Jan 25/Comex options expiry tomorrow so the crooks raid gold and silver today. Expect weakness in the precious metals until Tuesday/GLD loses another 5 tonnes which added the crooks in their selling of gold/China tries to rein in speculation by raising rates/Trump ready to build the wall between Mexico and the USA/Trump to restrict Muslim entry by country of origin/Malls in the USA are in deep trouble as they defaulting: cannot compete with the internet/Trump turning isolationist as he begins process of curtailing membership in international organizations like NATO etc/FINAL DRAFT

Gold at (1:30 am est) $1197.30 DOWN $13.00

silver  at $16.94:  down 24 cents

Access market prices:

Gold: $1201.00

Silver: $17.00

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:

WEDNESDAY gold fix Shanghai

Shanghai FIRST morning fix Jan 25/17 (10:15 pm est last night): $  1215.08

NY ACCESS PRICE: $1207.50 (AT THE EXACT SAME TIME)/premium $7.58

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1211.69

NY ACCESS PRICE: $1202.90 (AT THE EXACT SAME TIME/2:15 am)

  THE SPREAD 2ND FIX TODAY!!:  $8.79

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London FIRST Fix: Jan 25/2017: 5:30 am est:  $1203.50   (NY: same time:  $1203.50   (5:30AM)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Second fix Jan 25.2017: 10 am est:  $1195.00 (NY same time: $1196.60  (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

 

I wrote the following yesterday and the crooks whacked right on cue:

“We are now entering options expiry week so expect the crooks to whack gold and silver down to allow illegal gains on options underwritten by the crooked banks.  The comex expiry is  Thursday, the 26th of January and the options for the OTC/LBMA is Tues Jan 31.”

For comex gold: 

NOTICES FILINGS FOR JANUARY CONTRACT MONTH:  1 NOTICE(S) FOR 100 OZ.  TOTAL NOTICES SO FAR: 1204 FOR 120,400 OZ    (3.7449 TONNES)

For silver:

 NOTICES FOR JANUARY CONTRACT MONTH FOR SILVER: 1 NOTICE(s) FOR 5,000  OZ. TOTAL NUMBER OF NOTICES FILED SO FAR; 711 FOR 3,555,000 OZ

Let us have a look at the data for today

.

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In silver, the total open interest ROSE by 960  contracts UP to 177,601 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .888 BILLION TO BE EXACT or 126% of annual global silver production (ex Russia & ex China).

FOR THE JANUARY FRONT MONTH IN SILVER:  1 NOTICES FILED FOR 5,000 OZ.

In gold, the total comex gold FELL BY 1034 contracts WITH THE FALL IN  THE PRICE GOLD ($4.70 with YESTERDAY’S trading ).The total gold OI stands at 482,374 contracts.

we had 1 notice(s) filed upon for 100 oz of gold.

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

GLD:

We had a big  changes in tonnes of gold at the GLD/this time another WITHDRAWAL of 5.04 tonnes, exactly the same withdrawal of yesterday.

Inventory rests tonight: 799.07 tonnes

.

SLV

we had n0 changes in silver into the SLV:

THE SLV Inventory rests at: 337.408 million oz

.

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

1. Today, we had the open interest in silver RISE by 960 contracts UP to 177,601 AS SILVER WAS UNCHANGED with YESTERDAY’S trading. The gold open interest FELL by 1034 contracts DOWN to 482,374  WITH THE FALL IN THE PRICE OF GOLD OF $4.70  (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  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 7.00 POINTS OR 0.22%/ /Hang Sang closed UP 99.26 OR 0.43%. The Nikkei closed UP 269.51 POINTS OR 1.45% /Australia’s all ordinaires  CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed DOWN at 6.8805/Oil FELL to 52.74 dollars per barrel for WTI and 54.97 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8248 yuan to the dollar vs 6.8805  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE COMPLETELY NARROWS AS POBC ATTEMPTS TO STOP DOLLARS FROM LEAVING CHINA’S SHORES. HOWEVER BOTH CHINESE YUANS FALL WITH THE LOWER DOLLAR 

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

b) RPORT ON JAPAN

 none today

c) REPORT ON CHINA

i)The initiation of fees for all bitcoin transactions have knocked out the High Frequency traders but interestingly enough, the value of the bitcoin remains the same.   Yet volumes have retreated by 90%

( zero hedge)

ii)Chinese bond yields rise and this is the biggest rise since 2010.  Last night POBC raised the rates to 22 financial institutions and thus their actions are to try and rein in the huge amount of debt speculation:

( zero hedge)

4 EUROPEAN AFFAIRS

i)France

It looks like our front runner in France has got some problems:  his wife was paid for fake work with public funds

( zero hedge)

ii)Italy

the Italian constitutional court has ruled and has allowed modifed versions of the law. This should pave the way for new elections and make it difficult for Grillo’s party to lead..

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

i)Mexico

Here are the issues:

  1. the USA wants to talk about the wall and who will ultimately pay for it
  2.  Trump want the 25 billion USA dollars sent back by Mexican illegals to finance the wall.
  3. Mexico sends about 80 billion dollar with of exports into the USA with the USA having a sizable deficit with Mexico.
  4. it would be extremely difficult for Mexico to find another partner to trade with
  5. Mexico is angry that guns are supplied by the USA into Mexico and the USA is angry that Mexico supplies the huge amount of illicit drugs into States.

The only weapon that Mexico has is its silver and if they cut off the uSA, they have nowhere else to turn to get their supplies. Maybe this is why JPMorgan is hoarding silver

( zero hedge)

 

ii)Trump signs executive orders restricting immigration from 7 Muslim countries and he is also ready to order the Mexican wall to be built

( zero hedge)

iii)Trump states that the construction of the wall will begin in a few months which will certainly curtail illegal immigrants and cut down on the important of illicit drugs. To counter Trump’s move, all Mexico has to do is not to export all of its silver to the USA. China will buy everything.

(courtesy zero hedge)

iv) Caterpillar/Global growth Bellwether

Even though Caterpillar’s stock rises, it has posted its 49th consecutive month of declining sales.  This stock is the best Bellwether to give us a clue as to the global growth. It is non existent.

( zero hedge/Caterpillar)

7. OIL ISSUES

The crooks are running the asylum: WTI rises in rise despite plunging demand and soaring inventories coupled with rising production..go figure..

( zero hedge)

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)Mining companies see little appeal in searching for gold in Egypt:

( Knecht/Reuters)

ii)The new Sec Treasurer to be Mnuchin so far backs Fed independence and signals that reform there is not a priority

( Bloomberg/GATA)

10.USA STORIES

i)Capital One is a huge investor in the taxi cab business by loaning money against the value of Cab Medallions.  With the rise of UBER , it was in the cards that this industry would be on the verge of collapse.  Last night Capital ONE’S non performing loan rate soared to over 50% which definitely signals the collapse of the traditional taxi business.

( zero hedge)

ii)As indicated above Trump signs executive order restricting immigration from 7 Muslim countries

( zero hedge)

iii)Trump does not like what he sees in Chicago.  If the city does not fix the “horrible carnage” the President will send in the Feds

( zero hedge)

iv)Trump now orders Media blackout at other government agencies.  Yesterday it was the EPA, today the list lengthens:

( zero hedge)

v)This morning Trump is set to launch a major investigation into voter fraud. This should keep our snowflakes quiet:

( zero hedge)

vi)We knew that this will happen: furious environmentalists have reacted quite quickly to Trump’s actions on Keystone, Dakota and Alaska. They state that Trump will regret his actions.  It will be quite a battle

( zero hedge)

vii)Commercial Backed Mortgage Securities are defaulting like crazy as malls in the USA are in deep trouble.  The internet is killing boxed outlets

( zerohedge)

viii) Next on the list for Trump is to drastically reduce the USA’s role in international organizations. He wishes to curtail support for the United Nations and any other organization that does not fit Trumps’ criteria:

1. any nation that gives full membership to the Palestine Liberation Organization

2.any nation that funds abortions

3.any nation that circumvents sanctions against Iran

4. any nation that circumvents sanctions against North Korea.

5 any nation that sponsors terrorism

6. any nation that does not support human rights

7. any nation or organization that persecutes human beings.

this means that probably the USA will not fund the UN anymore.  The uSA is becoming isolationist.

(courtesy zero hedge)

ix)Get your popcorn ready as a budget showdown looms as the conservative side of the caucus asks for entitlement reform, something that Trump states categorically NO!!

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 1034 CONTRACTS UP to an OI level of 482,374 WITH THE FALL IN THE  PRICE OF GOLD ( $4.70 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 7  contract(s) DOWN to 54.  We had 8 notices filed YESTERDAY so we GAINED 1 contract(s) or AN ADDITIONAL 100 oz WILL 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 22,803 contracts DOWN to 156,984.(feb  2016: 145,830 contracts). March had a LOSS of 89 contracts as it’s OI is now 958. We are now slightly ahead with respect to OI when we compare data for open interest this year vs last year with the same amount of time to expire:

We had 1 notice(s) filed upon today for 100 oz

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And now for the wild silver comex results.  Total silver OI ROSE by 960 contracts FROM 176,641 up to  177,601 AS the price of silver REMAINED UNCHANGED IN PRICE with respect to 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 FELL by 150 contract(s) FALLING TO  30. We had 151 notice(s) filed on yesterday so we  gained 1 silver contracts or an additional 5,000 oz will stand  in this delivery month of January. The next non active month of February saw the OI RISE by 1 contract(s) RISING TO 229.

