Feb 3/For 3rd straight day , both gold and silver amounts standing increase per day/gold and silver advance today with an upside outside day reversal/Deutsche bank to slash more jobs as trading in fixed income falls again due to negative interest rates/The big story of the day: JPMorgan must undergo discoveries as appeals court overturns a private silver rigging case against them/Jobs report today shows increase in jobs but poor growth in earnings: the poor result sends Dow etc skyrocketing/Final draft now released

Gold at (1:30 am est) $1218.50 UP    $1.80

silver  at $17.45:  up 5  cents

Access market prices:

Gold: $1220.50

Silver: $17.51

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:

FRIDAY gold fix Shanghai

Shanghai FIRST morning fix Feb 3/17 (10:15 pm est last night): $  1216.88

NY ACCESS PRICE: $1214.45 (AT THE EXACT SAME TIME)/premium $2.43

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1216.88

NY ACCESS PRICE: $1213.90 (AT THE EXACT SAME TIME/2:15 am)

   SPREAD/ 2ND FIX TODAY!!:  $2.98

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London FIRST Fix: Feb3/2017: 5:30 am est:  $1213.05   (NY: same time:  $1213.30   (5:30AM)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Second fix Feb 3.2017: 10 am est:  $1215.20 (NY same time: $1215.40  (10 AM)

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

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

end

For comex gold:

FEBRUARY/ 

NOTICES FILINGS FOR FEBRUARY CONTRACT MONTH:  136 NOTICE(S) FOR 13600 OZ.  TOTAL NOTICES SO FAR: 4849 FOR 484,900 OZ    (15.082 TONNES)

For silver:

 

For silver: FEBRUARY

6 NOTICES FILED FOR 30,000 OZ/

TOTAL NO OF NOTICES FILED: 145 FOR 725,000 OZ

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  ROSE by 2374 contracts UP to 190,571 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  .952 BILLION TO BE EXACT or 136% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH: 6 NOTICES FOR 30,000

In gold, the total comex gold ROSE BY 5457 contracts WITH THE RISE IN  THE PRICE GOLD ($11.10 with YESTERDAY’S trading ).The total gold OI stands at 400,417 contracts

we had 136 notice(s) filed upon for 13,600 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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: 811.22 tonnes

.

SLV

we had a tiny changes in silver into the SLV/ a withdrawal of 136,000 oz to pay for fees such as storage and insurance

THE SLV Inventory rests at: 334.713 million oz

FEDERAL RESERVE BANK OF NY: GOLD MOVEMENT REPORT FOR DECEMBER EXPORTS

JANUARY REPORT

The FRBNY reported that we have 7,841 million dollars worth of gold in inventory valued at $42.22 for December.

The previous month we had 7,841 million dollars worth of gold inventory valued at $42.22 for December.

We thus had 0 gold oz moved out of inventory

end

.

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

1. Today, we had the open interest in silver RISE by 2374 contracts UP to 190,571 DESPITE THE FACT THAT SILVER WAS DOWN 2 CENTS with YESTERDAY’S trading. The gold open interest ROSE by 5457 contracts UP to 400,417 WITH THE RISE IN THE PRICE OF GOLD OF $11.10  (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

2c) COT report

(Harvey)

3c FEDERAL RESERVE BANK OF NY/GOLD INVENTORY MOVEMENT

(HARVEY)

3. ASIAN AFFAIRS

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 18.99 POINTS OR .60%/ /Hang Sang CLOSED DOWN 55.31 POINTS OR .24% . The Nikkei closed UP 3.62 POINTS OR 0.02% /Australia’s all ordinaires  CLOSED DOWN 0.42%/Chinese yuan (ONSHORE) closed UP at 6.8695/Oil FELL to 53.72 dollars per barrel for WTI and 56.77 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8183 yuan to the dollar vs 6.8695  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A BIT AS POBC ATTEMPTS TO STOP DOLLARS FROM LEAVING CHINA’S SHORES. BOTH YUANS STRONGER COUPLED WITH THE STRONGER DOLLAR

 

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

b) REPORT ON JAPAN

i)Last night:  Japanese bond yields surge despite intervention by the Bank of Japan.  Remember they are targeting a zero rate and we are getting .10 to .11%

( zero hedge)

ii)We brought to your attention the story of Japan willing to use its large pension fund to fund 700,000 USA jobs.  it seems that this is true.  Japan is so afraid of Trump that they are willing to undergo this ridiculous program

( zero hedge)

c) REPORT ON CHINA

none today

4. EUROPEAN AFFAIRS

Deutsche bank/Germany

Deutsche bank will slash more jobs as they are having great difficulty with their fixed income trading  (no doubt with negative interest rates)

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Israel

Trump flip flops a bit on Israel.  Trump tells Netanyahu that it would be helpful if no new settlements.  Trump states however that the settlements are not really a hindrance to the peace process

( zero hedge)

ii)IRAN/uSA

USA initiates more sanctions against Iran. Russia not a happy camper and thates that these are counter productive

( zerohedge)

6.GLOBAL ISSUES

This was quite a crash:  Mexico’s consumer confidence came crashing down with today’s reading:  68.5 instead of 84.9

( zerohedge)

7. OIL ISSUES

rig counts rise again to 16th month highs as USA production also rises.  However jobs are not to be found as robotics has done a great job replacing growth in this important sector

(courtesy zero hedge)

8. EMERGING MARKETS

Zimbabwe, home to the trillion dollar bank note which in 2009 could not even buy you a pkg of gum, is at it again,with their printing of Zimbabwe bond notes which is suppose to trade on a par with dollars.  A black market is already in full operation.

( Simon Black/SovereignMan)

9.   PHYSICAL MARKETS

i)The big story out late last night:  In a private case against JPMorgan et al, the appellant court overrules a divisional court’s rule dismissing JPMorgan from the silver rigging case. This has huge ramifications: we can now discover JPMorgan and ask them about their huge increase in silver inventory while at the same time shorting the paper comex/OTC silver:

( MarketSlant)

ii)Chris Powell comments on the above case:

( Chris Powell/GATA)

iii)Avery Goodman correctly states that the fun begins for JPMorgan as they will be finally discovered:

( Avery Goodman)

iv)There is no question that Trump wants to devalue the USA dollar which no doubt will create a global currency war..Mike Kosares comments

( Mike Kosares/GATA)

v)Alasdair Macleod’s weekly message to us:( Alasdair Macleod)

vi)What a riot:  the USA justice dept has done nothing in the silver price fixing case.  They have now asked a one yr delay so they can enter the class action case

Unbelievable..

( zero hedge)

10.USA STORIES

i)In Trump’s first payroll report, the BLS reports a surge in 227,000 jobs but the all important earnings component disappoints.  And believe it or not the unemployment rate ticks higher:

( zero hedge)

ii)Now the real report:

Let us head over to the comex:

The total gold comex open interest ROSE BY 5457 CONTRACTS UP to an OI level of 400,417 WITH THE RISE IN THE  PRICE OF GOLD ( $11.10 with YESTERDAY’S trading).  We are now in the contract month of FEBRUARY and it is one of the better delivery months  of the year. In this next big active delivery month of February we had a LOSS of 111 contracts DOWN to 2386.   We had 263 notices served upon yesterday and therefore we gained 152 contracts or an additional 15,200 oz will stand for delivery.  This is the first time in the history of the comex that we have gained in oz standing on  the second day notice, on third day notice and again today. In other words we have gained more oz standing on each of the 3 days following the first day notice (where investors initially stand for metal having held a future contract and then turning that contract  into physical metal). Somebody again is in urgent need of physical gold. The next non active contract month of March saw it’s OI fall by 190 contracts DOWN to 2679.The next big active month is April and here the OI ROSE by 4896 contracts UP to 273,040.

 

We had 136 notice(s) filed upon today for 13,600 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.  Total silver OI ROSE by 2374 contracts FROM 188,197 UP TO 190,571 DESPITE THE FACT THAT the price of silver FELL IN PRICE TO THE TUNE OF 2 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).

The  active month of February saw the OI RISE by 18 contract(s) UP TO  167.  We had 1 notices served upon yesterday so we GAINED 19 CONTRACTS  or an additional 95,000 oz will stand. This is also the very first time in comex history that both metals increased in ounces standing on the 3 days post first day notice.

The next big active delivery month is March and here the OI decrease by 4003 contracts DOWN to 127,069 contracts. For comparison purposes last year on the same date only 102,251 contracts were standing.

We had 6 notice(s) filed for 30,000 oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 205,705  contracts which is good.

Yesterday’s confirmed volume was 244,490 contracts  which is very good

volumes on gold are getting higher!

INITIAL standings for FEBRUARY
 Feb 3/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 3,311.55 OZ
 HSBC
Manfra
103 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 21,884.417  oz
Scotia
No of oz served (contracts) today
 
136 notice(s)
13,600 oz
No of oz to be served (notices)
2250 contracts
225,000 oz
Total monthly oz gold served (contracts) so far this month
4849 notices
484900 oz
15.082 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month     101,584.7 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 Scotia: 21,884.417 oz
total customer deposits; 21,884.417 oz
We had 2 customer withdrawal(s)
i) Out of Scotia:  96.45 oz  (3 kilobars)
ii) Out of HSBC:  3215.00 oz (100 kilobars)
total customer withdrawal: 3311.55 oz
103 kilobars
We had 1  adjustment(s)
i) Out of Brinks:  96.45 oz was adjusted out of the dealer and this landed into the customer account of Brinks  (3 kilobars)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
For FEBRUARY:

Today, 0 notice(s) were issued from JPMorgan dealer account and 35 notices were issued from their client or customer account. The total of all issuance by all participants equates to 136 contract(s)  of which 25 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (4849) x 100 oz or 484,900 oz, to which we add the difference between the open interest for the front month of FEBRUARY (2386 contracts) minus the number of notices served upon today (136) x 100 oz per contract equals 709,900 oz, the number of ounces standing in this  active month of FEBRUARY.
 
Thus the INITIAL standings for gold for the FEBRUARY contract month:
No of notices served so far (4849) x 100 oz  or ounces + {(2386)OI for the front month  minus the number of  notices served upon today (136) x 100 oz which equals 709,900 oz standing in this non active delivery month of FEBRUARY  (22.080 tonnes)
 we gained 152 contracts or an additional 15200 oz will stand in this active delivery month.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On first day notice for FEB 2016, we had 20.124 tonnes of gold standing. At the conclusion of the month we had only 7.9876 tonnes standing. The data suggests that we had almost identical amounts standing in Feb ’16 and Feb 2017; however today’s totals already surpassed the final amt which eventually stood  in 2016.(already 15.082 tonnes vs 7.9876 at the end of Feb).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 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/     3.9004 tonnes
FEB/ 21.608 tonnes
total for the 14 months;  248.153 tonnes
average 17.725 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 1,428,536.469 or 44.433 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,946.731.150 or 278.28 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.28 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 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 6 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE JANUARY DELIVERY MONTH
FEBRUARY INITIAL standings
 feb 3. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
503,721.510 0z
Delaware
Scotia
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
1220,561.310  OZ
CNT
Scotia
No of oz served today (contracts)
6 CONTRACT(S)
(30,000 OZ)
No of oz to be served (notices)
161 contracts
(805,000  oz)
Total monthly oz silver served (contracts) 145 contracts (725,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month   3,617,490.6 oz
 END
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of Delaware: 982.100 oz
ii) Out of Scotia: 502,739.410 oz
TOTAL CUSTOMER WITHDRAWALS: 503,721.510 oz
 we had 2 customer deposit(s):
i) Into CNT: 600,672.03 oz
ii) Into Scotia: 619,889.280 oz
x) Into JPMorgan:  zero  oz**
deposits into JPMorgan have now stopped.
total customer deposits;  1,220,561.310   oz
 
 we had 0  adjustment(s)
The total number of notices filed today for the FEBRUARY. contract month is represented by 6 contract(s) for 30,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at  145 x 5,000 oz  = 725,000 oz to which we add the difference between the open interest for the front month of feb (167) and the number of notices served upon today (6) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the FEBRUARY contract month:  145(notices served so far)x 5000 oz  + OI for front month of FEB.( 167 ) -number of notices served upon today (6)x 5000 oz  equals  1,530,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We gained 19 contracts or an additional 95,000 oz will stand.
At first day notice for the FEB/2016 silver contract month we initially had 515,000 oz standing for delivery.  By the conclusion of the delivery month we had 835,000 oz stand as some of the bankers required immediate silver inventory.
END
Volumes: for silver comex
Today the estimated volume was 69,643 which is excellent
YESTERDAY’S  confirmed volume was 78,603 contracts  which is excellent.
 
Total dealer silver:  30.205 million (close to record low inventory  
Total number of dealer and customer silver:   179.009 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

 

The COT report:

Last week you will recall that the crooks (commercials) were going net short as no doubt we were in the beginnings of options expiry week. Since the report ends on the first day notice Jan 31.2017, one would expect that the commercials would cover their shortfall.  Let us see what happened:

 

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
212,414 93,259 45,008 101,784 233,587 359,206 371,854
Change from Prior Reporting Period
2,560 -7,188 -74,790 -7,216 -1,787 -79,446 -83,765
Traders
169 84 79 42 43 242 178
 
  Small Speculators      
  Long Short Open Interest    
  39,227 26,579 398,433    
  -4,495 -176 -83,941    
  non reportable positions Change from the previous reporting period  
COT Gold Report – Positions as of Tuesday, January 31, 2017

Our large specs:

Those large specs that have been long in gold added 2560 contracts to their long side

those large specs that have been short in gold covered 7188 contracts from their short side.

(this was to be expected)

Our crooked commercials

those commercials that have been long in gold pitched a huge 7216 contracts from their long side

 

those commercials that have been short in gold covered 1787 contracts from their short side.

Our small specs;

those small specs that have been long in gold pitched 4495 contracts from their long side

those small specs that have been short in gold pitched a tiny 176 contracts from their short side.

