Jan 26/Gold and silver whacked again as comex options expire today/OTC options expire on Tuesday Jan 31/French minister states that Prime Minister May cannot negotiate with Trump: they must be frightened!/War of words between the Mexican President and Trump/ Trump: the wall will be built and paid for by Mexico/The entire senior management of USA State Dept resigns this morning!!

Gold at (1:30 am est) $1189.50 DOWN $7.80

silver  at $16.81:  down 13 cents

Access market prices:

Gold: $1189.00

Silver: $16.81

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:

THURSDAY gold fix Shanghai

Shanghai FIRST morning fix Jan 26/17 (10:15 pm est last night): $  1203.88

NY ACCESS PRICE: $1199.00 (AT THE EXACT SAME TIME)/premium $3.88

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1212.80

NY ACCESS PRICE: $1196.25 (AT THE EXACT SAME TIME/2:15 am)

  THE SPREAD 2ND FIX TODAY!!:  $16.55

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London FIRST Fix: Jan 26/2017: 5:30 am est:  $1191.55   (NY: same time:  $1192.95   (5:30AM)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Second fix Jan 26.2017: 10 am est:  $1189.20 (NY same time: $1189.20  (10 AM)

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

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

end

I wrote on  Tuesday that we have entered options expiry week and the crooks always whack gold/silver!  Right on cue the crooks whacked gold and silver again today to keep the price of gold below $1190 in gold and $16.80 in silver.  All call options taken at those strike prices became worthless today on the comex.  Now we enter the OTC options expiry based on London’s LBMA OTC prices.  They expire Jan 31.2017;

 

 

For comex gold: 

NOTICES FILINGS FOR JANUARY CONTRACT MONTH:  3 NOTICE(S) FOR 300 OZ.  TOTAL NOTICES SO FAR: 1207 FOR 120,700 OZ    (3.7542 TONNES)

For silver:

 NOTICES FOR JANUARY CONTRACT MONTH FOR SILVER: 0 NOTICE(s) FOR nil  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 FELL by A TINY 306   contracts DOWN to 177,295 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .887 BILLION TO BE EXACT or 126% of annual global silver production (ex Russia & ex China).

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

In gold, the total comex gold FELL BY 11,882 contracts WITH THE HUGE FALL IN  THE PRICE GOLD ($13.00 with YESTERDAY’S trading ).The total gold OI stands at 470,492 contracts.

we had 3 notice(s) filed upon for 300 oz of gold.

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

GLD:

We had no  changes in tonnes of gold at the GLD

Inventory rests tonight: 799.07 tonnes

.

SLV

we had a huge changes in silver into the SLV: a withdrawal of 3.369 million oz from its inventory/

THE SLV Inventory rests at: 335.039 million oz

.

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

1. Today, we had the open interest in silver FALL by 306 contracts DOWN to 177,295 AS SILVER WAS DOWN 24 CENTS with YESTERDAY’S trading. The gold open interest FELL by 11,882 contracts DOWN to 470,492  WITH THE FALL IN THE PRICE OF GOLD OF $13.00  (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  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 9.61 POINTS OR 0.31%/ /Hang Sang closed UP 325.05 OR 1.41%. The Nikkei closed UP 344.89 POINTS OR 1.81% /Australia’s all ordinaires  CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed DOWN at 6.8840/Oil ROSE to 53.11 dollars per barrel for WTI and 55.49 for Brent. Stocks in Europe ALL MIXED. Offshore yuan trades  6.8417 yuan to the dollar vs 6.8840  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 HIGHER DOLLAR 

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

b) RPORT ON JAPAN

 none today

c) REPORT ON CHINA

4 EUROPEAN AFFAIRS

i)ENGLAND

Believe it or not but England was the fastest growing developed economy in 2016:

( zero hedge)

ii)THE EU

The expected new ambassador to the EU states that we should short the Euro as a collapse may come in the next 12 to 18 months.  He is probably correct

( Mish Shedlock/Mishtalk)

iii)Holland

The Dutch regulator posted George Soros’ short position on Dutch Bank ING. His position was only .25% of the total outstanding and should not have been published. Down goes ING bank shares

( zero hedge)

iv)France

 

The French Finance Minister Sapin seems scared as he states that Prime Minister May is not in a position to negotiate with Donald Trump. She will prove him wrong!

( zerohedge)

v)Italy
Italian bond yields rise as well as credit default risk
(courtesy zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

i)Kyle Bass is one of the smartest guys on the planet and one must pay attention to what he states.

Three major points from his interview last night:

  1. Trumps new policies will add gasoline to an already smoldering China as they must “restructure”
  2. Trump’s new policies will be paid for with the border tax
  3. Trump’s new policies means a pro growth strategy and thus bond yields will rise both in Germany and the USA.  He thus states that the trade of the century is to short German bunds

( zero hedge)

ii)CANADA/MEXICO

Canadian official states that it will be Mexico that will be hurt and not Canada. Also remember that the uSA will need Canadian water

( zero hedge)

iii)MEXICO

a)Mr Nieto, Mexico’s President states that Mexico will not pay for any wall. Trump says that they will pay. Mexico has silver which the USA desperately needs to continue with the precious metal fraud.  China will buy all of Mexico’s silver.

let us see how this plays out..

( zero hedge)

b)Trump threatens to cancel the Nieto Nafta meeting if Mexico is unwilling to pay for the wall.  The Mexican peso gets clobbered and Canada is not offering any help to Mexico. Nieto is in a bind:  he may have to pay for the wall

( zero hedge)

 

c)NAFTA looks dead as Nieto snubs Trump and cancels his USA meeting

down goes the Peso
( zero hedge)
d)Sean Spicer now reveals how Mexico will pay for the Wall: it will be by imposing the 20% tax on all imports:

( zero hedge)

7. OIL ISSUES

i)Goldman Sachs brought out a great commentary on what will happen with a border tax with respect to oil  Now Nick Cunningham of Oil Price.com agrees with their assessment:  oil production will increase in the USA as temporarily USA production will have a greater value than imported oil.  The increased production because of no taxes would fuel oversupply in the world’s market which will then bring down prices globally:

( Nick Cunningham/Oil Price.com)

ii)Transcanada Pipelines applies for Keystone xL pipeline presidential permit:

( zero hedge)

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)A big Russian ally will probably win the huge Sukhoi gold mine located in Siberia.  Putin’s close ally has been sanctioned by the west:

( Bloomberg)

ii)John Embry states that the huge amount of derivatives, high frequency trading etc that dominates the world’s financial system will implode and that will send Armageddon upon us.(Kingworldnews/John Embry)

iii)GATA Chairman Bill Murphy is interviewed by Chris Mullen. Murphy describes the smashing of gold always on options expiry

(courtesy zero hedge)

10.USA STORIES

i)Initial and continuing claims jump with today’s reading of the jobless. Yet the Fed’s national activity index continues to rise’

( zero hedge)

ii)Strange data:

advance wholesale inventories surge by 1% on a month over month thanks to a huge boost to auto inventories. This should technically give a boost to 4th quarter GDP However we also witnessed December auto inventories decline. Which is correct?

( zero hedge)

iii)The higher mortgage rates coupled with the plunging mortgage applications certainly took the bite out of new home sales:  it crashed in December by a very large .7%!

( zero hedge)

iv)”Soft data” on USA services PMI indicates a rebound.  It was mainly the “hope” side of things which caused the survey to soar

( zero hedge)

v)Trump slams the ungrateful traitor Manning who should never been have released from prison who sold secrets of USA to Wikileaks and was charged with treason.  You can just imagine what will happen will the USA finds out that its gold has been compromised and treason charges to all of those who have engaged in that conduct

( zero hedge)

vi)Mitch McConnell states that Congress is moving ahead with it’s 12- 15 billion wall connecting Mexico with the USA.  It is amazing how the cost escalates:

( zero hedge)

vii)Oh OH !! this came out of left field:  the entire senior management team at the State Department all resigned

( zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 11,882 CONTRACTS DOWN to an OI level of 470,492 WITH THE FALL IN THE  PRICE OF GOLD ( $13.00 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 GAIN of 6  contract(s) UP to 60.  We had 1 notice(s) filed YESTERDAY so we GAINED 7 contract(s) or AN ADDITIONAL 700 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 26,980 contracts DOWN to 130,004.(feb  2016: 114,200 contracts). March had a GAIN of 315 contracts as it’s OI is now 1273. 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 3 notice(s) filed upon today for 300 oz

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And now for the wild silver comex results.  Total silver OI FELL by 306 contracts FROM  177,601 DOWN TO 177,295 AS the price of silver FELL IN PRICE TO THE TUNE OF 24 CENTS 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 ROSE by 4 contract(s) RISING TO  34. We had 1 notice(s) filed on yesterday so we  gained 5 silver contracts or an additional 25,000 oz will stand  in this delivery month of January. The next non active month of February saw the OI RISE by 0 contract(s) REMAINING AT  229.

