April 3/Open interest in silver rises again to 216,000 plus contracts and we are only 7,000 contracts away from record territory/ Huge deposit of 4.45 tonnes of gold into the GLD/Gold up $3.50 but silver down by 4 cents/Huge bomb blast in St Petersburg Train station/Moscow and Beijing join forces bypassing the uSA dollar as they are taking steps to have a gold backed currency/Susan Rice has been identified as the agent who “unmasked” Trump transition team”/Spicer calls this development troubling/USA PMI tumbles/So does all Auto sales for March/

Gold: $1250.80  UP $3.50

Silver: $18.19  DOWN 4  cents

Closing access prices:

Gold $1254.00

silver: $18.24!!!

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: 1255.73 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1247.55

PREMIUM FIRST FIX:  $8.18

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: 1255.14

NY GOLD PRICE AT THE EXACT SAME TIME: 1246.25

Premium of Shanghai 2nd fix/NY:$8.89

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  1246.88

NY PRICING AT THE EXACT SAME TIME: 1247.15

LONDON SECOND GOLD FIX  10 AM: 1247.25

NY PRICING AT THE EXACT SAME TIME. 1247.70

For comex gold:

APRIL/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  57 NOTICE(S) FOR 5700 OZ.  TOTAL NOTICES SO FAR: 221 FOR 22,100 OZ    (0.6874 TONNES)

For silver:

For silver: APRIL

0 NOTICES FILED TODAY FOR nil OZ/

Total number of notices filed so far this month: 271 for 1,355,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

FEDERAL RESERVE BANK OF NEW YORK EARMARKED GOLD MOVEMENT:

 

The FRBNY just released its March report on Gold movement at the FRBNY:

 

In February’s report: 7841 billion dollars worth of gold was in inventory valued at $42.22 per oz

 

In the March report:  78.41 billion dollars worth of gold was in inventory valued at $42.22 per oz

No of gold oz moved:  zero

 

END

 

The open interest in silver continues to advance with today’s reading at 216,000 contracts or about 7,000 contracts below the record set last year.  The price of silver is a good $2.15 below the price when the record OI was set. There is no question that the hedge funds together with a possible sovereign entity willing to take on the crooked bankers.

 

 

 

 

 

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  ROSE BY ANOTHER UNBELIEVABLE 4850 contracts UP to 216,372 DESPITE THE SMALL RISE IN PRICE ( 5 CENTS) WITH RESPECT TO FRIDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUES TO HASTILY ADD TO THEIR POSITIONS WITH THE BANKERS TRYING TO COVER THEIR EVER BURGEONING SHORTS (OVER 555 MILLION OZ) BUT TO NO AVAIL. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.082 BILLION TO BE EXACT or 154% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH: THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER

In gold, the total comex gold also ROSE BY 2661  contracts WITH THE  RISE IN THE PRICE OF GOLD ($2.30 with FRIDAY’S TRADING). The total gold OI stands at 417,554 contracts.

we had ONLY 57 notice(s) filed upon for 5700 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

We had another big change in tonnes of gold at the GLD: a DEPOSIT of 4.45 tonnes

Inventory rests tonight: 836.77 tonnes

.

SLV

We had no changes in inventory at the SLV/

THE SLV Inventory rests at: 330.894 million oz

end

.

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

1. Today, we had the open interest in silver ROSE BY AN UNBELIEVABLE 4,850 contracts UP TO  to 216,372 AS SILVER WAS UP ONLY 5 CENT(S) with FRIDAY’S trading. The gold open interest ROSE BY 2661 contracts UP to 417,554 WITH THE RISE IN THE PRICE OF GOLD TO THE TUNE OF $2.30  (FRIDAY’S TRADING).

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

 

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 12.27 POINTS OR .38%/ /Hang Sang CLOSED UP 149.89 POINTS OR 0.62% . The Nikkei closed UP 73.97 OR 0.39% /Australia’s all ordinaires  CLOSED UP 0.10%/Chinese yuan (ONSHORE) closed UP at 6.8872/Oil ROSE to 50.65 dollars per barrel for WTI and 53.51 for Brent. Stocks in Europe ALL IN THE RED EXCEPT DAX   ..Offshore yuan trades  6.8723 yuan to the dollar vs 6.8872 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN STRONGER AND THE OFFSHORE YUAN MUCH  STRONGER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE

3a)THAILAND/SOUTH KOREA/NORTH KOREA

Experts warn that a single North Korean Nuke could blackout the USA national electric grid and kill 90% of Americans through starvation etc.

( Jeremiah Johnson/nom de plume of a retired Green Beret/)

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

i)CHINA/NORTH KOREA AND THE USA

This scares me.  Trump to Xi: Solve North Korea or the USA will!

( zero hedge)

 

4. EUROPEAN AFFAIRS

i)Gibraltar/UK/EU

Article 50 is only 3 days old and already there are tremors as the EU seems to be suggesting that Spain must deal with the UK first.  The entire peninsula is totally against Spanish rule so they will be a major contention:

( zerohedge)

ii)UK

The United Kingdom puts nuclear power plants and airports on terror alert over a credible cyber threat:

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)St Petersburg, Russia

My goodness:  huge bomb blast at the St Petersburg Metro Train station near the Sennaya Square, with 50 dead. Putin considering a possible terrorist link:

( zero hedge)

ii)Russia releases first photo of the terrorism suspect:

( zerohedge)

6.GLOBAL ISSUES

i)Canada/China

IS CANADA NUTS!!  Canada to import Chinese workers as China wishes to again total access to the Canadian Market??

( zero hedge)

ii)South Africa

The South African Rand tumbles after S and P downgrades South Africa to junk

( zero hedge)

iii Global central banks

Global central banks are now starting to rethink 2% as their inflation goal target.  They now want to up it.  This will be deadly to all of us

( Mish Shedlock/Mishtalk)

7. OIL ISSUES

Compliance among OPEC members tumble!

( zerohedge)

8. EMERGING MARKETS

i)Venezuela

The Supreme Court reverses ruling as citizens continue to riot. Venezuela has the highest murder rate in the world at 70 per 100,000 inhabitants. The country has the largest in the ground oil reserves yet it ran out of gasoline

( zero hedge

9.   PHYSICAL MARKETS

i)The big story of the day:  Moscow and Beijing are now joining forces to bypass completing USA dollar in global markets and most importantly shift to a gold backed standard:

( zero hedge)

ii)An extremely important commentary from Andrew Maguire.  He tells Kingworldnews that the physical markets are now beginning to assert their authority over the paper markets.  Andrew believes and I think he is correct that there are probably 500 paper obligations to one physical one especially if you include derivatives. He points out that both gold and silver are in backwardation due to scarcity of metal and players are now fearing non delivery of metal that has engaged in some paper of those paper trades.

a must read..

( Kingworldnews/Andrew Maguire)

iii)a must see interview of Chris Powell as he is interviewed by Bernie Lo of CNBC discussing the manipulation of gold/silver.

(courtesy Chris Powell/GATA)

10. USA stories

i)Trump commences war against sanctuary counties in Maryland as 3 counties are harbouring illegal immigrants.

the fun begins:

( zero hedge)

ii)David Stockman comments that it will be impossible for the Republicans and Democrats to come to some sort of deal on tax cuts.

It just will not happen and he explains why!

( David Stockman/ContraCorner/Bonner and Partners>

iii)More detail on the “unmasking” of Trump personnel.  There seems to be no evidence at all of Russian interference in the USA election

( zero hedge)

iv)Then this:  Trump states that the Obama wiretapping of Trump and his administration is nothing but totally unprecedented

(courtesy zero hedge)

v)Confirmed: Susan Rice ordered the unmasking of the Trump team:

(courtesy zero hedge)

v b) Spicer claims that the Susan Rice investigation is moving in a “troubling direction”

( zero hedge)

vi)this is absolutely insane:  the Democrats have enough votes to block Gorsuch which will set off the nuclear showdown

(courtesy zerohedge)

vii)USA Manufacturing PMI plunges badly and this does not bode well for the 2nd quarter GDP

(courtesy zero hedge)

viii)This kind of tells the story. Every Automobile mfg sees a big miss on their March sells as they all tumble

( zero hedge)

 

Let us head over to the comex:

The total gold comex open interest ROSE BY 2,661 CONTRACTS UP to an OI level of 417,554 WITH THE  RISE IN THE PRICE OF GOLD ( $2.30 with YESTERDAY’S trading). We are now in the contract month of APRIL and it is one of the BETTER delivery months  of the year. In this APRIL delivery month  we had AN ANOTHER UNBELIEVABLE LOSS OF 2659 contract(s) FALLING TO 2,791. We had 164 notices served on first day notice so we lost a huge 2627 contracts or 262,700 oz will not stand for delivery in the active delivery month of April.

At the end of April/2016 only 12.3917 tonnes stood for physical delivery, although 21.306 tonnes stood initially at the beginning of April 2016.

The non active May contract month GAINED 314 contract(s) and thus its OI is 3053 contracts. The next big active month is June and here the OI ROSE by only 4883 contracts up to 298,781.

We had 57 notice(s) filed upon today for 5700 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
 And now for the wild silver comex results.  Total silver OI ROSE BY ANOTHER 4850 contracts FROM  211,522  UP TO 216,372 WITH FRIDAY’S 5 CENT GAIN.  THE BANKERS SUPPLIED THE NECESSARY CONTRACTS TO OUR HEDGE FUND LONGS WHO CONTINUE TO PILE INTO SILVER ON THE LONG SIDE.  We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The closing price of silver that day: $20.44. WE ARE ONLY 7,000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.17 BELOW THE PRICE OF $20.44 WHEN THAT RECORD WAS SET.

We are in the NON active delivery month is APRIL  Here the open interest fell by only 261 contracts. We had 271 notices filed on first day notice so surprisingly we gained 10 contracts or an additional 50,000 oz will stand for delivery.

 

 

The next active contract month is May and here the open interest GAINED 2042 contracts UP to 156,810 contracts which is astonishingly high. The next big active month will be July and here the OI gained 2091 contracts up to 33,852.

.

We had 0 notice(s) filed for NIL oz for the APRIL 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 62,672  contracts which is AWFUL.

Yesterday’s confirmed volume was 182,094 contracts  which is FAIR.

volumes on gold are getting higher!

INITIAL standings for APRIL
 April 3/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 NOT AVAILABLE oz
Deposits to the Dealer Inventory in oz NOT AVAILABLE oz

 

 

Deposits to the Customer Inventory, in oz 
 NOT AVAILABLE
No of oz served (contracts) today
 
57 notice(s)
5700 OZ
No of oz to be served (notices)
2634 contracts
263,400 oz
Total monthly oz gold served (contracts) so far this month
221 notices
22100 oz
0.6874 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  oz
Today we HAD XXX kilobar transaction(s)/
Today we had XXX deposit(s) into the dealer:
NOT AVAILABLE
total dealer deposits: NOT AVAILABLE oz
We had NOT AVAILABLE dealer withdrawals:
total dealer withdrawals:  NOT AVAILABLE oz
we had XXX  customer deposit(s):
 NOT AVAILABLE
total customer deposits; NOT AVAILABLE   oz
We had XX customer withdrawal(s)
 NOT AVAILABLE
total customer withdrawal: nil  oz
 we had XX adjustments:
For APRIL:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 57 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 1 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (221) x 100 oz or 22100 oz, to which we add the difference between the open interest for the front month of APRIL (2791 contracts) minus the number of notices served upon today (57) x 100 oz per contract equals 285,500 oz, the number of ounces standing in this  active month of APRIL.
 
Thus the INITIAL standings for gold for the APRIL contract month:
No of notices served so far (221) x 100 oz  or ounces + {(2789)OI for the front month  minus the number of  notices served upon today (57) x 100 oz which equals 285,500 oz standing in this non active delivery month of APRIL  (8.802 tonnes)
 
 
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
 We had 21.206 tonnes of gold initially stand for delivery in April 2016.  By the month’s conclusion we had only 12.39 tonnes stand.
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 4 months of  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/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 8.8802
total for the 16 months;  253.68 tonnes
average 15.855 tonnes per month
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Total dealer inventory 949,344.376 or 28.528 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,018,121.165 or 280.501 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 280.501 tonnes for a  loss of 22  tonnes over that period.  Since August 8/2016 we have lost 73 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 8 MONTHS  73 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
APRIL INITIAL standings
 April 3. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
not available oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 not available oz
No of oz served today (contracts)
0 CONTRACT(S)
(NIL OZ)
No of oz to be served (notices)
474 contracts
(2 370,000  oz)
Total monthly oz silver served (contracts) 271 contracts (1,355,000 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  7,112,665.4 oz
today, we had  NOT AVAILABLE deposit(s) into the dealer account:
total dealer deposit: NOT AVAILABLE oz
we had NOT AVAILABLE dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of Brinks:  300,614.08 oz
ii) Out of Scotia: 60,460.720 oz
TOTAL CUSTOMER WITHDRAWALS: NOT AVAILABLE oz
 We had NOT AVAILBABLE deposits:
***deposits into JPMorgan have now STOPPED.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
total customer deposits; NOT AVAILABLE  oz
 
 we had XXX adjustment(s)
The total number of notices filed today for the APRIL. contract month is represented by 0 contract(s) for NIL oz. To calculate the number of silver ounces that will stand for delivery in APRIL., we take the total number of notices filed for the month so far at 271 x 5,000 oz  = 1,355,000 oz to which we add the difference between the open interest for the front month of APRIL (474) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the APRIL contract month:  271(notices served so far)x 5000 oz  + OI for front month of APRIL.( 474 ) -number of notices served upon today (0)x 5000 oz  equals  3,725,000 oz  of silver standing for the APRIL contract month. 
We gained 10 contracts or an additional 50,000 oz will stand for delivery in this non active delivery month of April.
 

FOR COMPARISON

Initially for the April 2016 contract1,180,000 oz stood for delivery.  At the end of April 2016: 6,775,000 oz stood as bankers needed much silver to fill major holes elsewhere.

Volumes: for silver comex
 
Today the estimated volume was 24,074 which is POOR 
Yesterday’s  confirmed volume was 63,745 contracts  which is huge!!.
 
Total dealer silver:  29.502 million (close to record low inventory  
Total number of dealer and customer silver:   190.223 million oz
The total open interest on silver is now further from   its all time high with the record of 224,540 being set AUGUST 3.2016.

end

NPV for Sprott and Central Fund of Canada

will update later tonight the central fund of Canada figures

1. Central Fund of Canada: traded at Negative 6.2 percent to NAV usa funds and Negative 6.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.2%
Percentage of fund in silver:39.6%
cash .+0.1%( April 3/2017) 
2. Sprott silver fund (PSLV): Premium RISES  to -55%!!!! NAV (April 3/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to – 0.01% to NAV  ( April 3/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -55% /Sprott physical gold trust is back into NEGATIVE territory at -0.01%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

 Section: 

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

 

And now the Gold inventory at the GLD

April 3.2017: a huge deposit of 4.45 tonnes of gold into the GLD/Inventory rests at 836.77 tonnnes

March 31/another withdrawal of 1.19 tonnes of gold inventory fro the GLD/this inventory would no doubt be heading for Shanghai/GLD inventory: 822.32 tonnes

March 30/no changes in gold inventory at the GLD/Inventory rests at 833.51 tonnes

March 29/a withdrawal of 1.78 tonnes of gold out of the GLD/Inventory rests tongith at 833.51 tonnes

March 28/this is good!! A deposit of 2.67 tonnes of gold into the GLD/Inventory rests at 835.29 tonnes.

March 27/no changes in gold inventory at the GLD/Inventory rests at 832.62 tonnes

March 24/another withdrawal of 1.78 tonnes from the GLD/Inventory rests at 832.62 tonnes

March 23/no change in gold inventory at the GLD/Inventory rests at 834.40 tonnes

March 22/no changes in gold inventory at the GLD/Inventory rests at 834.40 tonnes

March 21/a deposit of 4.15 tonnes of gold into the GLD/Inventory rests at 834.40 tonnes

March 20/WE HAD A MASSIVE 6.81 TONNE WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 830.25 TONNES/THIS GOLD MUST BE ON ITS WAY TO SHANGHAI.  WITH GOLD RISING THESE PAST FEW DAYS, IT MAYS NO SENSE WHATSOEVER ON GOLD LIQUIDATION.