 

conclusions: the commercials go net short by 5429 contracts but that was by pitching some of their long positions. They covered a tiny 1787 contracts from their short side.  They may be having trouble extricating themselves from their mess.

(still bearish)

 

Now onto silver;

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
96,909 20,935 16,500 49,265 138,678
4,590 -363 1,073 2,070 8,399
Traders
97 33 44 34 38
Small Speculators Open Interest Total
Long Short 186,839 Long Short
24,165 10,726 162,674 176,113
1,505 129 9,238 7,733 9,109
non reportable positions Positions as of: 150 100
  Tuesday, January 31, 2017   © SilverSeek.com

When we left off last week, we found that the commercials were having difficulty covering their paper shorts.  Let us now see what happened this week:

 

Our large specs;

those large specs that have been long in silver added a huge 4590 contracts to their long side.

our large specs that have been short in silver covered a tiny 363 contracts from their short side.

 

Our crooked commercials;

those commercials that have been long in silver added 2070 contracts to their long side

those commercials that have been short in silver said the hell with things as they again supplied the necessary paper trying to contain the silver price;  they added 8399 contracts to their short side

Our small specs:

Those small specs that have been long in silver added 1505 contracts to their long side

those small specs that have been short in silver added a tiny 129 contracts to their short side.

Conclusions: commercials go net short by a huge 6,329 contracts with a rising silver price and first day notice over.  Strange! (very bearish)

 

 

 

 

 

And now the Gold inventory at the GLD

FEB 3/no change in gold inventory at the GLD/Inventory rests at 811.22 tonnes

Feb 2/another huge deposit of 1.48 tonnes/inventory rests at 811.22 tonnes

Feb 1/a huge “deposit” of 10.67 tonnes of gold into the GLD/Inventory rests at 809.74 tonnes.  this should stop GLD from sending gold to Shanghai.

JAN 31/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

jan 30/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

Jan 27/no changes at the GLD/Inventory rests at 799.07 tonnes

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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Feb 3/2017/ Inventory rests tonight at 811.22 tonnes
*IN LAST 82 TRADING DAYS: 138.59 TONNES REMOVED FROM THE GLD
*LAST 29 TRADING DAYS: 13.32 TONNES HAVE LEFT

end

 

Now the SLV Inventory
FEB3/ a tiny withdrawal of 136,000 oz to pay for fees etc/inventory rests at 334.713 million oz
Feb 2/no changes in silver inventory at the SLV/Inventory rests at 334.849 million oz
Feb 1/a withdrawal of 948,000 oz from the SLV/Inventory rests at 334.849 million oz
Jan 31.no change in inventory at the SLV/Inventory rests at 335.797 million oz
jan 30/no change in inventory at the SLV/Inventory rests at 335.797 million oz
Jan 27/we had a deposit of 758,000 oz into the SLV/Inventory rests at  335.797 million oz
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/
.
Feb 3.2017: Inventory 334.713  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.5 percent to NAV usa funds and Negative 7.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.7%
Percentage of fund in silver:39.1%
cash .+0.2%( feb 3/2017) 
.
2. Sprott silver fund (PSLV): Premium FALLS to -.29%!!!! NAV (Feb 3/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.36% to NAV  ( feb 3/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.29% /Sprott physical gold trust is back into NEGATIVE territory at -0.36%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRN

Ignore Sabre-Rattling and Buy Gold

  • Gold hits 12-week high
  • USD Gold price up 4.85% in last month
  • Sabre-rattling from Trump administration set-to benefit gold
  • Iran upset and Middle East tensions could drive oil and gold prices up.
  • Financial Times foresees “not only currency wars but a fully fledged trade confrontation that could be disastrous for the world economy.”
  • Royal Mint producing 50 % more gold bullion coins and bars compared to 2016
  • Utah moves to hold public funds in gold
  • WGC report demand for gold hit four-year high in 2016
  • Investment demand climbed by 70% last year fuelled by geopolitical uncertainties 

The Trump administration continues to sabre-rattle at global powers and threatens to disrupt the status-quo of international relations. Comments in just 24-hours by Donald Trump and his team have included attacking an Ivy League university, a nuclear power and two of the United States’ key trading partners.

We continue to look on as the unconventional tweets and announcement appear, but in the meantime watch the gold price hit 12-week highs and inflows of roughly 1.2 million ounces surge into gold ETFs, as uncertainty continues to drive investors towards safe havens.

FOMC stand-by to watch the Donald

Many market observers may have found a funny sort of comfort in seeing the statement of the FOMC meeting, this week. A funny thing to say, but given each day appears to bring a new surprise there is something reassuring that meetings and announcements from the likes of the Federal Reserve, continue as scheduled.

Unsurprisingly, and despite Janet Yellen’s warnings of a ‘nasty surprise on inflation if it was too slow with rate hikes’, the Federal Reserve held back from a further rate rise this week. The committee painted a fairly positive outlook of the economy, it was perceived to be dovish. The statement helped to ultimately push gold prices higher as the dollar fell in disappointment to no rate hike. For some this was an example of ‘The Fed that cried Wolf.’

The Fed is still expected to hike rates up at points throughout the year, but uncertainty about when and how much remains. The FOMC are waiting for further disclosure President Trump’s economic policy.

Gold was the only commodity that climbed higher (+0.9%) following the Fed announcement.

Iran on notice: be on notice to buy gold

Earlier this week Iran tested a ballistic missile and attacked a Saudi navy vessel. The Trump did not disappoint in letting the world that they were unhappy, through both Twitter and Mike Flynn.

Mike Flynn, Trump’s national security advisor stated, ““Recent Iranian actions involving a provocative ballistic missile launch and an attack against a Saudi naval vessel conducted by Iran-supported Houthi militants underscore what should have been clear to the international community all along about Iran’s destabilizing behaviour across the entire Middle East”

Flynn concluded, “As of today, we are officially putting Iran on notice.” This was followed by a Tweet confirming this position, by Trump.

Fordham University maritime law professor and former US Navy Commander Lawrence Brennan spoke to Business Insider on Monday.

“This attack is likely to impact US naval operations and rules of engagement (ROE) in nearby waters,” said Brennan, who pointed out that Iranian ships frequently harass and sail very closely to US Navy ships.

Brennan suggested that in light of the recent suicide boat attacks, the US Navy should now consider shooting Iranian or hostile vessels that get too close.

Given that Trump has so far proven his intention to follow through on campaign promises, we expect him to do the same with Iran. Whilst campaigning in Florida, in September, he told a rally of thousands that when it comes to Iran, “when they circle our beautiful destroyers with their little boats, and they make gestures at our people that they shouldn’t be allowed to make, they will be shot out of the water.”

The remarks from Trump and Flynn took immediate effect on the US dollar (already weakened by the FOMC’s statement) and sent gold higher (as shown in this Business Insider chart).

Iran weighed in on the matter with defence minster Hossein Dehghan telling Iranian state media that contrary to the claims of the US,  “The test was not a violation of a nuclear deal with world powers or any UN resolution,”

Later Ali Akbar Velayati, senior adviser to Iran’s supreme leader Ali Khamenei, told the Fars news agency, “”This is not the first time that an inexperienced person has threatened Iran … the American government will understand that threatening Iran is useless.”

Iran to dump the dollar but stocking up on gold

Of course, this wasn’t the first time President Trump has rattled the Iranians since he took office. When he declared a travel ban on seven countries, including Iran, the country’s central bank decided to respond.

Iranian Central Bank Governor, Valiollah Seif, told sate Press TV that the bank “is seeking to replace the dollar with a new common foreign currency or use a basket of currencies in all official financial and foreign exchange reports.” This will come into force on 21st March 2017. Seif has apparently recommended currencies “ with a high degree of stability.”

The country reportedly receives around USD$41billion in oil revenues, a risk on both sides of the equation.

It is also worth noting that Iran bucked the trend for gold demand in the last quarter of 2016. The WGC reports that a growth of 15% in Q4 helped push annual demand up to 41.0t. This push for gold was supported by the improving domestic economy and is set to continue to climb as the central bank releases new coins later this year.

Good for oil, good for gold

 

Low oil prices across the Middle East affected gold demand, according to the World Gold Council’s 2016 Q4 report, however with Trump’s ongoing fighting-talk (and executive orders to the Middle East) we expect the correlation between oil and gold prices to work in our favour.

Whilst the jury is still out on the correlation between gold and oil returns, there is some clearer correlation between their prices. It is estimated that over 60% of the time, there is a strong correlation between the two. The above chart compares the month-end LBMA fix gold price with the monthly closing price for West Texas Intermediate (WTI) crude oil since 1946.

With all the fighting talk with Iran, oil has had a bit of a pop up (also helped by Exxon’s (XOM) Rex Tillerson being sworn in as Secretary of State). As tensions increase in the Middle East and Trump carries on protecting America’s trade, we expect to see higher oil and therefore gold prices.

As oil prices rise, this pushes up inflation. Gold is an inflation hedge and therefore an increase in demand for the yellow metal, as a safe haven, will increase. It is also worth remembering the damage high oil prices can do on economic growth – by slowing it. Slow economic growth is likely to impact equity markets and boost demand for alternative investments such as gold and silver.

Currency wars set to come out into the open

It is not just the price of oil which signals a positive picture for gold in both the long and short-term. Currency wars, as most recently discussed by us a week ago are now an open threat to the stability of the global financial and trade system.

Trump suggesting that the US dollar was too strong and enticing China into a currency war now seems like a distant memory. It was in fact the start of a trend of the new administration to take on currencies.

Peter Navarro, head of the National Trade Council, had accused Germany of exploiting a ‘grossly undervalued Euro’. This came just days after Shinzo Abe had accused Trump of attacking both China and Japan and for “play[ing] the devaluation market” and was forced deny reports of yen manipulation.

Following Navarro’s Euro comments Ulrich Leuchtmann, an analyst with Germany’s Commerzbank, warned clients to “buckle up for a currency war that might become nasty…With his statement [Mr Navarro] has in fact fired the next salvo in the currency war the US administration is currently conducting against the rest of the world,”

These latest moves by both the President and Navarro signal further steps away from the usual protocol of government leaders who do not openly comment on the currencies of other countries. A job which is usually handled by the Treasury Secretary.

It will be interesting to see what Trump and Navarro think they can do about the strong dollar and other currencies. It is not so easy to devalue, as it once might have been. Moves to weaken the dollar are likely to occur through protectionist measures which will ultimately see price inflation exported around the world as the dollar is used in the majority of trade. This will not be taken well across the globe. The Financial Times echoes such concerns:

“But the chaotic start to the administration and what many see as its protectionist agenda have amplified fears of not only currency wars but a fully fledged trade confrontation that could be disastrous for the world economy.”

Hype overshadows the real news

Despite the announcement from the Yellen and her team, the ongoing sabre-rattling from the Trump administration distracts from economic reports that once influenced markets. For example, today the January employment report will be released, economists are expecting gains of 170,000 which could raise expectations of a rate-hike in March. However, markets appear distracted by activities in the Trump administration and a certain twitter account.

Should the jobs report be positive news then we may see a small-pullback in the gold price, however it is unlikely that investors wish to be short-gold given the world-wide geopolitical environment of uncertainty.

But it is not just Trump that is prompting upset and discomfort, as highlighted by the recent WGC report, gold demand was high in 2016 (and continues to be in 2017) because of ongoing uncertainty with Brexit, elections in France, Germany and Holland.

This has been reflected in an insightful report into government owned Royal Mint shows the explosion in demand for gold across both the UK and Europe. Reuters reports that demand has climbed by 50% since the same point last year and sales rose by one-third in January.

Demand in the UK is reportedly up 25%, whilst sales to German more than doubled in volume terms, in the last year. Workers at the Mint point to uncertainties surrounding Brexit, the EU and the United States as reasons for the dramatic pick-up in demand.

Far away from the White House and the communications machine that is Twitter, in Utah Rep. Ken Ivory introduced a bill that will add several provisions to state law that will allow (and arguably encourage) the use of gold and silver as legal tender.

House Bill 224 will give the state the option to hold public funds in gold and silver, as opposed to Federal Reserve notes. Utah has long been at the forefront in the move to sound money, in 2011 it was the first state in 80 years that allowed the precious metals to be used as legal tender. This latest bill is seen as the next step in allowing gold and silver to be used in everyday transactions.

 

2017 set to shine like 2016

Whilst Q4 saw outflows, 2016 was the second best year for ETFs on record according to the WGC’s latest report. Global demand for gold-backed ETFs was 531.9t – the highest since 2009.

The World Gold Council points to three main factors driving the surge in gold demand in 2016: negative interest rates, the FOMC’s decisions and uncertainty stemming from the geopolitical situation.’

Demand for ETFs continues to be strong, just one month into the year. A report released on January 20th, Inauguration Day, by Bank of America Merrill Lynch said that precious metals saw the first ETF inflows of $1.3 billion, the largest weekly gain in five months.

According to Bloomberg, almost $1.6 billion poured into the 10 precious-metals ETFs that have attracted the most money in January. In Europe, in the week of Trump’s inaugurations, Germany’s Xetra-Gold ETF added $544 million in gold-backed ETF inflows. That amount is ten times that in the world’s biggest gold-backed ETF, SPDR Gold Shares (GLD).

Uncertainty remains, as does the need to buy gold

As we discussed yesterday, there is much uncertainty in the markets at present. The inauguration of Donald Trump just two weeks ago has, if anything, increased this feeling rather than reassure markets. However this sabre-rattling is distracting and markets do not know where to turn.

Supply and demand ultimately affect prices, but it is expectations and sentiment that make markets move. Despite Trump doing exactly what he promised, he continues to shock in the way he is delivering on those promises and this is confusing the sentiment in the market. Putting aside the events in the first week of his Presidency, this week in just 24 hours President Trump managed to threaten an Ivy League institution with a stop their federal funding, put a nuclear power ‘on notice’ and insult Australia over immigrants.