The next big active delivery month is March and here the OI FELL by 1413 contracts DOWN to 133,038 contracts.

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

VOLUMES: for the gold comex

Today the estimated volume was 306,840  contracts which is excellent.

Yesterday’s confirmed volume was 398,511 contracts  which is huge

volumes on gold are getting higher!

Initial standings for january
 Jan 26/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 10,480.900 OZ
Scotia
manfra
326 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 32,150.000  oz
JPMorgan
1000 kilobars
No of oz served (contracts) today
 
3 notice(s)
300 oz
No of oz to be served (notices)
57 contracts
5700 oz
Total monthly oz gold served (contracts) so far this month
1207 notices
120700 oz
3.7542 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     4,821,194.6 oz
Today we HAD 3 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 1  customer deposit(s):
 i) into JPMorgan:  32,150.0000 oz  (1000 kilobars)
total customer deposits; 32,150.000 oz
We had 2 customer withdrawal(s)
 i) Out of Scotia:  10,030.800 oz
(312 kilobars)
ii) Out of Manfra:  450.10 oz (14 kilobars)
total customer withdrawal: 10,480.900 oz
We had 2  adjustment(s)
i) Out of Brinks;  7,386.370 oz was adjusted out of the dealer account and this landed into the customer account of Brinks
ii) Out of JPMorgan:  4662.073 oz was adjusted out of their dealer account and this landed into their customer account
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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 3 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 (1207) x 100 oz or 120,700 oz, to which we add the difference between the open interest for the front month of JANUARY (60 contracts) minus the number of notices served upon today (3) x 100 oz per contract equals 126,400 oz, the number of ounces standing in this non  active month of JANUARY.
 
Thus the INITIAL standings for gold for the JANUARY contract month:
No of notices served so far (1207) x 100 oz  or ounces + {OI for the front month (60) minus the number of  notices served upon today (3) x 100 oz which equals 126,400 oz standing in this non active delivery month of JANUARY  (3.9315 tonnes)
we gained 700 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/     3.9315 tonnes
total for the 13 months;  226.349 tonnes
average 17.411 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
Total dealer inventory 1,445,951.998 or 44.975 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,993,027.186 or 279.72 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.72 tonnes for a  loss of 23  tonnes over that period.  Since August 8/2016 we have lost 74 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 26. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 306,439.950 0z
Scotia
Brinks
Delaware
Deposits to the Dealer Inventory
 nil
Deposits to the Customer Inventory 
302,676.400 oz
CNT
No of oz served today (contracts)
0 CONTRACT(S)
(nil OZ)
No of oz to be served (notices)
34 contracts
(170,000  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  20,220,764.0 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 3 customer withdrawal(s):
i) Out of Scotia:  302,463.550 oz
ii) Out of Delaware: 971.200 oz
iii) Out of Brinks: 3005.200
TOTAL CUSTOMER WITHDRAWALS: 306,430.95 oz
 we had 1 customer deposit(s):
i) Into CNT:  302,676.400 oz
i) Into JPMorgan:  zero  oz**
deposits into JPMorgan have now stopped.
total customer deposits;  302,676.400   oz
 
 we had 0  adjustment(s)
The total number of notices filed today for the JANUARY. contract month is represented by 0 contract(s) for nil 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 (34) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JANUARY contract month:  711(notices served so far)x 5000 oz +(34) OI for front month of JAN. ) -number of notices served upon today (0)x 5000 oz  equals  3,725,000 oz  of silver standing for the JAN contract month. This is  STILL huge for a non active delivery month in silver. We  gained 5 contract(s) or an additional 25,000 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 53.193 which is very good
YESTERDAY’S  confirmed volume was 67,985 contracts  which is very good.
 
Total dealer silver:  29.343 million (close to record low inventory  
Total number of dealer and customer silver:   181.529 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 26/no changes at the GLD/Inventory rests at 799.07 tonnes/

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 tonnes

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 26/2017/ Inventory rests tonight at 799.07 tonnes
*IN LAST 77 TRADING DAYS: 150.74 TONNES REMOVED FROM THE GLD
*LAST 24 TRADING DAYS: 25.47 TONNES HAVE LEFT

end

Now the SLV Inventory
Jan 26./ a huge withdrawal of 2.369 million oz from the SLV/Inventory rests at 335.039 million oz
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 26.2017: Inventory 335.039  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.4 percent to NAV usa funds and Negative 7.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.8%
Percentage of fund in silver:39.0%
cash .+0.2%( jan 26/2017) 
.
2. Sprott silver fund (PSLV): Premium FALLS to +.09%!!!! NAV (Jan 26/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO – 0.38% to NAV  ( Jan 26/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.09% /Sprott physical gold trust is back into NEGATIVE territory at -0.38%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE

This is huge:  Switzerland has just reported a massive 158 tonnes of gold exports to China a gain of 416% from last months 30 tonnes.  Switzerland’s total exports rose by 96 tonnes to 287 tonnes. China was the major recipient for gold exports. England shipped out 148 tonnes to Switzerland.  The data seems to suggest that almost all of the England’s exporting of gold arrived in China vs Switzerland (refining into kilobars)

Switzerland’s Gold Exports To China Surge To 158 Tons In December

Switzerland’s Gold Exports To China Surge To 158 Tonnes In December

Switzerland’s gold bullion exports to China saw a huge jump in December, climbing to 158 tons versus a much lower 30.6 tons in November –  a jump of 416%.

According to Eddie van der Walt as reported on the Bloomberg terminal this morning, total Swiss gold exports surged to 287.6 tons in December (valued at CHF 10.8b) according to data on the website of the Swiss Federal Customs Administration.

Switzerland’s gold exports had already been very robust in November coming in at 191.4 tons. This means that total Swiss gold exports rose by over 50% from November to December due to global and particularly Chinese demand. Another indication of this global gold demand is that Swiss gold imports increased to 323.6 tons vs 220.5 tons – likely due to refinery demand and investors opting to store gold in Switzerland.

There was increased demand from China ahead of the Chinese New Year and due to concerns about the continuing devaluation of the yuan. This accounts for much of the rise but uncertainty regarding the election of President Trump may also have contributed to the strong rise in Swiss gold exports.

Gold exports to China in December “were the highest since at least January 2014” according to Bloomberg. Most of the exports to China are in the form of investment grade gold bars in the one kilogramme gold bar format which is used by Chinese investors, institutions, exchange traded funds (ETF) and indeed the Shanghai Gold Exchange.

Gold “exports to India dropped to 20.6 tons vs 63.2 tons in November and shipments to Hong Kong fell to 38 tons vs 45.8 tons.”

Gold bullion imports from the U.K. jumped to 148 tons vs 48.4 tons meaning that Swiss gold imports from the U.K. “were the highest since December 2015.” The London gold market continues to see outflows as gold continues to move from the London gold market to strong hands in China via the Swiss refineries. There are also flows to retail and high net worth investors including companies and family offices choosing to store gold in Switzerland and other safer jurisdictions.

end
A big Russian ally will probably win the huge Sukhoi gold mine located in Siberia.  Putin’s close ally has been sanctioned by the west:
(courtesy Bloomberg)

Putin’s sanctioned ally may win mine with a quarter of Russian gold resources

Section:

By Yuliya Fedorinova
Bloomberg News
Wednesday, January 25, 2017

Russia’s auction of its giant Sukhoi Log gold field this week pits a long-time ally of President Vladimir Putin against a rival bidder with little background in mining.

The resource in the isolated Irkutsk region of Siberia is one of the world’s largest untapped gold fields, making up a quarter of Russian reserves. It has held an allure for miners since Soviet geologists surveyed it in the 1970s. Yet BCS Global Markets strategist Kirill Chuyko and Societe Generale SA analyst Sergey Donskoy say one bidder is an overwhelming favorite to win the sale.

Their bets are on state-owned Rostec Corp., run by Sergey Chemezov, 64, whose relationship with Putin dates to the 1980s. The company has tied up with Russia’s biggest miner of the metal, Polyus PJSC. Competition comes from a grouping of state bank VTB and businessman Ibrahim Palankoev. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-01-25/putin-s-sanctioned-al…

END

 

John Embry states that the huge amount of derivatives, high frequency trading etc that dominates the world’s financial system will implode and that will send Armageddon upon us.