March 17/a huge withdrawal of 2.37 tonnes from the GLD/Inventory rests at 837.06 tonnes

March 16/no changes in gold inventory at the GLD/Inventory rests at 839.43 tonnes

March 15/ANOTHER HUGE DEPOSIT OF 4.44 TONNES/inventory rests at 839.43 tonnes

March 14/strange they whack gold and yet the GLD adds 2.93 tonnes of gold./inventory rests at 834.99 tonnes

March 13/a deposit of 6.78 tonnes of gold into the GLD/Inventory rests at 832.03 tonnes

March 10/ a withdrawal of 4.886 tonnes from the GLD/Inventory rests at 830.25

this tonnage no doubt is off to Shanghai

March 9/a withdrawal of 2.67 tonnes from the GLD/Inventory rests at 834.10

March 8/no change in gold inventory at the GLD/inventory rests at 836.77 tones

march 7/a huge withdrawal of 3.81 tonnes from the GLD inventory/inventory rests at 836.77 tonnes

March 6/No change in gold inventory at the GLD/Inventory rests at 840.58 tonnes

March 3/ a huge withdrawal of 2.96 tonnes of gold from the GLD/Inventory rests at 840.58 tonnes

March 2/a deposit of 2.37 tonnes of gold into the GLD/Inventory rests tat 843.54 tonnes

March 1/no change in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 28/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

feb 27/no change in gold inventory at the GLD/Inventory rests at 841.17 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
April 3 /2017/ Inventory rests tonight at 836.77 tonnes
*IN LAST 121 TRADING DAYS: 111.33 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 65 TRADING DAYS: A NET  16.10 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  41.53 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

 

April 3.2017; a withdrawal of 568,000 oz from the SLV/Inventory rests at 330.326

million oz/

March 31/no change in inventory at the SLV/Inventory rests at the SLV/Inventory rests at 330.894 million oz/
March 30/a huge withdrawal of 2.746 million oz from the SLV/inventory rests at 330.894 million oz/
March 29/a deposit of 1.136 million oz into the SLV/Inventory rests at 333.640 million oz
March 28/no changes in inventory at the SLV/Inventory rests at 332.504 million oz/
March 27/no changes in inventory at the SLV/Inventory rests at 332.504 million oz/
March 24/no change in inventory at the SLV/Inventory rests at 332.504 million oz/
March 23/no change in inventory at the SLV/Inventory rests at 332.504 million oz
March 22/no change in inventory at the SLV/Inventory rests at 332.504 million oz
March 21/no change in inventory at the SLV/Inventory rests at 332.504 million oz/
March 20/a gain of 1.232 million oz of silver into the SLV/inventory rests at 332.272 million oz/
March 17/no change in silver inventory/SLV inventory rests at 331.272 million oz
March 16/no changes in silver inventory/SLV inventory rests at 331.272 million oz
March 15/no change in silver inventory/SLV inventory rests at 331.272 million oz
March 14/ a deposit of 1.136 million oz of inventory into the SLV/Inventory rests at 331.272 million oz
March 13/no change in silver inventory at the SLV/Inventory rests at 330.136 million oz.
March 10/no change in silver inventory at the SLV/Inventory rests at 330.136 million oz/
March 9/another big withdrawal of 1.137 million oz from the SLV/Inventory rests at 330.136 million oz/
March 8/a big change; a withdrawal  of 1.515 million oz from the SLV/Inventory rests at 331.273 million oz/
march 7/no change in inventory at the SLV/Inventory rest at 332.788 million oz/
March 6/no change in inventory at the SLV/Inventory rests at 332.788 million oz/
March 3: two transactions:
i)March 3/ a small change, a withdrawal of 125,000 oz and this would be to pay for fees like insurance, storage etc/inventory now stands at 335.156 million oz.
ii) a huge withdrawal of 2.368 million oz/inventory rests this weekend at 332.788 million oz
March 2/no changes in silver inventory (despite the raid) at the SLV/Inventory rests at 335.281 million oz
March 1/no changes in inventory at the SLV/Inventory rests at 335.281 million oz/
FEB 28/no changes in inventor at the SLV/inventory rests at 335.281 million oz/
FEB 27/no change in inventory at the SLV/Inventory rests at 335.281 million oz/
March 31.2017: Inventory 330.326  million oz
 end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

Gold and Silver Best Performing Assets In Q1, 2017

– Gold, silver two of the best performing assets in the first quarter of 2017 with gains of  8% and 14% respectively
– Gold outperforms benchmarks – S&P 500 up 6%, MSCI (All Country World Index) up 6.4% (see tables)
– Nasdaq and German DAX rise 11.8% and 7.6%
– Silver best performing currency in quarter
– Five best performing currencies in Q1 are in order – silver, bitcoin, Mexican peso, Russian ruble and gold
– Gold’s biggest quarterly gain since Q1 16, when rose 16%
– Gold has seen gains in 8 of the last 10 first quarters
– Palladium and platinum  gain 17.7% and 5.2% respectively
– Uncertainty over Trump’s economic and foreign policies and geo-political risks from Brexit and elections in the EU lead to safe haven demand for gold and silver bullion

2017 Performance

Below are the tables and charts which show how markets and currencies have performed to date in 2017 – click on images to enlarge.

YTD 2017 Relative Performance – Finviz


2017 Asset Performance – Thomson Reuters


Gold Price Performance – Goldprice.org


‘Long Real Assets’ – BofAML via ZeroHedge.com



Gold in USD 1 Year – GoldCore.com


Silver in USD 1 Year – GoldCore.com
Daily and Weekly Updates Here

Gold and Silver Bullion – News and Commentary

Gold prices steady, buoyed by tepid U.S. econ data (Reuters.com)

Metals Enjoy Longest Rally in Seven Years as Low Rates Lure Cash (Bloomberg.com)

Gold, lumber buck rough first quarter for commodities (MarketWatch.com)

Asia markets higher, Trump’s NKorea comments weigh (CNBC.com)

Gibraltar chief minister rejects any talk of war, but says Spain’s behavior is ‘abominable’ (CNBC.com)

end

The big story of the day:  Moscow and Beijing are now joining forces to bypass completing USA dollar in global markets and most importantly shift to a gold backed standard:

(courtesy zero hedge)

Moscow And Beijing Join Forces To Bypass US Dollar In Global Markets, Shift To Gold Trade

The Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system, and to phase-in a gold-backed standard of trade.

According to the South China Morning Post the new office was part of agreements made between the two neighbours “to seek stronger economic ties” since the West brought in sanctions against Russia over the Ukraine crisis and the oil-price slump hit the Russian economy.

According to Dmitry Skobelkin, the deputy governor of the Central Bank of Russia, the opening of a Beijing representative office by the Central Bank of Russia was a “very timely” move to aid specific cooperation, including bond issuance, anti-money laundering and anti-terrorism measures between China and Russia.

The new central bank office was opened at a time when Russia is preparing to issue its first federal loan bonds denominated in Chinese yuan. Officials from China’s central bank and financial regulatory commissions attended the ceremony at the Russian embassy in Beijing, which was set up in October 1959 in the heyday of Sino-Soviet relations. Financial regulators from the two countries agreed last May to issue home currency-denominated bonds in each other’s markets, a move that was widely viewed as intended to eventually test the global reserve status of the US dollar.

Speaking on future ties with Russia, Chinese Premier Li Keqiang said in mid-March that Sino-Russian trade ties were affected by falling oil prices, but he added that he saw great potential in cooperation. Vladimir Shapovalov, a senior official at the Russian central bank, said the two central banks were drafting a memorandum of understanding to solve technical issues around China’s gold imports from Russia, and that details would be released soon.

If Russia – the world’s fourth largest gold producer after China, Japan and the US – is indeed set to become a major supplier of gold to China, the probability of a scenario hinted by many over the years, namely that Beijing is preparing to eventually unroll a gold-backed currency, increases by orders of magnitude.

* * *

Meanwhile, as the Russian central bank was getting closer to China, China was responding in kind with the establishment of a clearing bank in Moscow for handling transactions in Chinese yuan. The Industrial and Commercial Bank of China (ICBC) officially started operating as a Chinese renminbi clearing bank in Russia on Wednesday this past Wednesday.

“The financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation,” Dmitry Skobelkin, the abovementioned deputy head of the Russian Central Bank, said.

“The launching of renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries,” he added according to.

Irina Rogova, a Russian financial analyst told the Russian magazine Expert that the clearing center could become a large financial hub for countries in the Eurasian Economic Union.

* * *

Bypassing the US dollar appears to be paying off: according to the Chinese State Administration of Taxation, trade turnover between China and Russia increased by 34% in January, in annual terms. Bilateral trade in January 2017 amounted to $6.55 billion. China’s exports to Russia grew 29.5% reaching $3.41 billion, while imports from Russia increased by 39.3%, to $3.14 billion. Just as many suspected, with Russian sanctions forcing Moscow to find other trading partners, chief among which China, this is precisely what has happened.

The creation of the clearing center enables the two countries to further increase bilateral trade and investment while decreasing their dependence on the US dollar. It will create a pool of yuan liquidity in Russia that enables transactions for trade and financial operations to run smoothly.

In expanding the use of national currencies for transactions, it could also potentially reduce the volatility of yuan and ruble exchange rates. The clearing center is one of a range of measures the People’s Bank of China and the Russian Central Bank have been looking at to deepen their co-operation, Sputnik reported.

One of the most significant measures under consideration is the previously reported push for joint organization of trade in gold. In recent years, China and Russia have been the world’s most active buyers of the precious metal. On a visit to China last year, the deputy head of the Russian Central Bank Sergey Shvetsov said that the two countries want to facilitate more transactions in gold between the two countries.

“We discussed the question of trade in gold. BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets,” First Deputy Governor of the Russian Central Bank Sergey Shvetsov told Russia’s TASS news agency.

In other words, China and Russia are shifting away from dollar-based trade, to commerce which will eventually be backstopped by gold, or what is gradually emerging as an Eastern gold standard, one shared between Russia and China, and which may day backstop their respective currencies.

Meanwhile, the price of gold continues to reflect none of these potentially tectonic strategic shifts, just as China – which has been the biggest accumulator of gold in recent years – likes it.

 

END

An extremely important commentary from Andrew Maguire.  He tells Kingworldnews that the physical markets are now beginning to assert their authority over the paper markets.  Andrew believes and I think he is correct that there are probably 500 paper obligations to one physical one especially if you include derivatives. He points out that both gold and silver are in backwardation due to scarcity of metal and players are now fearing non delivery of metal that has engaged in some paper of those paper trades.

a must read..

(courtesy Kingworldnews/Andrew maguire)

 

Physical starts to nudge paper gold price, Maguire tells King World News

Section:

8:13a SST Saturday, March 31, 2017

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire, interviewed by King World News, sees signs that liquidity is draining away from the paper gold market and that physical gold purchases increasingly are influencing the price. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/andrew-maguire-were-witnessing-a-historic-shift…

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

end

a must see interview of Chris Powell as he is interviewed by Bernie Lo of CNBC discussing the manipulation of gold/silver.

(courtesy Chris Powell/GATA(

 

Le Metropole Members,

GATA secretary discusses gold market rigging on CNBC Asia

Submitted by cpowell on 01:59AM ET Monday, April 3, 2017.
Section: Daily Dispatches
9:58a HKT Monday, April 3, 2017

Dear Friend of GATA and Gold:

CNBC Asia’s “Squawk Box” program with Bernie Lo in Hong Kong this
morning gave your secretary/treasurer five or six minutes to
discuss recent developments in gold market rigging by central
banks. A two-minute, 30-second excerpt from the interview is
posted at the CNBC archive here:

http://video.cnbc.com/gallery/?video=3000606716

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

end

For your information:

(courtesy Lawrieongold)

 

World Top 20 Gold: Countries, Companies and Mines

April 2, 2017 lawrieongold

Herewith a series of tables, all gleaned from Metals Focus’ Gold Focus 2017 report released last week, which between them confirm that Peak Gold is not with us quite yet, although probably getting very close.

Table 1. Top 20 Gold Producing Nations 2015/2016 (Tonnes)

Rank Country 2015 Output 20 16 Output % Change
1 China 460.3 463.7 +1%
2 Australia 279.2 287.3 +3%
3 Russia 268.5 274.4 +2%
4 USA 215.5 225.7 +5%
5 Peru 170.6 166.0 -3%
6 South Africa 165.1 165.6
7 Canada 157.7 162.1 +3%
8 Mexico 131.7 128.4 -2%
9 Indonesia 114.2 109.5 -4%
10 Brazil 95.4 96.8 +1%
11 Ghana 95.4 95.6
12 Uzbekistan 85.5 86.7 +1%
13 Papua New Guinea 58.1 60.4 +4%
14 Argentina 63.8 59.6 -7%
15 Tanzania 53.2 55.3 +4%
16 Kazakhstan 51.0 52.6 +3%
17 Colombia 49.2 51.8 +5%
18 Mali 49.2 50.1 +2%
19 Burkina Faso 38.6 41.6 +8%
20 Chile 42.5 40.7 -4%
Others 57.5 58.1 +1%
Total 3,220.2 3,255.4 +1%

Source: Metals Focus

Table 2. Top 20 Gold Producing Companies 2015/2016 (Tonnes) (1 tonne= 32150.7 troy ounces)

Rank Country 2015 Output 2016 Output % Change
1 Barrick Gold 190.3 171.6 -10%
2 Newmont Mining 156.6 162.9 +4%
3 AngloGold Ashanti 122.8 112.8 -8%
4 Goldcorp 107.8 89.4 -17%
5 Kinross Gold 78.9 83.3 +6%
6 Newcrest Mining 77.4 76.7 -1%
7 Gold Fields 67.2 66.7 -1%
8 Polyus Gold 54.8 61.2 +12%
9 Navoi MMC (est) 61.0 61.0
10 Agnico Eagle Mines 52.0 51.7 -1%
11 Sibanye Gold 47.8 47.0 -2%
12 China National Gold 41.5 42.1 +1%
13 Yamana Gold 38.9 39.5 +2%
14 Randgold Resources 37.7 39.0 +3%
15 Shandong Gold 36.0 37.1 +3%
16 Zijin Mining 37.2 36.1 -3%
17 Harmony Gold 33.3 33.2
18 Glencore 30.0 31.9 +7%
19 Freeport McMoran 35.5 30.8 -13%
20 Fresnillo 23.7 29.1 +23%

Source: Metals Focus,

Table 3. World’s 20 Largest Producing Gold Mines 2016 (tonnes of gold)

Rank Mine Name Country Operator 2015 Output 2016 Output % Change
1 Muruntau Uzbekistan Uzbek Govt. 61.0 61.0
2 Pueblo Viejo Dominican Rep Barrick 29.7 36.3 +22%
3 Goldstrike USA Barrick 32.8 34.1 +4%
4 Grasberg Indonesia Freeport 38.3 33.0 -14%
5 Cortez USA Barrick 31.1 32.9 +6%
6 Carlin USA Newmont 27.6 29.4 +7%
7 Olimpiada Russia Polyus 23.6 29.3 +24%
8 Lihir PNG Newcrest 25.0 28.1 +12%
9 Batu Hijau Indonesia Amman Mineral 21.0 26.7 +27%
10 Boddington Australia Newmont 24.7 24.9 +1%
11 Cadia Valley Australia Newcrest 19.8 23.5 +19%
12 Super Pit Australia Newmont 19.9 23.3 +18%
13 Loulo-Gounkoto Mali Randgold 19.6 22.0 +12%
14 Kupol Russia Kinross 21.6 20.7 -4%
15 Yanacocha Peru Newmont 28.6 20.4 -29%
16 Kibali DRC Randgold 20.0 18.2 -9%
17 Canadian Malartic Canada Osisko 17.8 18.2 +2%
18 Tarkwa Ghana Gold Fields 18.2 17.7 -3%
19 Kumtor Kyrgyzstan Centerra 16.2 17.1 +6%
20 Sukari Egypt Centamin 13.7 17.1 +26%

Source: Metals Focus, Lawrieongold

-END-

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

 
 

1 Chinese yuan vs USA dollar/yuan STRONGER AT  6.8872(  SMALLER REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.8723/ Shanghai bourse UP 12.27 POINTS OR .38%   / HANG SANG CLOSED UP 149.89 POINTS OR 0.62% 

2. Nikkei closed UP 73.97 POINTS OR 0.39%   /USA: YEN RISES TO 111.40

3. Europe stocks opened ALL IN THE RED EXCEPT DAX      ( /USA dollar index RISES TO  100,61/Euro UP to 1.0653

3b Japan 10 year bond yield: RISES TO   +.075%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.40/ 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::  50.65 and Brent: 53.51

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  +.307%/Italian 10 yr bond yield UP  to 2.340%    

3j Greek 10 year bond yield RISES to  : 6.969%   

3k Gold at $1245.90/silver $18.16 (8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 7/100 in  roubles/dollar) 56.31-

3m oil into the 50 dollar handle for WTI and 53 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 111.40 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0031 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0686 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/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 (TODAY)

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.307%

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 2.387% early this morning. Thirty year rate  at 3.013% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks, US Futures Rise On First Day Of Q2 As Trump-Xi Meeting Looms

After the best quarter for US stocks since 2015, global equities have started off Q2 on the right foot, despite caution about the upcoming meeting between President Trump and China’s Xi Jinping later this week, and Fed Minutes which are expected to be more hawkish than the FOMC statement.