The next big active delivery month is March and here the OI rose by 526 contracts up to 134,451 contracts.

We had 1 notice(s) filed for 5,000 oz for the January contract.

VOLUMES: for the gold comex

Today the estimated volume was 372,611  contracts which is excellent.

Yesterday’s confirmed volume was 279,666 contracts  which is very  good

volumes on gold are getting higher!

Initial standings for january
 Jan 25/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 4629.600 OZ
Scotia
144 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
1 notice(s)
100 oz
No of oz to be served (notices)
53 contracts
5300 oz
Total monthly oz gold served (contracts) so far this month
1204 notices
120400 oz
3.7449 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   3000.000 oz
Total accumulative withdrawal of gold from the Customer inventory this month     4,810,713.7 oz
Today we HAD 1 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil oz
We had 1 customer withdrawal(s)
 i) Out of Scotia:  4629.600 oz
(144 kilobars)
total customer withdrawal: 4629.600 oz
We had 0  adjustment(s)
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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 1 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the JANUARY. contract month, we take the total number of notices filed so far for the month (1204) x 100 oz or 120,400 oz, to which we add the difference between the open interest for the front month of JANUARY (54 contracts) minus the number of notices served upon today (1) x 100 oz per contract equals 125,700 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 (1204) x 100 oz  or ounces + {OI for the front month (54) minus the number of  notices served upon today (1) x 100 oz which equals 125,700 oz standing in this non active delivery month of JANUARY  (3.9097 tonnes)
we gained 100 oz of gold standing for delivery.
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On first day notice for January 2016, we had .9642 tonnes of gold standing. At the conclusion of the month we had only .5349 tonnes standing so you can visualize the increasing demand for physical gold a t the comex.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2015:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2015: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9097 tonnes
total for the 13 months;  226.328 tonnes
average 17.410 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
Total dealer inventory 1,458,000.441 or 45.349 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,971,358.086 or 279.04 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.04 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 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 5 1/2 MONTHS  74 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE DECEMBER DELIVERY MONTH
JANUARY INITIAL standings
 Jan 25. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 80,787.500 0z
Scotia
Deposits to the Dealer Inventory
 nil
Deposits to the Customer Inventory 
nil oz
No of oz served today (contracts)
1 CONTRACT(S)
(5,000 OZ)
No of oz to be served (notices)
29 contracts
(145,000  oz)
Total monthly oz silver served (contracts) 711 contracts (3,555,000 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  19,914,323.0 oz
 END
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of Scotia:  80,787.500 oz
TOTAL CUSTOMER WITHDRAWALS: 80,787.500 oz
 we had 0 customer deposit(s):
i) Into JPMorgan:  zero  oz**
** JPMorgan has deposited a huge amount of silver on each and every day starting in 2017.  Today was the first day that they did not receive any silver.
total customer deposits;  nil   oz
TED BUTLER IS CORRECT:  JPMORGAN IS MASSIVELY ACQUIRING SILVER THROUGH THE COMEX BY “STOPPING” ON CONTRACTS HELD
 
 
 we had 1  adjustment(s)
 i) Out of CNT: 619,915.800 oz was adjusted out of the dealer of CNT into the customer acct of CNT
The total number of notices filed today for the JANUARY. contract month is represented by 1 contract(s) for 5,000 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  711 x 5,000 oz  = 3,555,000 oz to which we add the difference between the open interest for the front month of JAN (30) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JANUARY contract month:  711(notices served so far)x 5000 oz +(30) OI for front month of JAN. ) -number of notices served upon today (1)x 5000 oz  equals  3,700,000 oz  of silver standing for the JAN contract month. This is  STILL huge for a non active delivery month in silver. We  gained 1 contract(s) or an additional 5,000 oz will stand.
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.
END
Volumes: for silver comex
Today the estimated volume was 64,146 which is excellent
YESTERDAY’S  confirmed volume was 55,069 contracts  which is very good.
 
Total dealer silver:  29.343 million (close to record low inventory  
Total number of dealer and customer silver:   181.532 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 25/another exactly the same withdrawal as yesterday: 50.4 tonnes and again this was used in the whacking of gold today/inventory rests at 799.07

jan 24/a huge withdrawal of 5.04 tonnes and probably this was used today in the whacking of gold/inventory rests at 804.11 tonnes

Jan 23/a big change/this time a deposit of 1.19 tonnes of gold into the GLD/inventory rests at 809.15 tonnes.  The drainage of gold from the GLD to Shanghai has now stopped!

Jan 20/no changes in gold inventory a the GLD/Inventory rests at 807.96 tonnes

Jan 19/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 18/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 17/17/a deposit of 2.96 tonnes of gold/inventory at the GLD rests at 807.96 tonnes.  I guess there is no more gold inventory to sent to C+Shanghai

Jan 13/17/there were no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 12/2017/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 11/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

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
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Jan 25/2017/ Inventory rests tonight at 799.07 tonnes
*IN LAST 76 TRADING DAYS: 150.74 TONNES REMOVED FROM THE GLD
*LAST 23 TRADING DAYS: 25.47 TONNES HAVE LEFT

end

Now the SLV Inventor
Jan 25./another changes at the SLV/Inventory rests at 337.408 million oz
jan 24/ a withdrawal of 948,000 oz at the SLV/Inventory rests at 337.408 million oz
Jan 23/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 20/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
jan 19/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 18/no changes in silver inventory/inventory rests at 338.356 million oz/
Jan 17/no change in silver inventory at the SLV/Inventory rests at 338.356 million oz/
Jan 13/2017/on changes in the SLV inventory/rests tonight at 338.356 million oz/
Jan 12.2017/ no changes in the SLV Inventory/ rests at 338.356 million oz
Jan 11/ A HUGE WITHDRAWAL F 2.843 MILLION OZ/INVENTORY RESTS AT 338.356 MILLION OZ/
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/
.
Jan 25.2017: Inventory 337.408  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.3 percent to NAV usa funds and Negative 7.4% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.8%
Percentage of fund in silver:39.0%
cash .+0.2%( jan 25/2017) 
.
2. Sprott silver fund (PSLV): Premium FALLS to +.21%!!!! NAV (Jan 25/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO – 0.59% to NAV  ( Jan 25/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.21% /Sprott physical gold trust is back into NEGATIVE territory at -0.59%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE

Central Banks Banking On It

Blockchain – Central Banks Banking On Blockchain

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust …”

Satoshi Nakamoto (Unknown person or persons who designed bitcoin and created its original reference implementation, Bitcoin Core)

blockchain_bitcoinSource: Photosteve101 via Flickr

Fiat currency debasement and failure is why gold has survived and thrived for thousands of years  and indeed in recent years. It is why bitcoin is becoming more popular, with its growing market cap and ever-expanding ecosystem.

It is hard for central banks to dictate the value and supply of gold in the long term. Although they have tried and failed. This was seen during and after the London Gold Pool when gold prices surged from $35 to $850 in just 9 years and again in recent years when banks were found to be attempting to fix and manipulate gold prices. Manipulation frequently works in the short term but over the long term, the all powerful forces of supply and demand in the global market place will determine prices.

Similarly, it will be hard for central banks to dictate the value of bitcoin over the long term. Akin to gold, very limited supply and increasing global demand should determine prices rise in the long term.

Thus, both operate almost trust-less monetary policies and have a value in and of themselves, regardless of central bank diktats.

As it is both nature and human nature that supports gold, it is a blockchain that supports bitcoin. The bitcoin blockchain was designed so that no central bank would ever be needed to support the currency.

The bitcoin network is the bitcoin central bank, it creates new bitcoins and processes the transfer and settlement of the cryptocurrency. Monetary policy was set on day zero and its independence comes from its decentralisation.

Whilst the idea of no central bank is too much for many, you can be sure it is certainly too much for the central bankers themselves. After all, the breakthrough with bitcoin is that it is cryptography that secures it, not the force of an overarching central body. Bitcoin’s success has promoted the conversation as to how central banks can keep up, and take advantage of the technology in order to keep their monetary games going and further kicking the ‘fiat currency can’ down the road.

Central banks now want in on their own adulterated version of blockchain. It seems they have realised that they must embrace it in order to prevent their own demise.

Today, we take a brief look at why central banks are so keen to embrace the technology that was seemingly designed to render them the dodo of finance. In part two, next week we will address the concerns surrounding these apparent benefits.

Big on blockchain

15% of big banks will be using blockchain by the end of this year, according to the IMF and ‘most’ banks shortly after say the World Economic Forum (WEF). Driven by enthusiasm in the private sector, 2016 was the year the central bankers across the world woke up and began to talk about their explorations into, and the possibilities, of blockchain in the central banking system.

Dong He, who has lead research into digital currencies at the IMF, believes that the switch to digital currencies, by central banks could happen in the next five to ten years But, this depends on the speed at which the banking system moves to using the blockchain for financial transactions.

In June 2016 central bankers from 90 different countries attended a forum to discuss how the technology could be harnessed. In the same month Canada’s central bank announced that they had been experimenting with their own digital currency CAD-Coin, the UK, China and Barbados have shown similar levels of enthusiasm.