What is not confusing, as we see in the levels of gold demand, is market expectations. The market is expecting a period of uncertainty, it is expecting a period of raised tensions between the United States and the growing list of countries it has publicly taken issue with and it is expecting people to turn to safe havens such as gold and silver.

Yesterday we wrote about how big declarations and fear-mongering can distract us from what is really going on and, therefore, distract us from making the right decisions. It is clear that there is growing number of investors, around the world, who are not being distracted by the noise and the hype and are choosing to invest in safe havens such as gold and silver.

It would be wise to expect heightened uncertainty in the forthcoming months, if not longer. There is little point in looking to market sentiment at a time when a 140-character tweet can flip it upside down. Instead, investors should look to hold some of their wealth in gold and silver, assets that have long-held their value at times of unpredictability and turmoil whether through war, economic crises or political upheaval – all of which appear to be on the cards.

 

http://www.goldcore.com/us/gold-blog/ignore-sabre-rattling-buy-gold/

 

end

 

The big story out late last night:  In a private case against JPMorgan et al, the appellant court overrules a divisional court’s rule dismissing JPMorgan from the silver rigging case. This has huge ramifications: we can now discover JPMorgan and ask them about their huge increase in silver inventory while at the same time shorting the paper comex/OTC silver:

 

(courtesy MarketSlant)

PM Silver Rigging Case Back in Court

Appeals Court Overturns Dismissal in JP Morgan Silver Rigging Case

  • US Appeals Court overturns Dismissal in Silver Rigging Case against JPMorgan
  • The Appeals court rejected Judge Engelmeyer’s claim that the plaintiffs did not prove JPMorgan made “uneconomic bids” in the silver forward’s markets.
  • New Discovery May Win the Case for against JPMorgan

Summary

The New York 2nd U.S. Circuit Court of Appeals ruled yesterday that District Court Judge Engelmayer was in error when he dismissed the Silver price rigging lawsuits against JP Morgan. The appellate court felt that Engelmayer’s dismissal reasons amounted to “impermissible fact finding” and placed too high of a bar in concluding that plaintiffs had not adequately plead their case.

This reversal of the June, 2016 dismissal means the case will go back to the district court for further litigation. This also means the plaintiffs will ask for and receive more discovery. This can win the case for them.

The Lawsuit  Was Dismissed in June,2016

JPMorgan Chase & Co had won the dismissal of three private antitrust lawsuits, including from hedge fund manager Daniel Shak, accusing the largest U.S. bank of rigging a market for silver futures contracts traded on COMEX.The lawsuits accused JPMorgan of having in late 2010 and early 2011 placed artificial bids onto the trading floor, harangued employees at metals market COMEX to obtain prices it wanted, and made misrepresentations to a committee that set settlement prices.

Why it Was Dismissed in June

U.S. District Judge Paul Engelmayer in Manhattan, however, said the plaintiffs, who also included traders Mark Grumet and Thomas Wacker, did not show that JPMorgan made “uneconomic” bids, or intended to rig the market at counterparties’ expense.

He also questioned the plaintiffs’ use of Silver Indicative Forward Mid Rates (“SIFO”) as a benchmark for determining proper levels for the spreads in their lawsuits.

In fact on April 21st, 2016 JP Morgan urged the judge quash the litigation. JPMorgan insisted allegations that the bank monopolized the market were too vague to support antitrust claims. They urged the judge ot raise the bar for the plaintiffs’ burden of proof.

The Appeals Court Overturns the Dismissal Yesterday

The appellate court held that the plaintiffs did in fact submitted evidence that did in fact reach a level warranting further investigation. Therefore, the case should not have been dismissed.

In quoting the law, the 3 judges stated:

A plaintiff need only allege enough facts ‘to raise a right to relief above the speculative level,’ and ‘state a claim to relief that is plausible on its face.’

They stated that Judge Enlgemayer’s requirements for such specifics were too high to reach, describing the proof bar being raised to “a level of detail not required to withstand a motion to dismiss”

In essence what Judge Engelmeyer asked of the plaintiffs was impossible to ascertain in those proceedings.

Specifically: “Fact-specific questions cannot be resolved on the pleadings.”

Can JP Morgan Monopolize Silver? Yes

The appellate court noted that the plaintiffs’ allegation of JP Morgan’s ability to control silver futures prices with reference to a particular market was proven correct. Thus,

“The District Court did not err in concluding that the Plaintiffs plausibly alleged a relevant market.”

This means that the plaintiffs showed plausibility that JP Morgan could control the far end of the Silver futures term structure via non-competitive bids.

To traders, that means the JPM client who had to sell back month was faded way too low. [EDIT- And when one looks at the term structure from then, it is obvious that no true physical demand was in evidence based on the spot contango.- Vince Lanci]

Did JP Morgan Monopolize Silver?  To be Determined

The Appeals court did not say they believed JP Morgan exercised such ability to monopolize the Silver market. But the statement that they noted the power to do so was proven in the first hearing is significant in that it agrees with the District court’s findings.

What Next

  1. The appellate court says the plaintiffs made a sufficient enough case for further investigation into a monopoly claim
  2. The findings of the appellate court will accompany the case file
  3. Judge Engelmeyer’s decision is removed and the case is remanded for further litigation and discovery

MarketSlant’s Analysis post the decision in June, 2016

 SIFO IS KEY

Given the (lawsuits’) failure both to explain why SIFO should track silver futures spreads, and to concretely plead that it did so consistently, a mere general correlation between these two is not sufficient to make SIFO a reliable benchmark such that deviations from it support a claim of irrational pricing animated by anticompetitive aims,” Engelmayer wrote.

Analysis:  a poor job was done explaining the role of SIFO in spread pricing.

SIFO represents the spread between expirations of FORWARD physical contracts in silver. The futures spread markets are derivative of the SIFO spreads. SIFO represents the cost-of-carry for physical silver and is used in determining lease/borrow rates over periods of time. These are in-turn extrapolated and the dominant factor in determining futures spreads on COMEX. Comex spreads are a direct function of SIFO. Without SIFO there are no spreads. And since SIFO was a much bigger market than the Comex spread market. The pricing mechanism was not fully transaparent. It was in the hands of a few dominant cartel-like players, as it had been for 30 years.

Analysis: The demand was fabricated

The market was only partially backwardated. Spot was below the next 6 expirations. Translation: there was no massive demand for immediate delivery. There was only demand in months where the last remaining floor traders who took risk trading their own money had positions. JPM’s own book was likely short and had to get liquidity to cover their own positions. We knew Shak from our floor days, and were trading spreads off floor when this happened. They should not have lost this case. Comex traders do not trade spot. Spot was under the backwardation. Smoking gun? No, but damning circumstantial evidence in the least.

Bottom Line on the Trade

What really happened then was a silver miner had to hedge forward and cover up front. JPM likely had this client cornered and faded their back month bids. The miner, having no where else he could go, hit them OTC, when they were much better bid on the floor. Once SIFO and COMEX spreads are proven to be linked, the case will be made.

Blythe Did a Mini Buffet to a Client

How come in 1997 when Warren Buffet, who actually stood for delivery, the market did not rally until AFTER the spreads backwardated all the way to spot? Yet in 2011, the market had rallied already, and all of a sudden spreads (literally overnight during asian and london hours) went into backwardation? In a real market, the spread activity predicts the physical demand before the flat price does. You see the spot price start to act squirrelly to the front month future in the EFP. There are exceptions to this. But it is rare.

This trader also remembers that in 1997, Buffet was asked by the Govt to defer his request for delivery a year. He happily complied by selling spot and rolling out to a 1 year future. Payout? He netted an ROR of 40% due to negative carry without selling. Effectively he lent the producers their silver back to them ($7.40) at a premium of approximately 40% higher than his cost ($4.50). So Blythe did A mini Buffet, that’s all.

Why wasn’t that opportunity afforded SHAK and other locals? Does that have to be answered beyond this: In Mr. Buffet’s case “the integrity of the market was at stake”( Hunt Brother’s anyone?). The whole Silver mining industry was in jeopardy. (TBTF). But  in Shak v.JPM only locals got burned. I’m sure each one of my arguments for manipulation can be taken apart by some lawyer or expert. But that is what they do. Facts against them? Argue the Law. Law against them? Argue the facts. Both against them? Use ad hominum attacks to shoot the messenger.

END

 

Chris Powell comments on the above case:

(courtesy Chris Powell/GATA)

 

Silver-rigging anti-trust lawsuits against JPMorganChase reinstated

Section:

11:25p ET Thursday, February 2, 2017

Dear Friend of GATA and Gold:

Market Slant reports tonight that the U.S. 2nd Circuit Court of Appeals in New York has reinstated the silver-market rigging lawsuits against JPMorganChase, finding that the district court judge who dismissed the lawsuits engaged in “impermissible fact finding.” The case returns to the district court for more proceedings and presumably evidence discovery and deposition. Market Slant’s report is posted here:

https://www.marketslant.com/articles/jp-morgan-silver-rigging-dismissal-…

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

 

 

end

 

Avery Goodman correctly states that the fun begins for JPMorgan as they will be finally discovered:

(courtesy Avery Goodman)

 

JP Morgan Silver Manipulation Lawsuit Revived By Appeals Court!

On June 29, 2016, US District Court Judge Paul Engelmayer dismissed a lawsuit against JP Morgan Chase & Co. which alleged that the bank had engaged in extensive manipulation of the price of silver, in violation of both state and federal  antitrust laws. The plaintiffs appealed. On February 1, 2017, the US Appeals Court for the 2nd Circuit Court of Appeals held that their complaint contained sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This reverses the lower court and revives the lawsuit.
.

In other words, JP Morgan is now back on the “hot seat”. The most important result of this important decision is that the bank will be forced to face the process of “discovery”. Lawyers have a number of tools with which to ferret out the truth. JPM will face interrogatories, subpoenas, depositions and requests for documents. That means internal documents will be pried open.

Is JP Morgan the sole entity responsible for silver price manipulation? We don’t know that. Furthermore, our system of law and justice tells us that everyone, even mega corporations, are innocent until proven guilty. That having been said, the evidence that both the gold and silver market is being heavily manipulated is very strong.  A lot of fingers have pointed to JP Morgan but, in my view, much more than one bank is responsible. There are a number of other banks that are already being sued in other lawsuits.

The results of discovery may further implicate other banks and brokerage houses. It could make it possible to extract trading information from the Commodities Futures Trading Commission (CFTC), which improperly closed its own investigation of silver trading. The same issues are now being investigated by private sector lawyers who have no interest in cashing in on the possibility of future employment with the bank.  Maybe, this will help to drain the swamp.
.
You can read the appellate court decision, in its entirety, by clicking the link below.
.
end
There is no question that Trump wants to devalue the USA dollar which no doubt will create a global currency war..Mike Kosares comments
(courtesy Mike Kosares/GATA)

Mike Kosares: A Trump devaluation and global currency war?

Section:

2:15p ET Thursday, February 2, 2017

Dear Friend of GATA and Gold:

USAGold’s Mike Kosares today takes note of the growing impression that the Trump administration wants to devalue the U.S. dollar and speculates about how the devaluation might come about. Kosares’ commentary is headlined “A Trump Devaluation and Global Currency War?” and it’s posted at USAGold here:

http://www.usagold.com/cpmforum/2017/02/02/a-trump-devaluation-and-globa…

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

 

 

END

 

On the same them, Bloomberg news comments on the next Trump country that manipulates their currency

(courtesy Bloomberg/GATA)

 

Whom will Trump blast next over their currencies?

Section:

By Lananh Nguyen
Bloomberg News
Thursday, February 2, 2017

With all the Trump administration’s jawboning about countries devaluing their currencies to gain an unfair trade advantage, financial markets are left wondering: Who’s next?

Canada, Mexico, and even South Korea are potential candidates for exchange-rate criticism, according to William Cline, a senior fellow at the Peterson Institute for International Economics in Washington. That’s because those nations are some of the U.S.’s biggest trading partners, and in the case of South Korea, its currency is also 6 percent undervalued, according to a PIIE study.

“Who else would be on the list — in the first instance, the larger countries that matter more to our trade,” Cline said Wednesday. “I don’t think most economists would agree that they’re cheating, but that’s the conclusion that these kinds of attacks would imply.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-02-02/naughty-or-nice-redef…

 

END

 

Alasdair Macleod’s weekly message to us:

(courtesy Alasdair Macleod)

 

Alasdair Macleod: Price controls and propaganda

Section:

2:35p ET Thursday, February 2, 2017

Dear Friend of GATA and Gold:

In his new commentary, “Price Controls and Propaganda,” GoldMoney research director Alasdair Macleod explains why, despite the recent experience of Venezuela and Zimbabwe, governments are increasingly likely to resort to price controls to try to compensate their debasement of their currencies. Macleod’s commentary is posted at GoldMoney here:

https://wealth.goldmoney.com/research/goldmoney-insights/price-controls-…

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

 

end

What a riot:  the USA justice dept has done nothing in the silver price fixing case.  They have now asked a one yr delay so they can enter the class action case

Unbelievable..

(courtesy zero hedge)

 

Justice Department tries to stall discovery in silver price-fixing case

Section:

Silver Investors Slam Justice Department Discovery Halt in Silver Price-Fixing Case

By Kelcee Griffis
Law360.com, New York
Wednesday, February 1, 2017

https://www.law360.com/articles/887079/silver-investors-slam-doj-discove…

NEW YORK — Silver investors accusing major banks of price-fixing urged a New York federal court in a document posted Tuesday to forgo the U.S. Department of Justice’s proposed one-year discovery stay, asking the court to strike a compromise to “better balance the governmental and private interests at stake.”

In a heavily redacted document dated Jan. 19 but posted Tuesday, the investors asked to keep open the broader discovery in their consolidated proposed class action against banks including HSBC and The Bank of Nova Scotia, saying the Justice Department’s timeline to accommodate its criminal investigation would severely hamper the present multidistrict litigation.