European shares opened broadly higher, with Europe’s Stoxx 600 rising 0.3% – its 5th day of gains – following a rally in Asian markets on upbeat final PMI data and after a report that Chinese President Xi Jinping will create a new economic zone. S&P futures were modestly in the green, pointing to a higher open for the S&P on the first day of the new quarter.

Follow
David Ingles ✔ @DavidInglesTV
Mostly positive mfg PMIs out of Asia:
Vietnam 54.6
Philippines 53.8
Japan 52.6
Korea 52.4
Indonesia 50.5
Thailand 50.2
Malaysia 49.5
8:41 PM – 2 Apr 2017

A second PMI survey on China’s manufacturing on Saturday came in below market expectations but still showed a healthy expansion after a similar survey by the government on Friday pointed to strong growth in the sector. In Japan, the first major data release showed confidence among Japan’s large manufacturers rose for a second consecutive quarter in the first three months of the year after the BOJ’s “tankan” survey showed that business sentiment improved, albeit slightly less than expected (more below).

US futures are pointing to a modestly higher open with oil price holding above $50/barrel, thanks to a flat dollar after NY Fed President Dudley doused speculation of a more aggressive pace of policy tightening.

As the second quarter gets going, political developments threaten to cloud the improving global economic outlook, according to Bloomberg.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% , while Japan’s Nikkei gained 0.8% after hitting a seven-week low on Friday. U.S. stock futures also indicated a positive open for Wall Street shares, while focus turned to a meeting on Thursday and Friday between the U.S. and Chinese presidents.

The Stoxx Europe 600 Index gained as much as 0.4 percent before paring the advance, while the euro looked set to end its longest run of losses versus the dollar since February. Energy companies led a gain in emerging-market shares as oil held above $50 a barrel.

German manufacturing growth reached an reached an almost six-year high in March, Markit’s PMI for manufacturing showed on Monday, pushing the Dax to new record highs.

Manufacturing activity in France and Italy also rose, adding to signs of a pickup in momentum in the global economy. Overall, the final Euro area manufacturing PMI was unchanged from the flash estimate. Relative to the February release, the Euro area manufacturing PMI increased 0.8pt. There were minimal revisions in the manufacturing PMIs relative to the flash estimates (Euro area, Germany and France). The Italian figure increased +0.7pt from February, while the Spanish figure fell 0.9pt (there is no flash estimate for these countries). The breakdown of the area-wide figure showed gains in output (+0.2pt), new orders (+1.0pt) and employment (+0.8pt).

Euro area: Manufacturing PMI (Mar): 56.2, Cons/Flash: 56.2, Previous: 55.4
Germany: Manufacturing PMI (Mar): 58.3, Cons/Flash: 58.3, Previous: 56.8
France: Manufacturing PMI (Mar): 53.3, Cons/Flash: 53.4, Previous: 52.3
Italy: Manufacturing PMI (Mar): 55.7, Cons: 55.1, Previous: 55.0
Spain: Manufacturing PMI (Mar): 53.9, Cons: 54.7, Previous: 54.8
The pound fell for the first time in three days against the dollar as U.K. manufacturing growth unexpectedly cooled for a third month in March and may weaken further this quarter. IHS Markit PMI declined to 54.2 from revised 54.5 in February, below economists’ expectations for an uptick to 55

 

South Africa’s rand slumped for a sixth day after Finance Minister Pravin Gordhan was dismissed in a political shake-up.

“Despite the solid gains seen so far this year, there is some evidence that the rally in U.S. markets is looking a little tired given President Trump’s trials and tribulations in Congress,” said Michael Hewson, chief market analyst at CMC Markets. “The reflation trade is likely to face a new test this week when President Trump entertains the Chinese leader Xi-Jinping at his Mar-a-Lago golf course in Florida, which in the words of President Trump himself could be a little ‘difficult’.”

A failure to push through healthcare reforms last month has added to concerns that Trump may struggle to pass highly-anticipated tax cuts and infrastructure spending bills. Trump held out the possibility on Sunday of using trade as a lever to secure Chinese cooperation against North Korea and suggested Washington might deal with Pyongyang’s nuclear and missile programs on its own if need be.

On Friday, the U.S. president sought to push his crusade for fair trade and more manufacturing jobs back to the top of his agenda by ordering a study into the causes of U.S. trade deficits and a clamp down on import duty evasion.

Friday’s payroll report and meeting between U.S. President Trump and Chinese leader Xi this week will be watched for further direction for dollar. Trump said U.S. can “totally” address North Korea’s nuclear threat unilaterally if China doesn’t cooperate to put pressure on that nation, according to Financial Times. He has blamed China for U.S. trade deficits and job losses, saying discussion with Xi this week “will be a very difficult one.”

“From a data perspective, we think this week should be dollar supportive, but the big uncertainty is the Xi-Trump meeting,” says Rodrigo Catril, a currency strategist at National Australia Bank in Sydney. “My guess is that we will get a positive outcome, good for dollar and sentiment, but you never know.”

“The challenge for markets in an event-filled week will be to contend with the conflicting signals stemming from the Trump administration’s fiscal and trade policy agendas,” ING Groep NV strategists, led by Chris Turner, wrote in a note. “In particular, investors will be asking whether the White House clampdown on trade will be aggressive enough to directly thwart any U.S. reflation sentiment founded on renewed tax reform hopes.”

In curencies, the dollar index was up 0.15 percent at 100.49 – holding above four-month lows hit last week. After a modest reboumd, the euro was back to session lows at $1.065, despite today’s solid PMIs after data showed inflation in the currency bloc had slowed by more than expected in March.

Government bond yields in the euro zone’s lower-rated countries meanwhile rose on Monday, underperforming their peers as a reduction in the European Central Bank’s bond purchase program took effect. As of the start of April, the ECB’s monthly asset purchases fell to 60 billion euros from 80 billion euros.

Governments and other economic actors need to get ready for higher borrowing costs after years of record lows, ECB Executive Board member Benoit Coeure said on Monday.

In commodities, Brent crude futures were flat at $53.50 per barrel, while U.S. West Texas Intermediate crude futures were little changed at $50.58 a barrel.

* * *

Overnight Bulletin Summary

The first trading session of the quarter has seen a tentative start for European equities with newsflow relatively light
GBP has seen some selling pressure amid the latest UK manufacturing PMI data which fell short of expectations with GBP/USD back below 1.2500
Looking ahead, highlights include US Mfg. PMI data, US Construction Spending, ECB’s Coeure, Fed’s Dudley, Lacker and Harker
Market Snapshot

S&P 500 futures +0.1% at 2,360.5
STOXX Europe 600 up 0.1% to 381.56
MXAP up 0.3% to 147.41
MXAPJ up 0.4% to 481.00
Nikkei up 0.4% to 18,983.23
Topix up 0.3% to 1,517.03
Hang Seng Index up 0.6% to 24,261.48
Shanghai Composite up 0.4% to 3,222.51
Sensex up 0.9% to 29,873.24
Australia S&P/ASX 200 up 0.1% to 5,872.68
Kospi up 0.3% to 2,167.51
Brent Futures down 0.1% to $53.47/bbl
German 10Y yield fell 1.9 bps to 0.309%
Euro up 0.2% to 1.0669 per US$
Italian 10Y yield fell 12.6 bps to 2.022%
Spanish 10Y yield fell 0.9 bps to 1.658%
Gold spot down 0.3% to $1,245.89
U.S. Dollar Index up 0.1% to 100.48
Top Overnight News

President Trump said the U.S. can “totally” address North Korea’s nuclear threat unilaterally if China doesn’t cooperate to put pressure on, according to the FT
The Senate is hurtling toward a confrontation over President Trump’s first Supreme Court nominee in a week that could change how Washington works
Reckitt Benckiser is considering a sale of its food business, which makes French’s mustard and ketchup, to help pay for the $16.6 billion acquisition of infant-formula maker Mead Johnson Nutrition Co.
U.K. manufacturing unexpectedly cooled for a third month in March and may weaken further, according to IHS Markit
Crude stockpiles are starting to decline in a sign that the production cuts implemented this year are bringing the market to balance, according to OPEC’s Secretary-General Mohammad Barkindo
South African parliamentary Speaker Baleka Mbete said she’s considering a request to recall lawmakers to debate an opposition-sponsored motion of no confidence in President Jacob Zuma
Tesla Beats Estimate With 25,000 Deliveries as Model 3 Nears
Euro-Area Unemployment Falls to Record Low as Recovery Broadens
Imagination Tech Shares Plunge 69% After Apple Ends Chip Deal
Credit Suisse Said to Hire Deutsche Bank Equities Executives
Google Changes Ad Policies Again to Try to End YouTube Crisis
Asia equity markets start the quarter on a mostly positive note, although gains were relatively reserved as the region digested a slew of mixed data releases. Nikkei 225 (+0.4%) gained following the BoJ’s Tankan survey which despite missing expectations for Large Manufacturers Index and Outlook, still showed an improvement from prior while Large All-Industry Capex unexpectedly expanded and the Small Manufacturing Index rose to its highest in nearly a decade. ASX 200 (-0.2%) traded subdued as commodity related sectors underperformed with an unexpected contraction in Retail Sales also dampening sentiment, while Hang Seng (+0.5%) also edged gains despite Chinese Caixin Manufacturing PMI falling short of estimates, as the data still showed the 9th consecutive monthly expansion and is solely focused on the mainland which was closed for Tomb Sweeping Day. 10yr JGBs traded lower amid gains seen in Japanese stocks and after today’s BoJ Rinban announcement was for a relatively paltry JPY 370b1n. Furthermore, the curve flattened amid underperformance in the short-end.

Key Asian Economic Data

Chinese Caixin Manufacturing PMI (Mar) M/M 51.2 vs. Exp. 51.6 (Prey. 51.7).
Japanese Tankan Large Manufacturers Index (Q1) Q/Q 12 vs. Exp. 14 (Prey. 10).
Tankan Large Manufacturing Outlook (Q1) Q/Q 11 vs. Exp. 13 (Prey. 8)
Tankan Large All Industry CAPEX (Q1) Q/Q 0.60% vs. Exp. -0.30% (Prey. 5.50%)
Tankan Small Manufacturers Index (Q1) Q/Q 5 vs. Exp. 3 (Prey. 1); Highest since June 2007
Top Asian News

China Just Had Its Worst Ever Start to a Year for Bond Defaults
New Tepco Chairman Says Japan Nuclear Restart ‘Will Take Time’
Vietnam Will Ask Google and Amazon to Pay Tax: Tien Phong
Buying Spree in These Tokyo Stocks Unearned to Own Officials
Unwinding Property Curbs Gives Singapore Developers Headache
Central Banks Boost Yen Assets by Most Since at Least 1999
Asian Stocks Continue Quarterly Rally as Japanese Shares Gain
In Europe, the new quarter has kicked off in a tentative fashion, with major indices relatively unmoved so far this morning. In terms of a sector breakdown, financials are the laggards this session as energy names outperform, with little of note on a stock specific basis to report. With newsflow light elsewhere, Linde are among the best performers in Frankfurt this morning, trading higher by (+1.4%) after the Co.’s Chairman and CEO reiterated their confidence that the Praxair deal will be completed in the near future. Elsewhere, fixed income markets have seen upside in Bunds so far this morning, with the curve slightly steeper and all major counterparts wider against the German 10Y. The auction calendar is relatively bare today as the week kicks off, however is set to pick up later in the week as supply is scheduled from the likes of UK, Germany, France and Spain.

Top European News

Euro-Area Factory Recovery Broadens as Italy, France Improve
Spain Tells U.K. to Keep Its Cool After Falklands Comparison
Deutsche Asset, Infravia to Buy Control of Venice Airport’s Save
Sartorius Raises Forecast, Completes Essen BioScience Takeover
Euronext, Intercontinental Sign Derivatives Clearing Pact; Euronext Says Remains Willing Buyer of LCH.Clearnet SA
Reckitt Benckiser Reviews Food Business After Mead Johnson Deal
U.K. Manufacturing Slows as Inflationary Pressures Continue
Euribors Tick Higher After Praet; BTPs Lag, Schatz Outperforms
Nordic Capital’s Bambora Sets Sights on U.S. and Canadian Market
Putin’s Ally in Serbia Wins Presidential Vote by a Landslide
In currencies, Britain’s pound fell as much as 0.5 percent to $1.2492 after the worse-than-expected manufacturing data. South Africa’s rand tumbled 1.2 percent against the dollar, the most among major global currencies. The euro was little changed at $1.0655 and the Bloomberg Dollar index climbed 0.2 percent. FX markets have traded in a fairly tight range so far this session, with the only notable news coming in the form of the latest manufacturing PMIs, national readings from across the Eurozone printed a relatively mixed picture, with the Eurozone figure itself coming in line with expected, to see EUR/USD unchanged on the day. Elsewhere, the UK saw manufacturing PMI print a 4 month low and GBP/USD move below 1.2500 as a consequence. The latest PMI readings from the UK will do little to support the latest ‘trade of the week’s from the likes of Morgan Stanley and Barclays, who both recommend selling EUR/GBP.

In commodities, WTI crude was little-changed at $50.62 a barrel, after the biggest weekly gain of the year. Crude stockpiles are starting to decline in a sign that the production cuts implemented this year are bringing the market to balance, according to OPEC’s Secretary-General Mohammad Barkindo. Gold fell 0.3 percent to $1,245.70 per ounce. The metal has alternated between gains and losses for the past six days. Trade has been choppy so far, with WTI May’17 futures trading near USD 50.50/bbl as focus falls on OPEC and whether or not further agreements will be reached for H2’17. In terms of energy specific newsflow, sources suggested Libya’s crude oil output is to rise to approximately 660k bpd. Trade in metals have tracked the other asset classes in their relatively muted trade, as gold trades lower by around US 3/oz as USD holds steady.