The US also book ended 2016 with positive comments on blockchain, with Federal Reserve Governor Lael Brainard stating the technology, “may represent the most significant development in many years in payments, clearing and settlement.”

Commercial banks and other financial institutions have been looking at blockchain for a while now, but for the purposes of cross-border settlements and updating legacy-laden and archaic back-office systems. Central banks appear to be interested in it all, but they are particularly focused on digital currencies and this area is not something they want to leave to chance.

Deputy governor of the People’s Bank of China, Fan Yifei, wrote for Bloomberg

“Digital currencies have shown considerable promise…[our research] suggests that the best way to take advantage of these innovations is for central banks to take the lead, both in supervising private digital currencies and in developing digital legal tender of their own.”

No more tools in the box

The financial crisis paved the way for the rise of bitcoin and a new awareness and appreciation for gold.

Both assets reawakened something that had been lost in many mindsets – we can hold assets outside of the vulnerable fractional reserve banking system and fiat monetary system, as safe havens and with reduced counter party risk. Banks everywhere were forced to acknowledge that the game would soon be up and innovation was required.

The World Economic Forum recently stated

“Central banks increasingly are under pressure to keep ‘their’ currencies attractive. They should let the general public access electronic central bank money, not just financial institutions. To do this, they should embrace the blockchain.”

Pretty much since 1971, the central banking system has played with every tool available to them. This has become glaringly obvious since the 2008 financial crisis and whilst a further major crash has been averted, the current system is in an extremely fragile position of an unprecedented nature.

The monetary tools are running out, they are blunt, old and tired.

For many central banks, this is where the attraction of a digital currency is. It is not just about catching up with the current trend to go digital but it allows the bank to look beyond exploring new regulations in regard to preventing further financial crises; a digital currency could just put a new set of conditions on the monetary system which, supporters argue, could then prevent a financial crisis.

Smart Money

Those familiar with blockchain technology will be aware that much of the fuss surrounding the technology in the last twelve months has been around smart contracts – coding the logic of a contractual clause into a transaction.

This same idea can be put into digital currencies, making way for ‘smart money’. Smart money would give a host of benefits or restrictions to the user, depending on who you are. The issuer of the currency could put various conditions into the code in order to make sure it could only be transacted if various terms had been met.

This concept can (ideologically) be run across the whole financial system – reducing the size of the shadow banking system and bringing more oversight into activities. It can also give the central bank greater control over who receives assets, at what point and whether they can keep them.
Financial Oversight

A 2015 report by the Financial Stability Board (who oversee 90% of financial system assets) estimated that the shadow banking system “accounts for $137 trillion [in 2015] and now represents about 40% of total financial system assets in 20 jurisdictions and the euro area.”

This shadow banking system, means there is very little oversight as to how credit is created and what assets belong where and on whose balance sheet. A problem which lead to the toppling of the home of cards in 2008.

This was exacerbated by the fact that it took an exceptionally long time to unwind and work out what had happened with various financial instruments. A ledger system, with real-time oversight and faster transactions may reduce this problem.

This is where the blockchain carries appeal for central bankers. Regardless of what you think of the central banking system, you must agree that their top remit is stability in the financial system. This is the same remit that Satoshi Nakamoto gave to bitcoin.

The bitcoin blockchain is a transparent system, a similar blockchain for the central banking system would provide real-time visibility of all transactions happening across the network.

This level of oversight has the potential to add 3% to a country’s economic output, according to research by the Bank of England. It could also help central banks and regulators prevent a financial crisis, rather than deal with the aftermath. By having oversight of how credit is created, they could track it and see how far an asset is lent. Perhaps even creating conditions whereby it can no longer be lent, or created, if certain conditions are not met.

The power over the banked and the unbanked

Digital currencies, compared to cash, are relatively low cost. Therefore, many central bankers support a move to a fully digital currency as they make it possible to bring more people into the system, at little cost. We have discussed our concerns about cashless societies, previously, raising concerns of how it will pave the way for negative interest rates and bail-ins to be the norm.

Kenneth Rogoff, author of the War of Cash, believes digital currencies will play a key role in the less-cash society, as he advocates

“Eventually, there will be government digital currencies that ordinary people have access to at very low cost…[but] A government digital currency could be many decades away, and there are all sorts of security and regulatory issues that have to be navigated first. That said, many central banks are already thinking about it.”

In part two we will ask what powers digital currency system will give to central banks when it comes to individual users, savers and spenders? What controls can put in place over your money, and at what point can they decide that it is no longer your money?

For many a digital currency may seem a great idea for central banks as there will be some controls over money creation. Unfortunately this isn’t a given when creating a blockchain-based currency. In fact, it could make money-printing and therefore devaluation easier, a digital currency will allow helicopter money to become a far more realistic concept.

At the moment, money printing means cash entering the financial system via the banks. It rarely reaches business and individuals. The WEF argues that the pubic should have access to a central bank issued money, if a bank account sits on a digital ledger this is possible. This smart money concept might be particularly useful to central banks who are conducting QE or just taking money printing back to basics and handing the cash straight to businesses and individuals rather than banks.

Cybersecurity

One area, we do see as a strong advantage but will be explored in more detail in part two, is cybersecurity – the blight of the banking system (see the attack on the Central Bank of Bangladesh for just one example).

In 2017 this will continue to grow as a problem. In a letter to client banks, in November 2016, SWIFT warned of cybersecurity threats “The threat is very persistent, adaptive and sophisticated – and it is here to stay.”

In a blockchain-based banking system, it would be very difficult for data to be stolen and lost forever, each time a change was made the system would update across all banks and users, therefore information would be better protected and retained.

It is worth remembering that the original blockchain – the bitcoin blockchain – is still very much in existence and in seven years it has not suffered from a single successful attack on the core protocol.

Conclusion

The jury is still very much out on whether central banks need a digital currency, or even blockchain technology. The above is a quick glance over why central banks are exploring the options over digital currencies and what it could mean for them, we look forward to exploring them more.

But, rest assured the digital currency central banking system is likely coming. The central banks and their ecosystem believe they are about to ‘uber’d’ and therefore they need to act fast.

The World Economic Forum recently wrote
“If central banks don’t join forces, they risk being cut out from intermediation and surveillance. They also run the risk that payment service providers may move to other currency areas with an institutional environment that is more appealing for buyers and sellers. Neither can be in the interest of monetary authorities, even if the technical and legal challenges of engagement are huge.”

It seems the interest of the spender, saver and business is not of much concern, we believe a far deeper look is required into the implications, and how you can protect yourselves from the inevitable digital currency revolution that is coming your way. Look out for part two

 

http://www.goldcore.com/us/gold-blog/blockchain-central-banks/

end

 

Mining companies see little appeal in searching for gold in Egypt:

(courtesy Knecht/Reuters)

Mining firms see little appeal in Egypt’s gold exploration terms

Section:

By Eric Knecht
Reuters
Tuesday, January 24, 2017

CAIRO — The gold beneath Egypt’s desert could make it a top global producer, but the investment terms on offer are driving away small explorers whose skills the country needs to unlock its mineral wealth.

The Egyptian government launched its first international tender for gold mining concessions in eight years last week, potentially an exciting opportunity for global miners to help develop a relatively untapped gold-mining frontier.

Though it has a history of gold-mining stretching back to the pharaohs, Egypt today has a single commercial gold mine, Centamin’s Sukari, which produced 551,036 ounces last year.

In Egypt’s mineral-rich Eastern Desert alone, some exploration companies estimate potential gold reserves could be higher than 300 tonnes, although the government declines to give an estimate.

But mining companies active in Egypt and Africa say the new exploration round, which offers five concession areas and closes on April 20, is unlikely to lure investors because of commercial terms they say are among the least attractive in the world.

… For the remainder of the report:

http://www.reuters.com/article/us-egypt-gold-idUSKBN158263

 

END

 

The new Sec Treasurer to be Mnuchin so far backs Fed independence and signals that reform there is not a priority

(courtesy Bloomberg)

Mnuchin backs Fed independence and signals reform isn’t priority

Section:

By Craig Torres and Saleha Mohsin
Bloomberg News
Tuesday, January 24, 2017

U.S. Treasury Secretary nominee Steven Mnuchin isn’t jumping on the Republican bandwagon to audit the Fed.

In written questions by senators following his confirmation hearing last Thursday, Mnuchin was asked about his thoughts on “politicizing decisions made by the Federal Reserve Board of Governors and the benefits of an independent central bank.”

Mnuchin’s answer was crafted carefully.

“The Federal Reserve is organized with sufficient independence to conduct monetary policy and open market operations,” Mnuchin responded to Senator Bill Nelson, a Florida Democrat. “I endorse the increased transparency we have seen from the Federal Reserve Board over recent years.”

