold individuals to account in the case. As far back as September 2014, then-Attorney General Eric Holder said charges against traders were imminent.

Those efforts were hampered by issues of evidence and lack of cooperators, people familiar with the matter told Bloomberg last year. Bloomberg published a series of articles in 2013 exposing how the world’s biggest banks were colluding to rig foreign exchange rates.

 

Some prosecutions are moving forward. Over the past six months, two currency traders were charged and a third pleaded guilty to rigging allegations. This summer, Gardiner and Ashton were banned from the U.S. banking industry for life by the Federal Reserve, which also imposed a $1.2 million fine on Ashton.

Unlike the US, the U.K. Serious Fraud Office dropped its investigation into currency rigging last year citing insufficient evidence for a realistic prospect of conviction. The agency interviewed 19 individuals as part of its probe, according to a freedom-of-information request by Bloomberg in August, including four under caution. Interviews under caution generally mean the person is being treated as a suspect.

Some more details from Bloomberg for those unfamiliar with the story:

Citigroup, Barclays, JPMorgan and Royal Bank of Scotland Group Plc pleaded guilty in the U.S. in May 2015 to conspiring to rig currency rates. UBS received immunity from prosecution in the currency case, but its conduct breached an earlier agreement over its role in manipulating benchmark interest rates.

 

During the banks’ Jan. 5 sentencing, a federal judge in Connecticut urged the Justice Department to pursue individuals in the cases.

 

“Mischief will be best deterred if the people responsible are not only fired but that any compensation made to them that was triggered by the wrongful conduct, for example bonuses, are clawed back or disgorged,” U.S. District Judge Stefan R. Underhill said. “Frankly I would encourage the government to consider prosecution of individuals.”

 

This is a strange one:  China announces a drop in reserves of 20 tonnes from 1841 down to 1821 tonnes:

What one earth are the Chinese doing with their “official” gold

(courtesy Lawrie Williams/Sharp’s Pixley)

 

LAWRIE WILLIAMS: Is China falling out of love with gold? Does it make any difference?

JAN
10

According to the latest data we have received, the Chinese central bank, The People’s Bank of China, REDUCED its gold holdings in December by a quite substantial 20.98 tonnes – the first time it has reported a reduction in its gold reserves certainly for at least 16 years – probably more.  Over this period it has been adding to its reserves, although sometimes only reporting its rises at five or six year intervals, but the obvious conclusion has been that within these long intervals it has been building its reserves on a month-by-month basis but not reporting this.  Since mid 2015 it has been reporting its gold reserve purchases on a month by month basis, although recently these have fallen to a relative trickle – and the PBoC now appears to have reported a substantial sale – see chart below courtesy of Nick Laird’s www.goldchartsrus.com website:

China’s REPORTED monthly gold reserves since 2000

 

China has been known to play reporting games with its announced gold reserve levels, with gold volumes held in ‘non-reportable’ accounts which have then subsequently been moved into its Forex holdings as reported to the IMF.  The latest PBoC announcement puts the nation’s gold reserve at 1.821 tonnes – down from 1,842.6 tonnes as reported to the IMF for November (there is a marginal disparity here between the two reports, but of less than one tonne).

Now this may be a blip, an accounting correction, or a change in tack by the central bank – we probably won’t know without official comment from the Chinese, or until we see the January 2017 figure in a month’s time – if then – but we do know that Chinese Forex reserves have been under pressure, despite their apparently huge US$3 trillion plus size.  In part, apparently, the strain on Forex reserves has been in an attempt to prevent the yuan falling further against the US dollar and giving more ammunition for President Trump, when he takes office in 10 days time, for branding China as a currency manipulator and taking retaliatory measures accordingly.  Contrary to the Trump stated viewpoint, though,  most economists seem to believe that the yuan is actually overvalued but, as is almost always the case in economics there will also be respected economists with the opposite opinion.

China’s Forex reserves did indeed fall in December, but by a smaller than expected, by $41 billion to remain at $3.01 trillion.  If the yuan remains under pressure, we could well see further sales in the months ahead.

This, of course, drives a coach and horses through the mainstream analysts’ early year estimates of central bank buying during 2016, and only leaves Russia and Kazakhstan as continuing regular gold buyers of any significance.  With reported Indian demand being heavily down this year – although the volume of smuggled gold into that nation makes the true figures difficult to ascertain –  and the fall in SGE withdrawals in China, the projected gold supply/demand balance will have been upset quite considerably during the year.  Thus month by month demand figures from China, India and countries like Turkey, and whether new mined gold output has indeed peaked as some analysts have been predicting, could make 2017 a pretty uncertain year for gold fundamentals.

But overall it appears to be investor sentiment, rather than strict supply/demand fundamentals, which drives the gold price, and enough geopolitical and economic uncertainty ahead may well make true fundamentals relatively irrelevant, at least in the short to medium term.  Gold can, and does, ignore commodity-type fundamentals given its parallel monetary and safe haven insurance role.  It could, therefore, still have a very positive year ahead whether the Chinese are looking at gold from a more pragmatic viewpoint in terms of its utilisation in balancing the books and thus reducing its offtake, or not.  And with China, who knows?  The nation has had years of practice in obscuring its real gold buying – could this just be another case of announcing a fall in its official gold statistics in an attempt to muddy the waters further?

 

end

 

Yet the mint records a huge 15% increase on the first day sales in 2017

(courtesy Kitco)

U.S. Mint: 15% Increase In First-Day 2017 Gold Bullion Coin Sales

By Kitco News
Tuesday January 10, 2017 08:26

(Kitco News) – Along with the paper precious metals market, the physical market is off to a good start as the U.S. Mint said it saw strong demand for gold and silver bullion coins on the first day of sales in the new year.

The U.S. Mint started selling 2017-minted gold and silver coins Monday and reported strong demand compared to last year’s first-day sales. According to a press release, the mint sold 68,000 ounces of gold in various denominations of American Eagle gold bullion coins.

The Mint said that first-day sales increased 15% compared to 2016. One-ounce Buffalo bullion coins was slightly weaker, with first-day sales of 20,500 coins, down by 500 coins compared to last year.

Silver was even in stronger demand. On the first day of the new year, the Mint said it sold more than 3.7 million one-ounce coins, an increase of 35% compared to last year’s initial sales.

The coin sales come as gold and silver has seen a strong start to the year. Tuesday, on increased safe-haven demand, February Comex gold futures rose to their highest level in over a month. The market is holding onto most of its gains, last trading at $1,183.50 an ounce, up 2.7% since the start of the year. At the same time, March Comex silver futures last traded at $16.64 an ounce, up more than 4%.