US Event Calendar

9:45am: Markit US Manufacturing PMI, est. 53.5, prior 53.4
10am: ISM Manufacturing, est. 57.2, prior 57.7; Prices Paid, est. 66, prior 68; New Orders, prior 65.1; Employment, prior 54.2
10am: Construction Spending MoM, est. 1.0%, prior -1.0%
Wards Total Vehicle Sales, est. 17.3m, prior 17.5m; Vehicle Sales, est. 13.7m, prior 13.7m
Central Banks

10:30am: Fed’s Dudley Speaks at Press Briefing in New York
3pm: Fed’s Harker Speaks in Philadelphia on Fintech
5pm: Richmond Fed President Lacker Speaks (Event Cancelled)
DB’s Jim Reid concludes the overnight wrap

Welcome to a new financial quarter. One surprising element of Q1 was that the VIX index had its lowest average quarter since Q4 2006. As we’ve discussed a lot recently it seems that data best predicts where equity vol will trade but we’ve been surprised that there hasn’t been the odd spike up given the political uncertainties on both sides of the Atlantic. Data is winning out for now. On this, today see the release of the global PMIs which have been key to the decent performance (and low vol) of equities in Q1. Tomorrow we’ll likely update our PMI/YoY equity (%) performance charts but so far the rally in Q1 is consistent with the data so this is a key monthly number. The rest of the week ahead is at the end before the performance review but after today’s data deluge the week is bookended by Mr Trump hosting China President Xi Jinping (Thursday/Friday) and Friday’s payrolls which to be honest doesn’t feel quite as important as it often can do. With employment consistently firm of late, inflation numbers seem to have taken over as the swing factor for the pace of Fed hikes and on this side of the pond, further tapering from the ECB. On the ECB, today marks the start of the EU80 to EU60 billion taper (our words not Draghi’s!) and while we don’t know the taper split between PSPP and CSPP, this is going to be an interesting development to watch. First signs will occur next Monday where the weekly release will contain 3 days under the new regime. Last week’s CSPP number showed the lowest number outside of holiday periods so it’ll be interesting to see this afternoon’s release to see whether last week was a one-off or the start of slowly adjusting to a new lower level of corporate bond purchases.

Before we get there, the weekend newsflow has been fairly light although we have opened with some Trump-related headlines to decipher. Specifically it’s an interview that the President had with the FT which is attracting the most attention In it, the President was quoted as saying that the US is willing to take unilateral action against North Korea should it need to, regardless of China’s position. His exact quote was “if China is not going to solve North Korea, we will”. The subject of North Korea is set to be a big talking point between Trump and President Xi later this week so it’ll be worth keeping an eye on that.

The other significant news from this weekend comes from China. First is the announcement out of the PBoC on Saturday in which the Bank raised the interest rate for overnight standing lending facility loans by 20bps to 3.3%. At the same time the bank also raised the rate of 7-day loans to 3.45% and the 1-month rate to 3.8%. This follows similar mini hikes earlier in the year. The PBoC also said that it will “continue to implement a sound and neutral monetary policy, striking a good balance among maintaining growth and containing bubbles and mitigating risks”. Staying with China, there was a little bit of disappointment in the weekend data with the Caixin manufacturing PMI coming in 0.5pts lower in March at 51.2 (vs. 51.7 expected). That contrasts with the improvement in the official manufacturing PMI we saw on Friday to 51.8 (from 51.6).

Markets are closed in China this morning however bourses elsewhere have mostly kicked off April and Q2 on the front foot. In Japan the Nikkei and Topix are +0.38% and +0.31% respectively following the release of the BoJ’s Tankan Survey which showed some moderate improvement in business conditions for both small and large manufacturing businesses in Q1. Elsewhere the Hang Seng is +0.45% and Kospi +0.28%, while the ASX is -0.14% following some mixed data in Australia this morning. US equity index futures have opened with small gains while commodities are largely unchanged.

Quickly recapping Friday’s session now. While markets in Europe generally recovered from early losses, it was a bit of a directionless session in the US with equity markets in the end slightly underperforming. Moves were fairly modest though with the Stoxx 600 closing +0.18% and the S&P 500 -0.23%, with the latter paring the weekly move to +0.80%. In sovereign bond markets 10y Treasury yields generally tracked lower as the session went on and finished -3.2bps by the closing bell at 2.388%. That closing level also nicely bisected what was a fairly tight 8bps trading range over the full course of the week. The Fed’s Dudley probably disappointed some of the hawks by saying that the economy is clearly not overheating and that the rise in sentiment is not showing up in hard data. He also said that a couple more hikes this year “seems reasonable” but that also that the Fed may look to shrink the balance sheet later this year or in 2018, in which case they “might actually decide at the same time to take a little pause in terms of raising short term interest rates”. Meanwhile in Europe 10y Bund yields edged down 0.5bps to 0.322% with a disappointing Euro area CPI report not helping matters (more on that shortly). Elsewhere, in commodities WTI Oil (+0.50%) rose for the fourth session in a row and in doing so capped a weekly return of +5.48% which was the best since December with hopes rising that OPEC will extend its production cut deal past June.

Much of the focus on Friday was on the vast amount of data released on both sides of the pond. In the US there was some disappointment in the February personal spending print which came in at just +0.1% mom (vs. +0.2% expected), with real spending also falling unexpectedly (-0.1% mom vs. +0.1% expected). Personal income did however rise +0.4% mom as expected while the savings rate also rose to a five-month high. On the inflation front the PCE deflator was confirmed as rising +0.1% mom in February and the core +0.2% mom which helped to hold the YoY rate at +1.8%. Away from that, the Chicago PMI beat expectations after coming in at 57.7 in March (from 57.4; 56.9 expected) while the University of Michigan consumer sentiment reading was revised down at the final reading to 96.9 from 97.6, albeit still 0.2pts ahead of the February reading. All told the Atlanta Fed have now revised down their Q1 GDP estimate to 0.9% from 1.0% however the NY Fed’s measure continues to remain at a much higher 2.9%. Our US economists sit in the middle and are forecasting +2.0% in Q1.

Over in Europe on Friday the main disappointment was the aforementioned CPI report for the Euro area in March where headline CPI was estimated to be +1.5% yoy and down from +2.0%. Consensus was for +1.8% while the core rate also dipped to +0.7% yoy from +0.9%. That is the joint lowest core reading since April last year and you would imagine would give the ECB some food for thought. Meanwhile, in the UK Q4 GDP growth was confirmed at +0.7% qoq. In Germany the unemployment rate dipped one-tenth to 5.8% in March while February retail sales came in at a much better than expected +1.8% mom (vs. +0.7% expected).

To the week ahead now. This morning we’re kicking off the week in Europe with the final manufacturing PMI’s for March as well as a first look at the data for the UK and periphery. Also due out is PPI and unemployment rate data for the Euro area. This afternoon in the US we’ll get the final manufacturing and composite PMI’s for March along with the ISM manufacturing print and February construction spending data. Later this evening we’ll also get the March vehicle sales data. During the Asia session tomorrow we’ll have the RBA meeting outcome where no change is expected. In Europe we’ve got retail sales data for the Euro area due while in the US we will get the final durable and capital goods orders data revisions for February, along with February’s trade balance reading and factory orders data. Wednesday looks set to be a busy data with the final March services and composite PMI’s due in Japan and then in Europe. We’ll also get the final services PMI in the US along with the ADP employment report for March and ISM non-manufacturing print. Also due out will be the March FOMC meeting minutes. Turning to Thursday, the early data is due out of China with the Caixin PMI’s. In Germany we’ll get factory orders data while the ECB meeting minutes will also be released around lunchtime. In the US on Thursday the calendar is quiet with just initial jobless claims data due. It looks set to be a busy end to the week on Friday. In Europe we are due to get industrial production reports and trade data for the UK, France and Germany. In the US all eyes will be on the March employment report including the all important payrolls print. Wholesale inventories and consumer credit will also be due out in the US.

Away from the data the Fedspeakers this week include Dudley, Harker and Lacker today followed by Tarullo on Tuesday and Williams on Thursday. The ECB’s Coeure speaks today. Away from that, the second French presidential debate is due tomorrow night. As with the first debate it will be televised live. President Trump is also due to host China President Xi Jinping on Thursday and Friday. An informal EU finance ministers meeting is also due on Friday and Saturday.

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 12.27 POINTS OR .38%/ /Hang Sang CLOSED UP 149.89 POINTS OR 0.62% . The Nikkei closed UP 73.97 OR 0.39% /Australia’s all ordinaires  CLOSED UP 0.10%/Chinese yuan (ONSHORE) closed UP at 6.8872/Oil ROSE to 50.65 dollars per barrel for WTI and 53.51 for Brent. Stocks in Europe ALL IN THE RED EXCEPT DAX   ..Offshore yuan trades  6.8723 yuan to the dollar vs 6.8872 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN STRONGER AND THE OFFSHORE YUAN MUCH  STRONGER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

Experts warn that a single North Korean Nuke could blackout the USA national electric grid and kill 90% of Americans through starvation etc.

(courtesy Jeremiah Johnson/nom de plume of a retired Green Beret/)

 

Experts Warn A Single North Korean Nuke Could Blackout National Electric Grid And Kill 90% Of Americans

Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

For those who are skeptical about North Korea’s capabilities, there is an excellent article presented by The Hill, entitled How North Korea could kill 90 percent of Americans.”  The article is authored by none other than R. James Woolsey, former Director of the Central Intelligence Agency and by Dr. Peter Vincent Pry, the Executive Director of the EMP Task Force on National and Homeland Security and a former analyst with the CIA.

Although the President is moving forward with his agenda, he has hit a “stall” in these first two months just on repealing Obamacare: The Republican Party has been the stall, refusing to give him the necessary votes and impetus to overcome it.  As mentioned in previous articles, it will take the President at least 6 months before his actions and effectiveness can be assessed.  Six months is a long time.  In the meantime, the U.S. continues to emplace measures such as THAAD (Terminal High Altitude Aerial Defense) being deployed to South Korea.

China and Russia view it as an aggressive measure and a threat rather than a defensive strategy to protect South Korea and Japan.  This is partially correct.  The important thing to consider here is that North Koreans and their leader are starting to become more irate regarding the deployment of THAAD, the ongoing military exercises of U.S. and South Korean troops in the latter’s nation, and the demand by Japan for a first strike initiative to occur.

Here are some excerpts from the article that readers should keep in mind:

“The mainstream media, and some officials who should know better, continue to allege North Korea does not yet have capability to deliver on its repeated threats to strike the U.S. with nuclear weapons.  False reassurance is given to the American people that North Korea has not “demonstrated” that it can miniaturize a nuclear warhead small enough for missile delivery, or build a reentry vehicle for an intercontinental ballistic missile (ICBM) capable of penetrating the atmosphere to blast a U.S. city.

 

Yet any nation that has built nuclear weapons and long-range missiles, as North Korea has done, can easily overcome the relatively much simpler technological challenge of warhead miniaturization and reentry vehicle design.”

These two paragraphs clearly state that North Korea can miniaturize a warhead.  Once again, the naysayers will only be satisfied that they “can” when either an EMP (Electromagnetic Pulse) weapon and/or a nuclear warhead is delivered with either complete loss of power in the U.S. and/or the loss of an American city.  When such occurs, the naysayers will then say nothing.

The objective is not to be “right” in this debate, but to be aware…to foster such awareness and help others to make whatever preparations they can before such occurs.  Here is another declaration by this article…a deep one:

“The notion that North Korea is testing A-Bombs and H-Bomb components, but does not yet have the sophistication to miniaturize warheads and make reentry vehicles for missile delivery is absurd.”

The threat could not be made any clearer than that.  The article goes on to describe assessments made in February and March of 2015 by former senior national security officials who warned this:

“…North Korea should be regarded as capable of delivering by satellite a small nuclear warhead, specially designed to make a high-altitude electromagnetic pulse (EMP) attack against the United States.”

In April Admiral William Gortney, former Commander of North American Aerospace Defense (NORAD) warned at a press conference that the KN-08 mobile ICBM missile system of North Korea could strike the United States with a nuclear warhead.

Exactly six months later, Gortney declared (based on intelligence analyses) that North Korea has nuclear weapons, the capability to miniaturize them, and is capable of placing them on a missile that can reach the continental United States. This last excerpt of the article is very important due to the gravity of the current situation (the article was written today), the warning it gives, and the denouncement of the MSM (mainstream media) for obfuscating the facts on the matter and “underreporting” an issue of this magnitude:

“According to the Congressional EMP Commission, a single warhead delivered by North Korean satellite could blackout the national electric grid and other life-sustaining critical infrastructures for over a year – killing 9 of 10 Americans by starvation and societal collapse.  Two North Korean satellites, the KMS-3 and KMS-4, presently orbit over the U.S. on trajectories consistent with surprise EMP attack. 

 

Why do the press and public officials ignore or under-report these facts?  Perhaps no administration wants to acknowledge that North Korea is an existential threat on their watch.  Whatever the motives for obfuscating the North Korean nuclear threat, the need to protect the American people is immediate and urgent…”

These men are experts in the field.  Why is the United States (as a whole) being so lackadaisical when it comes to such a problem?  As I have written in the past, it is my fervent wish that it never comes to pass…because the death of millions is not a “fair tradeoff” just to be able to be “right” or “correct” in a point of view.  For me personally, it is not about that.  It is about paying attention to men who make it their full-time business to be aware of the true threat that the MSM does not report, and reporting it here.  In this manner, you may be able to give yourself a small edge to make it by being aware and taking any precautions you can take with your family.  It is better to be aware, prepared, and have nothing happen than to wake up one morning and find an American city has been nuked and an EMP has rendered us without power.  Let us hope that doesn’t ever happen.

end

b) REPORT ON JAPAN

c) REPORT ON CHINA

CHINA/NORTH KOREA AND THE USA

This scares me.  Trump to Xi: Solve North Korea or the USA will!

(courtesy zero hedge)

 

Trump To Tell Xi: “If China Is Not Going To Solve North Korea, We Will”

In an interview with the Financial Times coming less than a week ahead of his meeting with China’s president Xi Jinping in Mar A Lago (Xi, however, will not be staying at Trump’s “Winter palace” as the SCMP reports) Donald Trump has warned the US “will take unilateral action to eliminate the nuclear threat from North Korea unless China increases pressure on the regime in Pyongyang.”

Among the key topics for discussion with Xi Jinping, the US president said he would focus on the growing threat from Kim Jong Un’s nuclear program when he hosts the Chinese president at his Florida resort this week in their first meeting.

China has great influence over North Korea. And China will either decide to help us with North Korea, or they won’t,” Mr Trump said in the Oval Office. “If they do, that will be very good for China, and if they don’t, it won’t be good for anyone.”

But he made clear that he would deal with North Korea with or without China’s help. Asked if he would consider a “grand bargain” — where China pressures Pyongyang in exchange for a guarantee that the US would later remove troops from the Korean peninsula — Mr Trump said:

“Well if China is not going to solve North Korea, we will. That is all I am telling you.”

As a reminder, shortly after the latest North Korean ballistic missile test, China banned all coal imports from North Korea, effectively imposing a major economic blockade (coal accounts for up to 40% of North Korean exports, virtually all of its to China); that appears to be insufficient for Trump.

As the FT notes, the White House views North Korea as the most imminent threat to the US after Barack Obama warned his successor about the progress Pyongyang had made developing long-range missiles and nuclear weapons. In a separate interview, KT McFarland, the deputy White House national security adviser, told the FT that “there is a real possibility that North Korea will be able to hit the US with a nuclear-armed missile by the end of the first Trump term.”

The National Security Council has completed a review of options on North Korea that Mr Trump ordered after his inauguration, according to two people familiar with the review. One of those people said the review had been accelerated to have the options ready for the Trump-Xi summit.

Trump told the FT it was “totally” possible for the US to tackle North Korea without China. Asked if that meant dealing with Pyongyang one on one, he said: “I don’t have to say any more. Totally.”

“What President Trump is trying to do here is to press the Chinese hard by warning them what comes next if they don’t help or join with the US to deal with this problem,” said Dennis Wilder, a former CIA China analyst who later served as the top White House Asia aide to George W Bush.

Barring a pre-emptive strike on North Korea — which the administration will not rule out since all options are on the table — many experts believe the US needs Chinese help as Beijing has the most sway over Pyongyang. But Washington could consider alternatives, ranging from more effective sanctions to various kinds of more controversial covert action.