The response appears to lean against legislation such as the Fed Oversight Reform and Modernization Act of 2015, or FORM Act, which was introduced in the House of Representatives but never became law, which would have subjected the central bank’s monetary policy decisions to greater congressional scrutiny. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-01-24/mnuchin-backs-fed-ind…

end

 

Your early WEDNESDAY 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 6.8830(SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/ CHINA/OFFSHORE YUAN NARROWS COMPLETELY    TO 6.8248 / Shanghai bourse CLOSED UP 7.00 POINTS OR 0.22%   / HANG SANG CLOSED UP 99.26 OR 0.43% 

2. Nikkei closed UP 269.51 POINTS OR 1.43%   /USA: YEN FALLS TO 113.17

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index FALLS TO  100.03/Euro UP to 1.0766

3b Japan 10 year bond yield: RISES TO    +.074%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.17/ 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::  52.74  and Brent: 54.77

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 FALLS TO  +.429%/Italian 10 yr bond yield UP  to 2.047%    

3j Greek 10 year bond yield FALLS to  : 6.91%   

3k Gold at $1206.30/silver $16.98(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 11/100 in  roubles/dollar) 59.16-

3m oil into the 52 dollar handle for WTI and 54 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT a SMALL   DEVALUATION DOWNWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.17 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  0.9969 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  +.429%

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 2.471% early this morning. Thirty year rate  at 3.055% /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

Dow Set To Open On Verge Of 20,000 As Trump Trade Sends Global Stocks To 19 Month Highs

The day the Dow crosses 20,000 may finally be here, because with DJIA futures trading 65 points higher in premarket trading, added to yesterday’s close of 19,912 and latest record high in the S&P, it means that all it will take is a modest of only 25 points for the critical Dow threshold to be finally breached. Celebrating the upcoming record, world stocks hit a 19-month high on Wednesday, lifted by strong Japanese trade data, strong European company earnings and hopes that U.S. President Donald Trump will press ahead with a large fiscal spending package. In short: the Trumpflation rally is back with a bang (even if the dollar is not particularly enjoying it, although the decoupling between the USD and rates was duly noted yesterday so it isn’t too surprising).

“U.S. stocks have shown renewed signs of life this week, as the market toyed with the idea of reigniting the ‘Trump rally’ that we saw in the aftermath of the presidential election,” said Kathleen Brooks, research director at City Index.  “Wednesday’s key theme is the return of the ‘Trump trade’,” Brooks said.

 

In early trading, European equities extended the global rally as corporate earnings reignited investors’ optimism in economic growth with construction  companies outperforming on expectations Trump will announce the “massive” Mexican wall.

The MSCI All-Country World Index rose to 433.6, up 02%, to its highest level since June 2015 as equity markets from Tokyo to London climbed after the S&P 500 Index closed at a record. BHP Billiton Ltd. paced gains in resources shares and iron ore extended a rally. A surge in industrial metals bolstered raw-materials companies, while gold declined for a second day.  The yen edged higher after sliding Tuesday. The Aussie fell after weaker-than-expected inflation data, while oil retreated after a four-day advance.

Europe’s index of 300 leading shares and Germany’s DAX both rose 1 percent and Britain’s FTSE 100 was up 0.7 percent.  Spanish bank Santander was among the big gainers in Europe, its 4 percent rise in 2016 net profit giving its share price a similar boost and leading the continent-wide rally in bank stocks, despite some disappointing data out of the German IFO survey which missed on both expectations and conditions.

Japan’s Nikkei advanced 1.4 percent, buoyed by data showing the country’s exports rose for the first time in 15 months in December, a positive sign for the economy even as talk of U.S. protectionism looms over the outlook.

Corporate earnings are offering relief after traders began to unwind a rally in the dollar and equities amid concern that gains after Trump’s election had gone too far. Alibaba Group Holding Ltd. lifted its sales forecast as Chinese spending held strong and BHP reported a gain in second-quarter iron ore production after prices soared on demand from China. D.R. Horton Inc., the largest U.S. homebuilder, topped analysts’ estimates as job growth fueled buyer demand. As a result, S&P U.S. futures pointed to a higher open on Wall Street. On Tuesday the S&P 500 and Nasdaq both rose to fresh record highs and the Dow Jones Industrials came within 51 points of the elusive 20,000 mark. On Wednesday, the S&P is poised for another all time high.

Lingering concerns about growing protectionism from the Trump administration, and the potential negative effects on global trade and growth, remained close to the surface.

“It has kept dollar/yen flat despite the S&P 500 hitting new highs and Treasury yields edging up,” Kit Juckes, head of FX research at Societe Generale in London, was quoted by Reuters. “There’s no doubt that a major bout of protectionism-induced risk aversion would be yen-supportive, as well as negative for a bunch of currencies that depend on U.S. trade,” he said.

The 10-year yield inched up to 2.48 percent, recovering from its dip below 2.40 percent earlier in the week, while the two-year yield held firm at 1.23 percent. It was as low as 1.14 percent on Monday. While the greenback moved in tandem with the snap back in U.S. Treasury yields overnight, it struggled to make much headway in Asian and European trading. Germany’s 10-year Bund yield rose to a six-week high of 0.38 percent and France’s benchmark 10-year yield hit a one-year high of 0.95 percent, with bond prices weighed down by the rally in stocks and new debt supply.

The dollar slipped 0.1 percent to 113.65 yen, and 0.1 percent against a basket of currencies. The euro was unchanged at $1.0725, little-moved by a surprised fall in German business morale this month. Sterling jumped, rising just shy of $1.26 on a combination of short covering and position squaring. The decision overall was seen as clearing the way for Prime Minister Theresa May to get on with launching Brexit talks. Sterling has bounced 4 percent over the last week.

Oil prices gave back much of their overnight gains. Brent futures dipped 0.5 percent to $55.13 per barrel, after rising 0.4 percent overnight, following a report from API that showed a surprise inventory build. If history is any indication, today’s DOE inventory report should show a big draw.

Market Snapshot

  • S&P 500 futures up 0.3% to 2281.5
  • Stoxx Europe 600 up 0.9% to 365.3
  • MSCI Asia Pacific up 0.4% to 140.94
  • US 10Yr yield up 2 bps to 2.49%
  • Dollar index down 0.2% to 100.1
  • WTI oil futures down 0.7% to $52.82/bbl
  • Gold spot down 0.5% to $1203.23/oz

Top News

  • Trump Pins Keystone, Dakota Pipeline Fate on Renegotiation
  • German Business Confidence Unexpectedly Weakened in January
  • Trump to Unveil Plans for Mexico Border Wall in Security Push
  • Novartis Mulls Options Including Spinoff, IPO for Alcon Unit
  • Salon Media Weighs Sale of Controlling Stake to Activist: NYP
  • Takata Surges After Reiterating It Wants to Avoid Bankruptcy
  • Japan Dec. Exports Rise 5.4% Y/y; Est. +1.1%
  • Cisco to Buy Software Maker AppDynamics for $3.7 Billion
  • Plains Expands Permian Pipeline Reach With $1.2 Billion Deal
  • Alibaba Adds $7.5 Billion in Market Value After Raising Forecast

Asia equity markets traded higher as they were proplled higher from the record highs in the US, where markets cheered President Trump’s executive orders to advance the Keystone XL and Dakota Access pipelines which saw S&P 500 and NASDAQ Comp. hit record highs, while the DJIA moved to within 100 points of the elusive 20,000 level. Nikkei 225 (+1.4%) outperformed on JPY weakness and encouraging trade data which showed exports increased for the first time in 15 months, while ASX 200 (+0.4%) was lifted by gains in big miners after BHP Billiton reported better than expected Q2 iron ore output and Rio Tinto announced the sale of 2 mining assets. Hang Seng (+0.4%) and Shanghai Comp. (+0.2%) were also positive, although somewhat lagged their regional peers following a weak PBoC liquidity operation and reports the CIRC toughened regulation for insurers’ major stock investments. 10yr JGBs traded lower amid the increased risk appetite in Japan, with demand for government paper also dampened after a weak bond buying operation by the BoJ.

European equities have spent the European morning in the green, following on from the upside seen both stateside and over in Asia. Notable movers include Novartis (+2.9%) and Santander (+4.4%) in the wake of their earnings, while Deutsche Bank (+2.6%) also contributes to the upside seen in financials, with materials also leading the indices higher. The FTSE 100 was initially bolstered by upside in materials names following positive production updates from BHP Billiton and Antofagasta, however, the index lost some of its shine amid the tech-based spike higher seen in GBP/USD. In tandem with the risk on sentiment, Bund futures have reached fresh YTD lows to test 162.00 to the downside, while some of the pressure is potentially attributed to tapering concerns from Japan after BoJ’s Rinban operation buying focus was in the long end, potentially rising fears of tapering by the BoJ. Alongside this, EU corporate issuance is also likely taking its toll on regional paper.

Top European News

  • Novartis Says 2017 FY Sales to Be Broadly in Line with Prior Yr
  • Santander 4Q Net Beats Estimate; CET1 Fully Loaded 10.55%
  • Intesa Weighing Generali Deal That Would Reshape Italy Finance

In currencies, the Bloomberg Dollar Spot Index was little changed. The gauge has fallen for four straight weeks, the longest retreat since February. The pound was little changed after falling as much as 0.9 percent on Tuesday. The yen rose 0.1 percent to 113.66 per dollar following a 1 percent slide the previous session.  The Mexican peso reversed early gains after a New York Times report said Trump will sign an executive order for a border wall to be built. The Australian dollar fell 0.8 percent, erasing gains after data showed consumer-price growth weakened.