By Neils Christensen of Kitco News; nchristensen@kitco.com

-END-

 

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

 
 

1 Chinese yuan vs USA dollar/yuan DOWN to 6.9255(SMALL REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS   TO 6.90200 / Shanghai bourse CLOSED DOWN 9.57 POINTS OR 0.30%   / HANG SANG CLOSED UP 186.16 OR 0.83% 

2. Nikkei closed DOWN 152.89 POINTS OR .79%   /USA: YEN FALLS TO 116.23

3. Europe stocks opened ALL MIXED       ( /USA dollar index RISES TO  102.03/Euro DOWN to 1.0561

3b Japan 10 year bond yield: RISES TO    +.064%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 116.23/ 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::  52.10  and Brent: 55.01

3f Gold DOWN/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 REMAINS AT  +.281%/Italian 10 yr bond yield UP  to 1.900%    

3j Greek 10 year bond yield FALLS to  : 6.895%   

3k Gold at $1181.60/silver $16.58(8:45 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP   6/100 in  roubles/dollar) 60.08-

3m oil into the 52 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 SMALL   REVALUATION UPWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 116.23 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  1.0161 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0731 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 2.984% /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

Dollar Falls On Fading Trump Euphoria; Sterling Slide Spikes UK Stocks; US Futures Flat

Global stocks were fractionally lower in early European trading, closed Asia mixed, while S&P futures were unchanged, as the dollar fell for a second day on concerns ahead of Trump’s press conference on Wednesday. Oil rebounded after its Monday plunge, while commodity metals like iron ore rose limit up in Chinese trading. Top overnight stories include Valeant announcing the sale of $2.1 billion in assets to pay down debt; VW managers warned to stay in Germany as U.S. charges near; Yahoo! plans to shrink board, get rid of Marissa Meyer and change its name after Verizon deal.

On Monday, declines in energy and financial stocks weighed on the S&P 500 and helped stall the Dow’s pursuit of the 20,000 milestone ahead of earnings season and expected U.S. policy changes under Trump. Weakness spread to the the dollar, which has dipped against the euro and yen as euphoria over Trump policies is now fading, and was 0.15% lower against a basket of six major peers, at 101.62 slipping further from last week’s high of 103.82, its highest level since 2002.

The Bloomberg Dollar Spot Index weakened for the fourth time in five days ahead of the U.S. president-elect’s first news conference since July on Wednesday, and has now lost all YTD gains.

“The market has high expectations for Trump’s economic policy; perhaps they are booking profits just in case he throws in a curve-ball at tomorrow’s much anticipated press conference,” said City Index research director Kathleen Brooks.

Speaking of Trump’s upcoming statement, “the market is increasingly nervous about Donald Trump’s press conference on Wednesday. For FX markets, what will be particularly important will be what his plans are for the trade policy, for the relationship with China,” said Commerzbank currency strategist Esther Reichelt, in Frankfurt.

The pound touched its lowest level since Oct. 25 after U.K. Prime Minister Theresa May said over the weekend 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. The currency was down 0.2 percent at 1.2153 per dollar Tuesday. As a result of the ongoing plunge in sterling, the FTSE not only hit a new record high, but continued its unbroken pattern of gains, rising for the 11th consecutive session, the longest winning streak in 33 years.

Oil prices were a touch firmer at $55.11 LCOc1, a day after suffering their biggest one-day loss in six weeks. They fell nearly 4 percent on Monday on fears that record Iraqi crude exports in December, increased supplies from Iran and rising U.S. output would undermine an agreement by exporters to curb production.

Looking at Asian markets, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced just 0.5 percent, while Chinese stocks .CSI300 were little changed, largely shrugging off further signs of improvement in the industrial sector. Data showed producer inflation surged to a more-than-five-year high in December as raw materials prices soared.

This morning in Asian economics, the focus has turned over to the latest inflation report in China. The data has made for slightly mixed reading with CPI printing at +2.1% yoy in December which is down from +2.3% in November and also slightly lower than expected (+2.2% expected) following a slowdown in food price inflation. However, PPI has surged to +5.5% yoy (vs. +4.6% expected) from +3.3% and in doing so has reached the highest level since September 2011.

“Reflation continues in the factory sector,” said Julia Wang, an economist at HSBC Holdings Plc in Hong Kong. “The stable CPI suggests that the reflation is confined mostly in the industrial sector and hasn’t filtered into the real economy. So the PBOC would possibly not respond to it until inflation expands to the real economy.”

“Factory reflation is a positive for China’s economy – real borrowing costs are now negative,” Bloomberg Intelligence Chief Asia Economist Tom Orlik wrote in a note. “Rate hikes are part of the policy debate again, especially given the need to support a weak yuan.”

“The risk is to the upside for inflation and removes the possibility for near-term policy easing,” said Li Wei, the China and Asia economist for Commonwealth Bank of Australia in Sydney.Only four months out of a multi-year factory deflation, the world’s second-largest economy is poised to export inflation around the globe through its supply chains as manufacturers squeezed by higher input costs raise asking prices. Whether that rebound will be sustained hinges on how the global economy fares under a Donald Trump presidency and whether trade tensions flare between the U.S. and China.

In Europe, the Stoxx Europe 600 Index was little changed in London.  Miners led European gains after China’s producer price index rose at the fastest pace in more than five years in December. Wm Morrison Supermarkets Plc climbed 4.2 percent in the U.K. after reporting better-than-forecast holiday sales.

In the US, S&P 500 futures were likewise little changed after closing Friday at an all-time high.

In rates, Yields on Treasury notes were little changed at 2.37 percent.  Mozambique’s dollar bonds due January 2023 plunged to 54.83 cents on the dollar, an all-time low, on bets the nation won’t settle a coupon payment next week. Bonds in core European countries are little changed, while Italy, Spain and Portugal extended gains.

* * *

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2264
  • Stoxx 600 down 0.2% to 363
  • FTSE 100 up less than 0.1% to 7245
  • DAX down less than 0.1% to 11559
  • German 10Yr yield up less than 1bp to 0.28%
  • Italian 10Yr yield down 1bp to 1.88%
  • Spanish 10Yr yield down 2bps to 1.45%
  • S&P GSCI Index up 0.6% to 392.7
  • MSCI Asia Pacific up 0.1% to 139
  • Nikkei 225 down 0.8% to 19301
  • Hang Seng up 0.8% to 22745
  • Shanghai Composite down 0.3% to 3162
  • S&P/ASX 200 down 0.8% to 5761
  • US 10-yr yield up less than 1bp to 2.37%
  • Dollar Index down 0.15% to 101.78
  • WTI Crude futures up 0.5% to $52.23
  • Brent Futures up 0.4% to $55.18
  • Gold spot up 0.3% to $1,184
  • Silver spot up 0.3% to $16.61

Global Headline News

  • Valeant to Sell $2.1 Billion in Assets to Pay Down Debt: L’Oreal to pay $1.3b for skincare three brands; China’s Sanpower to buy Dendreon cancer unit for $820m
  • Alibaba Takes Big Step Offline With $2.6 Billion Intime Deal: Alibaba prices Intime at HK$10/share in take-private deal; deal expands e-commerce giant’s growing physical footprint
  • VW Managers Warned to Stay in Germany as U.S. Charges Near: filing against arrested VW executive points toward superiors
  • Alphabet Said in Talks to Sell Skybox Satellite Business: Planet Labs may buy Skybox and gain new employees from deal
  • Google May Pay EU280m to Settle Tax Probe in Italy: Repubblica
  • Yahoo Plans to Shrink Board, Change Name After Verizon Deal: Marissa Mayer is among six directors who plan to leave board of investment co. that will be left after closing of proposed sale of Yahoo’s main internet properties to Verizon
  • Snapchat Owner Makes U.K. Tax Hub in International Expansion: messaging app maker is adding staff and office space in London
  • Trump’s Son-in-Law Kushner to Take Unpaid White House Role
  • President Obama delivers “farewell address to nation”

Asian equity markets traded mostly lower following a similar lead from Wall St. where the S&P 500 and DJIA were dragged lower by the energy sector, with the NASDAQ 100 outperforming on Apple’s 1% gains. Japanese participants returned from public holiday with a firmer JPY dampening sentiment and leading Nikkei 225 (-0.8%) lower, while losses of over 3.5% in Fast Retailing shares further added to the slump. ASX 200 (-0.8%) snapped its 5-day winning streak and was pulled down by the energy sector after Brent crude futures declined below the 56.00 and 57.00 handles yesterday, however losses have been capped by mining names amid the near 1% rise seen is gold on Monday. In China, markets were mixed as reports that China regulators are looking to loosen restrictions on index futures trading boosted Hang Seng (+0.4%), while Shanghai Comp (-0.3%) took a hit after mostly worse-than-expected Chinese data. 10yr JGBs traded higher on return from Coming of Age holiday amid the risk averse tone in the region, with the yield curve steepening slightly amid outperformance in the super-short end.