Ahead of the US-China summit, Trump raised hopes that he would reach some kind of deal with Xi, despite heavy criticism about China’s trade surplus and exchange rate policy. “I have great respect for him. I have great respect for China. I would not be at all surprised if we did something that would be very dramatic and good for both countries and I hope so.”

As a reminder, the topic of North Korea was among the key issues discussed by US Secretary of State, Rex Tillerson, the, during his first visit to Asia, when he warned that the previous US “policy of strategic patience has ended.”

* * *

And in a separate topic, one just as important for US-China relations, namely trade, Trump told the FT that he will not push the Chinese president and discuss tariffs with Xi at the coming meeting, “maybe the next time we meet.”

Are you going to equalise tariffs?

 

Trump: I don’t want to talk about tariffs yet, perhaps the next time we meet. So I don’t want to talk about tariffs yet. But you used the word equalise. That is a very good word because they are not equalised. If you used a word other than tariff, it is not an equal. You know when you talk about, when you talk about currency manipulation, when you talk about devaluations, they are world champions. And our country hasn’t had a clue, they haven’t had a clue. The past administration hasn’t had and many administrations — I don’t want to say only Obama; this has gone on for many years — They haven’t had a clue. But I do.

More here.

end

4. EUROPEAN AFFAIRS

 

Article 50 is only 3 days old and already there are tremors as the EU seems to be suggesting that Spain must deal with the UK first.  The entire peninsula is totally against Spanish rule so they will be a major contention:

(courtesy zerohedge)

 

First Post-Brexit Tremors: Theresa May “Would Go To War” To Protect Gibraltar

The ink has yet to dry on Theresa May’s Article 50 signature from last week which officially started the UK’s 2-year long divorce from the EU, and already Europe has been traumatized by comments from former Conservative leader Michael Howard, who suggested that Theresa May is be prepared to go to war to protect Gibraltar as Margaret Thatcher once did for the Falklands, comments which according to the Guardian were “immediately criticized as inflammatory.”

Howard told Sky News on Sunday that: “There is no question whatever that our Government will stand by Gibraltar… 35 years ago this week another woman Prime Minister sent a task force half way across the World to defend the freedom of another small group of British people against another Spanish-speaking country…. I am absolutely certain our current Prime Minister will show the same resolve in standing by the people of Gibraltar.”

As The Telegraph adds, Howard said the British Government will stand by Gibraltar during Brexit talks amid claims of an EU “land grab” for the territory by Spain. It came as Spain confirmed that it would not initially block an independent Scotland’s attempts to join the European Union (EU). Alfonso Dastis, Madrid’s foreign minister, reportedly said Spain would not veto an independent Scotland’s EU hopes – while stressing he does not want to see the country leave the United Kingdom.

Aerial view of Gibraltar

A European Council document on Friday suggested that Spain will be given an effective veto on whether the Brexit deal applies to Gibraltar. Downing Street said May had called Fabian Picardo, the chief minister of Gibraltar, on Sunday morning to say the UK remained “steadfastly committed to our support for Gibraltar, its people and its economy”.

Taking British officials by surprise, the draft guidelines drawn up by EU leaders state that the Brexit deal will not apply to Gibraltar without an “agreement between the kingdom of Spain and the UK”.  One official told The Telegraph it is “absolutely unacceptable” and gives Spain too much power over the future of Gibraltar.

In response, on Sunday the Prime Minister told Gibraltar’s chief minister that Britain will never allow Spain to take over the peninsula against its will. Sir Michael Fallon, the Defence Secretary,  has also pledged to “protect” Gibraltar “all the way”. Speaking to the BBC’s Andrew Marr show, Fallon said: “The people of Gibraltar have made it clear that they don’t want to live under the sovereignty of Spain. Gibraltar is going to be protected all the way.”

“The Rock”, a British Overseas Territory since 1713 with 30,000 residents, remains a major source of diplomatic tensions. Gibraltar’s chief minister has warned the territory should not be used by Spain as a bargaining chip for Britain’s Brexit negotiations.

Fabian Picardo told the BBC this morning  that sharing sovereignty with Spain would be “absolutely awful” and  comparable to “living in somebody else’s land.”

 

He said he was “working closely with the British Government” and he would support the British Prime Minister in the upcoming negotiations to get the best deal.

 

“I am sure the UK will be batting for Gibraltar,” he said. “Gibraltar is not on the table as a chip”.

On Sunday, May told Mr Picardo that the UK is  “absolutely dedicated to working with Gibraltar for the best possible outcome  on Brexit”, Downing Street said. Quoted by The Telegraph, a May spokeswoman said Mrs May “reiterated our long-standing position that the UK remains steadfastly committed to our support for Gibraltar, its people and its economy”.

“The Prime Minister said we will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes, nor will we ever enter into a process of sovereignty negotiations with which Gibraltar is not content.”

 

“The Prime Minister said we remain absolutely dedicated to working with Gibraltar for the best possible outcome on Brexit and will continue to involve them fully in the process.”

 

Last night Boris Johnson, the Foreign Secretary, said that the UK’s support for Gibraltar will remain “implacable and rock-like”.

Elsehwere, when asked about the controversy surrounding May’s apparent threat to weaken security cooperation if Brexit talks turn sour, Defense Secretary Fallon said the negotiations had to cover both a trade deal and issues such as counter-terrorism and police cooperation. “It is very important to link trade and security because what we are now looking for is a deep and special relationship that covers both economic and security cooperation. Those two things go together,” he said.

“It is very important that we go on committed to the security of the continent.”

 

Fallon then talked about sending 800 troops to Estonia, others to Poland, and RAF Typhoons to Romania, which are all under Britain’s Nato commitments not linked to EU membership. “We are stepping up security because it remains our continent and this is a very uncertain time for Europe and right we should be playing our time on that. We’d all be worse off if there wasn’t a deal – we are expecting to have a deal.”

 

The defence secretary admitted some issues were inside the European treaties, and others (including Nato) not. “The letter refers to our ambition to have a completely new partnership on the economic side but also on security side,” he said, arguing that stating a fact about defence capabilities wasn’t a threat.

Meanwhile, the reaction in Gibraltar to the latest territorial posturing was quick. According to the UK’s Express.co.uk, the newspaper spoke to a host of Gibraltarians who are all adamant about one thing: there is nothing anyone could do to undermine their sovereignty as a proud nation: “one thing is very clear – people in Gibraltar are happy for Britain’s support, but said they can handle this on their own.”

Justine Rovegno said: “I think Gibraltar would be more prepared to relocate its entire population before we would let Spain take-over, we are an extremely stubborn community!”

Manuel Gracia added: “If Spain takes military action we’d stand our ground and I’m sure we’ll be helped by the UK.”  “If the EU cuts Gibraltar out of any deals and trade like I said Gib will stand it’s ground and look to other opportunities. ”

“As far as I’m aware there’s always been talk of Spain ‘taking Gib back’ with force, politics and pretty much every way you can think of.  None of it has worked so far and I find it doubtful that it’ll come to that. There will be tensions. There will be arguments but that’s what it’s always been like.”

Danielle Barclay took a more blunt stance, referring to the actions of Spain and Donald Tusk as being: “F****** disgusting and inhumane.”

As Express adds, “the population of Gibraltar seems relatively unfazed by the prospect of a Spanish invasion, EU strong arming and political scheming and are confident they have seen it all before and will come out of this stronger – as they always have.”

But there is an ominous sense of dread about what is to come, as Justine said: “I think the Gibraltarian community has survived very dark times because of Spain, I think most of them believe they have gone through the worst, and Spain going about this in such an intimidating way is just fuelling a fire that was lit many years ago.

 

“I felt that the younger community was learning that there was not a giant brick wall between Gibraltar and the Spanish, but I think the angst they are creating is slowly putting those thoughts back into everyone’s minds which is extremely sad.”

Not even one full week into Brexit, and nationalistic tensions – the continent’s soft spot – across Europe are once again rising, this time not the direct result of Europe’s refugee troubles. The good news: for now it is being handled diplomatically. The bad news: as the following chart from Goldman shows, the Brexit process is just beginning, and the potential for political and economic complications will only eventually be fully appreciated.

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

My goodness:  huge bomb blast at the St Petersburg Metro Train station near the Sennaya Square, with 50 dead. Putin considering a possible terrorist link:

(courtesy zero hedge)

 

10 Dead, 50 Injured After Explosion In St. Petersburg Metro, Putin Considering Possible Terrorist Links

SUMMARY:

  • An explosion occurred on a St. Petersburg Metro Train –  between Sennaya Square and the Institute of Technology
  • At least 10 dead
  • At least 50 injured
  • Device was an IED with shrapnel
  • Entire Transit system shutdown
  • Putin considering possible terrorist links

*  *  *

Update 5: Explosive device was left in briefcase in metro carriage – Interfax. There was no immediate claim of responsibility for the blast.

Update 4:A second device has been found –  Russian anti-terrorism committee says it has found and deactivated a bomb at another St. Petersburg subway station.

The National Anti-Terrorist Committee has confirmed that a makeshift bomb has been found at the Ploshchad Vosstaniya metro station in St. Petersburg and disposed of.

 

“At the Ploshchad Vosstaniya metro station in St. Petersburg a makeshift explosive device was found and rendered harmless on Monday,” National Antiterrorist Committee spokesman Andrey Przhezdomsky told the Rossiya-24 television news channel. “It was done promptly and professionally.”

 

“Special services and law enforcement agencies keep taking crucial measures to identify and avert terrorist threats,” the National Anti-Terrorist Committee said.

Update 3: The Mail is reporting at least 50 injured including children. Bloomberg reports the device was an IED with shrapnel.

The entire transit system has been shut down as bomb squads and rescuers are responding to the emergency.

Russian president Vladimir Putin says authorities are considering all possible causes of St Petersburg metro explosion including terrorism.

Reuters: rescue service source says 10 people killed and at least 20 others injured following a metro station explosion in St Petersburg

Russian president Vladimir Putin says authorities are considering all possible causes of St Petersburg metro explosion including terrorism

*  *  *

Update 2: Russian news services reporting at least 10 dead… (via TASS)

… at least ten people were killed, according to the Russian news agency TASS.

Preliminary reports indicate that some 10 people may have been killed and 20 injured in the blast, news agencies said citing sources close to the investigation.

The Tass news agency and Reuters said that 10 have been killed.

Interfax also said about 10 had died, with about 20 injured.

Selfie nation strikes once again…

Update 1: More details of a possible second explosion at the “Sennaya Ploschad [square]” Station note at least 10 people were injured.

Fire brigades are investigating reports of smoke at the Sennaya Ploshchad metro station in the Russian city of St. Petersburg, a regional Emergencies Ministry official told Sputnik on Monday.

 

“Preliminarily, there is strong smoke. Smoke protection service experts have been dispatched. The source of the smoke is being investigated,” the source said.

Seven stations closed on city subway network – “Victory Park”, “Electrosila”, “Moskovskiye Vorota”, “Frunze”, “Institute of Technology”, “Sennaya Ploshchad”, “Gostiny Dvor”.

*  *  *

As we detailed earlier, reports are coming of an explosion at the Teknologicheskiy Institut metro station in St.Petersburg, Russia that has left several injured…

The metro management said they received reports of an explosion inside the car, possibly of an improvised explosive device.

Rosbalt reports that (via Google Translate)

At the train station “Technological Institute”, an explosion occurred. This was reported by eyewitnesses.

 

According to them, many people have suffered as a result of the incident. On the published photo shows that the car door is badly damaged. Station platform clouded by smoke.

 

Details are not yet known. Official comments yet failed to get.

The situation does not look good…

There are many ambulances present already…

 

The station has been evacuated…

 

6.GLOBAL ISSUES

IS CANADA NUTS!!  Canada to import Chinese workers as China wishes to again total access to the Canadian Market??

(courtesy zero hedge)

China May Import Its Workers To Canada As It Seeks “Total Access” To Canadian Market

China’s ambassador to Canada, Lu Shaye, told the Globe and Mail that Beijing is seeking full access to Canada’s economy ahead of free trade talks, a move that could result in Chinese state-owned companies bringing their own employees to work on projects in Canada. Charles Burton, an associate political science professor at Brock University, said bringing their own workers abroad is “normal practice” for Chinese companies. “It’s not as if [the Chinese] would be asking something of Canada that they don’t expect from other countries,” he said.

Earlier this year, Canadian and Chinese officials held exploratory talks on a free trade deal and another meeting is set to take place this month,  Lu told the Globe, just as the US prepares to renegotiate NAFTA with Canada and Mexico.

Lu said that his government wants to avoid discussions of human rights issues, fearing it could become a “bargaining chip” in negotiations. Additionally, anticipating what has become an increasingly regular response by sovereign governments to China’s money-laundering disguised as M&A ambitions, the ambassador said China’s government would interpreted any attempt by Ottawa to block takeovers of Canadian companies on national security grounds as protectionism.

“Investment is investment. We should not take too much political considerations into the investment,” he said. “Just like the negotiations of the (Canada-U.S.) FTA, we should not let political factors into this process. Otherwise, it would be very difficult.”

Meanwhile, Canada’s ambassador to China, John McCallum, told the CBC that Prime Minister Justin Trudeau “is very clear that we want to pursue stronger ties with China. We think that in the medium term this will lead to more Canadian jobs.”


Canada’s ambassador to China, John McCallum, says a trade deal with China is

a priority for Prime Minister Justin Trudeau.

While China has recently pushed to adopt the mantle of the “world’s biggest defender of free trade” following Trump’s threats to impose protectionist measures, and has been among the most vocal countries in response to Trump’s proposed trade practices, critics say the country is itself a bastion of protectionism. They note China allows almost no foreign investment in banking and telecommunications. Many argue the country has not lived up to the commitments it made to open up its economy when it joined the World Trade Organization in 2001.

China’s interest in Canada lies primarily in energy, and in the possibility of exploiting Canada’s oilsands. The country will push for a reversal of Harper government-era policies that restricted the ability of Chinese state-owned businesses to invest in Canadian energy.

As Daniel Tencer writes, the vast majority of China’s largest corporations are state-run enterprises whose executives are often hand-picked by government. They also note that China’s notion of “full access” to an economy could be very broad. As the foreign policy blog OpenCanada notes, China’s 2015 free trade deal with Australia includes a provision that allows Chinese companies to bring their own employees into the country to work on projects, so long as those projects are worth more than AUD$150 million.

With the specter of being displaced from their jobs by imported Chinese workers, opinion polls suggest Canadians are split on the issue of free trade with China. One poll carried out for the Asia Pacific Foundation of Canada last August found 46% support for a deal with China, and the same percentage opposed. However, that was a stronger showing than a poll six months earlier, which showed only 36-per-cent support for a China trade deal at that time.

Canadians were much more likely to support free trade deals with more developed economies, such as the European Union, Japan and Australia.

end

 

South Africa

The South African Rand tumbles after S and P downgrades South Africa to junk

(courtesy zero hedge)

Rand Tumbles After S&P Downgrades South Africa To Junk: Full Text

While CDS markets had largely priced in a downgrade (with levels approaching those of Brazl), FX markets seemed surprised when moments ago S&P downgraded South Africa to junk, cutting it from BBB- to BB+, in the aftermath of last week’s sacking of finance minister Gordhan by president Zuma. The stated downgrade catalyst: “in our opinion, the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes. We assess that contingent liabilities to the state are rising.”

As UBS warned on Friday, a junking of South Africa could cause up to $10 billion in outflows, UBS said on Friday. Investment outflows at that level would effectively double South Africa’s current account gap, UBS said. President Jacob Zuma’s midnight ouster of finance minister Pravin Gordhan deepened a financial market selloff caused by political uncertainty that had been brewing all week.

The departure of Gordhan threatens to tip South Africa’s higher profile foreign currency credit rating, currently one notch above so-called junk at BBB-/Baa2, into non-investment grade. Moody’s is scheduled to review the rating next Friday.

UBS said however that a bigger danger lay in local currency debt. Rated two notches into investment grade, South Africa is one of the few emerging economies whose local currency bonds are eligible for Citi’s World Government Bond Index (WGBI), a global benchmark tracked by over $3 trillion worldwide.