“The department does not proffer any time frame for when it might file charges against any of its targets. Thus, the department’s proposal will result in a lengthy stay of this action,” the investors wrote.

The government asked to join the suit in early January and requested a partial yearlong stay of civil discovery while it conducts criminal investigations, saying the move would actually make way for the civil suit to forge ahead.

“In any event — and far from grinding to a halt — the proposed partial stay will allow significant aspects of the civil litigation and civil discovery to continue,” the department contended in a Jan. 9 memorandum.

The silver investors in the multidistrict litigation made clear on Tuesday they don’t oppose the government’s joining the suit, but they do take issue with it potentially slowing down their discovery.

The investors said they already made concessions involving depositions and proposed a type of three-month embargo that the department could renew periodically.

The plaintiffs said that if the court balances the department’s interests with their own, the agency could agree to produce certain documents “on an attorneys’ eyes-only basis.”

“This would allow plaintiffs to review documents and be ready to take depositions when the embargo is lifted, but also protect the department’s investigation by preventing public disclosure of the materials until the embargo ends,” the opposition brief said.

But the department already flatly rejected that proposal, the investors said.

Still, it would not be fair to force the proposed class to move for certification without the benefit of sufficient discovery, according to the filing.

In November a judge signed off on Deutsche Bank’s $38 million settlement with the class of investors who participated in U.S.-related trades of silver or silver derivatives dating back to January 1999.

In a December motion to file a third consolidated amended class-action complaint, the investors urged the court to add as defendants Barclays Bank and affiliates, BNP Paribas Fortis, Standard Chartered Bank, and Bank of America Merrill Lynch. The investors also asked the court to revive their previously dismissed claims against UBS.

The suit had alleged Deutsche Bank, HSBC, and Bank of Nova Scotia colluded to fix the price of silver futures to ensure the banks received high returns as part of The London Silver Market Fixing Ltd., which has set the price of physical silver since 1897.

Counsel for the parties could not be immediately reached for comment Wednesday.

The plaintiffs are represented by Barbara J. Hart, Vincent Briganti, Geoffrey M. Horn, Raymond Girnys, Christian P. Levis, and Michelle E. Conston of Lowey Dannenberg Cohen & Hart, and James J. Sabella, Robert G. Eisler, and Charles G. Caliendo of Grant & Eisenhofer PA.

Deutsche Bank is represented by Rob Khuzami, Joseph Serino and Kuan Huang of Kirkland & Ellis and Peter J. Isajiw of King & Spalding.

UBS AG is represented by David J. Arp, Melanie L. Katsur, Joel S. Sanders, Peter Sullivan, Indraneel Sur, and Lawrence J. Zweifach of Gibson Dunn.

The case is In re: London Silver Fixing Ltd. Antitrust Litigation, case number 1:14-md-02573, in the U.S. District Court for the Southern District of New York.

* * *

end

 

We now have our second state after Texas that will encourage a state owned gold depository

(courtesy Mike Maharrey/TenthAmendment Center)

Utah Bill Sets Stage For State Gold Depository, Further Encourages Use Of Metals As Money

ubmitted by Mike Maharrey via The Tenth Amendment Center,

A bill introduced in the Utah legislature would build on the state’s Legal Tender Act, creating a foundation for further action to encourage the use of gold and silver as money, and take another step toward breaking the Federal Reserve’s monopoly on money.

Rep. Ken Ivory (R-West Jordan) introduced House Bill 224 (HB224) on Jan. 27. The legislation would add several provisions to state law designed to encourage the use of gold and silver as legal tender. Passage would set the stage for expansion of gold repositories in the state and authorize further study on several sound money policies.

Specifically, HB224 would authorize the investment of public funds in specie legal tender held in a commercial specie repository. Under existing code, “specie legal tender” means gold or silver coin and bullion. “Commercial specie repository” means an institution that holds or receives deposits of specie legal tender that is located within the state. Practically speaking, passage would give the state the option to hold funds in gold and silver instead of Federal Reserve notes.

The legislation would also direct the State Money Management Council to make rules governing quality criteria for a commercial specie repository, in consultation with the state auditor.

A “GOLD BANK” FOR UTAH

Gov. Greg Abbot signed legislation creating a Texas gold bullion and precious metal depository in June of 2015. The facility will not only provide a secure place for individuals, business, cities, counties, government agencies and even other countries to to store gold and other precious metals, the Texas law also creates a mechanism to facilitate the everyday use of gold and silver in business transactions. In short, a person will be able to deposit gold or silver – and pay other people through electronic means or checks – in sound money.

Ivory said “secure public transaction is the ultimate goal” in Utah as well.

In fact, the United Precious Metals Association (UPMA) already offers publicly available accounts denominated in gold and silver dollars in Utah. According to the UPMA, in the past year it has grown 700 percent in assets under management and made up 2 percent of the market for U.S gold and silver coins.

“Despite a couple of zerohedge articles, most people remain unaware of Utah’s gold bank,” UPMA head of sales and marketing Jeremy Cordon said. “We are a few years ahead of Texas.”

According to Cordon, passage of HB224 would give UPMA and similar repositories a special recognition by the state, and that would likely expand the market for their services. The state of Utah will also be able to hold legal tender gold and silver in such repositories under the proposed law.

HB224 would also authorize Federal Fund Commission “to study and assess the taxpayer reporting requirements for specie legal tender income and the remittance of taxes on specie legal tender income; the collection of severance taxes in specie legal tender for taxes assessed under Section 59-5-202 on gold and silver production; and (viii) the issuance of bonds denominated and payable in specie legal tender for the purpose of retiring existing government debt.”

LEGAL TENDER

In 2011, Utah became the first state in over 80 years to pass a law making gold and silver coin legal tender. The following year, the legislature followed up, approving a bill clarifing several tax measures and more importantly, expanding the definition of specie to include gold and silver coin approved by the state.

Passage of HB224 would take the next step forward and further open the door for the use of gold and silver in everyday transactions in the state.

In a speech to the UPMA announcing the legislation, Ivory emphasized the connection between sound money and liberty. He told the story of a woman who tried to pay her bill at Walmart with gold coins. The cashier told her she needed “real money.” When the lady went to the bank, the teller gave her face value for the 14 Double Eagle coins – $280. The value of the gold itself was over $20,000.

“Think about where we are when we don’t understand the value. The nature of our property, the nature of our liberty embodied and represented in money that has a fixed standard.”

IMPACT ON FEDERAL RESERVE

The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” States have simply ignored this constitutional provision for years. It’s impossible for states to return to a constitutional sound money system when it taxes gold and silver as a commodity.

State actions like Utah’s Constitutional Tender Act, and the creation of a bullion depository in Texas take steps toward that constitutional requirement, ignored for decades in every state and sets the stage to undermine the monopoly of the Federal Reserve by introducing competition into the monetary system.

By making gold and silver available for regular, daily transactions by the general public, the state depositories create the potential for wide-reaching effect. Professor William Greene is an expert on constitutional tender and said in a paper for the Mises Institute that when people in multiple states actually start using gold and silver instead of Federal Reserve notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.

“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a ‘reverse Gresham’s Law’ effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes).

“As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there.

NEXT

HB224 was referred to the House Rules Committee, where it must pass by a majority vote before being referred to a standing committee for further consideration.

end

Your early FRIDAY 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 STRONGER AT  6.8695(SMALL REVALUATION NORTHBOUND   /OFFSHORE YUAN NARROWS   TO 6.8183 / Shanghai bourse DOWN 18.99 POINTS OR .60%   / HANG SANG CLOSED DOWN 55.31 POINTS OR .24% 

2. Nikkei closed DOWN 3.62 POINTS OR 0.02%   /USA: YEN RISES TO 113.08

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index RISES TO  100.04/Euro DOWN to 1.0736

3b Japan 10 year bond yield: FALLS TO    +.10%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.35/ 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::  53.72  and Brent: 56.77

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 UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.438%/Italian 10 yr bond yield UP  to 2.268%    

3j Greek 10 year bond yield FALLS to  : 7.53%   

3k Gold at $1211.75/silver $17.34(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 18/100 in  roubles/dollar) 59.23-

3m oil into the 53 dollar handle for WTI and 56 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 SMALL   REVALUATION NORTHBOUND   from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.08 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  0.9961 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0695 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 FALLS to  +.438%

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 2.481% early this morning. Thirty year rate  at 3.093% /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

US Futures Rise Ahead Of Payrolls Following A Surprise-Filled Asian Session

European stocks and S&P futures rose modestly ahead of January US payrolls data, along with the dollar, while Asian shares dropped after China returned from a week-long holiday. Bonds slid, oil rose while the JGB intervened in the bond market to prevent a bond rout, in one of two major surprises during the Asian session.

As reported last night, having closed at 0.109% yesterday the 10y JGB yield touched an intraday high of 0.150% this morning – the highest in 12 months – despite the BoJ offering to buy back ¥450bn of 5-10y maturities in a scheduled operation, which equaled the amount bought a  week ago. The quantity was clearly seen as too passive though in the context of breaking through what most think is the perceived upper limit of the BoJ’s level of comfort around the 0% 10y yield target. However after the market had tested their resolve the BoJ then made another move a couple of hours later in an unscheduled operation to buy back an unlimited amount of bonds again in the 5-10y bucket, at a fixed rate of 0.110%. The 10y yield has now fallen back. While that latter move has had a more obvious effect, it’s worth highlighting that the yield still remains above the BoJ’s perceived upper band, notwithstanding the fact that markets have been left a bit dazed and confused by all this. The Yen has also whipsawed and is currently -0.20% weaker.

That was not all: in the second unexpected Asian move, this morning China announced an unexpected tightening of policy when it raised rates on 7, 14 and 28-day reverse repos by 10bps to 2.35%, 2.50% and 2.65% respectively. That’s the first increase in the 28-day contracts since 2015 and since 2013 for the other two tenors. Keep in mind that this is the first working day following the New Year holiday in China, so it seems to be a decent statement of intent by the PBoC.

Additionally, the SLF rate was increased to 3.1 percent from 2.75 percent. The implicit tightening sent Chinese stocks lower, with the Shanghai Composite closing down 0.6%, and accelerating the selloff in Chinese 10Y government futures.

While a set of well-received corporate results helped prevent the weakness from spilling over into European stocks, the focus now shifts to the U.S. labor market report.

All of which brings us to payrolls Friday, a fitting end to what has been a busy week. The current market consensus for today is 175k although the range between economists is a fairly lofty 140k to 238k. Remember that Wednesday’s ADP came in at a much better than expected 246k while the employment component of the ISM manufacturing also bounced 3.3pts to 56.1, so the whisper number might be a little higher than the where the consensus is. As always keep an eye on the other components of the report too. The market expects the unemployment rate to hold steady at 4.7% and average weekly earnings to rise +0.3% mom.

The Bloomberg’s Dollar Spot Index rose, paring a sixth weekly decline, its longest losing streak since 2010. Europe’s Stoxx 600 index advanced and the region’s bonds dropped, following moves in Treasuries. Britain’s pound dropped against most of its major peers after growth slowed in the service industry amid surging costs.  As Bloomberg notes, central bank decisions have dominated the financial markets all week, as policy makers from Japan to the U.S. try to assess the impact of America’s new leadership on global growth. Investors are also looking for clues on economic strength amid a wave of corporate earnings. While signs point to increasing confidence that growth will accelerate, data have painted a murkier picture, highlighting the significance of Friday’s jobs report.

“The next hurdle for the USD to overcome is the Fed,” said analysts at Morgan Stanley, led by strategist Hans Redekker, in a note to clients, adding, however, that conditions for a resumption of the dollar to resume its rally have improved. Reiterations of continued monetary policy in Europe, the Bank of Japan’s commitment to control the JGB yield curve and weaker yuan fixings by the People’s Bank of China, are “three pluses” for the US dollar, Morgan Stanley said.

“Investors are really cautious, taking a defensive posture, as they wait and see what U.S. jobs data will show about the economy and the pace of rate increases,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. “The direction of global interest rates is also a key element keeping investors at bay.”

European stocks rose 0.5 percent as of 10:51 a.m. in London, reversing the previous session’s losses. Only miners dropped, following lower-than-expected China macroeconomic data. Futures on the S&P 500 edged higher. The index has gained or retreated by less than 0.1 percent for five of the past six days, and is down 0.6 percent on the week.

Meanwhile, in commodities oil prices edged up on threat of U.S. issuing new Iran sanctions while comments by Russian energy minister Alexander Novak that oil producers had cut their output in accordance with a pact agreed in December also helped support prices. Brent crude futures were up 17 cents, or 0.3 percent, to $56.72 a barrel. Brent is set to gain more than 2 percent for the week. Front month U.S. West Texas Intermediate crude futures climbed 15 cents, or 0.3 percent, to $53.69 a barrel.

The yield on 10-year U.S. Treasuries rose one basis point to 2.48 percent. The yield on German bonds due in a decade also added one basis point to 0.43 percent.