Top Asian News

  • China Factory Prices Rising Fastest in 5 Years: From being a drag on global inflation, China is potential force pushing prices higher
  • India Auto Sales Plunge Most in 16 Years on Modi’s Note Ban:

European equities are somewhat softer this morning albeit modestly so, with the exception of the FTSE 100 which continues to print fresh record highs amid the persistent fall in GBP. On a sector specific basis, UK grocery names are tracking higher with Morrison’s outperforming after reporting their best Christmas sales performance in 7-years, alongside the latest Kantar market share update. Elsewhere, WTI and Brent crude futures are a touch firmer today as oil nations begin to implement their production cuts, with Iraq cutting 160k bbls of the agreed 210k bbls.
In fixed income markets, this has been a quieter affair with yields largely unchanged while bunds hold above the
163.00 level. Elsewhere, the German-Spanish 10yr spread has noticeably tightened with the spread now sitting at 117bps.

Top European News

  • Metro Holiday Sales a ‘Cold Shower’ for Retailer Chasing Growth: co. cites ‘challenging’ market in December quarter; sales at Media-Saturn electronics stores were flat on year
  • Morrison Holiday Sales Beat Ests., Sees FY Pretax Above Ests.: holiday LFL sales ex-fuel up 2.9%, est. up 1.1%
  • Retailers Gain After Better-Than-Expected Morrison Results
  • Europe Left in Cold as Frost Triggers Global LNG Hunt: temperatures in southeast Europe may fall to -12C Tuesday; France, Greece are seeking extra gas supplies to meet demand
  • German Utilities Face Tough Year as Power Rally Set to Stall: companies may be forced to restructure, sell or close units

In currencies, the Bloomberg Dollar Spot Index dropped 0.1% as of 10:44 a.m. London time, leaving the gauge down 1% since touching a 14-year high on Jan. 3. The pound touched its lowest level since Oct. 25 after U.K. Prime Minister Theresa May said over the weekend 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. The currency was down 0.2 percent at 1.2142 per dollar Tuesday. The euro rose 0.1 percent.

In commodities, West Texas Intermediate crude added 0.3 percent to $52.28 a barrel after sinking 3.8 percent last session as an increase in U.S. drilling offset signs that OPEC members are sticking to planned output cuts. Iron ore futures for May delivery rose 5.5 percent to 580 yuan/ton on Dalian Commodity Exchange, the highest since Dec. 16, following a gain in factory prices in China. Gold advanced 0.3 percent to $1,184.00 an ounce, with demand forecast to rise ahead of Chinese New Year. Zinc rose 2.2 percent to a three-week high of $2725.50 a metric ton on signs that demand for the metal used to produce galvanize steel would increase in China.

Looking at the day ahead, this morning in Europe the only data due out comes from France where we’ll receive the November industrial and manufacturing production report. Over in the US the early data due out is the NFIB small business optimism survey which surged to 105.8 in December from 98.4. The final November wholesale trade sales and inventories revisions follow that before we then get the November JOLTS job openings report. Away from the data, President Obama is due to deliver a televised farewell speech from Chicago ahead of Trump’s general news conference tomorrow.

* * *

US Event Calendar:

  • 6am: NFIB Small Business Optimism, Dec. 105.8, est. 99.5 (prior 98.4)
  • 8:55am: Redbook weekly sales
  • 10am: Wholesale Inventories MoM, Nov. F, est. 0.9% (prior 0.9%)
  • 10am: JOLTS Job Openings, Nov., est. 5,500k (prior 5,534k)
  • 4:30pm: API weekly oil inventories

US Government:

  • 9:30am: Senate Judiciary Cmte hearing on nomination of Sen. Jeff Sessions, R-Ala., for attorney general
  • 1pm: Senate Intelligence Cmte hearing on Russian intelligence activities
  • 3:30pm: Senate Homeland Security Cmte hearing on nomination of retired Gen. John Kelly for Homeland Security secretary
  • 9pm: President Obama delivers “farewell address to nation”

* * *

DB’s Jim Reid concludes the overnight wrap

Although quiet, markets reversed much of Friday’s moves yesterday. The S&P 500 closed -0.35% and 10y Treasury yields ended 5.5bps lower at 2.365%. The Dow also finished the day -0.38% with that elusive 20,000 level for the index still proving to be a tough hurdle to clear. Credit markets also softened a touch (CDX IG +1bp wider) although primary markets continue to surge on with another $10bn pricing in US IG yesterday following the bumper issuance week last week. For the most part you can put the slightly softer tone for risk yesterday down to the -3.76% decline for WTI Oil. Natural Gas also tumbled -5.11%  and is down over -16% in 2017 already. Some record export data out of Iraq last month was cited as a trigger for the Oil decline while there was plenty of focus still on the US rig count data with the latest reading revealing that the number of rigs has risen for ten weeks in a row now and to the most since December 2015.

Meanwhile closer to home the Brexit debate has come back to the forefront. Sterling (-1.01%) tumbled to $1.2163 yesterday and in doing so closed at the lowest level since October 11th.Much of that move  occurred early on following PM Theresa May’s interview with Sky News over the weekend in which she highlighted that the UK will not look for piecemeal access to the EU. Chancellor Hammond also spoke yesterday and confirmed that no decision has yet been made on the UK’s trading relationship with the EU and that negotiations may need to include a discussion about what the interim period should look like. On a related topic there’s now the possibility for a snap election in Northern Ireland following the resignation of the deputy first minister yesterday over the handling of a public spending scandal which may well complicate Northern Ireland’s approach to the UK leaving the EU.

This morning in Asia the focus has turned over to the latest inflation report in China. The data has made for slightly mixed reading with CPI printing at +2.1% yoy in December which is down from +2.3% in November and also slightly lower than expected (+2.2% expected) following a slowdown in food price inflation. However, PPI has surged to +5.5% yoy (vs. +4.6% expected) from +3.3% and in doing so has reached the highest level since September 2011. That continues what has been a remarkable swing in momentum for prices at the factory gate, driven primarily by the mining sector, which turned positive last September following 54 consecutive months of deflation. Markets have been fairly directionless in Asia though this morning. Bourses in China are little changed while the Nikkei (-0.59%), Kospi (-0.16%) and ASX (-0.89%) are lower, however the Hang Seng (+0.20%) has edged slightly higher. Oil is little changed while in FX the offshore RMB (-0.12%) has been a lot more orderly this morning following the volatility over the last week or so.