In commodities, gold slid 0.5 percent to $1,204.07 an ounce after sliding 0.8 percent Tuesday. The metal reached the highest level since November earlier in the week. Iron-ore futures increased 1 percent to near the highest level in more than two years. Speculation of sustained Chinese demand for imports is outweighing repeated warnings from analysts that the rally is overextended and will unravel. There has been little relent in the Copper rise, having seen a 3%+ rise over the last couple days on supply concerns. Oil lost 0.8 percent to drop below $53 a barrel. Industry data showed U.S. stockpiles expanded while Libya increased crude output to the highest since 2014 as the country restores production following internal conflict.

Looking at the day ahead, it looks set to be a quiet day in the US today with the only data due out being the November FHFA house price index reading. We are due to hear from the BoE’s Carney at 4pm GMT when he holds a keynote speech at a G20 conference in Germany. The Bundesbank’s Weidmann and SNB’s Jordan are also scheduled to speak. Finally in terms of earnings, 31 S&P 500 companies are scheduled to report including Boeing (prior to the open) and eBay (after the close).

 

DB’s Jim Reid concludes the overnight wrap

Markets tried to come out of their recent lethargy yesterday with a strong day for risk and with bond yields climbing notably. Indeed both the S&P 500 (+0.66%) and Nasdaq (+0.86%) hit new record highs with the former in particular benefiting from a decent surge from metals and raw materials producers. DuPont and Freeport-McMoRan stood out most of all following their latest quarterly earnings reports and which more than overshadowed disappointing numbers out of Verizon which weighed on the wider telecoms sector. More notable though were the moves in rates. 10y Treasury yields climbed 6.8bps to close at 2.466%. That more or less wiped out Monday’s rally and it means that yields are now back to being just 1bp below the 2017 high and about 13bps off the highs in December. It was a similar story in Europe where 10y Bund yields climbed 4.6bps to finish at 0.404%. That’s just a shade below the 2017 high of 0.420% which itself was the highest yield in just under a year. It was much the same in EM too with hard currency 10y bond yields in Brazil, Colombia and Argentina between 4bps and 10bps higher.

A few factors seemed to combine to contribute to that sell-off in bonds. A broadly stable set of PMI indicators in Europe appeared to kick start the moves with the PMI’s pointing to what would be a solid start for growth in Europe in 2017. Manufacturing data in the US then surprised to the upside (we’ll touch on the data in more detail later on) while the corporate earnings results also helped sentiment to swing back positively. In addition WTI Oil rebounded +0.82% to close back above $53/bbl while it was a good day also for Iron Ore (+1.92%), Copper (+2.55%) and Aluminium (+0.95%). In addition to that there was  plenty of chatter about supply-induced weakness in European govvies with deals in France (20y), Spain (10y) and the UK (40y) while a 2y Treasury auction priced with the largest tail for a 2y auction since July.

Meanwhile the new Trump administration continues to plough on and dominate the front pages with the latest news being that Trump has taken steps to move forward on the construction of the Keystone XL and Dakota Access oil pipelines – both of which had previously been blocked by Barack Obama. As well as this, Trump’s budget chief nominee and well known fiscal hawk, Mick Mulvaney, also confirmed that that the near-$20tn national debt burden will need to be “addressed sooner rather than later”. Mulvaney also said to the Senate Homeland Security and Governmental Affairs panel that all Medicare benefits should be means-tested and that he supports a slow raising in the Social Security retirement age. All this adding more fuel to the fire in the fiscal stimulus debate. Mr Trump’s latest tweet suggested today will be a day of national security news. He also reiterated that “we will build the wall”. So watch this space.

Before we go on further, this morning in Asia we’ve seen most bourses follow the lead from Wall Street last night and trade higher in the early going this morning. The Nikkei (+1.10%), Hang Seng (+0.12%), Shanghai Comp (+0.15%), Kospi (+0.11%) and ASX (+0.38%) are amongst those markets higher while US equity index futures have also edged up. There was also some data out of Japan where exports were reported as rising a bumper +5.4% yoy in December (vs. +1.1% expected). In fact it is the first time YoY exports have turned positive in Japan since September 2015, bringing to an end 14 consecutive months  of negative prints.

Staying in Asia briefly, yesterday our China Chief Economist Zhiwei Zhang published a note highlighting a subtle and modest interest rate hike by the PBoC yesterday. He highlights that the PBoC hiked the rate of its medium-term lending facility (MLF) by 10bps in liquidity injections. Significantly, while the direct tightening impact is relatively small (compared with a benchmark interest rate hike), it does send important policy messages. Zhiwei highlights that firstly, it shows the PBoC’s determination to contain financial risks, serving as a warning shot to some leveraged investors on the domestic financial market. Secondly, against the backdrop of a potential Fed rate hike, this move breaks down the expectation that there would not be an interest rate hike of any kind in China, to a certain extent helping to reduce the pressure of capital outflows.

Moving on. For those that missed it yesterday, the UK Supreme Court threw up few surprises by confirming that the triggering of Article 50 will require an act of Parliament. The court ruled by an 8-3 majority. Significantly however the Supreme Court did not prescribe a lengthy bill and the judges dismissed the cases from the devolved authorities. Brexit Secretary David Davis confirmed that the Government will “shortly introduce legislation to allow the government to move ahead with invoking Article 50” and that “this will be a straightforward bill”. So this largely fits in with our view that the government will not offer significant concessions on the negotiating front and it’s likely that they will have sufficient support in Parliament to meet the end March deadline. Sterling did dip as much as -0.93% lower intraday yesterday but pared most of that move into the close to finish little changed at around the $1.253 mark.

Back to the aforementioned data, in Europe the flash PMI’s came in broadly flat in January with the composite for the Euro area at 54.3 versus 54.4 in December and market expectations of 54.5. By sector the manufacturing index reached a new cyclical high of 55.1 and encouragingly within the details there was a new post-2008 high for the employment index at 53.5. Our economists in Europe noted that with Germany posting a 0.5pt fall and France a 0.7pt rise, the flash PMI’s implied a marginal decline of the composite PMI on average in Italy, Spain and Ireland. That said, if unchanged for the rest of Q1 the Euro area composite PMI would point to GDP growth of close to +0.5% qoq which is above our economists’ forecast for +0.3%. Meanwhile in the US the flash manufacturing PMI for this month printed at 55.1 which was 0.8pts above the December reading and also above the 54.5 consensus estimate. The Richmond Fed manufacturing survey also came in above market at +12 (vs. +7 expected) although existing home  sales in December did disappoint slightly (-2.8% mom vs. -1.6% expected).

Before we wrap up, it was interesting to hear the hawkish comments out of the ECB’s Lautenschlaeger yesterday. The policy maker said that “all preconditions for a stable rise in inflation exist” and that “I am thus optimistic that we can soon turn to the question of an exit” from the ECB’s QE programme.

Looking at the day ahead, this morning in Europe the early data comes from France where we’ll get January confidence indicators. Germany then follows with the January IFO survey before we then get CBI trends orders and selling prices data in the UK for this month. It looks set to be a quiet afternoon in the US today with the only data due out being the November FHFA house price index reading. Away from the data we are due to hear from the BoE’s Carney at 4pm GMT when he holds a keynote speech at a G20 conference in Germany. The Bundesbank’s Weidmann and SNB’s Jordan are also scheduled to speak. Finally in terms of earnings, 31 S&P 500 companies are scheduled to report including Boeing (prior to the open) and eBay (after the close).

END

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 7.00 POINTS OR 0.22%/ /Hang Sang closed UP 99.26 OR 0.43%. The Nikkei closed UP 269.51 POINTS OR 1.45% /Australia’s all ordinaires  CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed DOWN at 6.8805/Oil FELL to 52.74 dollars per barrel for WTI and 54.97 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8248 yuan to the dollar vs 6.8805  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE COMPLETELY NARROWS AS POBC ATTEMPTS TO STOP DOLLARS FROM LEAVING CHINA’S SHORES. HOWEVER BOTH CHINESE YUANS FALL WITH THE LOWER DOLLAR 

3a)THAILAND/SOUTH KOREA/:

END

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

The initiation of fees for all bitcoin transactions have knocked out the High Frequency traders but interestingly enough, the value of the bitcoin remains the same.   Yet volumes have retreated by 90%

(courtesy zero hedge)

Chinese Bitcoin Trading Volumes Crash 90% Overnight

As we reported yesterday, there was one reason why bitcoin quickly became the darling of HFT and various high speed algo traders operating out of China – which is home to about 10 significant bitcoin venues, with a majority of trades executed on the top three, and which recently accounted for as much as 98% of global bitcoin trading: domestic transactions were “frictionless”, as there were no fees on buys or sells. However, that changed on Sunday night because as China’s three largest bitcoin exchanges, BTCC, Huobi and OkCoin, all said in separate statements on their websites, starting Tuesday they will charge traders a flat fee of 0.2% per transaction. The move was meant to “further curb market manipulation and extreme volatility.”

As expected, the impact was immediate and on the day the new fees went into effect, trading volumes crashed by roughly 90% across most Chinese exchanges.

According to Bloomberg, the same high-speed traders who had dominated bitcoin trading in China for the past year, are pulling out of China’s bitcoin market after the three biggest venues started charging transaction fees on Tuesday. One-hour volume at OkCoin fell 89% to 1,026 bitcoins at 1 p.m. local time, from 10,062 during the same period on Monday, according to the venue’s website. Huobi and BTC China saw declines of 92% and 82% respectively.