(Kingworldnews/John Embry)


Excessive leverage promises disaster for financial system, Embry says

Section:

7:57p ET Wednesday, January 25, 2017

Dear Friend of GATA and Gold:

The world financial system is heading toward disaster because of excessive leverage, Sprott Asset Management’s John Embry tells King World News today.

Embry says: “With the enormous increase in what I call ‘financial innovation’ — high-frequency trading, algorithms, staggering quantities of derivatives, etc. — the amount of leverage that has been introduced into the global financial system in the last couple of decades ensures a horrific ending.”

Embry’s interview is excerpted at KWN here:

http://kingworldnews.com/a-horrific-ending-as-the-world-moves-one-day-cl…

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

END

 

GATA Chairman Bill Murphy is interviewed by Chris Mullen. Murphy describes the smashing of gold always on options expiry

(courtesy zero hedge)

 

GATA chairman notes smashing of gold on eve of options expiration

Section:

8:14p ET Wednesday, January 25, 2017

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy, interviewed by GoldSeek Radio’s Chris Mullen, notes that the gold price today was driven below $1,200 on the eve of futures option expiration, a maneuver undertaken for years by the “gold cartel” without comment from mainstream financial market analysts. The inauguration of a new president, Murphy adds, has changed nothing about the rigging of the monetary metals market, but he senses that this year still will be a good one for the metals. Murphy’s interview is 12 minutes long and can be heard at GoldSeek Radio here:

http://radio.goldseek.com/nuggets/murphy01.25.17.mp3

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

END

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

 
 

1 Chinese yuan vs USA dollar/yuan DOWN to 6.8840(SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/ CHINA/OFFSHORE YUAN NARROWS COMPLETELY    TO 6.8417 / Shanghai bourse CLOSED UP 9.61 POINTS OR 0.31%   / HANG SANG CLOSED UP 325.05 PTS OR 1.41% 

2. Nikkei closed UP 344.89 POINTS OR 1.81%   /USA: YEN RISES TO 114.41

3. Europe stocks opened ALL MIXED      ( /USA dollar index RISES TO  100.28/Euro DOWN to 1.0702

3b Japan 10 year bond yield: RISES TO    +.091%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.41/ 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::  53.11  and Brent: 55.49

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.470%/Italian 10 yr bond yield UP  to 2.19%    

3j Greek 10 year bond yield FALLS to  : 6.88%   

3k Gold at $1187.80/silver $16.77(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 1 AND 1/100 in  roubles/dollar) 60.55-

3m oil into the 53 dollar handle for WTI and 55 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT a 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 114.41 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  0.9989 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0694 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 2.547% early this morning. Thirty year rate  at 3.121% /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

Global Stock Index On Verge Of All-Time High Propelled By “Dow 20,000” Euphoria

With global stock markets basking in the afterglow of Dow crossing 20,000 for the first time, on Thursday they propelled higher in sympathy with the US, as Asia and Europe are trading solidly in the green, as is the dollar which rebounded strongly off a 5 week low. Copper touched the highest price since November after reports of lower production. Global government bonds extended declines as France’s 10-year yield breached 1% for the first time in more than a year. Gold declined.

The Dow had been flirting with 20,000 points for weeks so it brought widespread cheer when it broke through. It only topped 19,000 in November and this was the second-shortest time on record for the index to jump 1,000 points. The next big milestone on deck is the S&P 2,300 – also the year end target for roughly half of Wall Street strategists  – which should be taken out shortly after the open.

As noted yesterday, the ‘Trump trade’, based on vague hopes of U.S. stimulus reflating growth, is back on – egged on by some impressive corporate earnings, higher commodity prices and signals that global growth is finally finding some traction. The MSCI’s 46-country All World index was within touching distance of its lifetime high as European stocks rose 0.5% to their highest since Dec. 2015, and within 1.5% of their all time highs, completing a global loop after Asia’s main bourses also saw a bumper session.

As Bloomberg notes, record highs in the world’s biggest equity indexes is fueling optimism that renewed growth in the U.S. will filter through into other major global economies, creating demand for commodities exports and driving investors out of fixed-income assets and gold. The rally may meet resistance from economic indicators that have reached the upper reaches of historical ranges, according to Deutsche Bank AG strategists.

“The surge in growth momentum that has been a key driver of the sharp moves in global equity and rates markets is likely to fade over the coming months,” according to a note published by strategists led by London-based Sebastian Raedler Wednesday.

Others were more optimistic: “The reflation trades are being driven by two main things,” said Neil Williams, chief economist at fund manager Hermes. “Countries more willing to open the fiscal box and we are awaiting Mr Trump’s long-awaited tax cuts in mid-year. And second is the prospect of ultra-loose monetary policy.”

A curious outlier was the dollar which as first pointed out here, has decoupled from the Trump Trade, and was wallowing near a seven-week low after losing its momentum this year and taking a dislike to Trump’s more controversial plans such as building a wall on the border with Mexico. However, the dollar index clawed back from its overnight lows to stand flat on the day.

“The problem that the greenback is having right now is two- fold – first Trump has been talking down the currency and second, his policies make foreign investors nervous,” wrote Kathy Lien, managing director of FX strategy for BK Asset Management. Sterling hit a six-week high after solid GDP data but then turned jumpy.

There were no such concerns in bond markets. Ten-year U.S. Treasury yields were back above 2.5% to their highest of 2017 so far and the equivalent German and French yields jumped to their highest levels in over a year.

In commodities, crude oil prices also bounced as global sentiment lifted and the dollar weakened, which helps non-U.S. buyers of dollar-denominated raw materials. WTI was up 0.8 percent at $53.18 a barrel after losing the same amount the previous day. Brent added 0.8 percent to $55.53 a barrel, while cooper hit a two month high as a strike loomed at the world’s biggest mine in Chile.

Europe’s cross-country European STOXX 600 index was trading 0.6% higher by 0945 GMT at its highest since December 2015. Germany’s DAX hit its highest since May 2015 and London’s FTSE was near an all-time record. Milan also showed little sign of nerves after Italy’s constitutional court on Wednesday opened the way for fresh elections in the country this year, potentially in the summer. Drug and healthcare companies lead the 19 industry groups of the Stoxx 600, with 40 of 42 members higher. Swiss drugmaker Actelion Ltd. jumped as much as 22% percent after agreeing to a $30 billion takeover by Johnson & Johnson.

Asian shares had a good day too. Japan’s Nikkei brushed aside a stronger yen to rise 1.7 percent, Hong Kong’s Hang Seng .HSI climbed 1.3 percent and Shanghai .SSEC edged up ahead of a week-long Lunar New Year holiday. “Today’s excitement mainly comes from strong U.S. stocks overnight, but people are also positive about Japanese companies’ earnings, especially machinery manufacturers,” said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.

S&P 500 futures were up 0.1 percent after the underlying index jumped 0.8 percent to 20,068.51 on Wednesday.

* * *

Bulletin headline summary

  • With a busy morning of stock-specific news, equities open higher following on from US and Asia as markets revel in the ongoing “Trump-factor”
  • The big data release this morning was in the UK as the Q4 GDP numbers saw a higher than expected 0.6% rise vs consensus +0.5%; although failed to lift GBP/USD
  • Looking ahead, highlights include UK GDP, US Weekly Jobs Data, US Services PMI, ECB’s Coeure and a US 7yr Note Auction

Market Snapshot

  • S&P 500 futures up 0.1% to 2296
  • Stoxx 600 up 0.6% to 369
  • FTSE 100 up 0.2% to 7179
  • DAX up 0.6% to 11874
  • German 10Yr yield up 3bps to 0.49%
  • Italian 10Yr yield up 9bps to 2.2%
  • Spanish 10Yr yield up 5bps to 1.59%
  • S&P GSCI Index up less than 0.1% to 398.3
  • MSCI Asia Pacific up 0.7% to 142
  • US 10-yr yield up 3bps to 2.54%
  • Dollar Index up 0.22% to 100.25
  • WTI Crude futures up less than 0.1% to $52.80
  • Brent Futures up 0.2% to $55.21
  • Gold spot down 0.6% to $1,193
  • Silver spot down 0.8% to $16.86

Top News

  • J&J Seals $30 Billion Actelion Deal in Push for Rare Disease: Actelion shareholders to get $280/share in cash in deal
  • Dutch Regulator Accidentally Posted Soros’s Short Positions: ‘Human error’ led to publishing on watchdog’s website
  • Credit Suisse Said to Consider Dublin Expansion as Brexit Nears: Ireland is courting lenders in race to win new finance jobs
  • Nordea CEO Says Trump, Brexit Bigger Threats Than Negative Rates: CEO says there’s no need to adjust current dividend policy
  • United Rentals to Acquire Competitor NES in $965 Million Deal
  • Sands Macau’s Newest Casino Is a Hit, Hurting Its Other Resorts
  • EBay Revives Investor Faith With Upbeat 2017 Forecast
  • STMicro Predicts Good Momentum, to Raise Investment in 2017
  • RBS to Take $3.8 Billion Charge Tied to U.S. Mortgage Probe
  • Mattel Crashes as Holiday Stumble Raises Turnaround Doubts
  • Unilever Sees Slow Start to Year After Sales Miss Estimates
  • Toshiba Said to Plan Selling Chip Unit Stake to Multiple Buyers
  • China Said to Order Banks to Curb New Loans in First Quarter
  • Verizon Offers $29 Billion Bond Swap to Tackle Looming Debt Wall
  • Ericsson Sales Exceed Estimates in Relief for New CEO Ekholm
  • KKR Said to Snag Goldman’s Role in UFC Loan After Fed Scolding
  • U.K. Economy Dismisses Brexit Threat as Growth Stays Strong
  • Jack Ma’s Ant Financial Close to Buying MoneyGram, WSJ Says
  • Conoco, Alaska State Gas Co. in Talks on LNG Plant Sale: Platts
  • LG Display Excluded From Suppliers for Apple iPhone 8: Maeil
  • FelCor Lodging Said to Consider Sale of Company, DJ Says
  • China Says U.S. Concerns on Its Semiconductors Overblown: WSJ

Asia equity markets rose, blostering positive global risk sentiment after another record US trading day where all 3 major indices extended on all-time highs and the DJIA finally broke above 20,000. This buoyed Nikkei 225 (+1.8%) which led the region on firm gains in financials after similar outperformance of the sector during US hours, despite trade being noticeably quieter with Australia, India and Taiwan all closed due to public holidays. Hang Sang (+1.4%) and Shanghai Comp. (+0.3%) also conformed to the widespread upbeat tone, although the mainland bourse slightly lagged after the PBoC conducted a CNY 250b1n weekly net drain, while several blue chips issued profit warnings and Chinese Industrial Profits also slowed. 10yr JGBs traded lower as widespread heightened risk appetite spurred outflows from safe havens, while a better than previously received enhanced liquidity auction for 10yr, 20yr and 30yr JGBs only provided mild reprieve.

Top Asian News

  • Deutsche Bank, Korea Exchange to Cancel Samsung Fat-Finger Trade: Trader accidentally posted order for more than 1.5m shares
  • China Sees Gray Generation as Quarter of Population by 2030: Shrinking labor force would create a drag on consumption
  • Barclays Veteran Andy Jones to Step Down as Asia-Pacific Chief

In Europe, with a busy morning of stock-specific news, equities open higher following on from US and Asia as markets revel in the ongoing “Trump-factor.” European earnings are beginning to pick up and subsequently dictating a bulk of the stock-specific moves. However, the main story of the session so far has the be healthcare giant JNJ striking a USD 30bIn deal with Actelion. Subsequently shares in the Co. rose 20% making it top of the Stoxx 600 leader board by some distance. Elsewhere in equities, Diageo (DGE LN) shares are up 5% after the Co. reported a 21% rise in its EPS and Organic op profit grew 4% inline with top end of guidance. In fixed income markets yields are rising with both French and German 10yr yields rising to recent highs. Today’s CTZ and BTPei taps did little to sway Italian prices. However, but after the Italian constitutional court ruled on a voting system to be illegal we may see some scope for more volatility in the Italian spreads. Stateside, 1800GMT sees the US 7yr note auction.

Top European News

  • U.K. Brexit Boom Still Sees Economy Plagued by Old Problems: Services were sole contributor to growth in fourth quarter
  • Fiat Chrysler Sees 2017 Debt Almost Halving Amid Cash Push:Carmaker ‘confirms conviction’ it can reach 2018 goals
  • Unilever Falls as Slow Start Casts Pall Over Consumer Sector

In currencies, the Bloomberg Dollar Spot Index was up 0.3 percent, though still headed for a fifth straight weekly decline, the longest stretch since May 2015. The pound weakened 0.2 percent to $1.261 after earlier climbing as much as 0.3 percent after a data release showed the U.K. economy grew faster than economists forecast in the fourth quarter. The euro slipped 0.3 percent to $1.0721.

In commodities, gold fell 0.6 percent to $1,193.24 an ounce after dropping 1.4 percent over the previous two sessions as optimism around corporate earnings fueled risk appetite. West Texas Intermediate crude rose 0.3 percent to $52.91, paring Wednesday’s declines as investors weighed output cuts from OPEC and other producing nations against expanding U.S. crude stockpiles. Copper for delivery in three months was little changed on the London Metal Exchange after climbing to the highest since Nov. 28 at $6,045.50 a ton after miner Anglo American said output fell. Iron ore continued its rally for a third day, with futures climbing 1.1 percent.

Turning to the day ahead, we have a busier day over in the US with preliminary wholesale inventories data (+0.1% expected; +1.0% previous) and the Chicago Fed National Activity Index reading (-0.05 expected; -0.27 previous) for December due, followed by weekly jobless claims data and the flash PMIs for January (services: 54.4 expected vs. 53.9 previous; composite: 54.1 previous). We close out the day with readings from the Conference Board leading index for December (+0.5% expected; 0.0% previous) and Kansas Fed manufacturing survey for January (8 expected; 11 previous).

DB’s Jim Reid concludes the overnight wrap

So where were you when you heard the news that the Dow had climbed above 20,000 for the first time? Well i was at my desk taking extra strong painkillers leftover from my various knee operations in an attempt to rid myself of the bad sore throat I’ve finally picked up off my wife and baby. Unlike the market, the whole family is feeling very sorry for themselves at the moment with Liverpool’s semi-final loss last night not being dulled by painkillers!

The Dow (+0.78%) ticked up over 130 points to power through the landmark, while the S&P 500 rose by +0.8% with financials (+1.65%) and healthcare (+0.86%) leading the way. The VIX (10.72) hit its lowest level since July 2014 and is now getting closer to all time low territory. Over in Europe the STOXX 600 also posted big gains of +1.3% (biggest rise since the day the US election result was known) with banks (+3.0%) and insurance (+2.5%) sectors as the key drivers. Banks in particular were likely helped by a continuation in the sell-off in yields. 10Y treasuries and bunds sold off +5bps and +6bps respectively, with US yields topping 2.5% while German yields hovered around their highest levels in a year. 10Y Gilts also saw yields rise by +7bps on the day. Oil was slightly lower (-0.7%) after news of increased US stockpiles but this has been reversed overnight in Asia. Currency markets saw the US dollar (-0.2%) fall against its major peers while sterling rose by +0.6% on the day.

On the topic of Sterling, DB’s FX strategist Robin Winkler published a short note yesterday discussing Sterling’s potentially lost reserve status. He notes that sterling is unlikely to benefit from a broader reallocation of EM currency reserves managed by central banks. He reasons that, to the extent that reserves serve as backstops against currency stress (rather than as sovereign wealth), the pound’s diminishing role in international capital flows post-Brexit should permanently reduce its reserve status. The topic is further discussed in the context of a model in the following note: https://goo.gl/HVBqw8

Staying with DB research our European equity strategist Sebastian Raedler highlights this morning that, according to the flash PMIs out this week, global growth momentum hit a six-year high in January. He argues that the acceleration in growth momentum has been a key driver of the sharp moves in global equity and rates markets over the past six months. Yet, with some economic indicators now in the top 5% of their historical range, he believes the surge in growth momentum is likely to fade over the coming months. This would be consistent with a period of consolidation for European equities, even though he still expects them to move higher by year-end (with an end-2017 target of 375 on the Stoxx 600).

Moving over to our economists our European team published a note reflecting on the Italian Constitutional Court’s ruling yesterday on ex-PM Renzi’s electoral law for the Lower House. They note that in line with expectations the Court has ruled against the two-round system, thus leaving Italy with a system which is likely to continue to lead to fragmented government. Author Marco Stringa thinks the market reaction is likely to be mixed as the chances of a populist (5SM) victory would have been boosted under a 2-round system but that the probability of gridlock at any early election is now more likely. Growth enhancing reforms are unlikely with the governments (fragile coalitions) formed under this system.

Overnight in Asia the biggest story has been the fresh curbs by the authorities on new loans in Q1, especially mortgage lending, The move has perhaps helped China underperform other regional bourses with the Shanghai Composite only +0.14% higher with the Nikkei +1.7% as we type. Financials have led the way in Japan. Meanwhile 10 year JGBs creep higher (+2bps to 0.078%) and further away from the zero level the BoJ is targeting. One to watch as global yields rise.

Now turning to data released yesterday and the European session saw various confidence indicators out of France, of which the January business confidence number disappointed (104 vs. 105 expected) while manufacturing confidence was in line with expectations (106 actual; 106 expected). The IFO survey out of Germany saw broadly soft numbers, as both business sentiment (109.8 vs. 111.3 expected; 111 previous) and business expectations (103.2 vs. 105.8 expected; 105.5 previous) unexpectedly slipped. The current assessment number ticked up but was still marginally short of expectations (116.9 vs. 117 expected; 116.7 previous). The UK CBI industrial trends survey was stronger but with prices seeing the most upward pressure since H1 2011. Yesterday was yet another quiet day over in the US with the FHFA house price index for November (+0.5% mom vs. +0.4% expected; +0.3% previous) as the only data of note.

Turning to the day ahead today we’ll see the February GfK consumer confidence reading out of Germany (10 expected; 9.9 previous) and the advance Q4 GDP reading in the UK (+2.1% YoY expected vs. +2.2% Q3). We have a busier day over in the US with preliminary wholesale inventories data (+0.1% expected; +1.0% previous) and the Chicago Fed National Activity Index reading (-0.05 expected; -0.27 previous) for December due, followed by weekly jobless claims data and the flash PMIs for January (services: 54.4 expected vs. 53.9 previous; composite: 54.1 previous). We close out the day with readings from the Conference Board leading index for December (+0.5% expected; 0.0% previous) and Kansas Fed manufacturing survey for January (8 expected; 11 previous).

END

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 9.61 POINTS OR 0.31%/ /Hang Sang closed UP 325.05 OR 1.41%. The Nikkei closed UP 344.89 POINTS OR 1.81% /Australia’s all ordinaires  CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed DOWN at 6.8840/Oil ROSE to 53.11 dollars per barrel for WTI and 55.49 for Brent. Stocks in Europe ALL MIXED. Offshore yuan trades  6.8417 yuan to the dollar vs 6.8840  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 HIGHER DOLLAR 

3a)THAILAND/SOUTH KOREA/:

END

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

4 EUROPEAN AFFAIRS

ENGLAND

Believe it or not but England was the fastest growing developed economy in 2016:

(courtesy zero hedge)

In Ironic Twist, Britain Was The Fastest Growing Developed Economy In 2016

Who can forget the “doom and gloom” warnings about the fate of the UK should Brexit win? Well, according to the latest confirmation received on Thursday, they were not only wrong but with an ironic twist because according to the Office for National Statistics, the UK economy grew by 0.6% in the Q4 of 2016, more than the 0.5% consensus estimate, and – more importantly – grew by 2% for all of 2016, making the UK the fastest growing economy among the G7 in the past year.

On an annualized basis, the U.K. economy grew 2.4 percent in the fourth quarter. The U.S. is forecast to have expanded 2.2 percent in the period, down from 3.5 percent in the three months through September.

The fourth-quarter GDP estimate showed that services surged 0.8 percent, adding 0.6 percentage point to GDP and offsetting stagnation in industrial production. Within that, the category that includes restaurant and hotels jumped 1.7 percent, its best performance since 2012. The robust data come as Theresa May prepares to meet US President Donald Trump on Friday. This will be an important step in her mission to build a “truly global Britain” that, she believes, will be able to exploit export markets more fully once freed from the constraints of the EU’s common tariffs and commercial policy.

Chancellor Philip Hammond welcomed the figures, saying “every major sector of the economy grew last year, which is further evidence of the fundamental strength and resilience of the UK economy”. He added that, while “there may be uncertainty ahead as we adjust to a new relationship with Europe”, the UK was “ready to seize the opportunities to create a competitive economy that works for all.”

“Strong consumer spending supported the expansion of the dominant services sector and although manufacturing bounced back from a weaker third quarter, both it and construction remained broadly unchanged over the year as a whole,” said Darren Morgan, head of GDP at the ONS.

Indeed, the growth was driven entirely by services, with zero support from construction and production, in a continuation of the recent trend of a lopsided expansion according to Bloomberg.

As expected, establishment economists embarrassed by their post-Brexit forecasts, quickly attacked the data suggesting the expansion would unlikely continue. Bloomberg with the report:

While the support is welcome, it may prove unsustainable. Households are borrowing with abandon and saving less, and an expected pickup in inflation through this year raises the risk of a squeeze on incomes. Economists forecast a sharp slowdown this year, and Bank of England of England Governor Mark Carney has warned of pressure from inflation and weaker business spending.

“Today’s data was good, but there are pockets of potential unsustainability in household spending that could drive a slowdown,” said Chris Hare, an economist at Investec Securities in London and a former Bank of England official. The “rebalancing” of the economy toward exports, sought by policy makers for years, has so far failed to materialize, he said.

Carney was among the economists who warned before the referendum that the U.K. might have faced a recession if Britons voted Leave. Pro-Brexit campaigners have pointed to the economy’s resilience as evidence that leaving the EU won’t make the country worse off.  Carney said last week that consumption-led growth “tends to be both slower and less durable” as it eventually overtakes earnings. Households borrowed at the fastest pace in more than 11 years in November and credit surged from a year earlier.

To be sure, the fairytale growth story – sustained in big part by the plunge in cable – is likely to face a reversal in the coming quarters. Companies from airline EasyJet Plc to telecommunications firm BT Group Plc have this month cited Brexit-linked problems such as a weaker pound and loss of business as they offered investors a forbidding outlook for this year. The U.K. currency has dropped 15 percent since the referendum in June, fueling inflation by driving up import costs.

Auto-industry investment plunged by more than a third last year as carmarkers concerned about Brexit shied away from long-term commitments, the Society of Motor Manufacturers and Traders said on Thursday.

As a result, growth is expected to slow this year as inflation picks up, driven by the depreciation of sterling, squeezing household incomes. “Growth at the end of last year appears to have relied excessively on household spending, which has been increasingly financed by debt,” said Samuel Tombs of Pantheon Macroeconomics.

“GDP growth likely will slow decisively in Q1 as the squeeze on households’ real incomes intensifies.”

That may indeed happen, but For now Brexiteers are enjoying their day in the sun, having been proven right, if only for the time being

end

THE EU

The expected new ambassador to the EU states that we should short the Euro as a collapse may come in the next 12 to 18 months.  He is probably correct

 

(courtesy Mish Shedlock/Mishtalk)

 

Trump’s Expected Ambassador To EU Says “Short The Euro, Collapse May Come In 12 To 18 Months”

Professor Ted Malloch, Trump’s expected ambassador to the EU says “The one thing I would so in 2017 is short the euro.

 

Partial Transcript

“I am not certain there will be a European Union in which to have negotiations… The one thing I would do in 2017 is short the euro. I think it is a currency that is not only in demise, but has a real problem and could in fact collapse in the coming year or year and a half.”

It nothing else, Trump is sure to provide fodder for media discussion for four full years.

That aside, it is refreshing to hear such discussions. The breakup of the Eurozone or EU is a very distinct possibility.

end

Holland

The Dutch regulator posted George Soros’ short position on Dutch Bank ING. His position was only .25% of the total outstanding and should not have been published. Down goes ING bank shares

(courtesy zero hedge)

Dutch Regulator ‘Accidentally’ Reports Soros’ Short Positions, Sends Bank Stock Sliding

Some of hedge fund billionaire George Soros’ short positions dating back to 2012 were published on the Dutch financial market regulator’s website this week due to “human error” according to the regulator AFM, according to Bloomberg. Dutch bank ING is among the positions exposed and its stock price is tumbling…

As Bloomberg notes, the short positions, bets on a stock declining, were “between 0.2 percent and 0.5 percent,” of shares outstanding in the companies shorted, AFM spokesman Ward Snijders said by phone on Thursday. The Dutch regulator publishes shorts of 0.5 percent or higher on its website on a daily basis. The smaller amounts were posted by mistake, he said.

The Financial Times earlier reported that some of the positions, including bets against Dutch banks, including ING Groep NV, appeared briefly on the website on Tuesday evening. ING declined to comment on Thursday.

Short positions, which are typically closely guarded, in Deutsche Bank AG jumped when it was revealed in June that Soros had bet that the stock would fall after the U.K. voted to leave the European Union. The German bank fell 14 percent on the first day after the ballot.

The Dutch regulator’s spokesman couldn’t disclose whether there has been contact with Soros following Tuesday’s error. A spokesman for Soros didn’t immediately respond to an e-mail seeking comment.

 

end

France

 

The French Finance Minister Sapin seems scared as he states that Prime Minister May is not in a position to negotiate with Donald Trump. She will prove him wrong!

(courtesy zerohedge)

Italy
Italian bond yields rise as well as credit default risk
(courtesy zerohedge)

‘ItaLeave’ Looms Again As Political Uncertainty Sends BTPs Plunging

Italian government bond risk is at its highest since before the Referendum as the constitutional court modifications push Europe’s troubled country closer to early elections (and the potential for ‘Italeave’).

While it is no longer clear precisely on what side of the anti-establishment divide 5-Star leader Beppe Grillo can be found after his recently rebuffed attempt to merge with a pro-Europe federalist in the European Parliament, should the 5-Star movement win in the upcoming elections, Europe will be one stop closer to the populist tipping point, especially since that will likely mean new all time highs in global markets.

And it appears the bond market is starting to realize…

And while peripheral European bonds have been a bloodbath recently, Italy is the notable outlier…

At its highest risk over Spain since the European crisis.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

Kyle Bass is one of the smartest guys on the planet and one must pay attention to what he states.

Three major points from his interview last night:

  1. Trumps new policies will add gasoline to an already smoldering China as they must “restructure”
  2. Trump’s new policies will be paid for with the border tax
  3. Trump’s new policies means a pro growth strategy and thus bond yields will rise both in Germany and the USA.  He thus states that the trade of the century is to short German bunds

(courtesy zero hedge)

Kyle Bass Hints What The “Greatest Trade He Has Ever Encountered” Is

Heyman Capital’s Kyle Bass, who as we reported two weeks ago returned an impressive 25% in 2016, spoke to Bloomberg TV’s Erik Schatzker and likened President Donald Trump’s trade and tax policies to gasoline which will accelerate an economic “restructuring” – a polite word for crash – in China.

Discussing a topic he has been particularly focused on since late 2015, Bass said China has “recklessly built a system that’s going to need to restructure and that just so happens to be metastasizing right when Trump becomes elected. This is a fire that’s been smoldering and it’s now starting to burn, and Trump is just more gasoline.” As he put it later “in lifecycles, what Trump is going to do, he is going to speed everything up.” That statement is absolutely spot on, on many different levels as we will soon find out.

Bass also said that imposing tariffs on Chinese imports could have “profound consequences” for the nation’s economy, where credit over the last 18 months has grown by $6.5 trillion while deposits have grown by half of that, or just $3 trillion, “so credit is growing exponentially, China has to fund enormous moves in credit growth just to keep in roughly the same place. We call it running to stand still.

He mocked “the idea that China is now the driving economic power in the world” calling it “illusory or somewhat of a fallacy” and as we reported in early January, confirmed that “it’s safe to say that the Asian theater is where we’ve been focused.”

Aside from China, Bass echoed recent favorable remarks by both Ray Dalio and Stanley Druckenmiller about the impact Trump would have on the US economy, which he said would now focus on labor over capital, and the resulting increase in capital investment could to a jump in productivity, all of which is happening near full employment and when combined with tax repatriation, will be “extremely stimulative” but also be inflationary. The impact will be “positive for the United States and slightly negative for the rest of the world,” he said. “But it’s not the globalist nightmare, in my opinion.”

As he says, if you need to boil it down into a soundbite: “short rates, dollar strong”, but the question is how do you get to pay for cutting the corporate tax rate, to which his answer is that a border tax – or “taxing the trade deficit” – is the “only way to pay.” However, if various retail-affiliated lobies such as Nike and WalMart offer enough resistance, Trump may simply enforce tariffs.

When asked how he played the election, Bass said that he waited until the results started coming in and found the market’s initial reaction to a Trump victory as irrational, and that just like Carl Icahn, he took on very “pro-growth” positions in currencies and rates in “huge amounts” later that night, in what ended up being an “easy trade.”

* * *

But what we found most interesting is a section discussing inflation in Germany and German Bunds, in which he may have dropped a hint to help us identify a trade he previously dubbed the “greatest risk-reward profile ever encountered.” Recall in his year end letter, Bass said the following:

One opportunity in particular has the greatest risk-reward profile we have ever encountered in our decade of being a fiduciary. As investors of ours, you are positioned to take advantage of one of the world’s greatest macro imbalances.

The trade Bass may be refering to is the same “short of a lifetime” first brought up by none other than Bill Gross in April of 2015, namely shorting German bunds, and which promptly crashed just days after the Gross prediction almost two years ago.

Why do we think so? Because when Shatzker asked Bass if “there are any natural Trump trades right now” Bass’ response was quick and to the point:

“Real rates in Germany are at the lowest level ever right now. Inflation in Germany is spiking. It’s not even moving in a linear fashion. You have even seen members of the ECB and the Bundesbank speak today about the fact that I think we are going to see inflation running much hotter than any of the central banks thought it would. Therefore I think the move in bonds is just beginning.”

It sounds that Bass now in agreement not only with Gross, but also Jeff Gundlach, who in his recent public webcasts has continued to hammer the thesis that shorting German Bunds has huge profit potential, and if indeed Bass sees the Short Bund trade as the greatest opportunity of his career, the Bund crash and VaR shock observed in May of 2015 may be imminent once again.

* * *

The rest of the Bloomberg interview, predictably, focuses almost entirely on China, where the crash thesis is well-known (if not the timing), and Bass expounds on the various ways one can play the upcoming crash, although – like any smart hedge fund manager – he won’t explicitly state for the record that he is short the renminbi or other Asian currencies. Toward the end, Bass takes an interesting detour in which he praises the Russian economic response to the recession of 2015 in what appears to be a decidedly bullish outlook on Russian assets, and when Shatzker proposes summarizing the Bass interview by saying “short China, long Russia”, Bass responds “that’s a good place to start”

 

end

 

CANADA/MEXICO

Canadian official states that it will be Mexico that will be hurt and not Canada. Also remember that the uSA will need Canadian water

(courtesy zero hedge)

Canadian Official On NAFTA Renegotiation: “Mexico Is In A Terrible, Terrible Position. We Are Not”

As reported yesterday, Mexico is not at all looking forward to starting the process of renegotiating NAFTA with Donald Trump, explicitly warning the US that “there are very clear red lines that must be drawn from the start.” What these lines are will be explained by Economy Minister Ildefonso Guajardo and Foreign Affairs Secretary Luis Videgaray who are both meeting with US officials in Washington on Wednesday and Thursday, setting the stage with next week’s visit from Mexico President Enrique Pena Nieto.

Only, Enrique Pena Nieto may not even come, because according to an AP report late on Wednesday, the Mexican President is rethinking his scheduled meeting with President Trump next week. Peña Nieto may scrap the planned Jan. 31 huddle because of Trump’s executive order authorizing the construction of a wall along the U.S.-Mexico border, AP added. The AP confirmed with a Mexican official in Mexico City that Peña Nieto is “considering” cancelling the rendezvous.

And while subsequently Bloomberg reported that Nieto will visit the US as planned after all, the fury in Mexico is palpable and the Mexico News Daily reported that Trump’s border wall order sparked fierce backlash among Mexican lawmakers. The National Action Party’s Margareta Zavala called Trump’s order “an offense to Mexico” ahead of Peña Nieto’s trip. Jorge Castaneda, who served as secretary under former Mexican President Vicente Fox, also blasted the measure Wednesday. “This is an insult to those Mexican officials, to the president of Mexico and to all Mexicans,” he said, referencing two Mexican officials who met Trump administration staff on Wednesday.

“It’s a way of making them negotiate under threat, under insults, and it should lead Peña Nieto to cancel his trip next week,” Castaneda added during a television interview. “Peña [Nieto] is a weak president in a weak country at a weak moment, but he has to find a way to get some official backbone.”

* * *

But while Mexico’s anger at the US is understandable, maybe the US’ southern neighbor should be just as angry at the country that border the US to the north: the third member of NAFTA, Canada.

Canada will 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.

In other words, when it comes to preserving NAFTA, it’s important, but what is more important is being on good enough terms with Trump to be able to cobble together a bilateral treaty should NAFTA fail.

As Reuters reports, the comments are some of 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.”

* * *

Of course, the reason why both Mexico and Canada are on edge, and why their superficial friendship is about to collapse, is because on Sunday Trump said he planned talks soon to begin renegotiating NAFTA, under which Canada and Mexico send most of their exports to the United States. The Canadian sources stress Ottawa has not taken any final decision on how to approach the NAFTA talks, since Trump’s opening stance is largely unknown.

For now the government’s official stance is to dismiss 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, Reuters’ 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.

Bilateral trade is critical for Canada, which sends 75 percent of its exports to the United States. Statistics Canada data for 2015 show two-way trade in goods with the United States totaled C$760 billion ($580 billion) compared to just C$26 billion with Mexico. Canada has a “very special status” and is unlikely to be hit hard by changes to NAFTA, the head of a business advisory council to Trump said on Monday.

And the punchline: Derek Burney, a former Canadian ambassador to Washington, told CTV News on Monday that Canada should distance itself from Mexico on NAFTA. “We have security agreements, both continental and multi-lateral — Mexico does not. Mexico has a huge border problem with the United States in terms of immigration and drugs — Canada does not,” he said.

Officials familiar with diplomatic contacts between Mexico and Canada say there has been no talk of creating a joint front against the United States over NAFTA on the grounds that such a move would raise tensions and be counterproductive.

And that – by dividing and conquering his counterparts who are too afraid to unite against him – is how Trump’s “negotiating victory” is assured before the negotiations have even begun.

 

end

MEXICO

Mr Nieto, Mexico’s President states that Mexico will not pay for any wall. Trump says that they will pay. Mexico has silver which the USA desperately needs to continue with the precious metal fraud.  China will buy all of Mexico’s silver.

let us see how this plays out..

(courtesy zero hedge)

Pena Nieto Tells Trump Mexico “Will Not Pay For Any Wall”, Demands Respect

Mexican President Enrique Peña Nieto reiterated Wednesday in a pre-taped address that his country “will not pay for any wall,” but expressed willingness to work with the Trump administration.

Peña Nieto also said he had ordered government agencies to step up protection for immigrants, demanding respect as an autonomous nation, while admitting Mexico is negotiating new trade rules with US.

“I have ordered the Foreign Ministry re-enforce measures of protection for our nationals (inside the US).  The 50 Mexican consulates in the United States will become authentic places of defense for the rights of the migrants.  Our communities are not alone.  The Mexican government will offer them the legal counsel which will guarantee them the protection they need.  I call on the legislators and civil society organisations to join their efforts so as to back them and support them (migrants). Wherever there is a Mexican migrant at risk that needs our support there we must be.  That is where there country should be.”

“I am saddened and am against the decision by the United States to continue with the construction of a wall that for years, far from joining us has divided us.  Mexico does not believe in walls.   I have said time and time again: Mexico will not pay for any wall.”

“These Executive orders also occur at a moment in which our country is initiating talks to negotiate new rules of cooperation, commerce, investment, security, immigration in the North American region.  This negotiation is very important for strength, certainty, and future of of our economy and our society.  As President of the Republic, I assume, squarely, the responsibility of defending and guarding the interests of Mexico and Mexicans.  It is my duty to deal with the problems and confront the challenges.  Based on the final report of the Mexican officials that at this moment are in Washington and the prior consultation of the Senate chamber and the National Conference of Governors (Mexican), I will make a decision about the next steps to be taken. ”

“Mexico offers and demands respect. “

Finally, the Mexican president didn’t say whether he will carry out planned visit to Washington on Jan. 31.

While the costs of “building the wall” are largely unknown, estimates have been made by both political parties…

Infographic: The Economics of Trump's Mexico Wall | Statista
You will find more statistics at Statista

In a Monday speech, Peña Nieto said his government is prepared to negotiate with the US if Mexico’s national sovereignty is respected. He laid out economic integration and respect for the rights of migrants and the money they send home as his nation’s key negotiating points.

Trump has suggested some of the $25 billion in annual remittances that migrants return home would be retained to pay for the border wall.

 

 

end

 

Trump threatens to cancel the Nieto Nafta meeting if Mexico is unwilling to pay for the wall.  The Mexican peso gets clobbered and Canada is not offering any help to Mexico. Nieto is in a bind:  he may have to pay for the wall

(courtesy zero hedge)

 

7. OIL ISSUES

Goldman Sachs brought out a great commentary on what will happen with a border tax with respect to oil  Now Nick Cunningham of Oil Price.com agrees with their assessment:  oil production will increase in the USA as temporarily USA production will have a greater value than imported oil.  The increased production because of no taxes would fuel oversupply in the world’s market which will then bring down prices globally:

(courtesy Nick Cunningham/Oil Price.com)

Is Trump Setting The Oil Markets Up For Another Bust?

Transcanada Pipelines applies for Keystone xL pipeline presidential permit:

(courtesy zero hedge)

 

Transcanada Applies For Keystone XL Pipeline Presidential Permit

Two days after Trump signed an executive order meant to streamline the approval of the mothballed Keystone XL pipeline, which the company said would add more than $3 billion to US GDP and create thousands of construction jobs, moments ago TransCanada announced it has submitted a Presidential Permit application to the U.S. Department of State for approval of the Keystone XL Pipeline, which as Trump vowed, will likely be approved by a fast-tracked procedure, setting off the first big conflict between Trump and the environmental lobby which has vowed to protest Trump’s Keystone and Dakota Access pipeline proposals.

From the press release:

TransCanada Applies for Keystone XL Presidential Permit

 

TransCanada Corporation (TSX: TRP) (NYSE: TRP) (TransCanada) announced today it has submitted a Presidential Permit application to the U.S. Department of State for approval of the Keystone XL (KXL) Pipeline. 

 

“This privately funded infrastructure project will help meet America’s growing energy needs as well as create tens of thousands of well-paying jobs and generate substantial economic benefit throughout the U.S. and Canada,” said Russ Girling, TransCanada’s president and chief executive officer.

 

“KXL will strengthen the United States’ energy security and remains in the national interest. The project is an important new piece of modern U.S. infrastructure that secures access to an abundant energy resource produced by a neighbor that shares a commitment to a clean and healthy environment. Numerous studies have shown that pipelines are a safer and more environmentally sound way to transport oil to market than trains and KXL raises the bar on both fronts,” concluded Girling.

 

Enhanced standards and the utilization of the most advanced technology will help ensure KXL will be built and operated to uphold our fundamental commitment to safety and the communities we serve.

 

Independent forecasts by the U.S. Department of State estimate that KXL will support tens of thousands of direct and indirect jobs and associated income during construction and contribute approximately $3.4 Billion to U.S. GDP.

 

TransCanada employees live in 38 states where the company operates in across the U.S. The company is committed to working productively with all stakeholders and tribal leaders as this project moves forward. KXL will benefit American workers, their families and the communities they live in as well as the U.S. economy. During construction, in Nebraska, South Dakota and Montana alone, KXL will generate hundreds of millions of dollars in employee earnings as well as tens of millions of dollars annually in local tax revenues providing much needed funds for community schools, hospitals, first responders and roads.

8. EMERGING MARKETS

none today

end

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

Euro/USA   1.0702 DOWN .0049/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 114.41 UP 1.152(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 1.2562 DOWN .0072 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT)

USA/CAN 1.3130 UP .0001 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS THURSDAY morning in Europe, the Euro FELL by 49 basis points, trading now WELL BELOW the important 1.08 level FALLING to 1.0702; 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 9.61 or 0.31%     / Hang Sang  CLOSED UP 325.05 POINTS OR 1.41%  /AUSTRALIA  CLOSED UP 0.35%  / EUROPEAN BOURSES ALL MIXED 

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

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

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

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

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

The NIKKEI: this THURSDAY morning CLOSED UP 344.89 OR 1.81% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 325.05 OR 1.41%  Shanghai CLOSED UP 9.61 POINTS OR 0.31%   / Australia BOURSE CLOSED UP 0.35% /Nikkei (Japan)CLOSED UP 344.89 OR 1.81%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1187.30

silver:$16.77

Early THURSDAY morning USA 10 year bond yield: 2.547% !!! UP 3 IN POINTS from WEDNESDAY 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  3.121, UP 2 IN BASIS POINTS  from TUESDAY night.

USA dollar index early THURSDAY morning: 100.28 UP 36 CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 4.12% UP 13  in basis point yield from WEDNESDAY 

JAPANESE BOND YIELD: +.091%  UP 2  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.57%  UP 3  IN basis point yield from  WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.234  UP 11 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 66 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.484% UP 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.0679 DOWN .0073 (Euro DOWN 73 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 114.61 UP: 1.346(Yen DOWN 135 basis points/ 

Great Britain/USA 1.2577 DOWN 0.0058( POUND DOWN 58 basis points)

USA/Canada 1.3109 UP 0.0042(Canadian dollar DOWN 42 basis points AS OIL ROSE TO $53.84

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This afternoon, the Euro was DOWN by 73 basis points to trade at 1.0679

The Yen FELL to 114.61 for a LOSS of 135 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL 58  basis points, trading at 1.2577/

The Canadian dollar FELL  by 42 basis points to 1.3109,  WITH WTI OIL RISING TO :  $53.84

The USA/Yuan closed at 6.8767
the 10 yr Japanese bond yield closed at +.091% UP 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1 IN basis points from WEDNESDAY at 2.527% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.103 UP 1/3  in basis points on the day /

Your closing USA dollar index, 100.57 UP 65 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 THURSDAY: 1:00 PM EST

London:  CLOSED DOWN 2.94 OR 0.04% 
German Dax :CLOSED UP 42.58 POINTS OR 0.36%
Paris Cac  CLOSED DOWN 10.43 OR 0.21%
Spain IBEX CLOSED DOWN 36.50 POINTS OR 0.38%
Italian MIB: CLOSED DOWN 142.58 POINTS OR 0.73%

The Dow closed UP 32.40 OR .16%

NASDAQ WAS closed down 1.16 POINTS OR .02%  4.00 PM EST
WTI Oil price;  53.84 at 1:00 pm; 

Brent Oil: 56.14  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  60.55 ROUBLES/DOLLAR  (DOWN  1 and 1/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD RISES TO +0.484%  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:$53.73

BRENT: $56.11

USA 10 YR BOND YIELD: 2.506%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.086%

EURO/USA DOLLAR CROSS:  1.0673 down .0008 

USA/JAPANESE YEN:114.53  UP 1.284

USA DOLLAR INDEX: 100.58  UP 66  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2592 : DOWN 43   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.484%

END

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

TRADING IN GRAPH FORM

Bonds, Dow, & Dollar Rise As Peso & VIX Protection Pounded

Anyone else get this feeling today…

 

S&P 2,300; Dow 20,100 early on but couldn’t extend gains…

 

NOTE Dow was closed right at 20100…

 

Despite the best efforts to crush VIX once again, the S&P could not hold on to gains… (NOTE that VIX was extremely wild around the 10.8 area where it died yesterday as Dow 20k hit)

 

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

 

It looks like the Short-squeeze ammo just ran out…

 

What happens next?

 

The Peso was pounded all day…

 

And the Dollar rebounded modestly… (pushing the Dollar Index back above 100)

 

Yen was the biggest loser today but all the majors lost ground as the greenback strengthened (though remains down on the week)

 

Remember, tonight is the last trading day for China before they go away for Golden Week (which has historically meant a weaker dollar and stronger gold)…

 

Despite stock gains and VIX decline, bonds were bid today (accelerating after a solid 7Y auction)

 

Gold and Silver are now lower on the week as copper and crude catch the reflation bug…

 

Gold and silver both broke below key levels ($1200 and $17)…

 

Bonus Chart: S&P hit 2,300 Record Highs today… and the gap between hope and reality yawns ever wider…

 

Bonus Bonus Chart: Today was the worst day for US Macro data since August…

 

 

END

 

Initial and continuing claims jump with today’s reading of the jobless. Yet the Fed’s national activity index continues to rise’

(courtesy zero hedge)

Initial, Continuing Claims Jump Despite Surge In Fed’s National Activity Index

While the non-seasonally-adjusted continuing claims data follows its norm of soaring post-Christmas, both the initial and continuing claims (adjusted) data has bee trending (albeit noisily) higher since troughing at the moment of the election

Being the most real-time index of activity (and not a survey of hope), one has to wonder why this is deteriorating when The Fed’s National Acitivty Index says everything is awesome…

Strange data:

advance wholesale inventories surge by 1% on a month over month thanks to a huge boost to auto inventories. This should technically give a boost to 4th quarter GDP However we also witnessed December auto inventories decline. Which is correct?

(courtesy zero hedge)

Wholesale Inventories Surge At Fastest In 14 Months (Thanks To Automakers)

Great news – Q4 GDP just got another technical boost as advance wholesale inventory rebuilding surged by 1.0% MoM and 2.60% YoY in Dec 2016 (the biggest surge since Oct 2015), to $608.3 billion.

The YoY surge was dominated by a 7.7% spike in motor vehicle inventories but perhaps worryingly December saw auto inventories decline 1.0% MoM.

end

The higher mortgage rates coupled with the plunging mortgage applications certainly took the bite out of new home sales:  it crashed in December by a very large .7%!

(courtesy zero hedge)

New Home Sales Collapse In December As Trump Rate Surge Hits

With soaring mortgage rates and plunging mortgage applications, it should be no surprise that new home sales crashed in December. Analysts expected a modest 0.7% decline but sales crashed 10.4% – the most since March 2015 – and at 536k SAAR, this is the lowest since Feb 2016.

First annual decline since February…

Home sales in The Midwest crashed 41% sequentially and 29% YoY.

The supply of homes for sale increased to 5.8 months, the highest since September 2015, from 5 months in November. There were 259,000 new houses on the market at the end of December, the most since 2009.

This is the first clear indication that higher rates are crushing the housing market…

And Median home price surges to $322,500, second highest in series history, just lower than the record $323,700 in September

As Bloomberg points out, the figures indicate that the increase in mortgage rates curbed momentum in the housing market after steady job gains and historically low borrowing costs helped push full-year sales to the highest since 2007. Stricter lending standards also remain a hurdle for buyers this year.

end

 

“Soft data” on USA services PMI indicates a rebound.  It was mainly the “hope” side of things which caused the survey to soar

(courtesy zero hedge)

US Services PMI Rebounds To 14-Month Highs As ‘Hope’ Soars

Following yesterday’s jump in US manufacturing PMI, Market reports the January flash Services PMI also spiked (after dropping for 2 months) to match manufacturing at 55.1 (notably above the 54.4 expectations). This is the highest Services print since Nov 2015. Hope remains the biggest driver of this ‘soft’ survey data with growth expectations for the next 12 months were the greatest since May 2015.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The improvement in service sector business conditions follows the news earlier in the week that manufacturing also enjoyed a bumper start to the year. The two PMI surveys collectively point to the economy growing at an annualised rate of just over 2.5% in January, and puts the US on a strong footing to achieve faster growth in 2017.

“Although the strong dollar is hitting exports, domestic demand clearly remains buoyant. Companies reported one of the highest inflows of new business for a year and a half as demand lifted higher at the start of 2017.

“Job creation also remained encouragingly solid, and especially impressive given current high overall levels of employment in the economy.

“Job gains are linked to increased optimism about the economic outlook. Business expectations of future growth are at their highest for just over one and a half years.

“The strong start to 2017 and bullish mood for the year ahead adds to our expectation that we will see the Fed hike rates a further three times in 2017.”

IHS Markit currently forecasts that the US economy will grow by 2.3% in 2017, up from 1.6% in 2016.

END
Oh OH !! this came out of left field:  the entire senior management team at the State Department all resigned
(courtesy zerohedge)

The Entire Senior Management Team At The State Department Just Resigned

 

end

 

 

Trump slams the ungrateful traitor Manning who should never been have released from prison who sold secrets of USA to Wikileaks and was charged with treason.  You can just imagine what will happen will the USA finds out that its gold has been compromised and treason charges to all of those who have engaged in that conduct

(courtesy zero hedge)

Trump Slams “Ungrateful Traitor” Chelsea Manning Who Should “Never Have Been Released From Prison”

 

 

END

 

Mitch McConnell states that Congress is moving ahead with it’s 12- 15 billion wall connecting Mexico with the USA.  It is amazing how the cost escalates:

(courtesy zero hedge)

McConnell Says Congress Moving Ahead With $12 – $15 Billion To Build Trump’s Wall”

Trump’s Mexican border wall from improbable is rapidly becoming imminent. First, it was Paul Ryan telling Greta Van Susteren that he is prepared to pay $8-$14 billion for Trump’s “massive wall”…

… and now he has support in the Senate, where Mitch McConneell has said Congress is moving ahead with $12 billion – $15 billion to build border wall.

BREAKING: Senate leader McConnell says Congress moving ahead with $12 billion – $15 billion to build border wall: http://reut.rs/2k4MCw5 

Photo published for Live political coverage

Live political coverage

Live coverage of the events surrounding the outcome of the U.S. presidential election and other U.S. political news

live.reuters.com

It appears Congress is unaware that Trump has renewed his push to get Mexico to pay for the wall.

That said, it is funny how the price suddenly just jumped: did Congress just realize the “wall” is just a different name for Congress’ favorite term, “pork”?

 

 

end

Well that about does it for tonight

I will see you tomorrow night

H

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