* * *

Market Snapshot

  • S&P 500 futures up 0.2% to 2280
  • Stoxx 600 up 0.5% to 364
  • MSCI Asia Pacific down 0.2% to 142
  • US 10-yr yield up less than 1bp to 2.48%
  • Dollar Index up 0.24% to 100.03
  • WTI Crude futures up 0.3% to $53.69
  • Brent Futures up 0.3% to $56.75
  • Gold spot down 0.2% to $1,214
  • Silver spot down 0.7% to $17.36

Top Global News

  • Trump to Order Review of Dodd-Frank, Halt Obama Fiduciary Rule: plans executive action Friday to significantly scale back the regulatory system put in place in 2010
  • America Movil Misses Estimates With Mexico Margins Pressured: Home market’s operating profit margin falls to 18% from 28%
  • Visa Sticks to Forecast Despite Strong Dollar, Shares Rise: New CEO Al Kelly sees ‘good momentum in the business’
  • Snap Files for IPO; 2016 Rev. $404.5m vs $58.7m y/y
  • Nordstrom Says It’s Cutting Ivanka Trump Brand Due to Poor Sales: Cites the brand’s performance in making the decision
  • Amazon Projects Spending That Concerns Investors Watching Profit: Company says earnings will shrink even as revenue soars
  • Panasonic Falls as U.S. Authorities Investigate Avionics Unit: Panasonic also raises full-year profit and sales forecasts
  • Snap Asks Non-Voting Investors to Focus on Vision, Not Losses: IPO investors only offered non-voting shares in company
  • Amgen Cholesterol Drug Meets Goals; Profit Tops Estimates: Results of large study could unleash sales of pricey Repatha
  • FireEye Falls After Disappointing Forecast, Executive Exits: Fourth-quarter sales were unchanged from a year earlier
  • Daimler Reviewing Collaboration With Nissan at Mexico Auto Plant: Infiniti output set to start this year, Mercedes in 2018
  • Escondida Strike Faces Delay as BHP Applies for Mediation: Request to labor authorities may add 5 days of negotiations

Asian markets were fractionally lower, following a subdued lead from as the region digested a miss on Chinese Caixin Manufacturing PMI and amid cautiousness ahead of NFP. This weighed on both the ASX 200 (-0.4%) and Nikkei 225 (Unch) with the latter choppy in reaction to BoJ-induced JPY fluctuations. Shanghai Comp. (-0.6%) and Hang Seng (-0.2%) traded negative on return of mainland participants who were greeted by the aforementioned miss on PMI data and after the PBoC raised rates for its reverse repo operations and Standing Lending Facility. 10yr JGBs whipsawed with initial pressure seen following a weak BoJ bond buying announcement of JPY 520BN vs. last Friday’s JPY 1.27TN total. However, 10yr JGBs then recovered after a late surprise by the BoJ to conduct a fixed-rate JGB purchase operation for unlimited amounts of 5-10yr JGBs, in which it offered to buy the benchmark 10yr at 0.11% and therefore effectively restricted further increases in yields.

Top Asian News

  • China Tightens as Japan Keeps Easing as Monetary Policy Diverges: PBOC hikes money market costs, BOJ intervenes in bond market
  • Jindal Said in Talks to Sell Power Plant for Over $1.5 Billion: Co. seeks to cut debt after eight straight quarters of losses
  • GIC Investment Chief Sees ‘Structural’ Changes in Tech, Health: Sovereign fund has created two groups for tech, healthcare
  • Mitsubishi UFJ Profit Unexpectedly Rises 17% on Bond Trading: Japan’s three biggest banks are on track to meet profit goals
  • Honda Raises Operating Profit Forecast by 21% on Weaker Yen: Yen has weakened about 7% since Trump elected U.S. president

European indices are trading in the green with materials the only sector in the red after poor manufacturing data from China. Energies outperform after WTI and Brent crude prices hold up after a few days of gains. In terms of major movers this morning, Banco Popular shares fell in the wake of their pre-market earnings release. The Spanish bank posted losses of EUR 3.58b1n which led shares to fall 8% at the open. In fixed income markets supply is light today with only with the UK DMO coming to market with their usual Friday T-bill tender.

Top European News

  • Banco Popular Posts $3.9 Billion Loss on Real Estate Purge: Troubled Spanish lender seeks to draw line under property bust
  • Areva Agrees Equity Investments From Japan Nuclear Companies: France to subscribe to EU2.5b reserved capital increase
  • Orange Seeks Africa Deals as Wireless Carrier Eyes Expansion: French wireless carrier ‘speaking to everyone,’ official says
  • Goldman Sachs Sells $940 Million Stake in Denmark’s Dong: Goldman will still own a 7% stake in the Danish utility
  • May Seeks to Ride Brexit Wave Targeting Historic By-Election Win: Conservatives are aiming for rare gain for a ruling party
  • U.K. Services Growth Cools as Costs Dominate Companies’ Concerns: PMI index falls to 54.5 in Jan. from 56.2 in Dec.

In currencies, the usual pre US payrolls trade sees the USD meandering in some well worn ranges, with USD bulls still looking to find a base. Despite some glitches in the data series of late — including the Q4 GDP number this time last week — the market has also been trying to fight off comments from president Trump and his advisers (on currency devaluation), but today’s numbers could put some focus back on domestic led policy drivers, albeit with the Fed rate hike profile currently erring towards 2 for 2017. USD/JPY is showing signs of the strain more than anywhere else, and this may have contributed to a little more intent in EUR/USD, as sellers came in hard ahead of 1.0850 yesterday. Resilience coming in from the low 1.0700’s, with buyers pointing to the rise in inflation despite the ECB choosing to look through the energy led effects. Cable could come under attack once again if USD bulls look for a safer route, and this will have been enhanced by the UK services PMIs this morning, which saw the index falling more than expected from 56.5 to 54.5 vs 55.8 expected. EUR/GBP has tipped 0.8600, but is struggling to hold onto gains. Russia’s ruble pared an earlier loss and bonds retreated after the central bank left its key rate unchanged at 10 percent and said the potential for a cut in the first half of the year has diminished.

In commodities, China’s return has failed to produce the fresh bid in base metals as some were expecting, with softness in prices partly attributed to a modest bid in the USD. Zinc and Lead are showing the larger percentage losses on the day so far, while Copper found price resistance ahead of USD6,000p/t yesterday, extending the pull-back to just shy of USD5,8000. Nickel has also eased back despite the impact on mines in the Philippines from the environmental `moratorium’. Oil headed for a third weekly gain as OPEC reached about 60 percent of its output-cut target and the U.S. was said to be planning new sanctions on Iran after a missile test. West Texas Intermediate crude advanced 0.4 percent to $53.74 a barrel and Brent climbed to $56.78.  Gold pared the biggest weekly gain since Jan. 13 as demand rebounded to a three-year high in 2016 as investor concerns over political issues including Brexit spurred demand for a haven. Bullion for immediate delivery slipped 0.2 percent to $1,213.17 an ounce, poised for a weekly increase of 1.9 percent. Industrial metals declined after after weaker-than-expected factory data and signs of tighter monetary policy in China, highlighting risks of demand slowing. Copper dropped 0.9 percent to $5,832.50 a metric ton and zinc lost 2.6 percent. Nickel fell 1.8 percent as companies in the Philippines pushed back on mine-closure orders that could restrict supply of the metal.

Looking at the day ahead, this morning in Europe it’ll be all eyes on the remaining January PMI’s where we’ll get the final revisions to services and composite readings for the Euro area, Germany and France, as well as a first look at the data for the UK and the periphery. Also due out this morning is the December retail sales numbers for the Euro area, which printed a disappointing -0.3% on expectations of a +0.3% rise. In the US it’ll be all eyes on the aforementioned January employment report and of course the nonfarm payrolls print. As well as that, the final services and composite PMI revisions will be made, while the ISM non-manufacturing reading for January and factory orders in December will also be out. Away from the data we’ll also hear from Chicago Fed President Evans this afternoon at 2.15pm GMT when he is due to speak on the US economy and policy. On the earnings front it’s fairly quiet with only 6 S&P 500 companies set to report.

* * *

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, Jan., est. 175k (prior 156k); Unemployment Rate, Jan., est. 4.7% (prior 4.7%)
  • 9:15am: Fed’s Evans Speaks on Economy and Policy in Olympia Fields
  • 9:45am: Markit US Services PMI, Jan. F (prior 55.1)
  • 10am: ISM Non-Manufacturing Composite, Jan., est. 57.0 (prior 57.2)
  • 10am: Factory Orders, Dec., est. 0.7% (prior -2.4%)
  • 10am: Durable Goods Orders, Dec. F (prior -0.4%); Capital Goods Orders Non-Def Ex-Aircraft & Parts, Dec. F (prior 0.8%)
  • 1pm: Baker Hughes rig count

DB’s Jim Reid concludes the overnight wrap

Welcome to payrolls Friday, a fitting end to what has been a busy week. Well we say its been busy, what with the world getting used to the ebbs and flows of a Trump Presidency and the subsequent need to keep our Twitter accounts within eyeshot, central bank meetings from the BoJ, Fed and BoE, European politics bubbling below the surface and the corporate reporting calendar kicking up a gear. That said, aside from some brief excitement on Monday, the reality is that we’re still hovering around similar low levels of volatility and markets appear to be no more convinced about the near-term direction relative to where we sat last week.

Indeed we thought it would be worth taking a quick snapshot of what markets have done this week. The most interesting price action has come in FX where Mr Trump’s jawboning about currencies has been a big factor. As a result we’ve seen the Dollar index trade in a high-to-low range range of 1.77%, the Yen trade in a 2.53% range and the Euro in a 1.96% range this week. However that is about the extent of the excitement. In rates 10y Treasury yields closed last night at 2.475% after closing at 2.485% last week, and have traded in a fairly unexciting 8bp range this week. Credit markets are much the same with CDX IG just 1.5bps wider this week (with a 2.5bp range) while iTraxx Main is 2bps wider over the week (in a 4bp range). What has been most remarkable though is the amazingly small day to day moves for US equities. Following the -0.60% loss on Monday the last three daily moves for the S&P 500 have been -0.09%, +0.03% and +0.06%. In fact if we go back to the last six trading days, the index has closed either up or down by less than 0.10% on five of those six days. The current level of the VIX (11.93) is also not too far off the two and a half year low on Friday of 10.58.

If the overnight session in Asia is anything to go by though, then we might be in for a livelier day today. The first thing to note is the latest moves in JGB’s. Having closed at 0.109% yesterday the 10y yield touched an intraday high of 0.150% this morning – the highest in 12 months – despite the BoJ offering to buy back ¥450bn of 5-10y maturities in a scheduled operation, which equalled the quantum bought a  week ago. The quantity was clearly seen as too passive though in the context of breaking through what most think is the perceived upper limit of the BoJ’s level of comfort around the 0% 10y yield target. However after the market had tested their resolve the BoJ then made another move a couple of hours later in an unscheduled operation to buy back an unlimited amount of bonds again in the 5-10y bucket, at a fixed rate of 0.110%. The 10y yield has now fallen back. While that latter move has had a more obvious effect, it’s worth highlighting that the yield still remains above the BoJ’s perceived upper band, notwithstanding the fact that markets have been left a bit dazed and confused by all this. The Yen has also whipsawed and is currently -0.20% weaker as we type. The Nikkei is up +0.36%. A fascinating few hours.

That’s not all though as this morning China also announced that they are raising rates on 7, 14 and 28-day reverse repos by 10bps to 2.35%, 2.50% and 2.65% respectively. That’s the first increase in the 28-day contracts since 2015 and since 2013 for the other two tenors. Keep in mind that this is the first working day following the New Year holiday in China, so it seems to be a decent statement of intent by the PBoC. Bourses in China have opened lower with the Shanghai Comp and CSI 300 currently -0.57% and -0.61% respectively.

Away from that the ASX (-0.47%) and Kospi (-0.18%) are also down, while US equity index futures are also in the red. There’s also been some Trump news to highlight with the announcement last night that the new administration is to impose fresh sanctions on Iran, possibly as soon as today. This comes after Trump warned on Wednesday that he was putting Iran “on notice” for recent military action and also for supporting various military groups. The WSJ is suggesting that the sanctions are unrelated to Iran’s nuclear program and so won’t violate the nuclear deal forged under Obama’s administration.

Back to payrolls. The current market consensus for today is 180k although the range between economists is a fairly lofty 140k to 238k. Our US economists have a below-market 150k forecast which they note is consistent with real GDP growth near 2%. Remember that Wednesday’s ADP came in at a much better than expected 246k while the employment component of the ISM manufacturing also bounced 3.3pts to 56.1, so the whisper number might be a little higher than the where the consensus is. As always keep an eye on the other components of the report too. The market expects the unemployment rate to hold steady at 4.7% and average weekly earnings to rise +0.3% mom.

Moving on. While there wasn’t a huge amount to report from markets in the US yesterday, it was a bit of a weaker day for European equities where the Stoxx 600 fell -0.34%. More eye catching were the moves in rates though. 10y Bund yields finished 4.3bps lower at 0.420% and yields in the periphery were anywhere from 4bps to 10bps lower. That may have reflected some of the commentary out of the ECB yesterday. Board member Praet said that the firming recovery in Europe is “not yet sufficiently robust to ensure a self sustained convergence of inflation rates to levels closer to 2%”.

The bigger impact though was perhaps the BoE. As expected there were no surprises on the policy front. DB’s Mark Wall highlighted that the key change to the BoE’s latest assessment of the economy was not that GDP was revised up, which was more predictable – the forecast for GDP growth in 2017 is now 2.0%, up from 1.4% in November and 0.8% in August – but that the supply side potential of the economy was revised up too. The impact of the latter effectively neutralized the ramifications on inflation from the former. More specifically, the BoE has reduced its view on the natural rate of unemployment to 4.5% from  5.0%. Overall Mark viewed the neutral tone in the BoE’s press statement, MPC minutes and Inflation Report press conference as more dovish than he had expected. In his view the hurdle to changing the policy stance, or signalling a potential change, is high. There remains a fear also that Brexit could yet hurt the economy more substantially and that the costs of a policy error are asymmetric.

Staying in Europe, yesterday DB’s Marco Stringa published an update on the political situation in Catalonia. He highlights that Catalonia’s independence quest is likely to return to the headlines over the next few months. He believes that the call for an independence referendum there is not just posturing to get a better fiscal deal. Indeed it is his long-held view that the fragile Catalan government can survive only if it is seen continuing with the plan to hold an independence referendum. The President of Catalonia has said that the independence referendum will take place at the latest in September 2017 but that according to Spanish media, the Catalan government is considering bring it forward to early summer. In Marco’s central case scenario, he does not think that the current Catalan government has enough political support to implement a unilateral secession from Spain even if the hypothetical independence referendum takes place. The main risk in the short term is increasing tensions that play into the hands of the pro-independence movement.