According to data from Bitcoinity there were roughly 4,800 trades on OKCoin between the hours of 11pm and midnight EST. In the following hour, the exchange registered just over 1,000 trades, denominated in CNY: a comparable fall of more than 80%.

Data pulled from Bitcoinity for BTCChina also demonstrates the apparent effect the new trading fees have had on volume. After registering more than 37,000 trades between the hours of 7 and 8pm EST, that amount had fallen to less than 1,000 between the hours of midnight and 1am EST

As discussed previously, and as Bloomberg noted, the lack of fees was seen as the main reason why as much as 80 percent of bitcoin trading in China was automated, with professionals using strategies such as “cross-exchange arbitrage” also known as frontrunning of major order blocks. The platforms made money by charging clients to withdraw bitcoin, but Tuesday’s changes may have ended that system for good. The moves came after the Chinese central bank made on-site inspections of the exchanges and reportedly found a number of violations.

“The exchanges are cutting their arms off to stay alive,” said Zhou Shuoji, whose Fintech Blockchain Group runs a bitcoin hedge fund and venture capital fund. The venues are proactively weeding out speculative trading to appease regulators, said Zhou. The fees, introduced by all three venues at midday on Tuesday, made market-making unprofitable, he said.

And while HFT traders, frontrunners and other “liquidity providing market makers” are furious that their business model in China was just crushed, the good news is that much of the inherent volatility in bitcoin may now be gone.

The good news is that bitcoin prices today were little changed, at around 6,300 yuan per bitcoin. Ultimately, any stability in bitcoin prices as a result of the elimination of HFT-driven volatility may be just what the digital currency needs to rise above $1000 and stay there

 

end

 

Chinese bond yields rise and this is the biggest rise since 2010.  Last night POBC raised the rates to 22 financial institutions and thus their actions are to try and rein in the huge amount of debt speculation:

(courtesy zero hedge)

Chinese 10Y Bond Yields Set For Biggest Monthly Jump Since 2010

China’s government bond prices and sovereign bond futures fell sharply on Wednesday as benchmark 10-year government bond futures fell 0.8% to 94.62, as yields on China 10-year bonds rising 6bps to 3.355%,
extending January’s climb to 33bps, the biggest monthly increase since
since October 2010, following a surprise move by the central bank to raise interest rates on a type of special emergency liquidity loans to certain financial institutions.

In a surprise announcement late Tuesday, the People’s Bank of China said it raised the interest rate on loans to 22 financial institutions via the medium-term lending facility, a new liquidity tool in place since 2014. While the central bank effectively injected another 245.5 billion yuan into markets, it also raised the interest rates on the two sets of loans, which are six months and one year in duration, by 10 basis points to 3.1% and 2.95% respectively.

As the WSJ adds, the move was widely viewed by investors as an effective rate increase intended to aid Beijing’s efforts to rein in debt-fueled speculative investments, and according to Goldman, the modest rate hike was a telegraphing of an implicit form of tightening. Still, as the chart below shows it is not exactly clear how making a liquidity facility, which has a record notional outstanding, fractionally more expensive is tightening.

According to Reuters, this was the PBOC’s first increase in the MLF interest rate since its debuted the liquidity tool in 2014, and first time it has raised one of its policy interest rates since July 2011. The last time the PBOC adjusted interest rates on MLF loans was in February 2016, when it lowered them.

One trader at a Chinese bank in Shanghai reckoned the rate increase was “bad news” because it raised the cost of funding at a time of seasonally tight liquidity heading into the week-long New Year holiday.

 

“The MLF loans meet market demand for funds, but the cost is going higher… The central bank is still aiming to reduce leverage at financial institutions,” she said.

 

Economists at ANZ said the PBOC will likely maintain generally supportive liquidity conditions, but at higher rates as it looks to prevent potential financial risks. Earlier on Tuesday, some Chinese media had reported credit growth could surge again in January, after higher-than-expected bank lending growth in December.

 

“With MLF rates moving higher, the market may view this as a signal that either the PBOC wants to have a steeper curve, or a higher curve across the tenors,” ANZ said in a note after the rise increase.

While it is unclear if a 0.1% increase in what is effectively an emergency liquidity loan is equivalent to monetary tightening, for now China’s traders are selling first and asking questions later. Should the selloff in the bond sector accelerate, it could have significant implications across all Chinese risk assets, and potentially lead to a slowing in China’s debt creation machine which for the past two years has been the primary driver behind the global growth impulse.

 

end

4 EUROPEAN AFFAIRS

It looks like our front runner in France has got some problems:  his wife was paid for fake work with public funds

(courtesy zero hedge)

France Launches Probe If Presidential Frontrunner Fillon Paid Wife For Fake Work

French financial prosecutors said on Wednesday they had opened a preliminary probe into the possible misuse of public funds following a press report about conservative presidential candidate Francois Fillon’s wife working for him as a parliamentary assistant.

The frontrunner in the April-May election has acknowledged his wife Penelope had worked for him when he was a legislator, but has fiercely denied the report in Le Canard Enchaine that she earned a big salary for work she never did.

The latest scandal to rock the French establishment follows a French newspaper report which alleged that Welsh-born Penelope Fillon, the wife of François Fillon who is the frontrunner to become the next president of France, was paid half a million euros with funds made available to her husband by the French parliament. The British-born wife of French presidential candidate Francois Fillon was paid around 500,000 euros ($538,000) over ten years from parliamentary funds made available to her husband, a report said Tuesday.

The Canard Enchaine, which mixes satire with investigative reporting, detailed various periods during which Penelope Fillon was paid from money available to her husband as a longstanding MP for the central Sarthe region. Hiring family members is not against the rules as long as the person is genuinely employed, but the newspaper said it had been unable to track down witnesses of her work.

Fillon’s wife had “indeed” worked for him, said Fillon spokesman Thierry Solere, as well as at a literary magazine owned by a close friend. “It is common for the spouses of MPs to work with them,” he told AFP.

Citing pay slips, the Canard Enchaine said Penelope (nicknamed “Penny”), who has always been seen as uninvolved in her husband’s political life, was paid from 1992 to 2002 from funds intended for parliamentary assistants.

From 2002, when Fillon took up a cabinet post under then president Jacques Chirac, she became an assistant to Marc Joulaud, who carried out Fillon’s parliamentary duties in his place, earning between 6,900-7,900 euros per month.

A colleague of Joulaud’s told the paper she “never worked with (Penelope). I have no information about this. I knew her only as a minister’s wife.” The paper said that Penelope was again paid “for at least six months” in 2012 when Fillon, then prime minister, left government after the defeat of rightwing president Nicolas Sarkozy. “In total, Penelope will have earned around 500,000 euros from parliamentary funds,” the paper said.

The paper also says that Penelope Fillon was paid around 5,000 euros a month between May 2012 and December 2013 by the periodical Revue des Deux Mondes.

Ironically, the literary magazine is owned by a friend of Fillon, Marc Ladreit de Lacharriere.

Canard Enchaine quoted the director of the monthly, Michel Crepu, as saying he was shocked. “I have never met Penelope Fillon and I have never seen her in the offices of the review,” he said.

Francois Fillon told a television interviewer in November that Penelope stayed at home in Sarthe while he worked as a lawmaker in Paris. “I didn’t have much time to see the first four (of five children) grow up because I was an MP,” he told Karine Le Marchand, the chatty presenter of “Ambition Intime” (Intimate Ambition) on the private TV channel M6. “It was 24/7, so basically they were raised by their mother.”

But he also said, without saying which time period he is referring to: “She was very involved in the campaigns, handing out flyers and attending meetings with me.”

Fillon added that the Welsh native is no longer involved in politics at all.

A trained lawyer, Penelope told Britain’s Sunday Telegraph after her husband became prime minister in 2007 that she preferred being at the couple’s 12th-century chateau near Le Mans, western France, with her children and five horses than in glitzy Paris. “I’m just a country peasant, this is not my natural habitat,” she joked.

Polls forecast that Fillon, from the rightwing Republicans party, would win presidential elections due in April and May if the vote were held today. But many analysts see the contest as highly unpredictable with Fillon facing competition from far-right candidate Marine Le Pen, centrist Emmanuel Macron and others.

It was not immediate clear if the probe could derail Fillon’s presidential aspirations.

 

 

end

 

Italy

the Italian constitutional court has ruled and has allowed modifed versions of the law. This should pave the way for new elections and make it difficult for Grillo’s party to lead..

(courtesy zero hedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

Mexico

Here are the issues:

  1. the USA wants to talk about the wall and who will ultimately pay for it
  2.  Trump want the 25 billion USA dollars sent back by Mexican illegals to finance the wall.
  3. Mexico sends about 80 billion dollar with of exports into the USA with the USA having a sizable deficit with Mexico.
  4. it would be extremely difficult for Mexico to find another partner to trade with
  5. Mexico is angry that guns are supplied by the USA into Mexico and the USA is angry that Mexico supplies the huge amount of illicit drugs into States.

The only weapon that Mexico has is its silver and if they cut off the uSA, they have nowhere else to turn to get their supplies. Maybe this is why JPMorgan is hoarding silver

 

(courtesy zero hedge)

Mexico Warns It Is Ready To Quit NAFTA If Trump Crosses “Red Lines”

Under relentless pressure from President Donald Trump, Mexico is said to be ready to discuss changes to trade rules about a product’s country of origin to try to avoid a disruptive fight with the United States over commerce.