In terms of other markets yesterday, it was a similar story in Europe too where the Stoxx 600 finished -0.49% (where weakness for financials also weighed in conjunction with the decline for energy stocks) and the DAX -0.30%. The FTSE 100 (+0.38%) stood out however, boosted by that weakness for Sterling. In rates we also saw 10y Bund yields edge down 2.2bps to 0.272% while yields in the periphery were 7bps to 8bps lower. Meanwhile Gold (+0.72%) extended its strong start to the year along with other precious metals.

Meanwhile, one interesting story yesterday was the news that Italy’s anti-establishment Five Star Movement had their membership request rebuffed by the pro-business Liberals in the European Parliament. This came after Five Star had voted to break their alliance with the UKIP party in favour of the Alliance of Liberals and Democrats for Europe. The leader of the Alliance of Liberals – former Belgium PM Guy  Verhofstadt – said that there was insufficient common ground to proceed with a tie up which appears unsurprising given the Alliance’s staunch support of the EU and shared currency. While Five Star leader  Beppe Grillo had put down his decision to try to align with the Liberals to practical reasons, there is also some suggestion that Grillo may have been trying to tone down Five Star’s reputation for Euroscepticism according to the FT.

Moving on. With regards to the economic data, there wasn’t a huge amount to report of. In the US the sole release was the November consumer credit print which came in much higher than expected ($24.5bn vs. $18.4bn expected) from $16.1bn in the month prior. Revolving credit was reported as jumping by the second most since February 2001. Over in Europe there was good news with the latest Sentix investor confidence reading for the Euro area, with confidence rising 8.2pts in January to 18.2 (vs. 12.8 expected) and to the highest level since August 2015. In Germany industrial production rose +0.4% mom in  November which was a little bit below consensus (vs. +0.6% expected) but came following an upwardly revised +0.5% mom in October. In addition, the latest trade data in Germany revealed that exports surged +3.9% mom in November and well ahead of expectations (vs. +0.5% expected). Our economists in Europe noted that the hard data right now in Germany would point to slight upside risks to their Q4  GDP forecast of +0.5% qoq although it’s possible that the December production data will reveal a slowdown as a result of weakness in the auto sector.

Meanwhile over at the ECB the latest CSPP holdings data was released yesterday. Unsurprisingly the data is heavily impacted by the holiday period however. As of January 6th, total holdings amounted to  €51.84bn which implies net purchases settled of just €0.77bn in the week. That is less than half the usual weekly pace but as a reminder only includes trades that settled in the first week of January, with the previous week being the holiday season. Elsewhere, there was a bit more Fedspeak to digest yesterday. The Boston Fed’s Rosengren (who in the past has been considered as a more dovish leaner) opined that  “we’re already running the economy a bit hot” and that “we’re at full employment”. As a result he said “a still gradual but somewhat more regular increase in the federal funds rate will be warranted”. Meanwhile the Atlanta Fed’s Lockhart, who is retiring at the end of next month, said that he was more inclined to favour two rate hikes this year, rather than three.

Before we wrap up, a quick mention that yesterday our House View team published their 2017 outlook. The team notes that the outlook has improved for developed economies as growth momentum has picked up in recent months and risk assets across the board have continued the rally sparked by Trump’s unexpected victory. But far more importantly, they believe that the election of Trump will fundamentally re-order the economic, financial and security arrangements of the post-WW2 era, and believe that these changes will have a significant impact on the economic performance of nations, industries and corporates across the globe.

Looking at the day ahead, this morning in Europe the only data due out comes from France where we’ll receive the November industrial and manufacturing production report. Over in the US the early data due out is the NFIB small business optimism survey which is expected to show a small increase in optimism in December. The final November wholesale trade sales and inventories revisions follow that before we then get the November JOLTS job openings report. Away from the data, President Obama is due to deliver a televised farewell speech from Chicago ahead of Trump’s general news conference tomorrow.

end

i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 9.57 POINTS OR 0.30%/ /Hang Sang closed UP 186.16 OR 0.83%. The Nikkei closed DOWN 152.89 POINTS OR .79% /Australia’s all ordinaires  CLOSED DOWN 0.76%/Chinese yuan (ONSHORE) closed WELL UP at 6.9255/Oil FELL to 52.10 dollars per barrel for WTI and 55.01 for Brent. Stocks in Europe: ALL MIXED. Offshore yuan trades  6.90200 yuan to the dollar vs 6.9255  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS AGAIN AS  DOLLARS ATTEMPT TO  LEAVE CHINA’S SHORES /

3a)THAILAND/SOUTH KOREA/:

none today

b) REPORT ON JAPAN

c) REPORT ON CHINA

4 EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

The Turkish lira falters to 3.78 to the dollar.  It even touched 4 to one yesterday. This nation is in trouble financially due to its huge external debts in dollars and the constant militant attacks on its soil by ISIS and/or PKK

(courtesy zero hedge)

Turkish Central Bank Intervenes To Halt Record Plunge In Lira

It was another bad day for the Turkish lira, which after plunging 5.8% in the first days of 2017, fell as much as 1.8% in early trading, dropping to a new all time low of 3.78 against the dollar, down nearly 7% YTD against the USD, pressured by a deteriorating economy, unpredictable terrorist and militant attacks, and a authoritarian president. The lira also passed 4 to the euro for the first time on Tuesday, with a deputy prime minister saying the economy was being targeted by “sabotage and attacks”.

Market focus has turned on the lira as a result of Turkey’s large external borrowing requirement which makes its currency one of the most vulnerable currencies to tightening by the Fed.

Not helping matters is that Turkish residents have been flocking to the stability of hard currencies, the opposite of what President Recep Tayyip Erdogan has been urging. As the following Bloomberg chart shows, deposits in foreign exchange for individuals and companies excluding banks rose for a third week, signaling a lack of confidence in the lira. It’s the biggest loser among world currencies so far in 2017.

Additionally, Turkish economic growth has remained sluggish and inflation is rising, yet the central bank has been under pressure from President Tayyip Erdogan not to hike interest rates. A series of gun and bomb attacks have heightened security concerns. On Tuesday the Turkish parliament voted to press on with a debate about constitutional reform to strengthen the powers of President Tayyip Erdogan.

“Nobody wants to be the last one in there and everyone is running for the door. There are no signs from the authorities that they are taking it seriously,” said Jakob Christensen, head of EM research at Danske Bank. Christensen said the risk of further attacks was undermining the tourist sector, which is vital for the economy and balance of payments.

Making matters worse, and confirming the currency crisis is becoming one of credit, Turkish five-year credit default swaps rose four bps to 288 bps according to Markit data, a one-month high, and the yield premium paid by Turkish sovereign bonds over U.S. Treasuries on the JPMorgan EMBI Global Diversified widened out 4 bps to 377 bps.

And while the central bank’s hand are largely tied as per Erdogan’s decree that no rates are to be hiked, moments ago the monetary authority had no choice but to intervene when it cut FX required reserve amounts by 50 bps, which it said would boost liquidity by around $1.5 billion, citing “unhealthy” price formation. In a statement on its website, the central bank also said the that additional steps might be taken to protect price and financial stability if necessary.  It noted that it monitors “excessive volatility” in markets. The Cenbank also lowered commercial lenders’ total borrowing limits in interbank money markets to 22b liras from Wednesday without saying what the previous limit was.

While the lira spiked modestly higher in kneejerk reaction, if recent similar overtures by its pressured EM peers are any indication, this latest intervention should have a half life of about an hour before the modest gains are all gone.

end

6.GLOBAL ISSUES

After spending 4 billion USA defending the Peso, it is crashing again to record lows:

(courtesy zero hedge)

The Mexican Peso Is Crashing (Again) To Record Lows

Well that was $4 billion well spent…

Following an unexpected plunge in fixed capital investment  (-0.9% YoY vs +0.3% expectations), the peso has crashed to record lows…

end

7. OIL ISSUES

Iraq is becoming very aggressive in its production output.  It was suppose to cut not increase its production:

(courtesy zero hedge)

Despite OPEC Cuts, Iraq To Boost February Oil Exports To Record High

One month ago, we were surprised to report that while oil traders and analysts were expecting OPEC member nations to, at least initially, pretend to comply and affirm their adherence to the production cuts as per the the Vienna meeting (before eventually cheating on their quotas), a very aggressive Iraq was not only not cutting output, but according to Iraq’s national oil company, the State Organization for Marketing of Oil (SOMO), had disclosed plans as of December 8, nine days after agreeing to cut production, to increase deliveries of its Basra oil grades by about 7% to 3.53 million barrels a day compared with October levels. The unexpected news was first reported by the WSJ which obtained a detailed oil-shipment program: such oil shipments represent about 85% of Iraq’s exports.

To be sure, Iraq did come up with a convenient scapegoat when just days later it blamed the autonomous Kurdish region of exporting more than its allocated share of oil. As a reminder, as part of the deal, Iraq, OPEC’s second largest producer, agreed to reduce output by 210,000 bpd to 4.351 million bpd. However, it immediately accused Kurdistan, over whose oil production Iraq’s level of control is limited at best, of producing well more than its quota.

“The region is exporting more than its share, more than the 17 percent stated in the budget,” Iraq oil minister Haider al-Abadi said at the time.

Fast forward to this morning, when Reuters, looking at the same loading schedules, reported that Iraq plans to raise crude exports from its southern port of Basra to an all-time high in February, keeping exports high even as OPEC production cuts take effect this month.

Just like last month, the country’s State Oil Marketing Company (SOMO) announced plans to export 3.641 million barrels per day (bpd) of crude in February, according to trade sources and preliminary loading schedules obtained by Thomson Reuters on Tuesday, beating a record of 3.51 million bpd set in December. The February volume includes 2.748 million bpd of Basra Light and 893,000 bpd of Basra Heavy, the documents showed.

Reuters adds that for January, SOMO had planned to export 2.627 million bpd of Basra Light and 903,000 bpd of Basra Heavy. Basra crude accounts for the bulk of oil exports from Iraq.

Surprisingly, despite the jump in exports, Iraq’s oil ministry said on Tuesday it has cut oil production by 160,000 bpd since the beginning of January in line with the OPEC decision.

While it is unknown if Iraq will again blame the Kurds on its seeming non-compliance, when despite allegedly cutting production it continues to capture market share by expoerting more, oil has slid and at least in early trading was down to session lows, and was approaching a critical support level.

(courtesy zero hedge)

8. EMERGING MARKETS

Venezuela hikes the minimum wage by 50% equivalent to 12 dollars USA per month. This nation is in serious trouble despite having the greatest amount of oil reserves in the ground

(courtesy zero hedge)

Venezuela Hikes Minimum Wage By 50% “Due To Economic War And Mafia Attacks”

end
And your humour story for today.  Curling on a grand scale in Canada:

 

end

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

Euro/USA   1.0561 DOWN .0024/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 116.23 DOWN 0.242(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 1.2146 DOWN .0023 (Brexit by March 201/UK government loses case/parliament must vote)

USA/CAN 1.3249 UP .0034 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS TUESDAY morning in Europe, the Euro FELL by 24 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 DOWN 9.57 or 0.30%     / Hang Sang  CLOSED UP 186.16 POINTS OR 0.23%  /AUSTRALIA  CLOSED DOWN 0.76%  / EUROPEAN BOURSES ALL MIXED 

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 TUESDAY morning CLOSED DOWN 152.89 OR .79% 

Trading from Europe and Asia:
1. Europe stocks ALL MIXED 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 186.16 OR 0.83%  Shanghai CLOSED DOWN 9.57 POINTS OR 0.30%   / Australia BOURSE CLOSED DOWN 0.76% /Nikkei (Japan)CLOSED DOWN 152.89 OR .79%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1181.60

silver:$16.57

Early TUESDAY morning USA 10 year bond yield: 2.390% !!! UP 1 IN POINTS from MONDAY 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  2.984, UP 1 IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 102.03 UP 19 CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 4.05% UP 7  in basis point yield from MONDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.064% UP 7/10  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

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

ITALIAN 10 YR BOND YIELD: 1.90  PAR  in basis point yield from MONDAY 

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

GERMAN 10 YR BOND YIELD: +.285% UP 1 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.0561 DOWN .0023 (Euro DOWN 23 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 115.79 DOWN: 0.167(Yen UP 72 basis points/ 

Great Britain/USA 1.2161 DOWN 0.0008( POUND DOWN 8 basis points)

USA/Canada 1.3210 DOWN 0.0005(Canadian dollar  UP 5 basis points AS OIL FELL TO $51.41

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This afternoon, the Euro was DOWN by 23 basis points to trade at 1.0561

The Yen ROSE to 115.79 for a GAIN of 17 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 8  basis points, trading at 1.2161/

The Canadian dollar ROSE by 5 basis points to 1.3210,  WITH WTI OIL FALLING TO :  $51.41

The USA/Yuan closed at 6.9179
the 10 yr Japanese bond yield closed at +.064% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield PAR IN basis points from MONDAY at 2.379% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.977 PAR  in basis points on the day /

Your closing USA dollar index, 102.07 UP 23 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 TUESDAY: 1:00 PM EST

London:  CLOSED UP 31.70 OR .52% 
German Dax :CLOSED up 19.31 POINTS OR 0.17%
Paris Cac  CLOSED up 0.66 OR 0.01%
Spain IBEX CLOSED DOWN 40.80 POINTS OR 0.43%
Italian MIB: CLOSED up 64.17 POINTS OR 0.33%

The Dow was DOWN 31.85 POINTS OR .16% 4 PM EST

NASDAQ WAS UP 02.00 POINTS OR .36%  4.00 PM EST
WTI Oil price;  51.41 at 1:00 pm; 

Brent Oil: 54.12  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  60.14 (ROUBLE DOWN 15/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD RISES TO +0.285%  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:$50.78

BRENT: $53.59

USA 10 YR BOND YIELD: 2.378%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.968%

EURO/USA DOLLAR CROSS:  1.0557 down .0028

USA/JAPANESE YEN:115.73  down 0.253

USA DOLLAR INDEX: 102.02  up 18  cents (BREAKS AGAIN HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2159 : DOWN 10  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.285%

END

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

TRADING IN GRAPH FORM

Bullion, Biotechs, & Banks Bid As Bonds & Black Gold Skid

Following this morning’s manic euphoria in small businesses and ahead of tonight’s delusion by Obama, given the market’s performance, this seemed appropriate…

But, it appears the hype of the reflation/growth trade is now well and truly over…

 

Financial conditions don’t seem to matter…

 

For now it’s all about 2018 or 2019 or 2020…?

 

Because trailing earnings are ‘disappointing’ to say the least…

 

And 2017 Earnings still haven’t been notched up by the analysts…

*  *  *

Having got all that off our chests… Nasdaq another record high as The Dow tried but failed again for 20k, clinging to unch as Small Caps and Trannies squeezed higher again…NOTE – once again we rallied into the European close and sold off… and once again a weak close

 

Nasdaq longest streak of gains to start a year since 2006.

 

Financials and Healthcare outperformed…

 

As Biotech stocks continue their charge higher, up 6 days in a row (longest win streak since July 2015) – best start to a year since 2000 (which was followed by complete carnage)…

 

Banks continue to tred water for the last few weeks ahead of this week’s chaos of earnings on Friday…

 

WMT stumbled into the red after announcing more layoffs…

 

VIX ended unchanged aftr the initial slam to send stocks higher…

 

The Dollar Index limped higher…

 

As Yuan weakened all day (back above 6.91/$)…

 

Treasury yields also limped higher today (long-end underperforming the short-end)…

 

WTI Crude front-month tumbled to a $50 handle at the NYMEX close…

 

Gold is up 11 of the last 13 days to 6 week highs…

 

Gold remains 2017’s biggest winner so far… with oil the biggest loser..

end

 

The following is a biggy:  we all wondered why Trump hired a huge number of Goldman Sachs former alumni and/or current members of the firm.  Now you will find out why!!!

(courtesy Russ and Pam Martens/WallStreet on Parade)

Here’s How Goldman Sachs Became the Overlord of the Trump Administration

By Pam Martens and Russ Martens: January 9, 2017

Occupy Wall Street Protesters Outside 15 Central Park West, the Residence of Lloyd Blankfein, CEO of Goldman Sachs

Occupy Wall Street Protesters Outside 15 Central Park West, the Residence of Lloyd Blankfein, CEO of Goldman Sachs

During his political campaign, Donald Trump repeatedly railed against Wall Street with a specific focus on Goldman Sachs. In the final days of his campaign, Trump released an advertisement (see video below) that featured his opponent, Hillary Clinton, shaking hands with Goldman Sachs CEO Lloyd Blankfein. As the image flickers on the screen, Trump does a voice over, stating: “”It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities.” As the ad ends, Trump bares his soul: “I’m doing this for the people and for the movement and we will take back this country for you and we will make America great again.”

How did a candidate who repeatedly demonized Goldman Sachs as the poster child for a corrupt establishment that owned Washington end up with Goldman Sachs’ progeny filling every post that even tangentially has the odor of money or global finance? One answer is family ties; another may be something darker.

Trump’s non-stop nominations and appointments of Goldman Sachs alumni have left his supporters stunned. Trump nominated Steven Mnuchin, a 17-year veteran of Goldman Sachs to be his Treasury Secretary. Stephen Bannon, another former Goldman Sachs banker, was named by Trump as his Chief Strategist in the White House. The sitting President of Goldman Sachs, Gary Cohn, has been named by Trump as Director of the National Economic Council, which, according to its website, coordinates “policy-making for domestic and international economic issues.”  Last week, in a move that stunned even Wall Street, Trump nominated a Goldman Sachs outside lawyer, Jay Clayton of Sullivan & Cromwell, to serve as Wall Street’s top cop as Chairman of the Securities and Exchange Commission. Adding to the slap in the face to Trump’s working class supporters, Clayton’s wife currently works as a Vice President at Goldman Sachs.

But the Goldman Sachs’ ties don’t stop there. 

When Alexander Blankfein, the oldest son of Goldman Sachs’ CEO Lloyd Blankfein was married in 2013, Joshua Kushner attended the wedding. Joshua had been Alexander’s roommate at Harvard according to the New York Times. Joshua is the brother-in-law to a woman who will play a major role in the Trump administration – Ivanka Trump, daughter of the President-elect and wife of Joshua’s brother, Jared.

According to Politico, Goldman Sachs partner, Dina Powell, President of the Goldman Sachs Foundation, is Ivanka’s “top adviser on policy and staffing.”

Then there is Erin Walsh who had worked at Goldman Sachs since 2010 as an Executive Director and head of its Office of Corporate Engagement for Asia Pacific. Walsh also previously worked in the Bureau of Near Eastern Affairs at the U.S. Department of State. Walsh is now part of Trump’s transition landing team for the State Department and is engaged in prepping the just retired CEO of ExxonMobil, Rex Tillerson, for his Senate confirmation hearing this week to become the Secretary of the Department of State, according to Politico.

A recent Executive Director of Goldman Sachs preparing the recent titular head of Big Oil to pass muster to run the State Department is the Orwellian version of draining the swamp — and Trump’s pre-election campaign language is proving to have been very Orwellian, as in reverse-speak.

And there is yet another former Goldman Sachs banker, Anthony Scaramucci, who sits on Trump’s transition team.

Since 2010, according to Federal Election Commission records, Gary Cohn, the President of Goldman Sachs and Trump’s designee as Director of the National Economic Council, has given $148,800 to political candidates running for Federal office. No contributions were made to Donald Trump. Despite that, Cohn will sit atop a powerful body and have the President’s ear on both domestic and international economic issues. According to multiple media reports, Jared Kushner, Trump’s son-in-law, is a close friend of Cohn’s and set up the first meeting with Trump.

During the primary campaign, when it emerged that Trump’s opponent Ted Cruz had received a loan from Goldman Sachs, Trump said that Cruz was “owned” by Goldman Sachs. Now the Dow Jones company, MarketWatch, has reported that Trump’s debt is held by more than 150 Wall Street firms. The New York Times has reported that Goldman Sachs Mortgage Company holds a loan on an office tower at 1290 Avenue of the Americas, a building that is 30 percent owned by Donald Trump.

Some of the Trump debt held by Wall Street firms, according to media reports, includes Donald Trump’s personal guarantee in the event of a default. The true owners of other Trump debt are shielded behind secretive Limited Liability Corporations. These serious conflicts of interests together with the unprecedented infusion of Goldman Sachs honchos into his administration, have the potential to set a new low in Washington politics – an outcome that America can ill afford as it struggles to rise above the greatest economic collapse since the Great Depression just eight years ago.

The Senate is set to hold confirmation hearings on nine of Trump’s nominees this week. Call your Senator today and demand that he or she asks the questions that will get to the bottom of these Byzantine conflicts.

 

 

end

 

November inventories rise more than expected at 1.00% month over month while sales disappointed at .4%.  Thus the inventories to sales ratio climbed back up again ( 3.38 to one) and we are still stubbornly stuck in recessionary territory

(courtesy zero hedge)

Wholesale Sales Disappoint Sending Inventories-Ratio Back Into Recession Territory

November saw inventories rise more than expected (+1.0% MoM vs +0.9% exp) and sales disappoint (+0.4% vs +0.5% exp) and were notably revised lower. This sent the inventories-to-sales ratio back up again – stubbornly stuck in recessionary territory.

Both Inventories and sales grew year-over-year…

But the gap between inventories and sales grew in absolute terms for the first time since July…

Sending the inventories-to-sales ratio back up again…

Automotive inventories-to-sales jumped higher once again – back near cycle highs.

(courtesy zero hedge)

Job Openings, Hires, Quits And Layoffs All Rebounded In November

While too backward looking to be actionable (it reflects the labor situation with a 2 month delay), today’s JOLTs report showed little in terms of changes for “Janet Yellen’s favorite labor market indicator”: the number of job openings was little changed at 5.522 million, below the 5.555 million expectation, but above a downward revised 5.451 million (from 5.534 million).

Hires and separations were also little changed at 5.219 million (up from 5.160 million), and 5.028 million (up from 4.966 million), respectively. Within separations, the quits rate was unchanged at 2.1 percent and the layoffs and discharges rate was unchanged at 1.1%. That said, the pace of hiring appears to have tapered off, after hitting cycle highs in February 2016 at 5.5 million, and remaining at levels largely unchanged over the past 2 years.

As shown in the next chart, while the trailing pace of job additions has been modestly declining in the past two years, net hiring also appears to have plateaued.

Meanwhile, discharges and other layoffs jumped by 68,000 in November rising to 1.637 million after hitting cycle lows of 1.513 million in September.

The offsetting good news, however, is that being “quits”, or the so-called take this job and shove it indicator, also rose, increasing by 41,000 to 3.064 million, just shy of the all time high reported last December when a total of 3.088 million workers quits their jobs on their own terms.

(courtesy zero hedge)

(courtesy zero hedge)

Wal-Mart To Cut “Hundreds” More Jobs Before End-January

Despite the proclamations from The White House and its lackeys that this is the best jobs recovery ever and we are at full employment, it appears all is not well at the world’s third largest employer.

We’ve discussed many times the fact that Walmart had been overly eager to boost everyone’s wage in order to appease the living wage crowd, and as a result the company had to move forward with massive layoffs and store closings to try and mitigate the impact on profits. Earlier last year we also noted that Walmart is testing out drones that when operational, will be able to carry out what once were human tasks in its large distribution centers. This effort will further position the company to be able to shed more labor and benefit expense in the future. That said, Walmart isn’t waiting for the drone initiative to come online.

After firing 7,000 in September, The Wall Street Journal reports, Wal-Mart is preparing another round of job cuts at its headquarters before the end of the month, according to people familiar with the situation.

The world’s biggest retailer plans to eliminate hundreds of jobs before the end of its fiscal year on Jan. 31, both at headquarters and regional personnel that supports stores, these people said. Many of the eliminations will affect Wal-Mart’s human resources department, a large team that some senior executives believe should be more efficient or whose duties could be handled by outside consultants, said these people. Other departments could be affected as well, say these people.

“We are always looking for ways to operate more efficiently and effectively,” said Wal-Mart spokesman Greg Hitt. “While we continually look at our corporate structure, we have not made any announcements.”

Other retailers have recently moved to slash jobs and close stores as they battle sluggish sales and try to save money to invest in their e-commerce efforts. Last week, Macy’s Inc. said it would close stores, cutting 10,000 jobs and streamlining operations.

Wal-Mart closed more than 150 U.S. stores last January, then in October said new-store openings would slow, but hasn’t announced plans for another round of large-scale closures.

So much for that minimum-wage PR-stunt, but at least the Walmart Greeter has returned

end
Chaos runs supreme as now Trump has completed backtracked again as the repeal of the Obamacare is on!!
(courtesy zero hedge)

Healthcare Chaos Emerges After Trump Backtracks, Demands Immediate Repeal Of “Catastrophic” Obamacare

Perhaps as a result an angry backlash to last night’s report by the WSJ that President-elect Donald Trump had allegedly sided with Rand Paul in pushing to delay the repeal of Obamacare until such time as there is a suitable replacement option, which as we explained are two entirely distinct processes, and that an ACA replacement could take years as it would require bipartisan support, moments ago the the NYT reported that Trump appears to have backtracked on his position as recently as yesterday, and has pressed Republicans to move forward with the “immediate repeal” of the Affordable Care Act and to replace it very quickly thereafter, saying, “We have to get to business. Obamacare has been a catastrophic event.”

Trump’s position undercuts Republicans who want a quick vote to repeal President Obama’s signature domestic achievement but who also want to wait as long as two to three years to come up with an alternative. But more to the point presented last night, Trump’s latest statement also is challenging the resolve of Republicans in Congress who do not want any vote on a repeal until that replacement exists such as Rand Paul, with whom Trump was said to have sided over the weekend.

According to the NYT Trump, “who seemed unclear about the timing of already scheduled votes” in Congress this week, demanded a repeal vote “probably some time next week,” and said “the replace will be very quickly or simultaneously, very shortly thereafter.”

That, however, as the NYT correctly notes, is impossible as republicans in Congress are nowhere close to agreement on a major health bill that would replace President Obama’s signature domestic achievement. A number of Republicans in the House and Senate have said publicly that they wanted to hold off on voting to eviscerate the health law until a replacement measure could be negotiated. Additionally, Democrats and Republicans would have to agree on a replacement to the existing law, which as Goldman explained yesterday afternoon, is likely the bottleneck that could take as much as 2 years.

So what is the current status of this suddenly chaotic process?

For now, the Senate is planning to vote Thursday morning on a budget resolution that would set up parliamentary protections for a health care repeal bill that would have to emerge from House and Senate committees by Jan. 27. The House would vote on Friday if that budget measure clears the Senate.

While that plan is under pressure from Republicans who want to slow the process as they struggle for an agreement on what would follow repeal, Trump is now saying there is no cause for delay, a 180 degree change in the position he reportedly espoused over the past few days. Trump also said he would not accept a delay of “more than a few weeks” before a replacement plan was voted on.

“Long to me would be weeks,” he said. “It won’t be repeal and then two years later go in with another plan.” That directly contradicts House Speaker Paul D. Ryan’s plans.

Furthermore, in his conversation with the NYT, Trump showed no sign of willingness to accept the health law any longer, despite numbers released today according to which some 11.5 million Americans have picked marketplace plans for 2017.

“It’s a catastrophic event,” he said. “I feel that repeal and replace have to be together, for very simply, I think that the Democrats should want to fix Obamacare. They cannot live with it, and they have to go together.”

And that’s where he is wrong, because Democrats would be delighted to not fix Obamacare, leaving over 11 million Americans uninsured, and furious at Trump for removing their insurance protections.

Trump, however, disagrees and has issued a political warning to Democrats who might stand in his way, saying he would campaign against lawmakers, especially in states that he won in November.

“It may not get approved the first time, and it may not get approved the second time, but the Democrats who will try not to approve it” will be at risk, warning that “they have 10 people coming up” for re-election in 2018. That alluded to Democratic senators in states he won.

“I won some of those states by numbers that nobody has seen. I will be out there campaigning,” he said.

To summarize, with Trump suddenly backtracking on a position he allegedly had as recently as yesterday, it appears the repeal of Obamacare will proceed as expected, and quickly, even though as of this moment, there are no concerte plans how to proceed with conceiving and implementing a replacement to the soon to the be repealed ACA. In other words, Chaos.

 

END

 

The following is an accident waiting to happen:

(courtesy zero hedge)

 

Obama Slashes Mortgage Insurance Premiums For Subprime Borrowers With Just 10 Days Left In Office

What do you do when a quick rise in mortgage rates suddenly threatens to tame home buying demand from subprime borrowers who, despite the lessons from the past, are still purchasing homes, en masse, with only 3.5% down payments and just enough monthly cash flow to cover mortgage payments?  Well, if you’re the Obama administration then you simply socialize the problem and force those higher mortgage costs on taxpayers.  Anything less would just be a hateful attempt to deny minority and low-income citizens their “right” to home ownership.

And while the Obama administration isn’t directly passing out tax dollars to subprime borrowers to make their monthly mortgage payments, its recent decision to lower the FHA’s annual mortgage insurance premiums by 0.25% is essentially the same thing since tax payers are still on the hook for the same risk but receiving lower premiums in return.  Per Bloomberg:

The FHA doesn’t make mortgages. It sells insurance, paid by borrowers, on loans protecting investors in case of default. The program allows borrowers to get a mortgage with a down payment of as little as 3.5 percent and a credit score of as low as 580, on a scale of 300 to 850. That makes it one of the most forgiving mortgage programs and popular among first-time home buyers.

 

Some in the real-estate industry have been calling for another fee cut and heralded Monday’s move.

 

“Dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA,” William Brown, president of the National Association of Realtors, said in a statement.

 

The FHA last cut premiums two years ago. That cut, which came as rates dropped and lowered the annual fee for most borrowers to 0.85 percent from 1.35 percent, led to a wave of refinances.

We vaguely remember something like this happening about 8 years ago and, while we’ll have to check our files, our recollection is that it didn’t work out all that nicely.

Of course, the move was intended to offset the recent ~60bps rise in average 30-year mortgage rates…because we simply can’t sit idly by while markets attempt to actually work.

Mortgage Rates

 

The private mortgage insurers, who have to compete with federally subsidized rates, shed about 5% of their market cap on the news.

PMI

 

Meanwhile, at least one Congressman, representative Jeb Hensarling of Texas, noted to Bloomberg that the Obama administration’s last minute parting gift to the U.S. taxpayer put them at “greater risk of footing the bill for yet another bailout.”

Representative Jeb Hensarling of Texas, chairman of the House Financial Services Committee, called the fee reduction “irresponsible.”

 

“It seems the Obama administration’s parting gift to hardworking taxpayers is to put them at greater risk of footing the bill for yet another bailout,” Hensarling said.

But we wouldn’t worry too much, the FHA only required a $1.7 billion taxpayer bailout last time around…no big deal really.

 

 

END

Activists are planning to turn the Trump inauguration into one of the biggest riots in USA history;
(courtesy Michael Snyder/EconomicCollapseBlog)

Activists Are Hoping To Turn Trump’s Inauguration Into One Of The Biggest Riots In U.S. History

ubmitted by Michael Snyder via The Economic Collapse blog,

Radical leftists are planning to make January 20th the most chaotic Inauguration Day in American history.  Their stated goal is to “disrupt” the Inauguration festivities as much as possible, and they are planning a wide range of “actions” to achieve that stated goal.  Some of the more moderate groups are using terms such as “civil resistance” and “civil disobedience”, but others are openly talking about “blockades”, jumping barricades, throwing projectiles and “citywide paralysis”.  My hope is that all of their efforts will turn out to be a big flop, but it is important to understand that these groups are well funded, highly organized and extremely motivated.  The election of Donald Trump has been perhaps the single most galvanizing moment for the radical left in modern American history, and they are working very hard to turn January 20th into a major political statement.

In fact, just recently one activist group took out a full page ad in the New York Times

Thousands of activists, journalists, scientists, entertainers, and other prominent voices took out a full-page call to action in the New York Times on Wednesday making clear their rejection of President-elect Donald Trump and Vice President-elect Mike Pence with the simple message: “No!”

“Stop the Trump/Pence regime before it starts! In the name of humanity we refuse to accept a fascist America!” the ad states, followed by a list of signatories that includes scholar Cornel West; author Alice Walker; Chase Iron Eyes of the Standing Rock Sioux; educator Bill Ayers; poet Saul Williams; CNN‘s Marc Lamont Hill; Carl Dix of the Communist Party USA; and numerous others.

The ad pointed people to refusefascism.org, and it asserted that Trump must be stopped whether he was legitimately elected or not

Trump promises to inflict repression and suffering on people in this country, to deport millions, to increase violence up to the use of nuclear weapons on people across the globe, and to inflict catastrophes upon the planet itself. He has assembled a cabinet of Christian fundamentalist fanatics, war mongers, racists, science deniers. NO! His regime must not be allowed to consolidate. We REFUSE to accept a Fascist America!

If you go to refusefascism.org, you will discover that the protests that they are organizing in Washington D.C. will begin on January 14th.  They say that they want to “stop the Trump-Pence regime before it starts”, and they hope to have protests going “every day and every night” without interruption through at least January 20th.

Another group that plans to kick things off on January 14th is DisruptJ20.  Of course that is short for “Disrupt January 20th”.  If you go to their official website, you will find a long slate of events that have already been scheduled.

According to Legba Carrefour, a spokesperson for DisruptJ20, one of the goals of the group is to block major transportation routes into and throughout our nation’s capital.  And he is not shy about the fact that they literally want to “shut down the Inauguration”

“We are planning to shut down the inauguration, that’s the short of it,” he says. “We’re pretty literal about that, we are trying to create citywide paralysis on a level that I don’t think has been seen in D.C. before. We’re trying to shut down pretty much every ingress into the city as well as every checkpoint around the actual inauguration parade route.”

If Carrefour and his fellow conspirators are able to actually accomplish that, it truly would be unprecedented.

And while DisruptJ20 is not publicly advocating violence, they are not exactly discouraging it either…

Carrefour says DisruptJ20 has no publicly announced plans to jump barricades along the inauguration parade route or throw projectiles at the new president, but that autonomous direct actions are encouraged.

“I can’t comment on specific stuff we’re doing like that, mostly because that would be illegal. But, yeah, it will get pretty crazy, I expect,” he says. “‘Have fun!’ I say.”

After the rioting that we have seen in Baltimore, Ferguson, Charlotte and many other communities around the nation in recent years, I hope that authorities are taking these threats quite seriously.

Once Donald Trump won the election, many conservatives seemed to think that the war was won.  But the truth of the matter is that many on the left were completely blindsided by Trump’s surprise victory, and now that they are fully awake they are gearing up for battle like never before.

And these protests are not going to end on January 20th.  In fact, abortion advocates are hoping to get close to a million women into Washington D.C. on the day following the Inauguration to protest for abortion rights.  Filmmaker Michael Moore is hoping that this march will be the beginning of “100 days of resistance” against Trump’s presidency…

Filmmaker and liberal icon Michael Moore has announced his plans to attend the Women’s March on Washington to protest Donald Trump’s inauguration later this month and has called for sore loser liberals to go further — by staging protests acts of resistance through the first 100 days of Trump’s presidency.

In an appearance, this weekend on MSNBC’s The Last Word, the 62-year-old Trumpland and Fahrenheit 9/11 director made a “call to arms” to those opposed to Trump’s presidency to join the Women’s March on Washington scheduled for January 21, the day after the presidential inauguration.

“It’s important that everybody go there,” Moore told MSNBC’s Ari Melber.

Of course it is easy to imagine how all of this could spiral wildly out of control.  If Trump cracks down on these protests really hard in an attempt to restore law and order, that could end up sparking a dramatic backlash against his “police state tactics”.  And if the protests become even bigger and more violent, Trump could respond by cracking down even more harshly.

Let us hope for some really cold weather in D.C. at the end of January so that as many troublemakers as possible get discouraged and stay home.  Violent protests, blockades and riots aren’t going to solve anything, and they could easily open fresh wounds in a nation that is becoming more divided with each passing day.

Well that about does it for tonight
I will see you tomorrow night
H.
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