Before we look at today’s calendar, in terms of yesterday’s data in the US, non-farm labour productivity rose a slightly stronger than expected +1.3% qoq annualised (vs. +1.0%) in Q4. Unit labour costs rose less than expected in the same quarter (+1.7% vs. +1.9% expected). Finally initial jobless claims decreased 14k to 246k last week. The only other data to note yesterday was the Euro area PPI reading which printed at +0.7% mom.

Looking at the day ahead, this morning in Europe it’ll be all eyes on the remaining January PMI’s where we’ll get the final revisions to services and composite readings for the Euro area, Germany and France, as well as a first look at the data for the UK and the periphery. Also due out this morning is the December retail sales numbers for the Euro area. In the US this afternoon it’ll be all eyes on the aforementioned January employment report and of course the nonfarm payrolls print. As well as that, the final services and composite PMI revisions will be made, while the ISM non-manufacturing reading for January and factory orders in December will also be out. Away from the data we’ll also hear from Chicago Fed President Evans this afternoon at 2.15pm GMT when he is due to speak on the US economy and policy. On the earnings front it’s fairly quiet with only 6 S&P 500 companies set to report. The only other thing to keep an eye on today is a meeting between EU leaders in Malta this morning where discussion topics are set to include migration and the political future of the bloc. Before we sign off, it’s worth noting that this Sunday President Trump is due to take part in a televised interview with Fox News prior to the Super Bowl  at 9pm GMT/4pm EST. So keep an eye on that one.

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 18.99 POINTS OR .60%/ /Hang Sang CLOSED DOWN 55.31 POINTS OR .24% . The Nikkei closed UP 3.62 POINTS OR 0.02% /Australia’s all ordinaires  CLOSED DOWN 0.42%/Chinese yuan (ONSHORE) closed UP at 6.8695/Oil FELL to 53.72 dollars per barrel for WTI and 56.77 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8183 yuan to the dollar vs 6.8695  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A BIT AS POBC ATTEMPTS TO STOP DOLLARS FROM LEAVING CHINA’S SHORES. BOTH YUANS STRONGER COUPLED WITH THE STRONGER DOLLAR

3a)THAILAND/SOUTH KOREA/:

END

b) REPORT ON JAPAN

Last night:  Japanese bond yields surge despite intervention by the Bank of Japan.  Remember they are targeting a zero rate and we are getting .10 to .11%

(courtesy zero hedge)

Japanese Bond Yields Surge, Yen Spikes As Kuroda Disappoints Market: “The Market Will Test The BOJ”

One week ago, yields on the Japanese 10Y JGB tumbled when the BOJ relented, and succumbed to market demands to expand its debt monetization, when it increased the size of its daily bond purchase operation, or POMO in NY Fed parlance, in the 5-10 year zone from JPY410BN to JPY450BN, which sent yields tumbling as market participants assumed the BOJ would chase every uptick in yields with progressively greater bond purchases. The day before, on January 25, the BOJ upset market expectations as it held off on the purchase of JGBs with maturities of more 1-3 three years and 3-5 years. Two days later, however, it increased the purchase of JGBs with maturities in the 5-10 year zone by 40 billion yen from the previously known amount, to 450 billion yen.

The unexpected moves aroused speculation as to whether the BOJ is preparing to taper its quantitative easing program. With market participants split in their views on the BOJ’s stance on monetary easing, yields on JGBs fluctuated wildly.

Fast forward to Friday, when on the previous day the 10Y JGB blew out to 0.10%, the highest yield since the JGB unviled NIRP one year ago, and prompted a fresh round of speculation whether the BOJ would again increase the amount of debt it purchased.  It did not, and as a result Japan’s 10-year yield surged as traders judged the central bank’s expanded bond purchases Friday to be insufficient to cap borrowing costs as global rates continued rising and steepening around the globe.

The 10Y yield rose as much as 4 bps to 0.15%, the highest since January of 2016, while the yield on the 20-year bond also climbed three basis points to 0.720%.

What is surprising is that the BOJ did increase purchases for bonds due in 5-to-10 years to 450 billion yen ($4 billion), from 410 billion yen planned for the first operation this month. However, since 450 billion is what the BOJ did last week when 10Y yields were lower, the market was clearly hoping for even more.  Furthermore, instead of purchasing bonds in the longer duration 10Y+ bucket, the central bank instead picked shorter maturities at 1Y, hinting there may be a scarcity in long-dated supply, arguably the stuff of Kuroda’s nightmares.

The increased purchase in the 5-10Y bucket mirrors the scale from last week, with the BOJ so far refraining from repeating its November offer to buy an unlimited amount of bonds at a fixed rate. The central bank has the option to announce fixed-rate operations at 2 p.m. Tokyo time Friday.

“There were some expectations that given the level of the yield rise, the amount would be boosted more,” said Souichi Takeyama, a rates strategist at SMBC Nikko Securities Inc. in Tokyo. “The focus will be on whether the BOJ will deliver further action later in the day as it still has options to rein in the rise in yields.”

A second analyst echoed the sentiment: “It’s not enough,” said Simon Pianfetti, a senior manager in the market solutions department at SMBC Trust Bank Ltd. in Tokyo and added that “the market will test the BOJ further.”

As Bloomberg adds, BOJ Governor Haruhiko Kuroda faces the challenge of seeking to hold down borrowing costs just as accelerating inflation is pushing up bond yields globally. While Kuroda on Tuesday recommitted to his yield-curve control strategy to hold 10-year debt at around zero percent, he also said investors shouldn’t pay too much attention to daily operations, reinforcing earlier efforts to expand the central bank’s flexibility in purchases.

As a reminder, the BOJ has committed to “curve control”, meaning it needs to adjust its bond purchases to account for any divergence in the 10Y away from 0%, which means the higher the yield, the more the BOJ needs to purchase. Which is why on days like today, when the BOJ disappoints, the reaction can be so violent, and not only in bonds, but also in the Yen, which jumped by 40 pips since the BOJ’s disappointing announcement, and the USDJPY sliding from 112.95 to 112.55.

“Market looks to have been looking for a broader spectrum of purchase increases to reaffirm the commitment,” said Peter Dragicevich, a foreign-exchange strategist at Nomura Holdings Inc. in Singapore. “But as the BOJ minutes noted this morning, some members have called for flexibility in meeting the target.”

Analysts interpret the BOJ’s target of around zero percent to mean a range between positive and negative 0.1 percent. Still, a few BOJ board members at the December policy meeting said the central bank should avoid setting a uniform range for its management of bond yields, minutes of that gathering showed Friday. With the 10Y blowing out beyond that key level, any failure by the BOJ to respond with an expanded monetization on Monday could result in a yield blow out.

And sure enough, with the BOJ leaving markets on edge, skeptical analysts promptly emerged, wondering if the BOJ is finally throwing in the towel and is preparing to join the ECB in tapering its bond purchases next:

SMBC Trust Bank

  • The increase was not enough
  • The market will test the BOJ further

Nomura (Peter Dragicevich, FX strategist)

  • Market looks to have been looking for a broader spectrum of purchase increases to reaffirm BOJ’s commitment
  • Market continues to test BOJ’s resolve with 10-year yields up a couple more basis points
  • But as BOJ minutes from December policy meeting noted this morning, some board members have called for flexibility in meeting the target

SMBC Nikko Securities (Souichi Takeyama, rates strategist)

  • BOJ has shown its willingness to contain rise in yields but seems to have failed to communicate well with markets
  • There were some expectations that BOJ would boost purchase amount more or may buy super-long-term bonds
  • With none of these expectations met, there is speculation BOJ isn’t serious about stopping rise in yields
  • The central bank may also be taking into account impact of its bond operations on the currency

Barclays (Naoya Oshikubo, rates strategist)

  • People expected BOJ to buy more, even in the zone of more than 10 years
  • The disappointing outcome accelerated the selloff in bonds

Should the 10Y yield continue to rise and fail to engender an appropriate response from the central bank, that would suggest that Kuroda is indeed tapering, and the time to aggressively sell the USDJPY has arrived.

 

 

end

 

We brought to your attention the story of Japan willing to use its large pension fund to fund 700,000 USA jobs.  it seems that this is true.  Japan is so afraid of Trump that they are willing to undergo this ridiculous program

(courtesy zero hedge)

 

c) REPORT ON CHINA

none today

4. EUROPEAN AFFAIRS

Deutsche bank/Germany

Deutsche bank will slash more jobs as they are having great difficulty with their fixed income trading  (no doubt with negative interest rates)

(courtesy zero hedge)

Deutsche Bank To Slash Jobs Across Equity, Fixed Income Trading

Having seemingly survived their existential crisis last year, it appears the world’s most systemically dangerous bank remains under pressure. Just a day after missing analysts’ earnings expectations, Deutsche Bank is set to announce major job cuts across its trading businesses.

As Bloomberg reports, the bank will cut as much as 17 percent of staff in its equities unit and reduce fixed-income headcount by as much as 6 percent, with notices to be served to employees soon, the person said.

Chief Executive Officer John Cryan is cutting 9,000 jobs across the company to raise profitability and capital levels eroded by misconduct costs. Deutsche Bank’s market share in fourth-quarter trading fell to the lowest since the financial crisis as Cryan cut assets and clients concerned about the company’s finances pulled back.

Debt-trading revenue rose 11 percent to 1.38 billion euros ($1.48 billion), falling short of the 1.68 billion-euro average estimate of 10 analysts in a Bloomberg News survey. Equity trading revenue, which analysts had expected to be flat, fell 23 percent to 428 million euros.

The equities business is still “flattish to slightly down” in January compared with a year earlier, though the firm’s debt-trading business saw a 40 percent increase in the month, Deutsche Bank Chief Financial OfficerMarcus Schenck said Thursday on a call with analysts.

Following chatter of more client redemptions during the call, the share price has begun to flag once again – but for now CDS remains well off its 2016 wides.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Israel

Trump flip flops a bit on Israel.  Trump tells Netanyahu that it would be helpful if no new settlements.  Trump states however that the settlements are not really a hindrance to the peace process

(courtesy zero hedge)

Trump Flip-Flops On Israel: Tells Netanyahu, No New Settlements

 

 

end

 

IRAN/uSA

USA initiates more sanctions against Iran. Russia not a happy camper and thates that these are counter productive

(courtesy zerohedge)

US Unleashes New Sanctions On Iran; Russia Says “Counter-Productive”

The U.S. imposed fresh sanctions on Iran as President Donald Trump seeks to punish Tehran for its ballistic missile program after warning the Islamic Republic that it is “playing with fire.” As Bloomberg reports, the Treasury Department published a list of 13 individuals and 12 entities facing new restrictions, some for contributing to proliferation of weapons of mass destruction and others for links to terrorism.

The reaction is clear – USD extending its losses and crude rallying…

Meanwhile, RIA is reporting that Russian foreign ministry officials have remarked that “sanctions against Iran are counter-productive.”

The following individuals have been added to OFAC’s SDN List:

  • AL-HAJJ, Yahya (a.k.a. AL-HAJ, Yahya; a.k.a. AL-HAJ, Yehia Issa Mohamad); DOB 23 May 1959; POB Aramta, Lebanon; Additional Sanctions Information – Subject to Secondary Sanctions; Gender Male; Passport RL 2544590 (Lebanon) issued 07 Jun 2013 expires 07 Jun 2018 (individual) [SDGT] [IRGC] [IFSR].
  • ASGHARZADEH, Abdollah; DOB 16 Sep 1968; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [NPWMD] [IFSR].
  • DARIAN, Tenny (a.k.a. SHAKHDARIAN, Tenny); DOB 06 Sep 1979; POB Tehran, Iran; citizen Iran; Additional Sanctions Information – Subject to Secondary Sanctions; Passport B23545963 expires 05 Mar 2017 (individual) [NPWMD] [IFSR].
  • EBRAHIMI, Hasan Dehghan (a.k.a. IBRAHIMI, Hasan Dahqan); DOB 21 Mar 1961; POB Dezfool, Iran; Additional Sanctions Information – Subject to Secondary Sanctions; Gender Male; Passport U19707756 (Iran) issued 12 May 2011 expires 11 May 2016 (individual) [SDGT] [IRGC] [IFSR].
  • FARHAT, Muhammad ‘Abd-al-Amir (a.k.a. FARHAT, Mohammad; a.k.a. FARHAT, Mohammad Abdul Amir); DOB 23 Aug 1969; POB Kuwait; Additional Sanctions Information – Subject to Secondary Sanctions; Gender Male; Passport RL 2325452 (Lebanon) expires 31 Jul 2017 (individual) [SDGT] [IRGC] [IFSR].
  • MAGHAM, Mohammad; DOB 16 Sep 1970; nationality Iran; Additional Sanctions Information – Subject to Secondary Sanctions; Passport H22452336 (Iran) (individual) [NPWMD] [IFSR].
  • ROSTAMIAN, Kambiz, Villa No 13, Cluster 31 Juemierah Islands, Dubai, United Arab Emirates; DOB 27 Aug 1960; Additional Sanctions Information – Subject to Secondary Sanctions; Passport RE0003026 (Saint Kitts and Nevis); alt. Passport I17217816 (Iran) (individual) [NPWMD] [IFSR].
  • SHARIFI, Ali (a.k.a. SALEHI, Ali); DOB 23 Feb 1966; POB Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions; Gender Male; Passport M31335740 (Iran); alt. Passport U30608043 (Iran) (individual) [SDGT] [IRGC] [IFSR].
  • XIANHUA, Qin (a.k.a. QIN, Jack; a.k.a. XIANHUA, Jack); DOB 08 Jan 1979; citizen China; Additional Sanctions Information – Subject to Secondary Sanctions; Passport E31457650 expires 21 Oct 2023 (individual) [NPWMD] [IFSR].
  • YUE, Richard (a.k.a. YAODONG, Yue); DOB 22 May 1974; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [NPWMD] [IFSR].
  • ZAHEDI, Mostafa (a.k.a. KHAZE, Karim; a.k.a. LIU, Jhon; a.k.a. OMAR, Asem; a.k.a. “IBRAHIM, Mohammad”; a.k.a. “IBRAHIM, Mohammed”); DOB 29 Jun 1978; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [NPWMD] [IFSR].
  • ZARGARI, Ghodrat (a.k.a. ZARGARI, Ghodratollah); DOB 1944; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [NPWMD] [IFSR].
  • ZHOU, Carol; DOB 30 Oct 1982; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [NPWMD] [IFSR].