As the two countries begin a difficult new relationship, Mexico sees possible common ground with Trump on the “rules of origin” of the North American Free Trade Agreement (NAFTA) that binds the two countries and Canada, Reuters reported. However, as AFP adds, even before the talks started, Mexico has drawn red lines ahead of the negotiations with Trump’s administration, warning it could quit the talks and NAFTA itself, if the discussions hit a wall, no pun intended.

Of course, it all begins with the wall.

During his campaign, Trump vowed to make Mexico pay for a massive border wall and threatened to finance it by tapping into the $25 billion in remittances that Mexican migrants sent back home last year. Mexico does not see things that way. “There are very clear red lines that must be drawn from the start,” Economy Minister Ildefonso Guajardo told the Televisa network as he prepares to meet with US officials in Washington on Wednesday and Thursday.

Asked whether the Mexican delegation would walk away from the negotiating table if the wall and remittances are an issue, Guajardo said: “Absolutely.”  Guajardo and Foreign Minister Luis Videgaray will hold the face-to-face talks with the new US administration ahead of a meeting between Trump and President Enrique Pena Nieto on January 31.

In addition to the wall, Trump wants to renegotiate NAFTA with Mexico and Canada, warning last week that he would abandon the pact unless the United States gets “a fair deal.” The Mexican government has responded that it is willing to “modernize” the pact, which came into force in 1994 and represents $531 billion in annual bilateral trade between Mexico and the United States.

Some 80 percent of Mexico’s exports go to the United States, a clear indicator of the country’s dependence on the US market for its economic well-being.

But Guajardo warned on Tuesday that Mexico was also willing to use the nuclear option, and exit the 23-year-old agreement. “If we’re going for something that is less than what we have now, it doesn’t make sense to stay in,” Guajardo said.

That said, since Trump’s stated intention is ultimately dismantling Nafta, Mexico’s gambit does not sound like a very reasonable initial negotiating position.

Cited by AFP, Pena Nieto vowed on Monday that there would be “neither confrontation nor submission” in the negotiations, which will include trade, immigration and other issues. Pena Nieto also looked further north for help on Sunday as he spoke with Canadian Prime Minister Justin Trudeau by telephone to discuss ways to boost North American economic integration.

Luis de la Calle, a Mexican economist and one of the original NAFTA negotiators, said it is impossible to enter negotiations without being willing to walk away if necessary.

Trump “puts pressure in an almost extortionist manner… to get as many concessions as possible,” de la Calle told AFP. “But countries must be much smarter.”

It was not clear just how countries can be smarter if, at least in the case of Mexico, the US has enough trade leverage it could cripple 80% of Meixcan exports overnight.

Videgeray said that while the United States has “great interest” in talking about trade, Mexico wants to “talk about every issue.”

On a separate topic, Pena Nieto has called on the Trump administration to do more to stop the illegal flow of weapons from the United States into Mexico, which Mexican officials blame for fueling a brutal drug war. To this Trump has responded that Mexico has to do more to stop the illegal flow of drugs from Mexico to the United States.

Meanwhile, even as it faces tough talks with the United States, the Mexican government is setting its eyes on new trade pacts with other countries. After Trump withdrew the United States from the Trans-Pacific Partnership on Monday, Pena Nieto said his government would immediately seek to negotiate bilateral agreements with other TPP members to “diversify” his country’s trade relations.

Guajardo noted that Mexico has good relations with China and said Beijing was a “big concern” for the Trump administration. It is unclear whether China has an interest in expanding its Pacific trade partnership to include the US neighbor, and how the US would react to such an eventuality.

But Valeria Moy, director of the Mexico Como Vamos think tank, said Latin America’s second biggest economy cannot lose sight of the importance of the United States while it looks for deals elsewhere.

“If you have the world’s biggest market next door to you, that’s the market you need to take care of, period,” Moy said. “What we can diversity is who we buy from.” And since that is not the US, one can see why Trump is confident he has all the leverage ahead of this particular round of trade talks which will be closely followed by the rest of the world, as it sets the stage for similar bi- and multi-lateral talks with other nations around the globe all vying for the wallet of America’s overindebted consumer.

Finally, making matters worse for Mexico is that suddenly its “other” Nafta partner, Canada, appears to have left it hanging. In a separate Reuters report, Canada said it would focus on preserving its U.S. trade ties during talks to renegotiate NAFTA and may not be able to help Mexico avoid being targeted by the Trump administration, Canadian government sources say.

“We love our Mexican friends. But our national interests come first and the friendship comes second,” a source said on the sidelines of a cabinet retreat in Calgary, Alberta.

“The two are not mutually exclusive,” the source added. The comment was the starkest yet by Canadian officials, who are increasingly convinced Mexico will suffer the most damage from changes to the North American Free Trade Agreement.

The government dismisses the idea that Canada will formally abandon Mexico. Foreign Minister Chrystia Freeland said on Tuesday that Canada supported NAFTA as a trilateral agreement and noted that Trudeau had talked to Mexican President Enrique Pena Nieto over the weekend.

That said, the government sources note Mexico and Canada would appear to have little in common. Trump is unhappy about the large U.S. deficit with Mexico and has promised to punish firms with manufacturing bases there.

“Our negotiating positions are totally different. Mexico is being hung out of an skyscraper window by its feet,” said a second government source.

“Mexico is in a terrible, terrible position. We are not,” said another Canadian person involved on the trade file.

And just like that, Trump has managed to divide, and shortly conquer, his counterparties in yet another negotiation.

 

 

END

 

Trump signs executive orders restricting immigration from 7 Muslim countries and he is also ready to order the Mexican wall to be built

(courtesy zero hedge)

Trump To Sign Executive Orders Restricting Immigration, Order Mexican Border Wall

Having taken on the Keystone pipeline and America’s struggling manufacturing sector in a flurry of executive actions on Tuesday, moments ago Reuters reported, citing several congressional aides and immigration experts briefed on the matter, that on Wednesday Donald Trump will sign several executive orders restricting immigration. The president is expected to sign the orders at the Washington headquarters of the Department of Homeland Security, whose responsibilities include immigration and border security.

Trump’s orders are said to involve restricting access to the United States for refugees and some visa holders from seven mostly Muslim nations including Iraq, Iran, Libya, Somalia, Sudan, Syria and Yemen.

Trump’s restrictions on refugees are likely to include a multi-month ban on admissions from all countries until the State Department and the Department of Homeland Security can increase the intensity of the vetting process.

Additionally, as AP first reported and the NYT confirmed, among the executive orders will be Trump’s announcement for plans to build a wall along the U.S.-Mexico border, something Trump himself hinted at in an evening tweet.

Big day planned on NATIONAL SECURITY tomorrow. Among many other things, we will build the wall!

… an announcement which has sent the Mexican peso sliding in late trading.

During his presidential campaign, Trump initially proposed a temporary ban on Muslims entering the United States to protect Americans from jihadist attacks. Many Trump supporters decried Democratic President Barack Obama’s decision to increase the number of Syrian refugees admitted to the United States over fears that those fleeing the country’s civil war would carry out attacks. However, since then both Trump and his nominee for attorney general, Jeff Sessions, have said they would focus the restrictions on countries whose emigres could pose a threat rather than placing a ban on people who follow a specific religion.

As Reuters adds, to block entry from the designated countries, Trump is likely to instruct the U.S. State Department to stop issuing visas to people from those nations, according to sources familiar with the visa process. He could also instruct U.S. Customs and Border Protection to stop any current visa holders from those countries from entering the United States. White House spokesman Sean Spicer said on Tuesday that the State and Homeland Security departments would work on the vetting process once Trump’s nominee to head the State Department, Rex Tillerson, is installed.

Other measures may include directing all agencies to finish work on a biometric identification system for non-citizens entering and exiting the United States and a crackdown on immigrants fraudulently receiving government benefits, according to the congressional aides and immigration experts.

So to recap: in addition to restricting immigration from seven countries, the Mexican Economy Minister Ildefonso Guajardo will be meeting with US officials in Washington on Wednesday and Thursday to discuss the future of Nafta, as reported earlier, while roughly at the same time Trump will announce his plans to start building a wall, which Mexico has said is a “red line” to any potential deal.

The entertainment value of Trump’s Day 3 may be the highest yet.

 

end

 

Trump states that the construction of the wall will begin in a few months which will certainly curtail illegal immigrants and cut down on the important of illicit drugs. To counter Trump’s move, all Mexico has to do is not to export all of its silver to the USA. China will buy everything.

(courtesy zerohedge)

Trump Says Construction Of Wall With Mexico To Begin “In Months”

In a preview of his first one-on-one interview since being sworn in as the 45th president of the United States, President Trump told ABC that Mexico would be paying for the proposed border wall and that negotiations between the two nations would begin “relatively soon.”

Confirming what he has stated all along – and is likely included in his forthcoming executive orders, Trump remarks…

“Ultimately, it will come out of what’s happening with Mexico … and we will be in a form reimbursed by Mexico, which I’ve always said,” Trump said.

 

During the interview, which took place at the White House this morning, Trump said that Mexico would pay the U.S. back “100 percent.”

He confirmed that U.S. taxpayer dollars would be used to start the construction but said reimbursement would follow.

“All it is, is we’ll be reimbursed at a later date from whatever transaction we make from Mexico,” he said. “I’m just telling you there will be a payment. It will be in a form, perhaps a complicated form. What I’m doing is good for the United States. It’s also going to be good for Mexico. We want to have a very stable, very solid Mexico.”

When asked about the start of construction, Trump said it would happen in “months.”

“As soon as we can, as soon as we can physically do it,” he said. “I would say in months, yea. I would say in months — certainly planning is starting immediately.”

For now the peso is rallying..

 

end

 

Even though Caterpillar’s stock rises, it has posted its 49th consecutive month of declining sales.  This stock is the best Bellwether to give us a clue as to the global growth. It is non existent.

(courtesy zero hedge/Caterpillar)

Caterpillar Posts Record 49 Consecutive Months Of Declining Retail Sales

 

 

 

7. OIL ISSUES

The crooks are running the asylum: WTI rises in rise despite plunging demand and soaring inventories coupled with rising production..go figure..

(courtesy zero hedge)

WTI, RBOB Surge Despite Plunging Demand, Soaring Inventories, Rising Production

To sum up…

 

Following big recent builds and API’s report overnight, oil held below the $53 level before DOE data confirmed the builds in crude and gasoline were even larger than API. Cushing saw a smaller than expected draw and Distillates an unexpected build. This is the 5th weekly crude build in the last six weeks and crude production also rose once again to its highest since April 2016.

 

API

  • Crude +2.93mm (+2.5mm exp)
  • Cushing -145k (-500k exp)
  • Gasoline +4.85mm
  • Distillates +1.95mm

DOE

  • Crude  +2.84mm (+2.5mm exp)
  • Cushing  -284k (-400k exp)
  • Gasoline +5.796mm (+1mm exp)
  • Distillates +76k (-1mm exp)

3rd weekly build in crude in a row (5th in last 6 weeks) and 4th major build in gasoline stocks…

As Bloomberg notes, those gasoline numbers are probably the biggest negative from this week’s report.

The stockpile has risen for 9 of the last 11 weeks and inventories are building in an already over-supplied market. Gasoline days of supply has jumped to 28.8 versus 27.1 a week ago. That inventory overhang just isn’t going away.

Crude oil inventories are 132 million barrels, or 37%, above the 5-year average level for the time of year.

Production continues to trend higher with lagged rig counts

Meanwhile, gasoline stocks rose another 6.8 million barrels to 253 million, and now stand 3.4%, or 8.2mmbbls, higher than this time last year.

Demand fell

  • Gasoline Demand Fell 3.62% in Past Four Weeks
  • Jet Fuel Demand Fell 3.72% in Past Four Weeks
  • Residual Fuel Demand Rose 10.91% in Past Four Weeks
  • U.S. Gasoline Demand Fell 30,000 B/D Last Week
  • U.S. Distillate Demand Fell 450,000 B/D Last Week

Total U.S. imports of crude 7810k b/d vs 8378k b/d

  • PADD 1: 1330k vs 844k
  • PADD 2: 2428k vs 2741k
  • PADD 3: 2707k vs 3355k
  • PADD 4: 407k vs 352k
  • PADD 5: 936k vs 1086k

Imports into U.S. by country in b/d:

  • Canada imports 3198k vs 3562k
  • Saudi Arabia imports 1178k vs 1363k
  • Venezuela imports 527k vs 618k
  • Mexico imports 402k vs 912k; down 56% w/w
  • Colombia imports 308k vs 169k
  • Ecuador imports 272k vs 266k
  • Nigeria imports 228k vs 148k
  • Kuwait imports 64k vs 47k
  • Iraq imports 617k vs 651k
  • Angola imports 91k vs 22k

* * *

The reaction was a kneejerk to the lows of the day (with stocks at the highs) and then the standard machine-driven ramp…

 

But Gasoline pricesd are plunging…total gasoline demand fell to the lowest level since February 2014.

8. EMERGING MARKETS

end

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

Euro/USA   1.0766 UP .0038/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 FALLING RATE

USA/JAPAN YEN 113.17 DOWN 0.690(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 1.2597 UP .0066 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT)

USA/CAN 1.3098 DOWN .0059 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 38 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0766; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ AND TODAY MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 7.00 or 0.22%     / Hang Sang  CLOSED UP 99.26 POINTS OR 0.43%  /AUSTRALIA  CLOSED UP 0.35%  / EUROPEAN BOURSES ALL IN THE GREEN 

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED UP 269.51 OR 1.45% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 99.26 OR 0.43%  Shanghai CLOSED UP 7.00 POINTS OR 0.22%   / Australia BOURSE CLOSED UP 0.35% /Nikkei (Japan)CLOSED UP 269.51 OR 1.45%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1207.10

silver:$17.00

Early WEDNESDAY morning USA 10 year bond yield: 2.471% !!! UP 1/4 IN POINTS from TUESDAY 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  3.055, UP 1 IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 100.08 DOWN 24 CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.985% UP 13  in basis point yield from TUESDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.074%  UP 2  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.54%  UP 3  IN basis point yield from  TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.111  UP 7 POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 57 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.465% UP 10 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.0730 up .0001 (Euro UP 1/10 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.78 DOWN: 0.079(Yen UP 8 basis points/ 

Great Britain/USA 1.2607 UP 0.0076( POUND UP 76 basis points)

USA/Canada 1.30700 DOWN 0.0085(Canadian dollar UP 85 basis points AS OIL ROSE TO $53.21

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This afternoon, the Euro was UP by 1/10 basis points to trade at 1.0730

The Yen ROSE to 113.78 for a GAIN of 8 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 ROSE 76  basis points, trading at 1.2607/

The Canadian dollar ROSE  by 85 basis points to 1.3070,  WITH WTI OIL RISING TO :  $53.21

The USA/Yuan closed at 6.8811
the 10 yr Japanese bond yield closed at +.074% UP 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 7 IN basis points from TUESDAY at 2.519% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.10 UP 7  in basis points on the day /

Your closing USA dollar index, 100.07 DOWN 20 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 WEDNESDAY: 1:00 PM EST

London:  CLOSED UP 14.09 OR 0.20% 
German Dax :CLOSED UP 211.11 POINTS OR 1.82%
Paris Cac  CLOSED UP 47.64 OR 0.99%
Spain IBEX CLOSED UP 162.10 POINTS OR 1.73%
Italian MIB: CLOSED UP 82 POINTS OR 0.42%

The Dow closed UP 155.80 OR .78%

NASDAQ WAS closed UP 55.38 POINTS OR .99%  4.00 PM EST
WTI Oil price;  53.21 at 1:00 pm; 

Brent Oil: 55.34  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.31 ROUBLES/DOLLAR  (DOWN 4/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD RISES TO +0.465%  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:$52.94

BRENT: $55.34

USA 10 YR BOND YIELD: 2.515%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.101%

EURO/USA DOLLAR CROSS:  1.0747 up .0019 

USA/JAPANESE YEN:113.29  DOWN 0.570

USA DOLLAR INDEX: 99.93  DOWN 34  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2634 : UP 102   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.465%

END

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

TRADING IN GRAPH FORM

Dow Hits 20k On Best Day In 7 Weeks As Investors Dump Dollars, Bonds, & Protection

 

In case you missed it, The Dow hit 20,000 today…

As we noted yesterday, the last month has seen the lowest trading range in US history…

 

And VIX dropped intraday to its 2nd lowest level in 10 years…

As Salil Mehta details, this level of VIX was last seen in 2014, 937 calendar days ago; and before that in 2007, 3624 days ago! This is the bottom 0.74% of all of VIX history.

Notably VIX died for 45 minutes this morning as The Dow surged to record highs… VIX 10.51 was the lows of the day…

 

Boeing, Goldman Sachs, and IBM were responsible for half The Dow’s gains today…

 

CAT did well but look at this fucking chart!!!

 

Today’s open saw yet another massive short squeeze…

 

Since the pre-Trump election lows, Small Caps are the biggest winners (up almost 19%) with S&P and Nasdaq up over 10% (both at record highs)…

 

Year-to-date, gold remains the winner but bonds went red today…

 

The S&P 500 neared Goldman’s year-end target of 2300 (though we note they said it will tage 2400 before falling in H2)…

 

Quite a significant decoupling from the dollar…

 

Ironically, as Trump unleashed his border security executive orders, the peso soared against the dollar…

 

AUD weakened modestly today but the majors mostly rallied against the greenback…

 

Broadly speaking, the Bloomberg Dollar Index was hammered lower today, testing ECB lows…

 

The better known Dollar Index closed back below 100…

 

Another ugly day for bonds, took the entire complex into the red for 2017…

 

USD weakness didn’t help crude, which shrugged off a machine ramp after crappy data to end back below $53…

 

Gold ended back below $1200…

 

Bonus Chart: Trumpian hope is high…

 

end

 

Capital One is a huge investor in the taxi cab business by loaning money against the value of Cab Medallions.  With the rise of UBER , it was in the cards that this industry would be on the verge of collapse.  Last night Capital ONE’S non performing loan rate soared to over 50% which definitely signals the collapse of the traditional taxi business.

(courtesy zero hedge)

Cab Industry On Verge Of Collapse? Capital One’s Taxi NPL Rate Soars Above 50%

(courtesy zero hedge)

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