A two-notch cut to local ratings would exclude the country from the index, UBS noted, estimating WGBI-indexed South African bond holdings at $10 billion – just above the country’s 2016 current account deficit of $9.5 billion, or 22 percent of total foreign holdings of South African debt. WGBI membership hinges on investment grade ratings on local debt from both Moody’s and Standard & Poor’s.

“South Africa’s continued inclusion in WGBI rests on a local currency investment grading rating from S&P and Moody’s – presently two notches away,” UBS analysts told clients. “Any unwind of these positions could effectively double the expected current account deficit.”

Fitch said on Friday that the cabinet shake-up heightened political risk and signalled policy change, and could result in a review of its ratings on South Africa.

And while CDS had largely anticipated the move…

… it came as a surprise to the rand which tumbled to 3 month lows on the news.

 

* * *

The full S&P downgrade text below:

South Africa Long-Term Foreign Currency Rating Cut To ‘BB+’ On Political And Institutional Uncertainty; Outlook Negative

OVERVIEW

  • In our opinion, the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.
  • We assess that contingent liabilities to the state are rising.
  • We are therefore lowering our long-term foreign currency sovereign credit  rating on the Republic of South Africa to ‘BB+’ from ‘BBB-‘ and the  long-term local currency rating to ‘BBB-‘ from ‘BBB’.
  • The negative outlook reflects our view that political risks will remain  elevated this year, and that policy shifts are likely, which could  undermine fiscal and economic growth outcomes more than we currently  project.

RATING ACTION

On April 3, 2017, S&P Global Ratings lowered the long-term foreign currency  sovereign credit rating on the Republic of South Africa to ‘BB+’ from ‘BBB-‘  and the long-term local currency rating to ‘BBB-‘ from ‘BBB’.

We also lowered the short-term foreign currency rating to ‘B’ from ‘A-3’ and  the short-term local currency rating to ‘A-3’ from ‘A-2’. The outlook on all  the long-term ratings is negative.

In addition, we lowered the long-term South Africa national scale rating to  ‘zaAA-‘ from ‘zaAAA’. We affirmed the short-term national scale rating at  ‘zaA-1’.

As a “sovereign rating” (as defined in EU CRA Regulation 1060/2009 “EU CRA  Regulation”), the ratings on the Republic of South Africa are subject to  certain publication restrictions set out in Art 8a of the EU CRA Regulation,  including publication in accordance with a pre-established calendar. Under the EU CRA Regulation,  deviations from the announced calendar are allowed only in limited  circumstances and must be accompanied by a detailed explanation of the reasons for the deviation.

In this case, the reasons for the deviation are the heightened political and  institutional uncertainties that have arisen from the recent changes in  executive leadership. The next scheduled rating publication on the sovereign  rating on the Republic of South Africa will be on June 2, 2017.

RATIONALE

The downgrade reflects our view that the divisions in the ANC-led government  that have led to changes in the executive leadership, including the finance  minister, have put policy continuity at risk. This has increased the  likelihood that economic growth and fiscal outcomes could suffer. The rating  action also reflects our view that contingent liabilities to the state,  particularly in the energy sector, are on the rise, and that previous plans to improve the underlying financial position of Eskom may not be implemented in a comprehensive and timely manner. In our view, higher risks of budgetary  slippage will also put upward pressure on South Africa’s cost of capital,  further dampening already-modest growth.

Internal government and party divisions could, we believe, delay fiscal and  structural reforms, and potentially erode the trust that had been established  between business leaders and labor representatives (including in the critical  mining sector). An additional risk is that businesses may now choose to  withhold investment decisions that would otherwise have supported economic  growth. We think that ongoing tensions and the potential for further event  risk could weigh on investor confidence and exchange rates, and potentially  drive increases in real interest rates.

We have also reassessed South Africa’s contingent liabilities. This reflects  the increased risk that nonfinancial public enterprises will need further  extraordinary government support. We expect guarantee  utilizations will reach  South African rand (ZAR) 500 billion in 2020, or 10% of 2017 GDP. The  utilizations are dominated mainly by Eskom (BB-/Negative/–), which benefits  from a government guarantee framework of ZAR350 billion (US$25 billion)–about 7% of 2017 GDP. We estimate Eskom will have used up to ZAR300 billion of this  framework by 2020.

South Africa’s energy regulator has capped Eskom’s permitted 2017/2018 tariff  increase at 2.2%–with negative implications for its financial performance.  Eskom will fund the resulting revenue gap via borrowings of up to ZAR70  billion, of which up to half may utilize government guarantees. Other  state-owned entities that we think still pose a risk to the country’s fiscal  outlook include national road agency Sanral (not rated), which is reported to  have revenue collection challenges with its Gauteng tolling system, and South  African Airways (not rated), which may be unable to obtain financing without  additional government support. While governance reforms have proceeded at the  airline, Eskom still has to complete its board appointments and appoint a  permanent CEO. Broader reforms to state-owned enterprises are still being  discussed and we do not foresee implementation in the near term.

South Africa continues to depend on resident and nonresident purchases of  rand-denominated local currency debt to finance its fiscal and external  deficits. We estimate that the change in general government debt will average  4.2% of GDP over 2017-2020. On a stock basis, general government debt net of  liquid assets increased to about 48% of GDP in 2017 from about 30% in 2010,  and we expect it will stabilize at just below 50% of GDP in the next three  years. Although less than one-tenth of the government’s debt stock is  denominated in foreign currency, nonresidents hold about 35% of the  government’s rand-denominated debt, which could make financing costs  vulnerable to foreign investor sentiment, exchange rate fluctuations, and  rises in developed market interest rates. We project interest expense will  remain at about 11% of government revenues this year.

South Africa’s pace of economic growth remains a ratings weakness. It  continues to be negative on a per capita GDP basis. While the government has  identified important reforms and supply bottlenecks in South Africa’s highly concentrated economy, delivery has been piecemeal in our opinion. The country’s longstanding skills shortage and adverse terms of trade also explainpoor growth outcomes, as does the corporate sector’s current preference to delay private investment, despite high margins and large cash positions.

South Africa’s gross external financing needs are large, averaging over 100% of current account receipts (CARs) plus usable reserves. However, they are declining because the current account deficit is narrowing. The trade deficit (surplus in 2016) has seen contraction, but given the small recovery in oil prices (oil constitutes about one-fifth of South Africa’s imports) we could see the trade balance weakening again. We could also see weaker domestic demand and a notable increase in exports from the mining and manufacturing sectors, along with a slower pace of increase in imports.

We believe sustained real exports growth is likely to be slow over 2017-2020 because of persistent supply-side constraints to production. Import growth will be compressed amid currency weakness and the subdued domestic economy. Therefore, we estimate current account deficits will average close to 4% of GDP over 2017-2020. However, South Africa funds part of its current account deficits with portfolio and other investment flows, which could be volatile. This volatility could stem from global changes in risk appetite; foreign investors reappraising prospective returns in the event of growth or policy slippage in South Africa; or rising interest rates in developed markets.

We consider South Africa’s monetary policy flexibility, and its track record in achieving price stability, to be important credit strengths. South Africa continues to pursue a floating exchange rate regime. The South African ReserveBank (SARB; the central bank) does not have exchange rate targets and does notdefend any particular exchange rate level. We assess the SARB as being operationally independent, with transparent and credible policies. The repurchase rate is the bank’s most important monetary policy instrument. Absent large currency depreciations, we expect that inflation will fall back below 6% this year and remain in the target range of 3%-6% over our three-yearforecast horizon.

OUTLOOK

The negative outlook reflects our view that political risks will remain elevated this year, and that policy shifts are likely which could undermine fiscal and growth outcomes more than we currently project.

If fiscal and macroeconomic performance deteriorates substantially from our baseline forecasts, we could consider lowering the ratings.

We could revise the outlook to stable if we see political risks reduce and economic growth and/or fiscal outcomes strengthen compared to our baseline projections.

end

 

Global central banks are now starting to rethink 2% as their inflation goal target.  They now want to up it.  This will be deadly to all of us

(courtesy Mish Shedlock/Mishtalk)

 

Central Banks Rethink 2% Inflation Target (In The Wrong Direction, Of Course)

Authored by Mike Shedlock via MishTalk.com,

If Central Banks wanted to make a positive impact on the global economy, they would abolish themselves and let the free market set rates.

Instead, and after pursuing a 2% inflation target for decades, central bankers now ponder the need for even higher rates of inflation.

Rethinking Made Worse

Please consider Rethinking the Widely Held 2% Inflation Target.

Inflation has finally returned to the Federal Reserve’s 2% goal after undershooting it for nearly five years. Now, just as the central bank has inflation where it wants it, economists and central bankers are starting to think the goal, and how it has been implemented in many places, was a mistake.

 

Spooked by inflation spikes during the 1970s and early 1980s, central bankers had come to view targets as a core tenet of sound monetary policy. In the 1990s and 2000s, many picked a 2% target, seeing it as not so high that it would disrupt business decisions and wage negotiations, and not so low that it would make interest rates unmanageable.

 

Today, after a long period of exceptionally low inflation and interest rates, central banks are talking about alternatives to rigid 2% targets. Many of these alternatives involve the option of letting inflation rise above 2% either permanently or for a time.

 

“This is one of those ideas that has moved from a crazy idea that no one would discuss to an idea that is being seriously discussed by important policy makers,” said Emi Nakamura, an economist at Columbia University.

 

The financial crisis and its aftermath shifted the consensus. Instead of high inflation, today’s central banks are confronted with aging populations, lower long-term growth and higher saving rates. Those all hold down the real natural interest rate—the equilibrium interest rate, adjusted for inflation, that keeps borrowing, lending and the broader economy in balance.

 

A very low natural rate is a problem for central bankers, who manipulate short-term interest rates to manage their economies. When the economy heats up, they push rates higher to slow it down. When the economy slows down, they cut rates to speed it up.

 

When the natural rate is very low, central banks risk running rates into zero when they’re trying to cut, effectively running out of room to stimulate the economy in a downturn. New research by Fed economists Michael Kiley and John Roberts suggests Fed officials may now confront near-zero interest rates 40% of the time or more because of the low natural rate.

 

Olivier Blanchard, an economist at Peterson Institute for International Economics, kicked off the debate over higher inflation in 2010 when he suggested a 4% target while serving as the International Monetary Fund’s chief economist. The idea was that a steady rate of higher inflation would mean that nominal interest rates could be higher too, leaving central banks more room to cut in a downturn to boost output.

Preposterous Nonsense

The blatant nonsense inherent in the above article is apparent in one second flat, just by looking at the chart.

The natural interest rates can never be negative. Here’s why: A negative rate implies things like one would rather have 90 cents tomorrow than a dollar today.

That’s illogical. Rather than accept negative rates, one could simply sit on money.

Don’t confuse negative natural rates with storage charges for safe keeping. Storage charges are a service fee, not a natural interest rate.

Also, the idea the Fed or anyone else can divine the natural rate is in and of itself preposterous. The free market could, not a collective bunch of self-appointed economic wizards.

Finally, these self-appointed wizards not only think they can determine the natural rate, they arrogantly believe they know when to override that rate.

Economic Challenge to Keynesians

Of all the widely believed but patently false economic beliefs is the absurd notion that falling consumer prices are bad for the economy and something must be done about them.

I have commented on this many times and have been vindicated not only by sound economic theory but also by actual historical examples.

My article Deflation Bonanza! (And the Fool’s Mission to Stop It) has a good synopsis.

And my Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.

There is no answer because history and logic both show that concerns over consumer price deflation are seriously misplaced.

The BIS did a study and found routine deflation was not any problem at all.

Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study.

It’s asset bubble deflation that is damaging.

And in central banks’ seriously misguided attempts to fight routine consumer price deflation, central bankers create very destructive asset bubbles that eventually collapse.

When those bubble burst, and they will, it will trigger debt deflation, which is what central banks ought to fear.

For a discussion of the BIS study, please see Historical Perspective on CPI Deflations: How Damaging are They?

Meanwhile, economically illiterate writers bemoan deflation, as do most economists and central banks. The final irony in this ridiculous mix is central bank policies stimulate massive wealth inequality fueled by soaring stock prices.

Challenge to John Williams

I challenge John Williams to a debate on interest rate policy. All proceeds will go to charity. Of course, Williams would never agree to debate me.

Confused About Safekeeping?

For a discussion of the difference between safekeeping charges and negative interest rates, please see Confusion Over Negative Interest Rates; What About Safekeeping Fees?

end

7. OIL ISSUES

Compliance among OPEC members tumble!

(courtesy zerohedge)

As Quota Compliance Tumbles, Is The End Of OPEC Near?

OPEC’s progress in reducing the oversupply in global oil markets relied on contributions from Nigeria and Libya in March, two countries that are exempt from the group’s deal to rein in production.

The Organization of Petroleum Exporting Countries pumped 32.095 million barrels a day, down 200,000 a day from February, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. Supply from Nigeria and Libya dropped by a combined 210,000 barrels a day to 1.55 million and 620,000 a day, respectively.

Among the 10 members bound by production caps, compliance weakened to 89 percent of pledged reductions from 104 percent, the survey showed. As well as the two African countries, Saudi Arabia buoyed the group’s effort by cutting its own output by more than it agreed late last year.

Which raises the question, as Rakesh Upadhyay of OilPrice.com asks, is this the end of OPEC?

OPEC, which has far exceeded the average life of cartels, is on the brink of failure. Though cracks have been developing in the cartel since the start of the current oil crisis, the group has managed to stay together so far. Nevertheless, the success of the current OPEC deal for production cuts will decide its future as a cartel.

What is a cartel?

A cartel is a group of like-minded producers, who act in concert—or collusion—to achieve a shared goal of increasing their profits by means of restricting supply, fixing prices, or destroying their competition by illegal means. The average life of the 20th Century cartels has been 3.7 to 7.5 years, according to various studies by Margaret Levenstein and Valerie Suslow. In the past two centuries, cartels have been able to influence prices by an average of 25 percent.

History of OPEC’s success in boosting oil prices

Since its inception, OPEC has been fairly successful in boosting prices by various means. A few of the price increases, however, were due to reasons other than direct OPEC action, nevertheless benefitting their members.

Though the 1973 oil embargo was brought on by political reasons, OPEC used the production cuts of the embargo to boost oil prices from $3 a barrel in 1973 to $12 a barrel in 1974.

The 1979 energy crisis was not a brainchild of OPEC. The production dropped due to the Iran-Iraq war, and the price of oil doubled in about 12 months, again benefitting OPEC members.

OPEC was able to boost prices using production quotas and production cuts following the Asian Financial Crisis in 1997.

What has OPEC done to support oil prices in the current oil crisis?

OPEC, as any cartel would, has used two strategies to influence oil prices. However, both have been unsuccessful in achieving their objectives.

In 2014, Saudi Arabia, the de facto leader of OPEC, attempted to stifle the competition of the shale oil drillers by keeping their production intact. As a result, oil prices plummeted to multi-year lows of about $27 a barrel in February 2016. The drop in oil prices saw 119 North American oil and gas producers file for bankruptcy from the beginning of 2015, according to Haynes and Boone, LLP.

U.S. oil production dropped about 883,000 barrels a day by August 2016, after topping out at 9.7 million barrels a day in April 2015. Nevertheless, the price decrease went well below OPEC’s expectations. Meanwhile, many shale oil drillers used a combination of better technology and hedging to continue pumping oil, despite the low prices.

As its first strategy failed to effect the U.S. shale oil production to the extent presumed, OPEC then adopted a second strategy of cutting production. On November 30, OPEC sealed a deal to cut production after months of difficult negotiation. Though prices bounced and broke out of the $52 levels – a strong resistance – they could not reach the $60 levels preferred by OPEC members.

However, this modest rally in crude oil prices rejuvenated the U.S. shale oil drillers, and U.S. oil production is now on the rise. As a result, crude oil has dipped again and is hovering near the $50 per barrel level.

The market believes that if crude oil prices remain above $50 per barrel, U.S. shale oil production will increase. For this reason, OPEC is finding itself in a catch-22 situation: It is losing market share to the U.S. shale oil drillers, but it is unable to propel prices considerably higher. It is losing its ability to influence prices above a certain level. Related: What Gold Can Tell You About Oil Prices

What happens if the Cartel fails in its objective

A cartel is able to hold its members only when it fulfills their objective of higher prices, which has not been the case with OPEC. The member nations will now look to fulfill their objective by cheating and acting individually, according to their requirement.

Saudi Arabia, which was the leader of OPEC and the price setter of the world, is losing its clout in OPEC. Even in the current round of production cuts, most of the work is being done by Saudi Arabia, whereas the other members are shying away from their designated quotas.

OPEC has far outlived the average lifespan of a cartel, but if the OPEC members don’t regroup and act together, chances are that the cartel will come to an end very soon.

8. EMERGING MARKETS

Venezuela

The Supreme Court reverses ruling as citizens continue to riot. Venezuela has the highest murder rate in the world at 70 per 100,000 inhabitants. The country has the largest in the ground oil reserves yet it ran out of gasoline

(courtesy zero hedge)

“Explosive” Situation As Supreme Court Reverses Ruling

While investors had largely given Venezuela’s economic catastrophe the benefit of the doubt for the past two years as crude collapsed and the country’s CDS soared to record highs only to normalize subsequently, yesterday bond investors got very nervous for the first time in a while, as the Venezuela 9.25% of 2027 bonds crashed on fears a presidential coup may be imminent after Wednesday’s decision by the pro-Maduro supreme court to assume the functions of congress, in effect making Venezuela a Maduro dictatorship. The opposition promptly slammed the decision as a “coup” against an elected body and demanded army intervention, and the tipping point came when even a formerly pro-Maduro Attorney General, Luisa Ortega, slammed the “unconstitutional” usurpation of power.

One day later, the bond selloff, coupled with a dire surge in domestic anger and protests, as well as international condemnation, appears to have been sufficient to spook Maduro that this may be one of his last (bad) decisions because on Saturday morning, Venezuela’s Supreme Court reversed its decision to strip congress of its legislative powers.

“This controversy is over … the constitution has won,” Maduro said in a televised speech just after midnight to a specially convened state security committee that ordered the top court to reconsider its rulings. The Supreme Court duly erased the two controversial judgments during the morning, the information minister said.

In an amusing twist, Maduro tried to cast the U-turn as his own personal achievement, one of a wise statesman resolving a power conflict, everyone and certainly his opponents said it was a hypocritical row-back by an unpopular government that overplayed its hand.

“You can’t pretend to just normalize the nation after carrying out a ‘coup,'” said Julio Borges, leader of the National Assembly legislature, quoted by Reuters. He publicly tore up the court rulings this week and refused to attend the security committee, which includes the heads of major institutions.

While the Supreme Court flip-flop may take the edge off protests, Maduro’s opponents at home and abroad will seek to maintain the pressure. They are furious that authorities thwarted a push for a referendum to recall Maduro last year and also postponed local elections scheduled for 2016. Now they are calling for next year’s presidential election to be brought forward and the delayed local polls to be held, confident the ruling Socialist Party would lose.

“It’s time to mobilize!” student David Pernia, 29, said in western San Cristobal city, adding Venezuelans were fed up with autocratic rule and economic hardship. “Women don’t have food for their children, people don’t have medicines.”


Venezuelan Bolivarian National guards officers are confronted by university students

during a protest outside of the Supreme Court in Caracas, on March 31, 2017

As mentioned yesterday, today the National Assembly plans an open-air meeting in Caracas, while South America’s UNASUR bloc was to meet in Argentina with most of its members unhappy at Venezuela. The hemispheric Organization of American States (OAS) had a special session slated for Monday in Washington.

As Reuters adds, even before this week’s events, OAS head Luis Almagro had been pushing for Venezuela’s suspension, but he is unlikely to garner the two-thirds support needed in the 34-nation block despite hardening sentiment toward Maduro round the region.

That said, Venezuela can still count on support from fellow leftist allies and other small nations grateful for subsidized oil dating from the 1999-2013 rule of late leader Hugo Chavez. Maduro accuses the United States of orchestrating a campaign to oust him and said he had been subject this week to a “political, media and diplomatic lynching.”


A woman wears a banner over her mouth with a message that reads in Spanish:
“Venezuela lives in a dictatorship” during a protest, in Caracas

Serious criticism even came from within government, with Venezuela’s attorney general Luisa Ortega rebuking the court in an extremely rare show of dissent from a senior official. “It constitutes a rupture of the constitutional order,” he said in a speech on state television on Friday.

The Supreme Court’s decision helped to further galvanize resistance to Maduro, Pockets of protesters had blocked roads, chanted slogans and waved banners saying “No To Dictatorship” around Venezuela on Friday, leading to some clashes with security forces. Given past failures of opposition street protests, however, it is unlikely there will be mass support for a new wave. Rather, the opposition will be hoping ramped-up foreign pressure or a nudge from the powerful military may force Maduro into calling an early election.

* * *

Meanwhile, the nation continues to disintegrate, with Reuters reporting that Venezuela’s murder rate rose to an average 60 per day last year, up from about 45 per day in 2015, the attorney general’s office said on Friday, as the country’s worst economic and political crisis in history continues to claim victims Official data put the murder rate at 70.1 per 100,000 inhabitants last year, one of the highest in the world and up from 58 in 2015.

Violent crime is one of the most pervasive anxieties for Venezuelans, especially in poor slums dominated by gangs and rife with guns. Numerous state security plans and disarmament drives in recent years have failed to curb violence given easy access to weapons, police participation in crime, and high levels of impunity in the nation of 30 million people.

A brutal economic recession that has millions skipping meals has pushed more Venezuelans towards crime, according to officials, rights groups and neighborhood organizations. Recently, Venezuela – the country’s with the world’s largest proven oil reserves, ran out of gasoline.

end

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

Euro/USA   1.0653 UP .0012/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RAISING INTEREST RATES/EUROPE BOURSES IN THE RED EXCEPT DAX

USA/JAPAN YEN 111.40 UP 0.148(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 1.2503 DOWN .0038 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3349 UP .0060 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS MONDAY morning in Europe, the Euro ROSE by 12 basis points, trading now BELOW the important 1.08 level  RISING to 1.0653; 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+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 12.27 POINTS OR 0.38%     / Hang Sang  CLOSED UP 149.89 POINTS OR 0.62% /AUSTRALIA  CLOSED UP 0.10%  / EUROPEAN BOURSES IN THE RED EXCEPT DAX

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

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

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

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

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

The NIKKEI: this MONDAY morning CLOSED UP 73.97 POINTS OR 0.39%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 149.89 POINTS OR 0.62% / SHANGHAI CLOSED UP 12.27 OR .38%/Australia BOURSE CLOSED UP 0.10%/Nikkei (Japan)CLOSED UP 73.97 OR 0.62%  / INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1246.10

silver:$18.15

Early MONDAY morning USA 10 year bond yield: 2.387% !!! PAR IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.019, PAR  IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 100.61 UP 16  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 3.909%  DOWN 9  in basis point yield from FRIDAY 

JAPANESE BOND YIELD: +.075%  UP 1/2  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.643%  UP 2 IN basis point yield from FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.343 UP 3 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 70 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.277% DOWN 5 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.0656 UP .0015 (Euro UP 15 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.02 DOWN: 0.233(Yen UP 23 basis points/ 

Great Britain/USA 1.2479 DOWN 0.0063( POUND DOWN 63 basis points)

USA/Canada 1.3398 UP 0.01090(Canadian dollar DOWN 109 basis points AS OIL FELL TO $50.20

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This afternoon, the Euro was UP by 15 basis points to trade at 1.0656

The Yen ROSE to 111.02 for a GAIN of 23 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 BY 63  basis points, trading at 1.2479/

The Canadian dollar FELL by 109 basis points to 1.3398,  WITH WTI OIL FALLING TO :  $50.20

The USA/Yuan closed at 6.8831/
the 10 yr Japanese bond yield closed at +.075% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 6  IN basis points from FRIDAY at 2.343% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.97 DOWN 6  in basis points on the day /

Your closing USA dollar index, 100.55 UP 10  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 40.23 OR 0.55% 
German Dax :CLOSED DOWN 55.67  POINTS OR 0.45%
Paris Cac  CLOSED DOWN 36.60 OR 0.71%
Spain IBEX CLOSED DOWN 137.60 POINTS OR 1.32%
Italian MIB: CLOSED DOWN  125.19 POINTS OR 0.61%

The Dow closed DOWN 13.01 OR 0.06%

NASDAQ WAS closed DOWN 17.05 POINTS OR 0.29%  4.00 PM EST
WTI Oil price;  50.20 at 1:00 pm; 

Brent Oil: 53.17  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.30  DOWN 6/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS TO +0.277%  FOR THE 10 YR BOND  1:30 EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:$50.25

BRENT: $53.15

USA 10 YR BOND YIELD: 2.323%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.953%

EURO/USA DOLLAR CROSS:  1.0671 up .0031

USA/JAPANESE YEN:110.90   DOWN .357

USA DOLLAR INDEX: 100.46  up 1  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2481 : DOWN .0060  OR 60 BASIS POINTS.

Canadian dollar: 1.3380  UP .0092 (CAN DOLLAR DOWN 92 BASIS PTS)

German 10 yr bond yield at 5 pm: +.277%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Start Q2 With A Whimper: VIX Smash Saves Dow As Reflation Trade Is MIA

With an otherwise stellar Q1 ending with a whimper, traders expected that Monday would bring a return if not the “animal spirits”, then at least the Reflation trade. That, however did not happen, for various reasons as profiled earlier by RBC, among which:

  • rates reversing fueled by softening ‘soft’ data vs ‘prices paid’ overshoot, helping to ‘kick off’ a reversal within equities ‘momentum’ longs as ‘growth’ names fading,’defensives’ lead and ‘reflation’ is again hammered.
  • Early focus on the big ‘Prices Paid’ beat in today’s ISM (highest absolute # since ’11), with S&P futures at lows on the session following the release indicating ‘bad inflation’ concerns when weighed against signs of ‘slowing growth’ (Street Q1 GDP downgrades, Atlanta Fed GDPNow downticking, Markit comments on Q2 post Manu PMI release) and weakening ‘soft data.’  This harkens back to the post Dec Fed concerns around ‘stagflation’ potentials and / or ‘hiking faster than we’re growing’ fears…i.e. Fed “policy error.”
  • Firmer USD (“policy divergence” and start of new Japan fiscal year highlighted below) is meagerly attempting to keep US rates from breaking dangerously lower (recent move lower fueled by the leveraged fund short-squeeze in USTs turning now to interest in establishing LONGS), but this week’s heavy econ calendar will also have fundamental impacts.
  • Today’s US data update is showing us that the much-focused-upon ‘hard vs soft’ data dynamic is showing signs of a ‘true-up,’ with the scale of ‘soft’ data survey beats reverting modestly lower (also see the ‘forward looking’ quote below from Markit’s Chief Business Economist—“…the loss of momentum seen in February and March bodes ill for the second quarter”).
  • leadership from ‘defensives’ / ‘low volatility’ / ‘anti-beta’ which certainly isn’t helpful for the buy-side majority.  Initially the ‘new safe haven’ of ‘growth’ held, although as Tech slips further back on the S&P sector performance tables, we see ‘momentum’ fading as well.  Bringing up the rear we see ‘cyclicals’ / ‘value’ getting properly hammered as the aforementioned ‘duration sensitive’ sectors rally, as ‘reflation’ takes another hit.

After sliding sharply at the open, just as news of the St. Petersburg explosion broke, the market managed to grind its way higher all day…

… with the Dow emerging into the green shortly before the close courtesy of a relentless selloff in the VIX, which closed at the day’s low, and barely in the green after being 10% higher earlier in the session.

Whatever the internal market dynamics that caused the rebound, however, the otcome was clear: the reflation trade failed to make an appearance all day, despite speeches by several Fed members including a repeat appearance by Bill Dudley (who howeverf was warning about the negative impact of record student loans, even if with a 5 year lag) because while the USD dollar was modestly higher…

…. the stronger Yen did not help, and with the USDJPY sliding back under 111, the expected bid from Japanese buyers on the first day of the new year failed to materlize.

 

To be sure, there was no trace of reflation across the TSY complex, which saw yields slide at the start of the day, and failed to catch a bid throughout the day,

To be sure, there was no reflation in the 5Y5Y complex, which has pancaked since the early days after the Trump election and if anything has been on a modest downward path.

Arugably the key driver behind the reflation trade in recent weeks, the price of crude, was hite early on, and failed to regain its Friday closing price, even though $50 has emerged as a support level for the time being.

* * *

But while the overall market started Q2 with a whimper at best, one stock ignored decided to yet again crush shorts, and soared to new all time highs, while its CEO was gloating at the expense of shorts: Tesla hit new all time highs today…

… as for Amazon, which likewise closed at new all time highs, it is now just over $100 away from $1,000/share and making Jeff Bezos the richest man in the world.

end

Early trading in NY this morning;

Dow Drop Erases Post-Healthcare Debacle Gains

US equities have erased all the gains since the pulled-Obamacare-repeal vote as VIX pushes well above 13…

 

 

It appears reality is setting in that perhaps a fractured GOP is not the best environment for a tax reform package that is more than priced in.

end

 

Trump commences war against sanctuary counties in Maryland as 3 counties are harbouring illegal immigrants.

the fun begins:

(courtesy zero hedge)

‘Sanctuary’ Crackdown Begins: Homeland Identifies 3 Maryland Counties Harboring Illegal Immigrants

A month ago, Maryland Attorney General Brian E. Frosh wrote to federal authorities asking that they declare the state’s courts, schools and hospitals off limits to immigration agents. Frosh, a Democrat, wrote that he was sending the letter in response to new immigration guidelines issued by the Trump administration that greatly expand the number of people considered a priority for removal from the country.

“I am concerned that the Administration’s aggressive new policies will discourage the most vulnerable immigrants from seeking judicial protection and medical care, which will cause avoidable injuries and potentially even deaths,” Frosh wrote.

 

“I ask that you take action to remove this immediate threat to the health and safety of immigrants in Maryland by declaring our courts and hospitals to be safe locations, where U.S. Immigration and Customs Enforcement and Customs & Border Protection authorities will not be allowed to identify and seize potential deportees.”

Frosh’s request mirrored efforts by jurisdictions led by Democrats in Maryland and around the country to declare themselves sanctuaries, meaning they won’t use local resources to aid efforts to seize immigrants.

However, all that was before AG Sessions surprise press conference last week in which he detailed the administration was stepping up its push back against cities that break the law by not enforcing actions against illegal immigrants.

“Today, I’m urging states and local jurisdictions to comply with these federal laws.  Moreover, the Department of Justice will require that jurisdictions seeking or applying for DOJ grants to certify compliance with 1373 as a condition for receiving those awards.”

 

“This policy is entirely consistent with the DOJ’s Office of Justice Programs guidance that was issued just last summer under the previous administration.”

 

“This guidance requires jurisdictions to comply and certify compliance with Section 1373 in order to be eligible for OJP grants.  It also made clear that failure to remedy violations could result in withholding grants, termination of grants and disbarment or ineligibility for future grants.”

 

“The DOJ will also take all lawful steps to claw back any fines awarded to a jurisdiction that willfully violates Section 1373.”

Sessions also called on states like Maryland and California to scrap their plans for becoming a sanctuary state.

“That would be such a mistake.”

 

“I would plead with the people of Maryland to understand this makes the state of Maryland more at risk for violence and crime, that it’s not good policy.”

And, as Fox Baltimore reports, it appears the administration is cracking down on Maryland already…

Three Maryland counties have been identified as protecting illegal immigrants in their custody.

 

Homeland Security has identified Baltimore, Montgomery and Prince George’s counties as non-cooperative jurisdictions after defying a federal request to hold immigrants in their custody.

 

In an emailed statement Baltimore County spokesperson Ellen Kobler says, “Regarding the detainer listed in the Declined Detainers Outcome Report, we cannot identify any individual in Baltimore County Detention Center records that matches any of the information in the ICE report.”

 

On a weekly basis, jurisdictions that fail to co-operate with detainer requests have started to be identified by Homeland Security.

 

An executive order requires it.

Prepare for more tears from Schumer, and more pained expressions from Pelosi who appear quite comfortable supporting people breaking America’s laws.

 

end

 

David Stockman comments that it will be impossible for the Republicans and Democrats to come to some sort of deal on tax cuts.

It just will not happen and he explains why!

(courtesy David Stockman/ContraCorner/Bonner and Partners>

(courtesy zero hedge)

end

 

Then this:  Trump states that the Obama wiretapping of Trump and his administration is nothing but totally unprecedented

(courtesy zero hedge)

Trump Doubles-Down On Obama ‘Wiretap’ Narrative: “This Is Unprecedented”

As much as we suspect the establishment the establishment would prefer this can of self-incriminating worms was firmly kept shut, President Trump has doubled-down on his accusations of Obama administration surveillance of Trump and his campaign officials in his latest tweet…

.@FoxNews from multiple sources: “There was electronic surveillance of Trump, and people close to Trump. This is unprecedented.” @FBI

Obviously citing ‘sources’ is not the ‘smoking gun’ but given that entire narratives have been proscribed by mainstream media and politicians on the basis of nothing more than ‘anonymouse sources’, why is a Fox ‘source’ any different from a CNN or WaPo ‘source’? Is it any wonder Democrats are so desperate to silence Nunes?

end

 

Confirmed: Susan Rice ordered the unmasking of the Trump team:

(courtesy zero hedge/Bloomberg)

Confirmed: Susan Rice “Unmasked” Trump Team

Once again it appears that Trump was right: the conspiracy theory that a close Obama associate worked to “unmask” the Trump team, resulting in the ongoing media spectacle over “collusion” between Trump and the Kremlin, has been confirmed, first by Mike Cernovich, and now by Bloomberg itself.

As noted last night, Journalist and author Mike Cernovich dropped an exclusive bombshell – naming Obama’s National Security Advisor Susan Rice as the official responsible for the ‘unmasking’ of the incoming Trump team during ‘incidental’ surveillance. This was apparently discovered after the White House Counsel’s office reviewed Rice’s document log requests:

The reports Rice requested to see are kept under tightly-controlled conditions. Each person must log her name before being granted access to them.

Upon learning of Rice’s actions, [National Security Advisor] H. R. McMaster dispatched his close aide Derek Harvey to Capitol Hill to brief Chairman Nunes.

Cernovich pointed out, as revealed in an article by Circa, that President Obama began loosening the rules regarding “incidental intercepts” starting in 2011 – making it easier for the US Government to spy on individuals who are not the primary target(s) of a surveillance operation.

As his presidency drew to a close, Barack Obama’s top aides routinely reviewed intelligence reports gleaned from the National Security Agency’s incidental intercepts of Americans abroad, taking advantage of rules their boss relaxed starting in 2011 to help the government better fight terrorism, espionage by foreign enemies and hacking threats

And guess who had authorization to unmask individuals who were ‘incidentally’ surveilled? Former CIA Director John Brennan, former Attorney General Loretta Lynch, and Obama’s National Security advisor Susan Rice. Also of note is the claim that New York Times journalist Maggie Haberman has been sitting on the Susan Rice story for at least two days:

This reporter has been informed that Maggie Haberman has had this story about Susan Rice for at least 48 hours, and has chosen to sit on it in an effort to protect the reputation of former President Barack Obama.

Fox News anchor Adam Housley tweeted on Friday that the surveillance that led to the unmasking began before Trump was the GOP nominee, and that the person who did the unmasking is a “very senior” and “very well known” person in the surveillance community – and not someone in the FBI. As ZeroPointNow noted, “this of course begs the question of whether or not President Obama would have ordered Rice to perform the unmasking.”

* * *

Until this morning, the Cernovich report was unconfirmed, with many in the “legacy media” accusing Cernovich, who recently was profiled on 60 Minutes for being a prominent member of the “fake news” dissemination team for being – what else – fake news. However, moments ago Bloomberg’s Eli Lake confirmed that it was indeed Susan Rice who was responsible for the repeatedly “unmasking” multiple members of the Trump team, in what may be dubbed yet another “conspiracy” to delegitimize the current US president.

From Eli Lake:

White House lawyers last month learned that the former national security adviser Susan Rice requested the identities of U.S. persons in raw intelligence reports on dozens of occasions that connect to the Donald Trump transition and campaign, according to U.S. officials familiar with the matter.

 

The pattern of Rice’s requests was discovered in a National Security Council review of the government’s policy on “unmasking” the identities of individuals in the U.S. who are not targets of electronic eavesdropping, but whose communications are collected incidentally. Normally those names are redacted from summaries of monitored conversations and appear in reports as something like “U.S. Person One.”

As Lake adds, the National Security Council’s senior director for intelligence, Ezra Cohen-Watnick, was conducting the review, according to two U.S. officials who spoke with Bloomberg View on the condition of anonymity because they were not authorized to discuss it publicly. In February Cohen-Watnick discovered Rice’s multiple requests to unmask U.S. persons in intelligence reports that related to Trump transition activities. He brought this to the attention of the White House General Counsel’s office, who reviewed more of Rice’s requests and instructed him to end his own research into the unmasking policy.

The intelligence reports were summaries of monitored conversations — primarily between foreign officials discussing the Trump transition, but also in some cases direct contact between members of the Trump team and monitored foreign officials. One U.S. official familiar with the reports said they contained valuable political information on the Trump transition such as whom the Trump team was meeting, the views of Trump associates on foreign policy matters and plans for the incoming administration.

Rice has not yet responded to a Bloomberg email seeking comment on Monday morning. Her role in requesting the identities of Trump transition officials adds an important element to the dueling investigations surrounding the Trump White House since the president’s inauguration.

Making matters worse, Rice appears to have lied:while has not spoken directly on the issue of unmasking, last month when she was asked on the “PBS NewsHour” about reports that Trump transition officials, including Trump himself, were swept up in incidental intelligence collection, Rice said: “I know nothing about this,” adding, “I was surprised to see reports from Chairman Nunes on that account today.

Ironically, it’s the same Susan Rice who two weeks ago tweeted the following:

Susan Rice: When the White House twists the truth, we are all less safe. Why veracity matters to our security. https://www.washingtonpost.com/opinions/susan-rice-when-the-white-house-twists-the-truth-we-are-all-less-safe/2017/03/21/f7cdef86-0e45-11e7-9d5a-a83e627dc120_story.html?utm_term=.df6f9f4a48f8 

Photo published for Opinion | Susan Rice: When the White House twists the truth, we are all less safe

Opinion | Susan Rice: When the White House twists the truth, we are all less safe

The actions of America’s allies — and enemies — depend on our perceived credibility.

washingtonpost.com

 

Lies aside, according to the Bloomberg reports, “Rice’s multiple requests to learn the identities of Trump officials discussed in intelligence reports during the transition period does highlight a longstanding concern for civil liberties advocates about U.S. surveillance programs. The standard for senior officials to learn the names of U.S. persons incidentally collected is that it must have some foreign intelligence value, a standard that can apply to almost anything. This suggests Rice’s unmasking requests were likely within the law.

Perhaps, but they also served a key political purpose: to create a media firestorm of controversy involving the Trump team, and to delegitimize Donald Trumpas much as possible.

Furthermore, the news about Rice also may explain what Bloomberg dubs the “strange behavior of Nunes in the last two weeks.”

It emerged last week that he traveled to the White House last month, the night before he made an explosive allegation about Trump transition officials caught up in incidental surveillance. At the time he said he needed to go to the White House because the reports were only on a database for the executive branch. It now appears that he needed to view computer systems within the National Security Council that would include the logs of Rice’s requests to unmask U.S. persons.

 

The ranking Democrat on the committee Nunes chairs, Representative Adam Schiff, viewed these reports on Friday. In comments to the press over the weekend he declined to discuss the contents of these reports, but also said it was highly unusual for the reports to be shown only to Nunes and not himself and other members of the committee.

In a tacit admission by Lake that Rice may have crossed numerous boundaries, the Bloomberg reporter adds “much about this is highly unusual: if not how the surveillance was collected, then certainly how and why it was disseminated.”

However the real question goes back to square one: did Obama order the unmasking, and if so, to what political purpose?

end

Spicer claims that the Susan Rice investigation is moving in a “troubling direction”

 

(courtesy zero hedge)

 

Spicer Says Susan Rice Investigation Moving In A “Troubling Direction”

Earlier this morning we noted that it was looking increasingly likely that Obama’s National Security Advisor, Susan Rice, was behind the unmasking of the identity of various members Trump’s team who were ‘incidentally’ surveilled during the 2016 campaign (see “Confirmed: Susan Rice “Unmasked” Trump Team“).  If true, of course, this raises a number of questions about the Obama administration’s motives and whether various members of his team may have broken laws.

And while Spicer was somewhat non-committal on the issue at his daily press briefing earlier, pending the results of an ongoing investigation, he did say that new revelations were heading in a “troubling direction.”

ReporterSenator Rand Paul has called the reports that Susan Rice ordered the unmasking of Trump’s associates a “smoking gun”, does the President agree with that characterization and what does he think of these reports?”

 

Spicer:  “There is an ongoing investigation, that we have supported, looking into this matter.  I will say there is a troubling direction that some of this is going in.  But we’re going to let this review go on before we jump to [conclusions].”

 

“But I think that it is interesting, the lack of interest that I’ve seen from the press corps in one set of developments versus another set of developments.” 

 

Meanwhile, as Trump has pointed out many times, Spicer went on to tell Fox News that the most troubling part of the whole situation was the media’s apparent ‘lack of interest’ in the potentially illegal actions of Susan Rice versus their complete fascination with Trump’s alleged ties to Vladimir Putin for which no one has offered a single shred of evidence…

…none of which is all that surprising, now is it?

end

 

this is absolutely insane:  the Democrats have enough votes to block Gorsuch which will set off the nuclear showdown

 

(courtesy zerohedge)

 

Democrats Have Enough Votes To Block Gorsuch Nomination, “Nuclear” Showdown Inevitable

As we previewed last Friday when Senator Clair McCaskill’s “No” decision was seen by many “whip counts” as the decisive “final” vote, moments ago Senate Democrats clinched enough support to block Neil Gorsuch’s nomination to the Supreme Court, in the process setting up what now appears an inevitable “nuclear” showdown over Senate rules later this week.

The threshold was passed when Sen. Chris Coons  announced on Monday that he will oppose President Trump’s pick on a procedural vote where he will need the support of eight Democrats to cross a 60-vote threshold. Coons became the 41st Democrat to back the filibuster.

“Throughout this process, I have kept an open mind … I have decided that I will not support Judge Gorsuch’s nomination,” Coons said quoted by The Hill. “I am not ready to end debate on this issue. So I will be voting against cloture,” Coons said, absent a deal to avoid the nuclear option.

After Coons’ decision, unless one of the 41 Democrats change their vote, the filibuster of Gorsuch will be sustained in a vote later this week.

More details from The Hill:

Gorsuch’s path to overcoming a filibuster closed on Monday after Democratic Sens. Dianne Feinstein (Calif.), Patrick Leahy (Vt.) and Mark Warner (Va.) each announced they would oppose Gorsuch’s nomination. Only four Democratic senators have said they will support President Trump’s pick on the initial vote: Sens. Heidi Heitkamp (N.D.), Joe Donnelly (Ind.), Joe Manchin (W.Va.) and Sen. Michael Bennet (Colo.).

 

Heitkamp, Donnelly and Manchin are each up for reelection in states carried by Trump in the 2016 election. Bennet — who won reelection last year — has been under a microscope because of Gorsuch’s ties to Colorado, and didn’t specify that he would vote for the nominee during a final vote.

Having been “under a mountain of pressure” from liberal outside groups to block Gorsuch’s nomination, Democrats predictably caved. “Progressives argue that voting for his nomination — even on a procedural vote — helps enable President Trump and is out of line with what the base of the party wants. With Democrats now able to block Gorsuch’s nomination, Republicans are expected to change the rules to circumvent the filibuster.”

The most likely next step is the Republican use of the nuclear option (previewed earlier), and although GOP leadership hasn’t specifically said they will use the “nuclear option,”  GOP senators appear resigned to lowering the threshold for Supreme Court nominations. Republicans have been quick to note that Democrats, then led by Majority Leader Harry Reid (D-Nev.), used the nuclear option in 2013  to lower the confirmation threshold for lower court judges and executive nominees.

“If we have to, we will change the rules, and it looks like we’re going to have to,” Sen. Lindsey Graham (R-S.C.) said during the Senate Judiciary Committee’s meeting on Gorsuch’s nomination. “I hate that. I really, really do.”

Sen. John Cornyn (R-Texas), the No. 2 Senate Republican and a member of the committee, added that Gorsuch will be confirmed by the end of the week.  “If they’re going to oppose Neil Gorsuch to the Supreme Court of the United States, they will never vote and never support a nominee of this President,” he said.

 

With the Judiciary Committee expected to clear Gorsuch’s nomination on Monday, a full Senate vote is expected by the end of the week.

 

Graham compared Democratic complaints to “arsonist complaining about the fire.”

For a longer take of how the GOP’s use of the nuclear option could transform the Senate, please read the following preview.

 

USA Manufacturing PMI plunges badly and this does not bode well for the 2nd quarter GDP

(courtesy zero hedge)

‘Soft’ Data Slammed As Manufacturing PMI Plunges To 6-Month Lows: “Bodes Ill For Second Quarter”

Just as we warned was historical precedent, it appears the hope and hype in ‘soft’ survey data is catching back down to ‘hard’ data’s reality.

 

Markit’s US Manufacturing PMI printed a disappinting 53.3 for March (final) – the lowest since September – as New Orders tumbled and input costs soared to 30 month highs.

ISM Manufacturing drifted lower for the first time since August, printing an inline 57.2. But the pattern was the same with New Orders dropping as Prices Paid surges

Unadjusted new orders hit their highest in over 4 years…

NOTE the chart below – ISM seems to track stocks, PMI seems more ‘real’

 

 

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

The post-election resurgence of the manufacturing sector seen late last year is showing signs of losing steam. Output growth slowed to a six-month low in March, optimism about the outlook has waned and hiring has slowed accordingly.

 

“While the survey data suggest that the goods producing sector enjoyed a relatively good first quarter on the whole, the loss of momentum seen in February and March bodes ill for the second quarter.

 

“The survey data have acted as a reliable advance guide to official data in the past, and in March indicate a slowing of output growth to an annualised rate of around 2%. The survey’s employment index is meanwhile consistent with official manufacturing payroll numbers falling slightly.

 

“If the activity numbers send a dovish signal topolicymakers, the survey’s price indices favour the hawks. Inflationary pressures have risen to a two and a half year high, despite the oil price easing during the month.”

Evidently stagflationary pressures are growing ever stronger.

(courtesy zero hedge)

I will see you tomorrow night

H

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4 comments

  1. peaknikmicki · · Reply

    Thanks Harvey.
    Have you had a chance to read the latest article on KWN with James Turk.
    http://kingworldnews.com/james-turk-massive-short-squeeze-send-gold-skyrocketing/

    He talks about FPS’s basically being used for delivery of physical metal against Comex contract, outside of the Comex warehouse.
    The article only contained a small window of data but it peaked my curiosity to what the longer term stats have been for deliveries and how this may tally with fully paid up contracts evaporating from OI.
    Would also be most interesting to analyse JT’s statement that FPS deliveries had to be rolled over and this indicates there is a real short squeeze developing. Is this something new or has it happened multiple times in the last cpl years (and they always managed to pull a rabbit out of the hat)….

    thanks again for you effort.

    Like

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