The following entities have been added to OFAC’s SDN List:

  • COSAILING BUSINESS TRADING COMPANY LIMITED, 2808 Number 1 Building, 98 Nanjing Road, Shinan District, Qingdao, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • EAST STAR COMPANY (a.k.a. SATEREH SHARGH MOBIN CO.; a.k.a. SATEREH SHARGH SAMIN CO., LTD.; a.k.a. SETAREH SHARGH CO.), Unit 5, Third Floor, 15th Street, Bokharest Avenue, Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • ERVIN DANESH ARYAN COMPANY (a.k.a. ERVIN DANESH), 5th Floor, No. 78, Forsat Shirazi Street, North Kargar Street, Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • MAHER TRADING AND CONSTRUCTION COMPANY (a.k.a. MAHER TRADING AND ENGINEERING; a.k.a. “MAHER COMPANY”), Concord building, 7th floor, Verdan, Beirut, Lebanon; Harik Harik, on the street near al-Husnayn Mosque, Malik bin Qazzam, 5th floor, Beirut, Lebanon; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR].
  • MIRAGE FOR ENGINEERING AND TRADING (a.k.a. “MIRAGE FOR ENGINEERING”), Kalim Bechara Building, 2nd floor, Trabulsi Street, Badaro, Beirut, Lebanon; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR].
  • MIRAGE FOR WASTE MANAGEMENT AND ENVIRONMENTAL SERVICES SARL, PO Box 113/6655, Msieleh Main Road, Rabiyeh Building, 2nd floor, Msieheh, Lebanon; Website www.miragewm.com; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR].
  • MKS INTERNATIONAL CO. LTD. (a.k.a. MKS INTERNATIONAL; a.k.a. MKS INTERNATIONAL GROUP), Office No 4, Babataher Street, Dr Fatemi Avenue, Tehran, Iran; PO BOX 14155-4618, Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • NINGBO NEW CENTURY IMPORT AND EXPORT COMPANY, LTD. (a.k.a. NEW CENTURY IMPORT AND EXPORT CO. LTD), 5 Hongtang South Road, Jiangbei, Ningbo 315033, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • OFOG SABZE DARYA COMPANY, Unit Seven, Fourth Floor, Number 18, 15th Street, Khaled Eslamboli Street, Beheshti Avenue, Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • REEM PHARMACEUTICAL (a.k.a. REEM PHARMACEUTICAL, LLC; a.k.a. REEM PHARMACEUTICAL, S.A.R.L.; a.k.a. REEM PHARMACEUTICAL, SAL), Kalim Bechara Building, 2nd floor, Trabolsi Street, Badaro, Beirut, Lebanon; Website www.reempharma.com; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR].
  • ROYAL PEARL GENERAL T.R.D. (a.k.a. ROYAL PEARL CHEMICAL; a.k.a. ROYAL PEARLS; a.k.a. ROYAL PEARLS GENERAL TRADING), PO Box 74382, Dubai, United Arab Emirates; Office No. 8, Near Regal International, Sheikh Zayed Road, Dubai 74382, United Arab Emirates; Website www.royalpearlchem.com; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
  • ZIST TAJHIZ POOYESH COMPANY (a.k.a. POOYESH ENVIRONMENTAL INSTRUMENTS; a.k.a. ZIEST TAJHIEZ POOYESH), 16, Afshar Alley, Fajr Street, Motahari Avenue, Tehran, Iran; Website www.pooyeshenviro.ir; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].

The following changes have been made to OFAC’s SDN List:

  • DODIK, Milorad, Republic of Srpska, Bosnia and Herzegovina; DOB 12 Mar 1959; Gender Male (individual) [BALKANS]. -to- DODIK, Milorad, Republika Srpska, Bosnia and Herzegovina; DOB 12 Mar 1959; Gender Male (individual) [BALKANS].

Ahead of the announcement, Iran’s foreign minister, Mohammad Javad Zarif, said, “Iran unmoved by threats as we derive security from our people.” He added later: “We will never use our weapons against anyone, except in self-defense.”

 

Iran has responded…

Iran will bar the American wrestling team from a major international meet this month in response to President Trump’s order severely limiting travel from several Muslim-majority countries, including Iran.

 

Bahram Qasemi, the Iranian Foreign Ministry spokesman, announced the ban Friday morning, the Islamic Republic News Agency reported.

6.GLOBAL ISSUES

This was quite a crash:  Mexico’s consumer confidence came crashing down with today’s reading:  68.5 instead of 84.9

(courtesy zerohedge)

A New Problem For Mexico: Consumer Confidence Crashes To Record Low

While the biggest threat facing Mexico, and its unpopular president Enrique Pena Nieto, in the past month has been President Trump’s insistence on building a “Massive Wall”, which Mexico would pay for, as well as Trump’s threats of renegotiating NAFTA, today we got a fresh reminder that America’s neighbor to the south has another looming problem: a rapidly deteriorating economy coupled with surging inflation on the back of the recent 20% price hike for gasoline, which culminated in a record crash in Mexican consumer confidence.

While the whisper number was 84.9, and the survey said 83.5 the actual print came in at an unprecedented 68.5 (69.3 seasonally adjusted) the lowest print on record. Consumer confidence posted a broad based and extraordinarily large 17.9% mom decline in January (-25.7% yoy), and has now declined in 7 of the past 8 months. The aggregate consumer confidence is at the weakest level since the series began to be reported in April 2011.

Significant declines were recorded across all of the five confidence sub-indices. Furthermore, consumers become more negative about both the current and expected personal and, in particular, the overall economic picture. The index measuring the current situation of the individual household posted a 9.7% mom sa decline and the index measuring perceptions of the future situation of the household declined by an even larger 15.6% mom sa. Furthermore, the index assessing consumers’ perceptions of the current economic picture posted a large 22.6% mom sa decline and the forward-looking index assessing expectations with regards to the outlook for the economy posted a 23.6% mom sa decline. Finally, the index measuring the current capacity of households to buy durable goods compared with a year ago posted a 23.5% mom sa decline.

The sharp decline in consumer confidence reflects the surge in inflation in January driven by the very large double digit increase in gasoline and gas prices, which triggered several episodes of public social discontent, as well as ongoing concerns about Trump.  As Goldman warns, weakening consumer and business confidence is a source of growing concern about the outlook for real activity as it turns consumers/households more defensive (increases precautionary savings and reduces the appetite to buy durable goods) and through it undermines the hitherto strong buoyancy of private consumption

As Bloomberg adds Mexico’s consumers have been propping up growth for the past couple of years (and contributing to the current-account deficit). Retail spending accelerated to a seven-year high in the 12 months through November. Today’s plunge will surely impact retail and banking stocks and feed through into rate expectations, sending shopper on the “back foot.”

The number is likely to drop further: Mexico’s annual inflation shot up in early January to 4.78%, its fastest pace in over four years, stoked by a government-led increase in gasoline prices. Consumer prices are seen rising to over 5.2 percent this year, according to a central bank poll published this week, a move well above policymakers’ upper limit of 4 percent that will likely fuel further interest rate hikes.

Trump’s victory has sent shock waves through Mexico, threatening to upend years of cooperation between the neighboring countries. U.S. threats to rip up a free trade deal with Mexico cast a chill over company investment plans, while worries of slower growth and inflation could hit private spending.

“The fall in consumer confidence is directly related with Donald Trump taking office, and his threats toward Mexico, but it’s also affected by inflationary pressures,” Gabriela Siller, of Banco BASE, said in an investor note.

No matter the cause, unless the rapid plunge in public sentiment is arrested Mexico will have greater problems than just Trump to deal with in the near future, including political turbulence which could sweep the current regime from power, leading to a power vacuum at a time when Mexico is most vulnerable to pressure from its far more powerful neighbor to the north, giving Trump free reign to make even more aggressive demands, resulting in even further public anger on the ground in Mexico, until eventually something snaps.

7. OIL ISSUES

rig counts rise again to 16th month highs as USA production also rises.  However jobs are not to be found as robotics has done a great job replacing growth in this important sector

(courtesy zero hedge)

Rig Count Surges Again To 16-Month Highs (But Where’s The Oil Industry Jobs)

For the third week in a row, the US oil rig count rose dramatically (up 15 to 583 – the highest since October 2015). This is the biggest 3-week surge in rig counts since April 2013… (the biggest 3-week percentage gain since Nov 2009)

 

Production continues to trend with rig count...

 

However, as exuberant as this number is, job gains are nowhere to be found as the robotization of the industry (amid more ‘real’ costs of capital) provide no help to Americans…

As Bloomberg notes, the addition of just 100 jobs to industry payrolls lags well behind the pace of the overall U.S. economy, which added 227,000 workers during the month. The growing use of robots and other efficiencies honed over the course of a 2 1/2 year market downturn means more work is getting done with fewer people. Confirming previous fears that robots are repacing roughnecks.

The inevitable advance of technology and automation has upended industries such as car manufacturing and food processing. Now robotics is making its way into the oil fields by helping drilling activities and putting together heavy pipes.

For companies, more automation would mean higher efficiency, safer operations, and ultimately, lower drilling and production costs. For oil rig workers, it would mean that part of the jobs lost during the oil price downturn would never return. Also, part of the new job openings would require a different type of skill set: for example, information technology and advanced computer skills.

But even if automation is expected to increase, and some day take over drilling sites and drillships, it is not the norm in the oil and gas industry today. While there have been early adopters, the oil and gas drilling business is still years away from becoming an automated activity.

Companies that had been lavishly spending on drilling at oil prices at $100 per barrel were too busy pumping oil and gas to think of efficiency and production costs. But the oil price bust has squeezed their budgets, and the firms are now seeking to cut costs while increasing efficiency.

Apart from reducing the human factor in drilling such as shifts or fatigue, or work-related accidents and incidents, automation can reduce headcount costs.

Automated drilling rigs may be able in the future to reduce the number of persons in a drilling crew by almost 40 percent, from 25 workers to 15 workers, Houston Chronicle’s Jordan Blum writes, quoting industry analysts.

Drilling company Nabors Industries expects that it may be able to reduce the size of the crew at each well site to around 5 people from 20 workers now if more automated drilling rigs are used, Bloomberg’s David Wethe says.

However, a sensitive issue such as workforce in an industry that had slashed a couple of hundred thousand jobs during the downturn has just become even more sensitive with the new U.S. administration.

“The Trump Administration will embrace the shale oil and gas revolution to bring jobs and prosperity to millions of Americans,” President Trump’s America First Energy Plan states.

So companies are likely to keep a low profile on how much staff costs they would be saving.

“They’ll more likely brag about the automation rather than these head counts,” James West, an analyst with investment bank Evercore ISI, told Bloomberg.

Automation is also likely to drive small-sized subcontractors doing jobs for larger companies out of business.

Although it is expected in the not-so-distant future, automated rigs will not be replacing en masse human workforce this year or next. Right now, there are many conventional under-utilized rigs, especially in offshore drilling, where companies had slashed exploration and drilling expenditure.

In land drilling, activity in the U.S. oil patch is picking up, and employment has recently shown the first signs of gains after more than two years of declines.

Total job growth in Texas is expected to rise from 1.6 percent in 2016 to around 2 percent in 2017, Dallas Fed assistant vice president and senior economist Keith Phillips said earlier this month.

“Job growth picked up in the second half of 2016 due to a stabilization of the energy sector,” Phillips noted.

Part of the jobs lost over the past two and a half years may never return due to increased automation, but the recovery of U.S. drilling may send companies hunting again for staff this year.

8. EMERGING MARKETS

Zimbabwe, home to the trillion dollar bank note which in 2009 could not even buy you a pkg of gum, is at it again,with their printing of Zimbabwe bond notes which is suppose to trade on a par with dollars.  A black market is already in full operation.

(courtesy Simon Black/SovereignMan)

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

Euro/USA   1.0736 DOWN .0026/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 RISING RATE/EUROPE BOURSES GREEN 

USA/JAPAN YEN 113.08 UP 0.271(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 1.2489 DOWN .0029 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT)

USA/CAN 1.3049 UP .0020 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS FRIDAY morning in Europe, the Euro FELL by 26 basis points, trading now WELL ABOVE the important 1.08 level FALLING to 1.0736; 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 MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 18,99 POINTS OR0.60%     / Hang Sang  CLOSED DOWN 55.31 POINTS OR .24% YEAR   /AUSTRALIA  CLOSED DOWN 0.42%  / EUROPEAN BOURSES 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 FRIDAY morning CLOSED UP 3.62 POINTS OR 0.02% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 55.31 POINTS OR .24%       / Australia BOURSE CLOSED DOWN 0.19% /Nikkei (Japan)CLOSED UP 362.02 POINTS OR 1.22%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1212.00

silver:$17.33

Early FRIDAY morning USA 10 year bond yield: 2.481% !!! UP 1 IN POINTS from THURSDAY 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  3.093, UP 1 IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 100.04 UP 22 CENT(S) from WEDNESDAY’s close.

This ends early morning numbers FRIDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 4.172% UP 5  in basis point yield from WEDNESDAY 

JAPANESE BOND YIELD: +.10%  DOWN 2 (DESPITE INTERVENTION)  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.682%  UP 4 IN basis point yield from  WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.265  UP 2 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 59 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.412% DOWN 2 IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.0783 UP .0022 (Euro UP 22 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.16 DOWN: 0.276(Yen UP 28 basis points/ 

Great Britain/USA 1.2516 DOWN 0.0002( POUND DOWN 2 basis points)

USA/Canada 1.2995 DOWN 0.0033(Canadian dollar UP 33 basis points AS OIL ROSE TO $53.82

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 22 basis points to trade at 1.0783

The Yen FELL to 112.16 for a GAIN of 28 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 2  basis points, trading at 1.2516/

The Canadian dollar ROSE  by 33 basis points to 1.2995,  WITH WTI OIL RISING TO :  $53.82

The USA/Yuan closed at 6.8649/CHINA NOW OPEN AFTER NEW YEAR’S CELEBRATION
the 10 yr Japanese bond yield closed at +.10% DOWN 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 3 IN basis points from THURSDAY at 2.444% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.079 DOWN 1 in basis points on the day /

Your closing USA dollar index, 99.66 DOWN 49 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 FRIDAY: 1:00 PM EST

London:  CLOSED UP 47.55 OR 0.67% 
German Dax :CLOSED UP 23.54 POINTS OR 0.20%
Paris Cac  CLOSED UP 31.13 OR 0.65%
Spain IBEX CLOSED UP 56.30 POINTS OR 0.60%
Italian MIB: CLOSED UP 226.85 POINTS OR 1.20%

The Dow closed UP 186.55 OR 0.94%

NASDAQ WAS closed UP 30.57 POINTS OR 0.54%  4.00 PM EST
WTI Oil price;  53.82 at 1:00 pm; 

Brent Oil: 56.92  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.92 ROUBLES/DOLLAR  (UP 49/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD FALLS TO +0.412%  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:$53.83

BRENT: $56.79

USA 10 YR BOND YIELD: 2.469%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.091%

EURO/USA DOLLAR CROSS:  1.0786 up .0024 

USA/JAPANESE YEN:112.60  DOWN 0.204 

USA DOLLAR INDEX: 99.76  down 3  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2481 : DOWN 37   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.412%

 

 

END

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

TRADING IN GRAPH FORM

Disappointing Wages Spark Biggest Market Rally Of The Year

 

Bad news is good news again…

 

US Macro Surprises continue to disappoint…

 

And to be clear – all the gains in macro data have been ‘soft’ survey gains with ‘hard’ real data completely unchanged…

 

But bad news is great news and stocks had their best day of the year… Dow back above 20,000…

 

Stocks managed to scramble back to green on the week (Dow and Trannies red)…Small Caps squeezed to best of the week

 

On another big short squeeze…

 

VIX was crushed back to a 10 handle – after all it was a payrolls day and you always buy the fucking payrolls day dip…

 

Led by banks surging on Dodd-Frank repeal executive orders…

Goldman and JPMorgan accounted for half of The Dow’s gains today.

But it was an ugly week for FANG stocks…

 

And Energy stocks were the worst on the week…

 

Weak jobs data was trumped by Fed speak today to ramp yields back higher (30Y notable underperformer)…

 

The 2s30s Treasury yield curve steepened dramatically this week (post-Fed, post-payrolls) to its steepest since December…

 

But as we noted earlier, real yields have erased all the trumpflation gains…

 

The USD Index fell for the 6th week in a row (every week in 2017) – and this week was the worst for the greenback since July 29th… falling to 2-month lows

 

The USD Index rallied back into the green briefly today thanks to a comment from The Fed’s Williams but ended lower…

 

As the dollar dropped on the week, Bitcoin rallied during China’s Golden Week… back above $1000.

 

Gold also gained (up 5th of last 6 weeks), closing at its highest weekly close since the election…

 

Copper had its worst week of the year as gold won… Gold had its best week since April 2016

 

Just one thing…

 

END

 

trading today:

Food for thought:

Trumpflation Hope Is Over

US real yields have collapsed since shortly after The Fed hiked rates, with today’s decline erasing the entire post-election Trumpflation surge in TIPS yields.

As Bloomberg reports, so-called real yields hit an intermediate peak the day after the Federal Reserve’s December interest-rate increase, and have since proceeded to grind lower amid rising doubts that President Donald Trump’s suite of policies will be as pro-growth as initially thought.

 

Still, it’s probably nothing…

 

In Trump’s first payroll report, the BLS reports a surge in 227,000 jobs but the all important earnings component disappoints.  And believeit or not the unemployment rate ticks higher:

(courtesy zero hedge)

Trump’s First Payroll Report: 227K Surge In Jobs, But Earnings Disappoint; Unemployment Rate Ticks Higher

Donald Trump’s first official economic report has started off on the right foot, with the BLS reporting that some 227K jobs were added in January, far above the 175K expected, and in line with the ADP number.

The change in total nonfarm payroll employment for November was revised down from +204,000 to +164,000, and the change for December was revised up from +156,000 to +157,000. With these   revisions, employment gains in November and December combined were 39,000 lower than previously reported.

Offsetting the headline surge in jobs was a disappointment in the average hourly earnings which rose a tepid 0.1% , below the 0.3% expected, and below the downward revised December 0.2% (from 0.4%) despite January being the month in which minimum wage hikes took place across 19 states.

On the year, average hourly earnings rose by 2.5%, the weakest annual growth since August. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.84.

While the amount of average weekly hours for all employees remained flat at 34.4, the average weekly earnings dipped to 1.9%, the lowest print in the past year.

Judging by the market reaction, which has seen the dollar drop as stocks and bonds rose, this is a mildly dovish report and is likely to sow more doubts about the Fed’s plane to hike rates three times in 2017.

Also of note, the unemployment rate ticked up from 4.7% to 4.8% even as the number of employed workers according to the Household survey declined modestly.

More details from the report:

  • Total nonfarm payroll employment rose by 227,000 in January. Employment increased in retail trade, construction, and financial activities.
  • Retail trade employment increased by 46,000 over the month and by 229,000 over the year. Three industries added jobs in January–clothing and clothing accessories stores (+18,000), electronics and appliance stores (+8,000), and furniture and home furnishings stores (+6,000).Employment in construction rose by 36,000 in January, following little change in December. Residential building added 9,000 jobs over the month, and employment continued to trend up among residential specialty trade contractors (+11,000). Over the past 12 months, construction has added 170,000 jobs.
  • Financial activities added 32,000 jobs in January, with gains in real estate (+10,000), insurance carriers and related activities (+9,000), and credit intermediation and related activities (+9,000). Financial activities added an average of 15,000 jobs per month in 2016.
  • In January, employment in professional and technical services rose by 23,000, about in line with the average monthly gain in 2016. Over the month, job gains occurred in computer systems design and related services (+13,000).
  • Employment in food services and drinking places continued to trend up in January (+30,000). This industry added 286,000 jobs over the past 12 months.
  • Employment in health care also continued to trend up in January (+18,000), following a gain of 41,000 in December. The industry has added 374,000 jobs over the past 12 months.
  • Employment in other major industries, including mining and logging, manufacturing, wholesale trade, transportation and warehousing, information, and government, showed little change over the month.
  • The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in January. In manufacturing, the workweek edged up by 0.1 hour to 40.8 hours, while overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.6 hours for the sixth consecutive month.
  • In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $26.00, following a 6-cent increase in December. Over the year, average hourly earnings have risen by 2.5 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.84.

Americans “Not In The Labor Force” Plunge By A Record 736,000

While Trump has personally expressed skepticism about the validity of the payrolls report, and especially the seasonally adjusted Establishment Survey, one aspect of the jobs report he has been especially focused on is the number of people who are out of the labor force for economic reasons or otherwise: this is the infamous 95 million number that he brings up every time the strength of the “Obama recovery” has been mentioned. Which is why we are confident Trump will be happy to learn that in January, while the US economy added some 227K jobs according to the Establishment Survey, the Household Survey showed that the number of people not in the labor force tumbled by a whopping 736,000, the biggest drop in our series history, bringing the number of Americans not in the labor force to 94,366.

Curiously, a driver of this move is that the civilian non-institutional population reportedly declined by 660K, declining to 254,082 K, which we attribute to the annual benchmark revisions in the jobs report.

One of the direct consequences of this move is that the unemployment rate went up as the civilian labor force grew from 159,640K to 159,716K even as the number of Employed workers – per the household survey – actually declined by 30,000 to 152,081.

It also means that the Labor Participation Rate rose from 62.7% to 62.9%, the highet print since September.

 

END

Somehow the wage growth disappointment sparks a bad news is good news story as stocks are bid as well as bonds and gold, but the dollar dumps

(courtesy zero hedge)

Wage Growth Disappointment Sparks “Bad News Is Good News” Bid For Stocks, Bonds; Dollar Dumps

The disappointing slowdown in average hourly earnings growth – the weakest since August – means The Fed is likely on hold for March at a minimum and that “bad news” is great news for stocks and bonds and is sending the dollar tumbling…

Full-Time Jobs Soar By 457K To Record High; Part-Time Jobs Tumble By 490K

 

The job growth was uniform across the board:

(courtesy zerohedge)

Where The January Jobs Were

While in recent months, we had documented that job growth was mostly observed in lower, or minimum-wage paying, jobs, in January, when as the BLS earlier reported the US added some 227K jobs, the increase was uniform across virtually all job sectors, with only Government and Transportation and Warehousing jobs declining by 10,000 and 4,000, respectively. All other sectors saw an increase in employees.

The breakdown is as follows:

  • Retail jobs rose by 46,000 in January, and by 229,000 in 2016. Three industries added jobs in January–clothing and clothing accessories stores (+18,000), electronics and appliance stores (+8,000), and furniture and home furnishings stores (+6,000). We find this surprising in light of the mass layoff announcements reported by retailers in recent months.
  • Construction jobs rose by 36,000. Residential building added 9,000 jobs over the month, while residential specialty trade contractors added +11,000. Over the past 12 months, the US has added 170,000 jobs.
  • Financial jobs rose by 32,000 jobs in January, with gains in real estate (+10,000), insurance carriers and related activities (+9,000), and credit intermediation and related activities (+9,000). Financial activities added an average of 15,000 jobs per month in 2016.
  • Employment in professional and technical services rose by 23,000, in line with the average monthly gain in 2016. Over the month, job gains occurred in computer systems design and related services (+13,000).
  • Food services and drinking places jobs – i.e., waiters and bartenders – continued to trend up in January (+30,000). This industry added 286,000 jobs over the past 12 months, and continues to
  • Health care jobs added another +18,000 positions, following a gain of 41,000 in December. The industry has added 374,000 jobs over the past 12 months.
  • Employment in other major industries, including mining and logging, manufacturing, wholesale trade, transportation and warehousing, information, and government, showed little change over the month.

 

And visually:

Despite Dismal Jobs Data, Dollar Jumps On Fed’s Williams Headlines

Disappointing earnings growth this morning seemed to convince traders that The Fed would likely be on hold through March (and The Fed’s statement earlier in the week did nothing to help_ but after tumbling all morning, the dollar is now jumping higher because The Fed’s John Williams says he “sees some arguments to raise rates in March.”

The Fed is clearly in panic mode that they have lost contro of the narrative…

  • *

  • *FED’S WILLIAMS SAYS ALL FOMC MEETINGS ARE LIVE
  • *FED’S WILLIAMS: INFLATION MOVING BACK TO 2%
  • *WILLIAMS SAYS MARCH IS ON THE TABLE, DECISION DATA-DEPENDENT
  • *WILLIAMS SAYS 3 HIKES `REASONABLE GUESS’ FOR FED RATES IN 2017
  • *FED’S WILLIAMS SAYS NOT WORRIED ABOUT U.S. ECONOMY STALLING
  • *WILLIAMS: INFLATION WILL BUILD UP IF WE PUSH ECONOMY TOO HARD
  • *FED’S WILLIAMS SEES SOME ARGUMENTS TO RAISE RATES IN MARCH

And sure enought the algos buy it!!

The adjusted border tax has winners and losers.  The exporters are surely the huge winners and the importers the losers.  War is about to break out over this

(courtesy zero hedge)

Two Wars Are About To Break Out Over Border Adjustment Tax

 

end

 

Donald strikes out against Iran and Arnold but thanks Australian PM for honesty despite hanging up on him:

(courtesy zero hedge)

In Tweetstorm, Trump Lashes Out At Iran And “Paid Protesters”, Mocks Arnie, Thanks Australia PM

In an early tweetstorm, President Trump fired off a volley of five (so far) tweets early on Friday morning, touching on all the key salient newsitems over the past 24 hours, including the ongoing feud with Schwarzenegger, the Australia PM phone call, the imminent round of Iranian sanctions, his upcoming meeting with business leaders and last but not least, the “professional anarchists” who foiled a speech by Milo Yiannopoulos at UC Berkeley. The good news for traders is that none of them appear to be particularly market moving or focusing on any specific company or part of the market.

The tweets in order as they came in:

Yes, Arnold Schwarzenegger did a really bad job as Governor of California and even worse on the Apprentice…but at least he tried hard!

Yes, Arnold Schwarzenegger did a really bad job as Governor of California and even worse on the Apprentice…but at least he tried hard!

Iran is playing with fire – they don’t appreciate how “kind” President Obama was to them. Not me!

Iran is playing with fire – they don’t appreciate how “kind” President Obama was to them. Not me!

Thank you to Prime Minister of Australia for telling the truth about our very civil conversation that FAKE NEWS media lied about. Very nice!

Thank you to Prime Minister of Australia for telling the truth about our very civil conversation that FAKE NEWS media lied about. Very nice!

Meeting with biggest business leaders this morning. Good jobs are coming back to U.S., health care and tax bills are being crafted NOW!

Meeting with biggest business leaders this morning. Good jobs are coming back to U.S., health care and tax bills are being crafted NOW!

Professional anarchists, thugs and paid protesters are proving the point of the millions of people who voted to MAKE AMERICA GREAT AGAIN!

Professional anarchists, thugs and paid protesters are proving the point of the millions of people who voted to MAKE AMERICA GREAT AGAIN!

* * *

Yesterday we showed a histogram of Trump’s various tweeting hours, however it now appears that the 6-7am block will need to be revised, as it is rapidly becoming Trump’s favorite tweeting hour.

(courtesy ServiceMarkit)

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: