April 5/Fed minutes spook NY trading today/Gold and silver fall with the orchestrated raid but reocver once the minutes were released/Trump to change course in Syria and run into direct conflict with Putin/Turkey decides to buy huge quantities of gold: 28 tonnes last month/More on the Susan Rice affair!/Obamacare repeal and tax reform are now dead!!

Gold: $1245.40  DOWN $9.60

Silver: $18.17  DOWN 13  cents

Closing access prices:

Gold $1256.25

silver: $18.33!!!

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: $1265.15 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1254.50

PREMIUM FIRST FIX:  $10.65

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SECOND SHANGHAI GOLD FIX: $1264.85

NY GOLD PRICE AT THE EXACT SAME TIME: 1254.95

Premium of Shanghai 2nd fix/NY:$9/90

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LONDON FIRST GOLD FIX:  5:30 am est  1252.50

NY PRICING AT THE EXACT SAME TIME: 1252.75

LONDON SECOND GOLD FIX  10 AM: 1245.80

NY PRICING AT THE EXACT SAME TIME. 1245.90

For comex gold:

APRIL/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  81 NOTICE(S) FOR 8100 OZ.  TOTAL NOTICES SO FAR: 436 FOR 43,600 OZ    (1.356 TONNES)

For silver:

For silver: APRIL

190 NOTICES FILED TODAY FOR 950,000 OZ/

Total number of notices filed so far this month: 523 for 2,615,000 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 surpassing 219,000 contracts to 219,160 or about 4,000 contracts below the record set last year. The price of silver is a good $2.27 below the price when the record OI was set. There is no question that the hedge funds together with a possible sovereign entity are willing to take on the crooked bankers.

Today the markets were spooked by the Fed minutes as many Fed Governors and Presidents are remarking that the stock market may be in a bubble. The news propelled gold and silver higher in the access market.

 

The volume on the silver comex was extremely high and we may see a considerable rise in its OI for tomorrow’s reading despite the fact that silver was down 13 cents. Let us see what tomorrow brings.

 

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  ROSE BY A TINY 225 contracts UP to 219,160 WITH THE RISE IN PRICE ( 11 CENTS) WITH RESPECT TO YESTERDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUES TO SLOWLY 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.  1.095 BILLION TO BE EXACT or 157% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH: THEY FILED: 190 NOTICE(S) FOR 950,000 OZ OF SILVER

In gold, the total comex gold also ROSE BY A HUGE 6742 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.20 with YESTERDAY’S TRADING). The total gold OI stands at 427,808 contracts.

we had 81 notice(s) filed upon for 8100 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

We had no changes in tonnes of gold at the GLD:

Inventory rests tonight: 836.77 tonnes

.

SLV

We had a big change  in inventory at the SLV/ a withdrawal of 1.042 million oz from the SLV

THE SLV Inventory rests at: 329.284 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 ANOTHER TINY 225 contracts UP TO  to 219,160 DESPITE THE FACT THAT SILVER WAS UP A HEALTHY 11 CENT(S) with YESTERDAY’S trading. We no doubt had some short covering as the longs keep piling on. In contrast, the gold open interest ROSE BY A STRONG 6,742 contracts UP to 427,808 WITH THE RISE IN THE PRICE OF GOLD TO THE TUNE OF $4.20  (YESTERDAY’S TRADING).

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 47.79 POINTS OR 1.48%/ /Hang Sang CLOSED UP 139.32 POINTS OR .51%  . The Nikkei closed UP 51.02 OR 0.27% /Australia’s all ordinaires  CLOSED UP 0.34%/Chinese yuan (ONSHORE) closed DOWN at 6.8962/Oil ROSE to 51.55 dollars per barrel for WTI and 54.66 for Brent. Stocks in Europe ALL MIXED   ..Offshore yuan trades  6.8826 yuan to the dollar vs 6.8962 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN WEAKER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

Not the greatest timing to release another ballistic missile as North Korea fires another one on the eve of the visit by Xi with Trump

(courtesy zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

GERMANY

This should get the citizens all riled up ahead of the September elections:  270,000 Syrian refugees have been granted permission to bring family members to Germany:

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)RUSSIA/USA/SYRIA

Trump and Putin are now on a collision course after a supposed chemical attack on a rebel held town of Khan Sheikhoun. Trump claims that the Syrians used sarin gas.  Putin claims that Syrian planes hit a chemical warehouse storing toxic chemicals.

( zero hedge)

ii)Trump responds:  Assad crossed many many lines and he signalls an imminent change in Syria policy.

This does not look good with respect to USA/Russia relations

( zero hedge)

6.GLOBAL ISSUES

7. OIL ISSUES

i)Oil retreats after a surprise inventory build as the crude glut is now back to record highs:

( zero hedge

ii)Mexican production from PEMEX continues to falter and 2016 was no different than 2015. Unless new drilling will occur, Mexico will run out of reserves in 9 years

( OilPrice.c0m)

8. EMERGING MARKETS

VENEZUELA

Gunfire and riots break out as Venezuela’s national guard clashes with anti-maduro protesters

( zero hedge)

9.   PHYSICAL MARKETS

i)This is a change:  Turkey now gives its central bank the first option on buying domestic gold before buying other gold on the open market.  Turkey now wishes to increase its reserves in gold

( Reuters/GATA)

ii)Erdogan two weeks ago gave a edict for his central bank and others to buy gold.  Apparently they listened as Turkey imported 28.2 tonnes in March which is huge for them.

( Reuters)

iii)Turkey is trying to duplicate the Indian affair of trying to bring private gold into the mainstream.  They are going to introduce sovereign gold bonds and gold lease certificates.  This will fail

(Anadolu Agency/GATA)

iv)An excellent paper from Steve St Angelo.  The uSA imported a record 202 million oz (6300 tonnes) of silver last year even though consumption fell.  The 202 million oz of imports is roughly 1/3 of annual global production ex China ex Russia.  If consumption in the uSA is down why the huge increase. Steve believes and I agree with him that silver users are loading up on silver as they see a scarcity of silver down the road

( Steve St Angelo/SRSRocco report)

10. USA stories

A.FOMC minutes:  highlights:

  1. the balance sheet to shrink  (Harvey: good luck)
  2. stock prices are too high

B.Immediate reaction to the FOMC announcment!: Feds warning falls on deaf ears

afternoon trading…

( zero hedge)

i)Another great commentary from David Stockman as he weighs in on the Susan Rice et al affair:

( zero hedge)

ii a)Now the Wall Street Journal reports that Susan Rice was not alone in the “unmasking’ of the Trump transition team

( zero hedge)

iib)Trump says Susan Rice likely committed a crime in unmasking key Americans. I really think the crime is the release to the press, not the unmasking

(courtesy zero hedge)

iii)I really have no faith whatsoever in the ADP report. The private payroll report showed a huge 263,000 job gain on expectations of only 185,000. The February number was downgraded by 43,000 jobs

( zero hedge)

iv) Yesterday we had a soft USA PMI in manufacturing.  Today we had soft PMI in the service side. It seems that soft data are now rolling over and in total contrast to the above ADP data:

( zero hedge)

v)Steve Bannon kicked off of Trump’s National Security Council:

( zero hedge)

vi)Then late in the afternoon:

both Obamacare repeal and the Trump tax reform are dead

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 6,742 CONTRACTS UP to an OI level of 427,808 WITH THE  RISE IN THE PRICE OF GOLD ( $4.70 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 LOSS OF 183 contract(s) FALLING TO 2,367. We had 134 notices served yesterday so we lost another 49 contracts or 4,900 oz will not stand for delivery in the active delivery month of April and these were cash settled via the ERP route highlighted by James Turk and myself last night.

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 10 contract(s) and thus its OI is 2726 contracts. The next big active month is June and here the OI ROSE by 5994 contracts up to 307,520.

We had 81 notice(s) filed upon today for 8100 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
 And now for the wild silver comex results.  Total silver OI ROSE BY A TINY 225 contracts FROM 218,935 UP TO 219,160 WITH YESTERDAY’S 11 CENT GAIN.  THE BANKERS SUPPLIED THE NECESSARY CONTRACTS TO OUR HEDGE FUND LONGS WHO CONTINUE TO PILE INTO SILVER ON THE LONG SIDE. WE MUST HAVE HAD SOME BANKER SHORT COVERING. 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 4,000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.20 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 67 contracts. We had 62 notices filed yesterday so we lost only 5 contracts or an additional 50,000 oz will not stand for delivery  and these were cash settled via the ERP route.

The next active contract month is May and here the open interest LOST ONLY 1432 contracts DOWN to 155,439 contracts which is astonishingly high.The non active June contract gained 160 contracts to stand at 168. The next big active month will be July and here the OI gained 1439 contracts up to 36,736.

FOR COMPARISON SAKE, ON APRIL 5/2016 WE HAD 111,747 CONTRACTS STANDING FOR DELIVERY. SO YOU CAN VISUALIZE FOR YOURSELF THE HUGE DIFFERENCE BETWEEN 2016 AND THIS YEAR.

For those keeping score, the initial amount of silver oz that stood for delivery for the May 2016 contract month: 28.01 million oz.  By conclusion of the month only 13.58 million oz stood and the rest was cash settled.(ERP ROUTE)

.

We had 190 notice(s) filed for 950,000 oz for the APRIL 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 196,757  contracts which is GOOD.

Yesterday’s confirmed volume was 166,215 contracts  which is FAIR.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 5/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 123,415.049 oz
HSBC
SCOTIA
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 207,843.366 oz
JPMorgan
No of oz served (contracts) today
 
81 notice(s)
8100 OZ
No of oz to be served (notices)
2286 contracts
228,600 oz
Total monthly oz gold served (contracts) so far this month
436 notices
43,600 oz
1.356 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   220,478.7 oz
Today we HAD 0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits: 0 oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had 1  customer deposit(s):
 i) Into JPMorgan: 207,843.366 oz  (6.46 tonnes)  something is brewing if JPMorgan deposits that much gold.
total customer deposits; 207,843.366  oz
We had 2 customer withdrawal(s)
 i) Out of HSBC: 89,026.119 oz
ii) Out of Scotia: 34,388.93 oz
total customer withdrawal:  123,415.049  oz
 we had 0 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 81 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 20 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 (436) x 100 oz or 43,600 oz, to which we add the difference between the open interest for the front month of APRIL (2367 contracts) minus the number of notices served upon today (81) x 100 oz per contract equals 272,100 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 (436) x 100 oz  or ounces + {(2367)OI for the front month  minus the number of  notices served upon today (81) x 100 oz which equals 272,200 oz standing in this non active delivery month of APRIL  (8.466 tonnes)
we lost 49 contracts or an additional 4900 oz will not stand and these guys were cash settled via the ERP route. 
 
 
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 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.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first 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: 8.466
total for the 16 months;  253.308 tonnes
average 15.831 tonnes per month
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Total dealer inventory 983,188.826 or 30.528 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,937,836.054 or 278.00 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.00 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 9 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
APRIL INITIAL standings
 April 5. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
972.600 oz
CNT
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 1,201,651.290 oz
CNT
JPMorgan
No of oz served today (contracts)
 190 CONTRACT(S)
(950,000 OZ)
No of oz to be served (notices)
215 contracts
(1,075,000  oz)
Total monthly oz silver served (contracts) 523 contracts (2,615,000 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  202,262.5 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: Nil oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of Delaware:  972.600 oz
TOTAL CUSTOMER WITHDRAWALS: 972.600 oz
 We had 0 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; nil oz
 
 we had 1 adjustment(s)
i) Out of CNT:  621,153.900 oz leaves the DEALER account and enters the CUSTOMER account of CNT
The total number of notices filed today for the APRIL. contract month is represented by 190 contract(s) for 950,000 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 523 x 5,000 oz  = 2,615,000 oz to which we add the difference between the open interest for the front month of APRIL (405) and the number of notices served upon today (190) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the APRIL contract month:  523(notices served so far)x 5000 oz  + OI for front month of APRIL.( 405 ) -number of notices served upon today (190)x 5000 oz  equals  3,690,000 oz  of silver standing for the APRIL contract month. 
We lost 5 contracts or an additional 25,000 oz will not stand for delivery in this non active delivery month of April and they were cash settled as per the route discussed above.
 

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 71,823 which is GIGANTIC (359 MILLION OZ) 
Yesterday’s  confirmed volume was 56,958 contracts  which is EXCELLENT!!.
 
Total dealer silver:  29.181 million (close to record low inventory  
Total number of dealer and customer silver:   191.213 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 6.1 percent to NAV usa funds and Negative 6.0% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.1%
Percentage of fund in silver:39.8%
cash .+0.1%( April 4/2017) 
 Sprott figures later tonight
2. Sprott silver fund (PSLV): Premium FALLS  to -37%!!!! NAV (April 4/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to – 0.00% to NAV  ( April 4/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -37% /Sprott physical gold trust is back into NEGATIVE/positive territory at -0.00%/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 5/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

April 4/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

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 5 /2017/ Inventory rests tonight at 836.77 tonnes
*IN LAST 123 TRADING DAYS: 111.33 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 67 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 5/ a withdrawal of 1.042 million oz from the SLV/Inventory rests at 329.284 million oz

April 4/no change in inventory at the SLV/Inventory rests at 330.326 million oz/

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/
April 5.2017: Inventory 329.284  million oz
 end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

Heraeus Gold Refinery Buys Swiss Refiner Argor- Heraeus

By Mark O’Byrne April 5, 2017

– Heraeus gold and precious metals refinery buys Swiss refinery Argor-Heraeus
– Heraeus reported to have paid “few hundred million euros for the remaining Argor shares”
– Argor-Heraeus “goodwill” alone reported to have been valued at over “half a billion Swiss francs”
– Global technology & precious metals refiner Heraeus will acquire stakes from Commerzbank and Austrian Mint
– Heraeus involved with Argor-Heraeus since 1986
– Swiss refinery Argor Heraeus once fully-owned by UBS
– Heraeus to profit from Argor’s competence for gold and silver refining and international footprint
– Prudent Germans know history and love gold

http://www.goldcore.com/ http://www.goldcore.com/

Employee holds one hundred gram Heraeus gold bar at bullion dealers Goldcore, in London, UK in 2010 Photographer: Chris Ratcliffe/Bloomberg

Heraeus, the family owned German global technology and precious metals refining company has announced that it is to buy one of Switzerland’s largest gold and silver refineries, Argor-Heraeus.

Heraeus gold and precious metals refinery is one of the world’s largest provider of precious metals services and Heraeus gold bars are some of the most trusted gold bars in the markets.

It is rumoured to have agreed to pay some €300 million for the 67% stake, taking its total holdings up to 100%. According to the Handelsblatt, goodwill alone “was estimated at around half a billion Swiss francs.”

The move by Heraeus gold refinery to buy the remaining 67% does not change the face of Argor-Heraeus from a Swiss- based refinery to a German one. Whilst is headquartered in Mendrisio (Ticino, Switzerland) it has ‘international branch offices in Germany, Italy and Chile.’

Argor’s gold refining is not purely Swiss either, Argor- Heraeus operates gold refining and gold bar production facilities in Hanau, Hong Kong, and Newark (New Jersey).

The Argor-Heraeus company was founded in 1951 and in 1973 the Union Bank of Switzerland (UBS) acquired full ownership of the refinery. Hereaus has held a stake in the Swiss refinery since 1986 when UBS and Heraeus Group (Germany) formed a joint venture, creating Argor-Heraeus SA.

Since 1999 UBS has not been involved and Argor-Heraeus has been owned by private companies, with Heraeus holding 33% of Argor-Heraeus shares, Commerzbank holding 32.7% of the equity, the Austrian Mint holding another 30%, and Argor-Heraeus’s management holding the balance of shares.

http://www.goldcore.com/us/our- products/gold-bars/

Heraeus describes itself as a ‘global technology company’ and plan to “fully profit from Argors competence and capacity for gold and silver,” according to Heraeus CEO Jan Rinnert in a statement released this week.

What does AG do?

Heraeus has an annual gold output of 400- 500 tonnes of gold per year, they produce 10% of the roughly 5,000 tonnes of gold refined by the top seven gold refineries.

What is still known as Argor-Heraeus, sits within just a few kilometres of Valcambi (the world’s largest gold refinery) and PAMP.

According to goldbarsworldwide.com Argor-Heraeus has the following facilities:

(1) Gold refining and the recycling of scrap
(2) Gold semi-finished products for the watch & jewellery industries
(3) Gold medals & coins
(4) Gold bars
(5) Precious metals services and logistics

When it comes to gold bars, it is ‘renowned for its manufacture of customized bars for banks around the world, notably in Europe, CIS and Middle East.’ It is involved in the ‘entire distribution chain for precious metals, from the mine to the end user, to the benefit of all partners involved.’

London Good Delivery

Argor-Heraeus has a close relationship with the LBMA which goes back a long way. In 1952 it became the first LBMA accredited refiner to have ‘manufactured a range of minted bars’.

It has produced London Good Delivery gold bars since 1961. Today it also produces silver, platinum and palladium Good Delivery bars and in 2004 it became one of five London Good Delivery referees appointed by the LBMA, for gold and silver.

Why buy the whole company?

Currently precious metals account for €1.9billion of Heraeus’ €12.9 billion total revenues (2015 financial year). As stated above, the company has been involved with the Swiss refinery business since 1986 and owned 33% of the business, prior to this latest purchase.

In late 2016 it was revealed that other buyers had been sniffing around the Argor-Heraeus business. S&P Global Platts reported that Capvis, a Swiss private equity company, was looking to buy the Swiss refinery for €200 million, by early 2017. However, the deal fell through when the price was deemed too high.

The Capris deal may have fallen through as Heraeus were beginning to make interested noises about buying. The company would clearly had total transparency on all activities within the refinery business and would have been in a better place to make an offer. Interestingly, it knew enough to make it happy to pay over one-third more than Capvis were purportedly considering.

Heraeus describes itself as a ‘global technology company’. When it comes to precious metals its expertise is mainly in the platinum group of metals. In a statement announcing the sale Heraeus CEO Jan Rinnert said the company plans to “fully profit from Argors competence and capacity for gold and silver.”

Rinnert is clearly hoping that Argor-Heraeus’ expertise and infrastructure in the gold and silver market will go a significant way in the parent company’s power across the precious metal industry. Whilst Argor-Heraeus has locations outside of Switzerland (see above) the new owner can complement this with its own infrastructure that extends to Asia, North America and India, as well as its German headquarters. There are obvious synergies there.

The acquisition is yet another one in the Swiss gold and precious metals refining sector. It comes after the acquisition of Neuchâtel based Metalor Technologies by Japanese Tanaka Precious Metals in July 2016. In the summer of 2015, Indian group Rajesh Exports announced the takeover of Ticino-based Swiss gold and silver refiner Valcambi.

Prudent Germans know history and value gold

One thing that hasn’t been covered above, or in any of the press coverage is the consideration Heraeus must have made regarding the outlook for the gold and silver market. Why would you acquire one-third more for a company and pay such a high price for “goodwill” unless you were pretty confident of expected growth and future profits?

The refinery makes gold bars and silver bars for all involved in the gold market from central banks through to retail investors. This latest acquisition is one in a line of foreign acquisitions of Swiss refineries and says a lot about confidence in the gold market.

It also shows the value that Germans place on gold. Knowing history and especially monetary history and understanding the vulnerability of paper or electronic currencies that are being debased helps them in this regard.

It is another example of the understanding most German people and business owners have in the importance of and value of gold.

http://www.goldcore.com/us/gold-blog/heraeus-gold- refinery-buys-swiss-refiner-argor-heraeus/

END

An excellent paper from Steve St Angelo.  The uSA imported a record 202 million oz (6300 tonnes) of silver last year even though consumption fell.  The 202 million oz of imports is roughly 1/3 of annual global production ex China ex Russia.  If consumption in the uSA is down why the huge increase.

Steve believes and I agree with him that silver users are loading up on silver as they see a scarcity of silver down the road

(courtesy Steve St Angelo/SRSRocco report)

Record U.S. Silver Imports As Consumption Declines… Where Did The Silver Go?

By SRSROCCO on April 4, 2017

Something strange took place in the U.S. Silver market last year. It seems as if the United States imported a record amount of silver in 2016 while its apparent consumption decline considerably. This does not make sense. Which means, a lot of silver has been acquired and stored, over and above the quantity needed by the U.S. Market.

According to the most recently released data in the USGS 2017 Silver Mineral Commodity Summary, U.S. silver imports reached an estimated record high of 6,300 metric tons (mt) in 2016:

U.S. silver imports last year were 6% higher than 2015 and are 25% higher than the average for 2012-2014. This is quite interesting because apparent silver consumption declined considerably last year. The USGS calculated that apparent U.S. silver consumption decreased from 8,000 mt in 2015 to 7,230 mt in 2016. This is nearly a 800 mt decline in U.S. silver consumption. However, U.S. silver imports increased nearly 400 mt last even as consumption declined:

Even though U.S. silver consumption are higher than imports, we must take into account domestic mine supply and recycling. Also, the USGS calculates “apparent” U.S. silver consumption by the following:

U.S. Apparent Consumption = Mine production + Secondary (new & old scrap) + Imports – Exports – Adjustments for Government and Industrial Stock Changes (including Comex inventories).

So, if overall U.S. silver consumption declined by almost 800 mt, why did silver imports reach a new record high of 6,300 mt?? It seems as if some large entities or institutions are acquiring a lot of silver as overall demand continues to decline.

Furthermore, U.S. silver imports hit another record last year. Total U.S. silver imports of 6,300 mt accounted for 30% of global mine supply in 2016, up from 21% in 2012:

Thus, U.S. silver imports now account for nearly one-third of total global mine supply. You will also notice that GFMS – Silver Institute forecasts that global silver mine supply declined in 2016. Their 2017 World Silver Survey should be out within the next month.

I am speculating here, but it makes a lot of sense for large institutions to acquire silver at this low price before the global stock markets collapse. When the markets finally crash, there won’t be too many high-quality assets to move one’s funds into.

Even though precious metals sentiment and buying is down the first three months of 2017 versus last year… I see this as a very interesting indicator. While some look at this trend as being negative, I look at it as being… THE CALM BEFORE THE STORM.

Additionally, I continue to see more and more precious metals investors becoming frustrated or negative because the metal prices or values have not performed as many have expected. While I thought the gold and silver prices would correct back higher sooner… I am not at all concerned about the timing of this event. However, the revaluation of gold and silver is not decades away as some who believe that the Fed and Central Banks will continue manipulating the market indefinitely.

The Fed and Central Banks will hit a brick wall and that is due to the disintegrating energy sector…. especially the U.S. and global oil industry. Which is precisely why I focus on the energy industry to get an idea of how close we are to ECONOMIC CLIFF.

Lastly, I will be posting a new interview tomorrow that I had with Kenneth at Crush the Street last week. I suggested to them that we do another interview due to several of my followers contacting me about Charles Savoie of SilverStealers.net statement that the Pilgrims (Elite) were going to get the U.S. to nationalize silver and only pay $2.00 an ounce.

While I respect Charles Savoie’s in depth research on the Pilgrims (Elite), I disagree with some of his future assumptions on the silver price and market. I base this on his lack of understanding of the energy sector and the ongoing disintegration of the U.S. and global oil industry. I explain this in detail in the interview.

This is a change:  Turkey now gives its central bank the first option on buying domestic gold before buying other gold on the open market.  Turkey now wishes to increase its reserves in gold

(courtesy Reuters/GATA)

Turkey to give central bank first option on buying domestic gold, sources tell Reuters

Section:

By Nevzat Devranoglu
Reuters
Tuesday, April 4, 2017

ANKARA, Turkey — Turkey is taking steps to give its central bank the right of first refusal on domestically produced gold, two sources said, allowing it to boost reserves of the precious metal without depleting foreign currency holdings.

Like other central banks, the Central Bank of the Republic of Turkey holds a mix of assets, including foreign currencies and gold, as official reserves. The International Monetary Fund has recommended that Turkey bolster its foreign reserves to shield itself from external volatility.

Buying more domestically produced gold, which is priced in lira, will allow the bank to avoid depleting foreign reserves at a time when the domestic currency has been hammered by political concerns.

“The central bank is being given first option” to buy locally mined gold, said an official from the domestic gold sector. “This means the central bank will become a primary gold buyer in lira.” …

… For the remainder of the report:

http://www.reuters.com/article/turkey-cenbank-gold-idUSL5N1H53VN

END

Erdogan two weeks ago gave a edict for his central bank and others to buy gold.  Apparently they listened as Turkey imported 28.2 tonnes in March which is huge for them.

(courtesy Reuters)

 

Gold imports surge as Turks heed Erdogan’s call and vote looms

Section:

By Behiye Selin Taner and Tuvan Gumrukcu
Reuters
Tuesday, April 4, 2017

Turkish gold imports rose 17-fold to 28.2 tonnes in March, as Turks looking to hedge currency risk ahead of a referendum in two weeks time followed President Tayyip Erdogan’s calls to buy gold instead of dollars.

After the sharpest falls in the Turkish lira since the 2008 financial crisis last November, Erdogan called on Turks to sell dollars and buy lira or gold to prop up the local currency. Gold imports have been rising year-on-year ever since.

“People have started opting for gold rather than foreign currencies,” said Mehmet Ali Yildirimturk, a gold specialist in Istanbul’s Grand Bazaar, adding that a moderate recovery in the lira had also made gold more affordable again.

Gold imports to Turkey rose almost eightfold to 36.7 tonnes in December after Erdogan’s calls, their highest monthly level in just over two years, according to data from the Precious Mines and Metals Markets of the Istanbul bourse. …

… For the remainder of the report:

http://www.reuters.com/article/turkey-imports-gold-idUSL5N1HC4SA

END

Turkey is trying to duplicate the Indian affair of trying to bring private gold into the mainstream.  They are going to introduce sovereign gold bonds and gold lease certificates.  This will fail

(Anadolu Agency/GATA)

 

Turkey to introduce sovereign gold bonds, gold lease certificates

Section:

From the Daily Sabah, Istanbul
with Anadolu Agency reporting
Sunday, April 2, 2017

Turkey’s deputy prime minister, Mehmet Şimşek, announced that the government will add two new secure investment tools to the financial system — gold-denominated bonds (sovereign gold bonds) and lease certificates (sukuk) denominated in gold in order to bring under-the-mattress gold into the economy.

“With this important step that will further deepen the financial system, our citizens will get additional income from the idle gold they stockpile under their mattress, while the savings will increase and the economy will gain momentum,” Şimşek told the Anadolu Agency, adding that gold is regarded as a “safe haven” in Turkey and is seen as a traditional investment tool.

Şimşek pointed out that the Central Bank of the Republic of Turkey has paved the way for some of the required reserves of the banks deposited in the Turkish lira to be kept as gold, noting that a fair amount of gold kept by citizens “under the mattress” has been brought into the economy with the regulation, adding that while gold accounts are offered by banks, volume has not reached the desired level. …

… For the remainder of the report:

https://www.dailysabah.com/economy/2017/04/03/turkey-to-introduce-sovere…

END


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

 
 

1 Chinese yuan vs USA dollar/yuan WEAKER  6.8962(   REVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8826/ Shanghai bourse UP 47.79 POINTS OR 1.48%   / HANG SANG UP 139.32 POINTS OR .57%

2. Nikkei closed UP 51.02 POINTS OR 0.27%   /USA: YEN FALLS TO 110.79

3. Europe stocks opened ALL MIXED      ( /USA dollar index RISES TO  100,55/Euro DOWN to 1.0669

3b Japan 10 year bond yield: FALLS TO   +.066%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.79/ 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::  51.55 and Brent: 54.66

3f Gold DOWN/Yen UP

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

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

3h Oil 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 RISES TO  +.261%/Italian 10 yr bond yield DOWN  to 2.255%    

3j Greek 10 year bond yield RISES to  : 7.11%   

3k Gold at $1252.65/silver $18.27 (8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 6/100 in  roubles/dollar) 56.06-

3m oil into the 51 dollar handle for WTI and 54 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.79 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  1.0037 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0709 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 RISES to  +.261%

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 2.352% early this morning. Thirty year rate  at 2.993% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

China Surge, Rising Oil Push Global Stocks Higher; S&P Futures Flat As Fed Minutes Loom

European stocks rebounded after a downbeat start, aided by a return to the post-Euro open momentum ignition in the USDJPY while Asian stocks rose after China shares surged 1.5%, the most since August. For now S&P futures are fractionally in the red, although we expect them to turn progressively higher as US traders get to their desks to frontrun the now traditional “post open” ramp.

Treasuries steadied ahead of today’s Fed Minutes release and tomorrow’s key weekly political event, the first meeting between Trump and China’s president. Elsewhere, oil continued its rise while gold declined from a multi-week high.

In an otherwise quiet session, China was the outlier as the Shanghai Composite Index rose 1.48%, the most since August, while Taiwan’s Taiex advanced 1.4 percent as both markets reopened after a holiday. China announced Saturday it would develop an economic zone in Xiongan, Hebei province, prompting prospective buyers to throng to the region, snapping up local construction companies many of which soared by the daily 10% limit, while commodities such as coking coal, iron ore and steel rebar soaring.

Source: @Yuantalks

For once it was not the US but France that grabbed the political spotlight, where last night we had the second of three live televised presidential debates. As DB’s Jim Reid recounts, much like the first it tested viewers’ stamina again with the clock running close to 4 hours in the end. In terms of the key takeaways the general feeling was that it was the six less popular candidates which largely stole the show, frequently questioning and attacking the front runners. Of the candidates in contention, Macron was largely on the defensive for most of the night, standing his ground but never seemingly coming under too much pressure. Melenchon was the most attacking. Fillon failed to really standout and took on a barrage of attacks on ethics and Hamon was largely in the shadows. Le Pen was heavily questioned at times and looked under pressure and very much in defence-first mode. Le Pen’s comments were also typically defiant and she closed out by making remarks including to “take back our sovereignty”, “civilisation in danger” and also “the owners of their country with the right to a border”.

In terms of the early results an Elabe poll covering 1,024 viewers following the debate found that Melenchon was seen as the most convincing with 25% of the votes followed in order by Macron (21%), Fillon (15%) and Le Pen (11%). A separate Opinionway survey had Melenchon, Macron and Fillon all tied on 18% a piece followed by Le Pen with 11%. So that result would suggest that the debate has done little to further Le Pen’s chances with the Elabe pollster highlighting that the fierce competition on the anti-European issues contributed to Le Pen’s mediocre score. As we said following the first debate though, Hilary Clinton was seen as the comfortable winner in all the US Presidential debates so it’s worth taking these results in context.

Interestingly leading into the debate yesterday the 2y OAT-Bund spread hit a near 5-year high at 47bps, surpassing the high from earlier the year in February when the spread hit 42bps. To be fair this might be as much to do with the supply and demand issues for bunds as anything else.

In any case, with polls showing Marine Le Pen was far from convincing at the latest French presidential debate, risk-off sentiment has lost momentum and risk reversals in EUR/JPY have kept moving higher. Two-week volatility smile steepens in favor of EUR calls, while puts on two-month tenor flatten slightly.

Global markets may have reflected some of this with the the MSCI All-Country World Index climbed 0.1 percent. The Stoxx Europe 600 added 0.2 percent after fluctuating between gains and losses. Futures on the S&P 500 Index were little changed. The underlying gauge advanced 0.1 percent on Tuesday.

Crude continued its advance before DOE oil inventory data which is expected to show U.S. stockpiles retreated from a record. West Texas Intermediate crude climbed 1.2% to $51.64 a barrel, adding to Tuesday’s advance. Base metals increased after a plan to develop an economic zone near Beijing boosted the outlook for demand, with zinc climbing 1.8 percent as a smelter in Peru was also affected by flooding

Oil and gas companies led the Stoxx Europe 600 Index toward a second day of gains after the gauge fluctuated in early trading. The greenback, 10-year U.S. Treasuries and futures for the S&P 500 were all  little changed. South Africa’s rand reversed gains after President Jacob Zuma survived calls to quit. As Bloomberg reiterates, investors and markets remain in a holding pattern, awaiting the next major catalyst to either end or extend the global rally that pushed stocks to a record last month. A series of major data releases this week, culminating in a payrolls report Friday forecast to show 175,000 jobs added by U.S. employers in March,  is offering clues to the strength of the world’s biggest economy.

As Reuters notes, the dollar lost its grip on earlier gains as concerns over a North Korean missile test worsened sentiment ahead of the summit between the U.S. and Chinese leaders. Topping the agenda at Trump’s Mar-a-Lago resort in Florida will be whether he makes good on his threat to use U.S.-China trade ties to pressure Beijing to do more to rein in its nuclear-armed neighbor North Korea, which is working to develop missiles capable of hitting the United States. The dollar index, which tracks the U.S. currency against a trade-weighted basket of six peers, was down on the day at 100.48 , as slumping U.S. Treasury yields also gave investors little incentive to buy dollars.

“The meetings are expected to be informal, unscripted discussions of how the two countries will address, but not immediately resolve, their differences,” said strategists at Morgan Stanley in a note to clients.

“Any commentary on how the US specifically wants to try to reduce the trade deficit with China will be watched by FX investors,” the strategists wrote.

Meanwhile, oil climbed to a near one-month high on signs of a gradual tightening in global oil inventories and on concern about a supply outage at a field in the United Kingdom’s North Sea that feeds into an international benchmark price. Brent crude futures the international benchmark for oil, were up 1 percent at $54.73 per barrel. U.S. West Texas Intermediate (WTI) crude futures was also up 1 percent. London copper rallied as Chinese traders returned from a two-day break to buy up metals following brighter global manufacturing reports. Zinc and nickel tracked a rally in steel. Safe-haven gold steadied helped by sluggish moves in riskier assets. Spot gold edged up 0.1 percent.

Key near-term catalyst include minutes from the Fed’s March meeting, scheduled to be released Wednesday, and a similar account of the ECB’s latest policy gathering is due Thursday. China’s president will meet his U.S. counterpart for two days starting Thursday. U.S. non-farm payrolls are due Friday.

Bulletin Headline Summary from RanSquawk

  • Energy and material names have soared in early trade to see the commodity-heavy FTSE outperform its European counterparts
  • The big data release this morning was the UK services PMI number, which exceeded expectations to print 55.0.
  • Looking ahead, highlights include US Services PMI, ADP Employment Change and ISM Non-Manufacturing PMI, DoEs and FOMC Minutes

Market Snapshot

  • S&P 500 futures down 0.1% to 2,354.00
  • STOXX Europe 600 up 0.06% to 380.24
  • MXAP up 0.3% to 147.61
  • MXAPJ up 0.5% to 482.40
  • Nikkei up 0.3% to 18,861.27
  • Topix up 0.01% to 1,504.66
  • Hang Seng Index up 0.6% to 24,400.80
  • Shanghai Composite up 1.5% to 3,270.31
  • Sensex up 0.1% to 29,949.61
  • Australia S&P/ASX 200 up 0.3% to 5,876.20
  • Kospi down 0.01% to 2,160.85
  • German 10Y yield fell 0.7 bps to 0.25%
  • Euro up 0.04% to 1.0678 per US$
  • Brent Futures up 1.1% to $54.77/bbl
  • Italian 10Y yield fell 4.7 bps to 1.981%
  • Spanish 10Y yield fell 1.0 bps to 1.607%
  • Gold spot down 0.2% to $1,254.00
  • U.S. Dollar Index down 0.09% to 100.45

Top Overnight News from Bloomberg

  • Trump Officials Alarmed China May Bid for Westinghouse Unit
  • North Korea Fires Ballistic Missile Before Xi-Trump Meeting
  • Fed Leak Probe Dooms Lacker But Leaves Key Question: Who Leaked?
  • Deutsche Bank Loses Senior Executives After Bonuses Slashed
  • Zuma Said to Survive Calls to Quit in South Africa’s ANC
  • ChemChina Wins U.S. Approval for $43 Billion Syngenta Deal
  • Taser CEO to Make Announcement in Live Broadcast Tomorrow
  • JAB Holding Said in Advanced Talks to Acquire Panera Bread
  • Euronet-MoneyGram Talks Said to Progress Slowly on Data Access
  • McDonald’s Names Morgan Flatley as U.S. Chief Marketing Officer
  • Cheniere Head Sees 30 New LNG Trains Needed to Meet 2030 Demand
  • Energy Transfer Expects Dakota Access in Service in Coming Weeks
  • Devon, Chesapeake Get Sierra Club’s Quake Fracking Suit Tossed
  • CME Cuts Margin Requirement for Front-Month WTI Oil by 6.9%
  • Plains Files Rate for Bridger-to-DAPL Service Effective April 15
  • Euro-Area Economy Accelerates Less Than Forecast on Services

Asia equity markets traded choppy following the mild gains on Wall St. which was led by the energy sector after WTI crude futures reclaimed the USD 51/bbl level to the upside. ASX 200 (+0.3%) swung between gains and losses as strength in commodity-related sectors was counterbalanced by losses in financials, while Nikkei 225 (+0.3%) saw a similar indecisive tone as USD/JPY and JPY-crosses teetered. Hang Seng (+0.3%) and Shanghai Comp. (+1.5%) were higher on return from holiday despite the PBoC refraining from liquidity injections, with the mainland outperforming amid strength in materials after a 7% surge in coking coal prices due to supply concerns following Cyclone Debbie. 10yr JGBs traded flat amid an indecisive tone in the region, while the BoJ’s presence in the market for a respectable JPY 1.135t1n of JGBs failed to spur demand, as the bank also slightly reduced its buying in 1yr-3yr maturities. PBoC refrained from conducting open market operations today, for a net drain of CNY 90bIn.

Top Asia News

  • China Market Access in Spotlight as First Trump-Xi Meeting Nears
  • China Likely to Be Named Currency Manipulator by U.S.: StanChart

Energy and material names have soared in early trade to see the commodity-heavy FTSE outperform its European counterparts on what has been an otherwise dreary morning for equities. Other than the FTSE 100, indices are flat across Europe, with little in the terms of a tangible trend in direction so far this week. On a more macro scale, services PMIs have been the main focus of the session, with French and Eurozone readings both printing lower than the preliminary readings, however any impact on financial markets has been offset by the German composite beating on Exp. As such fixed income markets have been particularly muted, with Bunds lower by a modest 10 ticks. Gilts slipped on the latest services PMIs, with the stellar reading seeing the June’17 futures slips below yesterday’s 128.22 nadir with bears now eyeing a potential test of a minor Fib retracement level at 127.91.

Top European News

  • U.K. Services Grow Faster Than Forecast; Price Surge Intensifies
  • Sick of Brexit Limbo, Foreign Bankers Are Asking to Be Sent Home
  • German Cabinet Backs Facebook Bill to Counter Fake News, Hate
  • Wood Group Gains After Raising Expected Synergies From Amec Deal
  • EU’s Juncker Says No Brexit Deal Would Mean Everyone Loses
  • Serb Protests Against ‘Dictatorship’ Spread After Vucic Elected
  • OATs Gain With Small Relief Rally as Le Pen Struggles in Debate
  • EU’s Verhofstadt: Brexit Is a Cat-Fight That Got Out of Hand
  • Seadrill Plunges for Second Day Amid Speculation Over Bankruptcy

In currencies, the Bloomberg Dollar Spot Index was little changed after a two-day gain. The euro edged lower to $1.0668. The pound climbed 0.3 percent to $1.248, advancing for the first time in three days as U.K services grew faster than economists expected. The South African rand jumped as much as 1.1 percent before falling 1.1 percent. The big data release this morning was the UK services PMI number, which exceeded expectations to print 55.0. This went against the manufacturing and construction components as new orders were attracted by the weak exchange rate, but despite this, thin market conditions have made for a tight range in Cable, as support ahead of 1.2400 has been tempered by sellers coming in ahead of 1.2500. Similarly in EUR/GBP, .8545-50 and 0.8600 limits contain. Range bound markets further highlighted by a 25 tick range in EUR/USD, where a test of 1.0700 on the upside was rebuffed. The USD perspective has been largely behind this, with US Treasury yields grinding higher, but to a modest degree as yet. This has produced a tentative move higher in USD/JPY, but we continue to trade south of the 111.00 level, but we have now twice survived a test on 110.00. A modest recovery in Copper has given AUD some relief after yesterday’s selling across the board. No real change in sentiment at the RBA, citing concerns over domestic debt levels but cautiously optimistic on the global outlook, so yield plays will carry favour here when the risk mood is calm. The same goes for the NZD, but we are getting pulled further away from 0.7000, but 0.6900 will be hard fought.

In commodities, the Bloomberg Commodities Index rose to a one-month high, buoyed by oil and base metals. West Texas Intermediate crude climbed 1.2 percent to $51.64 a barrel, adding to Tuesday’s advance. Base metals increased after a plan to develop an economic zone near Beijing boosted the outlook for demand, with zinc climbing 1.8 percent as a smelter in Peru was also affected by flooding. With oil tipping above the $51.50 mark, we could see some renewed consolidation inside these limits, but traders will be looking ever closely to the inventory data for signs of further impact from the production cuts. The market is still hoping for an extension to the agreement, and this hope reflects some of the recent gains seen. Base metals are up right across the board, with Copper up another 1.5% today, but outpaced by Nickel which is up near 2.0% so far. Gold has come back off the highs, where $1260 looks to be providing some clear resistance. Silver continues to stall ahead of the USD18.40-50 area, with USD resilience weighing on both.

Looking at the day ahead, this morning in Europe the main focus should be on the final March services and composite PMI revisions where we’ll also get a look at the data for the UK and periphery. This afternoon in the US we will also get the final PMI revisions along with the ISM non-manufacturing for March (expected to decline to 57.0 from 57.6) and the ADP employment change print for March. The consensus for the latter is 185k while our US economists are forecasting a below market 140k. Later this evening we will also get the aforementioned FOMC minutes from the March 15th meeting. Away from that there is no Fedspeak today although over at the BoE policy maker Vlieghe is due to speak this afternoon in London.

US event calendar

  • 7am: MBA Mortgage Applications, prior -0.8%
  • 8:15am: ADP Employment Change, est. 185,000, prior 298,000
  • 9:45am: Markit US Services PMI, est. 53.1, prior 52.9; US Composite PMI, prior 53.2
  • 10am: ISM Non-Manf. Composite, est. 57, prior 57.6
  • 2pm: FOMC Meeting Minutes

DB’s Jim Reid concludes the overnight wrap

We’re kicking off in France this morning where last night we had the second of three live televised presidential debates. Much like the first it tested viewers’ stamina again with the clock running close to 4 hours in the end. In terms of the key takeaways the general feeling was that it was the six less popular candidates which largely stole the show, frequently questioning and attacking the front runners. Of the candidates in contention, Macron was largely on the defensive for most of the night, standing his ground but never seemingly coming under too much pressure. Melenchon was the most attacking. Fillon failed to really standout and took on a barrage of attacks on ethics and Hamon was largely in the shadows. Le Pen was heavily questioned at times and looked under pressure and very much in defence first mode. Le Pen’s comments were also typically defiant and she closed out by making remarks including to “take back our sovereignty”, “civilisation in danger” and also “the owners of their country with the right to a border”.

In terms of the early results an Elabe poll covering 1,024 viewers following the debate found that Melenchon was seen as the most convincing with 25% of the votes followed in order by Macron (21%), Fillon (15%) and Le Pen (11%). A separate Opinionway survey had Melenchon, Macron and Fillon all tied on 18% a piece followed by Le Pen with 11%. So that result would suggest that the debate has done little to further Le Pen’s chances with the Elabe pollster highlighting that the fierce competition on the anti-European issues contributed to Le Pen’s mediocre score. As we said following the first debate though, Hilary Clinton was seen as the comfortable winner in all the US Presidential debates so it’s worth taking these results in context.

Interestingly leading into the debate yesterday the 2y OAT-Bund spread hit a near 5-year high at 47bps, surpassing the high from earlier the year in February when the spread hit 42bps. To be fair this  might be as much to do with the supply and demand issues for bunds as anything else. The ECB isn’t helping as we’ll see below. Price action in and around the debate hasn’t been particularly material however and if anything the Euro is firmer and is in fact up about +0.40% from yesterday’s intraday low. We’ll wait to see if there is much of a reaction in markets in Europe when they open this morning but the focus in the Asia session has for the most part turned over to the news of another missile launch by North Korea into the Sea of Japan. This has been confirmed by the Pentagon and as a reminder comes just before President Trump is due to host China’s President Xi Jinping tomorrow. That news hasn’t failed to stem what has been a mostly positive start to trading led by the reopening of bourses in China where the CSI 300 and Shanghai Comp are both up over 1%. The Hang Seng is also +0.29% while the Nikkei is +0.27%. The Kospi and ASX are currently flat, as are US equity futures.

The moves in Asia this morning follow a fairly directionless session on Wall Street last night. The S&P 500 passed between gains and losses 28 times during the day before finishing with a modest +0.06% gain. While Banks underperformed (-0.34%) they did recover from heavier losses at the open helped by some comments from President Trump around Dodd-Frank, and on separate reports on tax talks. The President confirmed that his administration is working on changes to the Dodd-Frank act which is intended to make it easier for banks to lend and which will include a “very major haircut”. On the tax front  the debate was about an article in the Washington Post which suggested that the Trump administration is exploring a VAT and carbon tax as part of the tax code overhaul, although this has been somewhat downplayed by a White House spokesman since.

Meanwhile energy stocks had a decent session after energy prices crept higher. Despite no data or newsflow, WTI Oil (+1.57%) rose for the fifth time in the last six sessions to close above $51/bbl for the first time since March 7th. Natural Gas (+5.27%) also had its strongest day in almost three months and closed at the highest since January 27th. It’s worth noting that US HY energy spreads have now hit the tightest (446bps) since March 8th and are about 40bps tighter relative to the wides of the year made just last week. Elsewhere, Treasuries did their best to reverse much of Monday’s rally with the 10y yield rising +4.1bps to close at 2.361%. It’s hovering around similar levels this morning. Instead of the usual focus on deciphering Fedspeak the focus was instead on the resignation of the Richmond Fed’s Jeffrey Lacker with immediate effect following the news that he had disclosed confidential information in an analyst meeting. Lacker was due to retire later this year and while the news should have no real monetary policy impact (he was a non-voter) one would expect the Fed Chair to be questioned about the issue. While we’re on the Fed today we will get the FOMC minutes from last month’s meeting where it’ll be interesting to see how much of a debate around tapering of the balance sheet there was given all the recent forward guidance.

The most significant news yesterday for credit was the latest ECB CSPP data which was released a day later than usual yesterday and incorporated the data up to month end and was the last release before we see the first impact of tapering. Last week they bought an average of €335mn corporates per day which was up from the prior week’s non-holiday period low (€308mn) but below the daily average of €365mn since the program started. So a continuation in the slowdown in the run-up to QE tapering. We’ll see next week if there is more trimming as the overall buying program officially reduces. One could argue credit easing via CSPP makes more sense than PSPP, given scarcity issues in government bonds, and so they could decide to continue CSPP at the usual pace even as the broader QE gets trimmed. On the other hand, making the QE cut fall squarely on govies might send the wrong signal to the periphery/semi-core. There are no clues at the moment as to how they split the taper other than perhaps the hint of a slowdown in corporate purchases in the last two weeks. My personal view is that they do taper CSPP as well as PSPP. Related to this we learnt that the average maturity of German bund purchases (the benchmark for Euro credit) remained at very low levels (4.72 vs. 4.34 last month) in March. In December and January this was over 12 and 9 respectively. This matters for credit as if the ECB buying is concentrated at this maturity bucket it’s more competing with the average life of the credit index and as such makes it more difficult for credit to keep up with the performance of bunds in what is essentially a risk on environment. For more on this see our credit bite (https://goo.gl/ddv05Y) we published last month after the initial shock shortening of average life of bund purchases.

The rest of the macro data did little to really move the dial. In the US, the February trade balance revealed a deficit of $43.6bn which was a little narrower than the consensus had expected and also $4.6bn narrower than the January deficit. Meanwhile factory orders were reported as rising +1.0% mom in February which was in line with expectations and so putting them up +7.3% yoy. Durable goods orders in February were revised up one-tenth at the final count to +1.8% mom however core capex orders were confirmed as declining -0.1% mom. In Europe the only data concerned the retail sales numbers for February which printed at +0.7% mom for the Euro area and more than expected.

Looking at the day ahead, this morning in Europe the main focus should be on the final March services and composite PMI revisions where we’ll also get a look at the data for the UK and periphery. This afternoon in the US we will also get the final PMI revisions along with the ISM non-manufacturing for March (expected to decline to 57.0 from 57.6) and the ADP employment change print for March. The consensus for the latter is 185k while our US economists are forecasting a below market 140k. Later this evening we will also get the aforementioned FOMC minutes from the March 15th meeting. Away from that there is no Fedspeak today although over at the BoE policy maker Vlieghe is due to speak this afternoon in London.

3. ASIAN AFFAIRS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 47.79 POINTS OR 1.48%/ /Hang Sang CLOSED UP 139.32 POINTS OR .51%  . The Nikkei closed UP 51.02 OR 0.27% /Australia’s all ordinaires  CLOSED UP 0.34%/Chinese yuan (ONSHORE) closed DOWN at 6.8962/Oil ROSE to 51.55 dollars per barrel for WTI and 54.66 for Brent. Stocks in Europe ALL MIXED   ..Offshore yuan trades  6.8826 yuan to the dollar vs 6.8962 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN WEAKER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

Not the greatest timing to release another ballistic missile as North Korea fires another one on the eve of the visit by Xi with Trump

(courtesy zero hedge)

 

 

North Korea Fires Ballistic Missile Into East Sea

Picking the worst possible time (or perhaps having it picked for it) to demonstratively launch a rocket, just as Trump and Xi are set to discuss the North Korea nuclear threat, with the US president reportedly prepared to announce that ““If China Is Not Going To Solve North Korea, We Will” and take unilateral action to eliminate any potential threats coming out of North Korea’s regime, moments ago South Korea’s Yonhap reported that North Korea on morning Wednesday fired a projectile suspected to be a ballistic missile toward the East Sea, military officials said.

The South Korean Joint Chiefs of Staff announced, “North Korea fired an unidentified projectile in Sinpo, South Hamgyong Province, into the East Sea.”

And while we await more details, as well as news of a potential response by South Korea, Japan, or even the US – recall “US Delta Force, SEAL Team 6 Prepare To Take Out Kim Jong-Un, Practice Tactical North Korea “Infiltration” – it is worth noting that earlier on Tuesday, a White House official said that the clock for resolving the North Korean nuclear issue “has now run out,” and the United States is looking at “all options on the table” to deal with the problem, according to Reuters.

The official, who spoke on condition of anonymity to preview the upcoming summit between President Donald Trump and Chinese President Xi Jinping, also said that how to deal with North Korea is a “test of the relationship” between the U.S. and China.

“We would like to work on North Korea together. There is an opportunity,” the official said during a conference call briefing. “We’ve been … trying pretty much everything to bring about a safe and denuclearized peninsula. So this is some ways a test of the relationship.” The official stressed the urgency of the problem, saying, “The clock is very, very quickly running out.

“We would have loved to see North Korea join the community of nations. They’ve been given that opportunity over the course of different dialogues and offers over the course of four administrations with some of our best diplomats and statesmen doing the best they could to bring about a resolution,” the official said.

Needless to say, random gratuitous ballistic missile launches will not help, and if anything, may prompt the US to retaliate now that both Trump and Tillerson have said any provocation by North Korea will be met with a response.

On Sunday, Trump said in an interview with the Financial Times that China should help with the North Korea problem by using the “great influence” it has over Pyongyang, warning that if it doesn’t, the U.S. will solve the problem on its own, and that won’t be good for anyone. Trump also said he will use trade as an incentive for China to take action on the North.

On Tuesday, Trump said the North is a “humanity problem,” and he will talk about the issue with China’s Xi.

“North Korea clearly is a matter of urgent interest for the president and the administration as a whole. I think the president has been pretty clear in messaging how important it is for China to coordinate with the U.S. and for China to begin exerting its considerable economic leverage to bring about a peaceful resolution to that problem,” the White House official said.

“Certainly, it is going to come up in their discussions. Somewhere in the order of just shy of 90 percent of North Korea’s external trade is with China. Even though we hear sometimes that China’s political influence may have diminished, with North Korea, clearly its economic leverage has not. It is considerable and so that will be one of the points of discussion,” he said.

The Trump-Xi meetings will also be watched closely as to whether the U.S. stands up to China for bullying South Korea for hosting the U.S. THAAD missile defense system designed to defend better against ever-growing missile threats from North Korea.

The White House official said that the deployment will go ahead as planned.

“We are familiar with China’s objections to THAAD. The United States will always act to defend our allies and to defend our homeland against any threat, particularly one of the nature of the North Korean regime with the kinds of terrible weapons that they’re developing. There will be no move away from protecting our South Korean allies and the United States,” he said. The official also said that China’s retaliation against the South is “disturbing.”

“South Korea is a responsible, friendly, economically dynamic democracy that is seeking together with its ally, the United States, to put in place defensive systems. It doesn’t make much sense and at some levels even is disturbing to be punishing South Korea for wanting to do that,” the official said.

“If THAAD is a problem to other countries in the region, they need to look to North Korea,” he said.

It is unclear if today’s launch provoked Seoul to respond with a THAAD response, one that will be frowned upon be Beijing and other countries in the region.

 

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

GERMANY

This should get the citizens all riled up ahead of the September elections:  270,000 Syrian refugees have been granted permission to bring family members to Germany:

(courtesy zero hedge)

Germans Concerned After 270,000 Syrian Refugees Granted Permission To Bring Family Members

With worries about mass migration having largely faded from Germany’s consciousness after a record surge in 2015, and an angry popular reaction, prompted Angela Merkel to curb the inflow of refugees, there is renewed concern in Germany following a report that up to 270,000 Syrians in Germany have the right to bring in their family members, a “revelation” that could refuel the debate about migration less than six months before a national election. Germany’s Bild cited a government paper showing that a total of 431,376 Syrians applied for asylum in Germany in 2015 and 2016 and said that of those 267,500 are allowed to bring their families to Germany.

As Reuters observes, Germany blessing such a material migration could play into the hands of the anti-immigrant Alternative for Germany (AfD) party, which has lost support in recent months as the refugee issue has receded from the headlines ahead of a Sept. 24 election.  Sure enough, senior AfD member Alexander Gauland condemned the figures, saying it was “absolute madness” to allow so many people to bring their families to Germany: “Billions and billions of tax money are being swallowed and the social state is being steered toward breakdown while our eyes are wide open.”

In 2016 Germany suspended family re-unifications for two years for migrants who get “subsidiary protection” – granted to people who are not considered as being persecuted individually but in whose home country there is war, torture or other inhumane treatment.

According to Reuters, Syrians are the biggest group of asylum applicants in Germany. They are increasingly being granted subsidiary protection rather than refugee status and that means they are only granted the right of residence for a year, although this can be extended. But Chancellor Angela Merkel’s Christian Democrats (CDU), their Bavarian sister party – the Christian Social Union (CSU) – and the Social Democrats (SPD), their junior coalition partner, decided last week to make exceptions for people with subsidiary protection status in hardship cases.

More than a million migrants flocked to Germany in 2015 and 2016 but arrivals have dropped significantly.

The AfD, which has made immigration one of its key rallying points, is currently on between 7 and 11 percent in opinion polls, above the 5 percent threshold to enter parliament. CSU leader Horst Seehofer told German magazine Stern tackling the AfD was a main aim.

 

“If we govern the country sensibly and don’t attack each other personally in the election campaign, we can push the AfD under 5 percent,” Seehofer said. However, while his party is behind Merkel in the election campaign he said it was sticking to its demand for a cap on the number of migrants coming here – a proposal which the chancellor has rejected.

In 2016, some 280,000 migrants arrived in Germany, a sharp drop compared with 890,000 the previous year. Bild said while there were no numbers for 2017 yet, the federal police had already caught more than 20,000 illegal migrants on the borders in the first three months of this year.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

RUSSIA/USA/SYRIA

Trump and Putin are now on a collision course after a supposed chemical attack on a rebel held town of Khan Sheikhoun. Trump claims that the Syrians used sarin gas.  Putin claims that Syrian planes hit a chemical warehouse storing toxic chemicals.

(courtesy zero hedge)

 

Trump On Collision Course With Putin After Moscow Denies Syria Behind Chemical Attack

For the first time since his election, president Trump is set for a direct collision course with Vladimir Putin after Russia said on Wednesday it stands by Syrian President Bashar al-Assad despite widespread popular outrage over a chemical weapons attack which the media was quick to pin on the Syrian president, in a carbon-copy of events from 2013 which nearly launched a US invasion of the middle-eastern nation, when a YouTube clip – subsequently shown to be a hoax – served as proof that Assad had used sarin gas on rebels in a Damascus neighborhood.

As reported yesterday, Western countries including the US accused Assad’s armed forces for the chemical attack, which choked scores of people to death in the town of Khan Sheikhoun in a rebel-held area of northern Syria hit by government air strikes. While Washington said it believed the deaths were caused by sarin nerve gas dropped by Syrian aircraft, Moscow offered an alternative explanation, claiming the poison gas had leaked from a rebel chemical weapons depot struck by Syrian bombs.

The strike, which was launched midday Tuesday, targeted a major rebel ammunition depot east of the town of Khan Sheikhoun, Russian Defense Ministry spokesman Major-General Igor Konashenkov said in a statement. The warehouse was used to both produce and store shells containing toxic gas, Konashenkov said. The shells were delivered to Iraq and repeatedly used there, he added, pointing out that both Iraq and international organizations have confirmed the use of such weapons by militants.

The same chemical munitions were used by militants in Aleppo, where Russian military experts took samples in late 2016, Konashenkov said. The Defense Ministry has confirmed this information as “fully objective and verified,” Konashenkov added.

According to the statement, Khan Sheikhoun civilians, who recently suffered a chemical attack, displayed identical symptoms to those of Aleppo chemical attack victims.

Naturally, Syrian rebels disagreed: Hasan Haj Ali, rebel commander of the Free Idlib Army rebel group, and quoted by Reuters called the Russian statement a “lie”.

“Everyone saw the plane while it was bombing with gas,” he told Reuters from northwestern Syria. “Likewise, all the civilians in the area know that there are no military positions there, or places for the manufacture (of weapons). The various factions of the opposition are not capable of producing these substances.”

The incident is the first time Washington has accused Assad of using sarin since 2013, when hundreds of people died in an attack on a Damascus suburb. At that time, Washington said Assad had crossed a “red line” set by then-President Barack Obama. Back then Obama threatened an air campaign to topple Assad but called it off at the last minute after the Syrian leader agreed to give up his chemical arsenal under a deal brokered by Moscow, a decision which Trump has long said proved Obama’s weakness.

The latest incident, which comes at a very odd time – just days after the White House it will no longer pursue the ouster of Assad, cementing the Syrian leader’s resolve not to do anything to infuriate the US administration – means Trump is faced with the same dilemma that faced his predecessor: whether to openly challenge Moscow and risk deep involvement in a Middle East war by seeking to punish Assad for using banned weapons, or compromise and accept the Syrian leader remaining in power at the risk of looking weak.

As reported last night, Trump described Tuesday’s incident as “heinous actions by the Bashar al-Assad regime”, but also faulted Obama for having failed to enforce the red line four years ago. Obama’s spokesman declined to comment. Washington, Paris and London have drawn up a draft U.N. Security Council statement condemning the attack and demanding an investigation. Russia has the power to veto it, as it has done to block all previous resolutions that would harm Assad.

As a result, all eyes will now be on Trump’s response.

As Reuters puts it, “Trump’s response to a diplomatic confrontation with Moscow will be closely watched at home because of accusations by his political opponents that he is too supportive of Russian President Vladimir Putin. He has previously said the United States and Russia should work more closely in Syria to fight against Islamic State.”

Should Trump engage, devolving relations between Russia and the US to a level last seen under the Obama administration, it will be interesting to watch the justification provided by the “Russia-hacking” conspiracy theorists.

Aside for US-Russia relations, the chemical attack in Idlib province, one of the last major strongholds of rebels that have fought since 2011 to topple Assad, will complicate diplomatic efforts to end a war that has killed hundreds of thousands of people and driven half of Syrians from their homes.

It is worth recalling that “Jihadist groups have a strong presence in Idlib alongside other rebel groups, some of which have received backing from powers including Turkey and the United States”. It is in their interest to not only watch the conflict between Russia and the US escalate, but to do everything in their power to create false flag events that achieve this.

Finally, it is worth noting that over the past several months Western countries, including the United States, had been quietly dropping their demands that Assad leave power in any deal to end the war, accepting that the rebels no longer had the capability to topple him by force. The use of banned chemical weapons would make it harder for the international community to sign off on any peace deal that does not remove him, something that Assad – and the rebels – are all aware of. It goes without saying, that the Syrian president had the most to lose from launching a chemical attack just as both the military and diplomatic tide was turning in his favor.

British Foreign Secretary Boris Johnson, who two months ago shifted his country’s policy by saying Assad should be allowed to run for re-election, said on Wednesday that he must go. “This is a barbaric regime that has made it impossible for us to imagine them continuing to be an authority over the people of Syria after this conflict is over.”

And now, all eyes on Trump.

END

Trump responds:  Assad crossed many many lines and he signalls an imminent change in Syria policy.

This does not look good with respect to USA/Russia relations

(courtesy zero hedge)

“Assad Crossed Many, Many Lines”: Trump Signals Imminent Change In Syria Policy

Just one week after Rex Tillerson signaled of a historic U-Turn in US policy regarding Syria, when he said that “the longer term status of President Assad will be decided by the Syrian people” suggesting the US is no longer intent on removing the Syrian president, this afternoon Trump signaled that the White House is about to U-turn once again, likely emerging in the same place where the Obama administration was when it nearly invaded Syria in 2013.

Speaking at a press conference with Jordan’s King Abdullah, II, President Trump on Wednesday called the suspected chemical weapons attack on civilians in Syria “a terrible affront to humanity” and hinted briefly that a change in U.S. policy on Syria may be coming as a result. Trump said that he was moved by reports of a deadly gas attack in Syria, saying that the Syrian leader – who has denied being behind the attack – had “crossed a lot of lines.”

“It crossed a lot of lines for me,” Trump said at a press conference with Jordanian King Abdullah II at the White House. “When you kill innocent children, innocent babies, little babies with a chemical gas that is so lethal that people were shocked to hear what gas it was, that crosses many lines beyond the red line. Many, many lines.”

While painfully reminiscent of a similar chemical attack conducted in 2013, which was subsequently revealed to be a false flag, U.S. officials said they believe the attack was carried out by the regime of Syrian President Bashar al-Assad. Which, again, does not make much sense since just days before the chemical attack, Trump administration officials said the U.S. would no longer prioritize regime change in Syria and that they expect Mr. Assad to remain in power. Perhaps the mere suggestion that someone – i.e., US-backed Syrian rebels or ISIS jihadists in the area of Idlib – could engage in a false flag attack is considered too much “tin foil” conspiracy theory.

And so, just hours after Bannon departed his security council, Trump started to shift toward a neo-con posture, saying that the reports of women and children who had died in the “horrible” attack had a “big impact” and caused him to rethink his strategy on Syria.

“I do change. I am flexible. I am proud of that flexibility,” Trump said. “I will tell you that attack on children yesterday had a big impact on me. Big impact. It was a horrible, horrible thing. I’ve been watching it and seeing it, and it does not get any worse than that. I have that flexibility. And it is very, very possible, and I will tell you it is already happened, that my attitude toward Syria and Assad has changed very much.”

Trump declined to outline what his new approach to Syria may be.

Meanwhile, as reported earlier today, should Trump pick up where Obama left off, and launch a full-blown escalation in Syria or worse, he will have his first official diplomatic collision with the Kremlin, which not only defended Assad earlier today, but said it would continue its military activity in Syria.

6.GLOBAL ISSUES

7. OIL ISSUES

Oil retreats after a surprise inventory build as the crude glut is now back to record highs:

(courtesy zero hedge

WTI/RBOB Tumble After Surprise Inventory Build Sends Crude Glut Back To Record High

Following last night’s API-reported unexpected draw in crude, the energy complex was on a tear heading into the DOE data… but that ended quickly with a surprise build in crude and smaller than expeccted draws in gasoline and distillates. WTI/RBOB are notably lower on the data. Another rise in production further stressed markets.

 

API

  • Crude -1.8mm (-150k exp) – biggest draw since 2016
  • Cushing +1.3mm
  • Gasoline -2.6mm (-1.75mm exp)
  • Distillates -2mm

DOE

  • Crude +1.566mm (-150k exp)
  • Cushing +1.413mm
  • Gasoline  -618k (-1.975mm exp)
  • Distillates -536k

Product stocks have been falling consistently since the beginning of February, but the surprise crude build shocked markets after last night’s API print

 

Pushing total crude stocks to a new record high…

Cushing, Oklahoma, the pricing point for Nymex crude futures, saw a big build, putting stockpiles there over 69 million barrels for the first time.

 

Production rose once again…

 

WTI and RBOB prices were soaring into the print

Price increase is “partly the API and partly some supply disruptions as well,” says Hamza Khan, head of commodities strategy at ING. “You have to question how much of this rally is overdone, some of it could be short covering and the fundamentals haven’t changed that much”

end

Mexican production from PEMEX continues to falter and 2016 was no different than 2015. Unless new drilling will occur, Mexico will run out of reserves in 9 years

(courtesy OilPrice.c0m)

Are Mexico’s Oil Reserves Almost Depleted?

Submitted by OilPrice

Mexico’s oil and gas regulator said last week that the country’s proved hydrocarbon reserves will drop by 10.6 percent in 2017. This forecast, coupled with the lower oil production that state company Petroleos Mexicanos (Pemex) reported for yet another year in 2016, is painting a rather bleak picture of Mexico’s reserves.

Without resumption in investments and more drilling, and if no significant finds occur, Mexico will be running out of reserves within 9 years, according to an official from the National Hydrocarbons Commission.

However, the energy reform that ended Pemex’s monopoly and allowed foreign companies to invest in Mexico’s oil exploration and production is expected to start yielding results by the end of this decade. The deepwater bidding round last December attracted major international oil companies, and Mexico awarded blocks to consortia including Chevron, Exxon, Statoil, BP, Total, and China Offshore Oil Corporation.

In addition, the analysts are now largely calling the end of the downturn and expect deepwater investment to pick up in coming years.

Mexico’s National Hydrocarbons Commission said last week that as of January 1, 2017, the country’s proved oil and gas reserves are estimated at 9.16 billion barrels of oil equivalent, down by 10.6 percent from the 10.243 billion boe as of the beginning of 2016. Proved oil reserves were down 7.9 percent to 7.037 billion barrels from 7.641 billion barrels estimated as of 2016.

In its 2016 results release, Pemex reported crude oil production of 2.154 million bpd last year, down by 5 percent over 2015, mostly due to natural declines of a number of producing fields.

According to the EIA, Mexico’s crude oil production has been steadily dropping since 2005 as a result of natural production declines from Cantarell and other large offshore fields.

Surely, the oil price slump has not helped Mexico’s output either, and has complicated the energy reform that the country started implementing in 2013.

But now, steadier prices and new projects involving international oil companies are expected to start offsetting declines after 2020, according to the International Energy Agency (IEA).

Projected crude oil production bottoms out at under 2 million bpd towards 2020 and then rises as the reform efforts bear fruit, new projects – notably deepwater developments – start operation and higher oil prices improve profitability, the IEA said in its Mexico Energy Outlook last year.

Mexico is already seeing its first international offshore drilling success, after Italy’s oil major Eni said last month that the first well drilled by an international oil major in Mexico since the 2013 reform “indicates a meaningful upside to the original estimates”.

A Rystad Energy analysis from last month compares the potential of the Brazilian and Mexican E&P markets to attract foreign investment. According to Kjetil Solbraekke, Head of Rio Office at Rystad Energy, currently planned exploration activity in Mexico and Brazil point to increased capex in both countries, and “numbers indicate that Mexico can reach the same level of investments as Brazil in 15 years.”

In addition, Rystad Energy says that “there are reasons to believe that the exploration play types are fairly similar in Mexico as they are in the U.S. There is also reason to believe that the discoveries might be in the same range as in the U.S. and more or less of similar productivity.”

Potential discoveries aside, the deepwater drilling industry is emerging leaner and more cost-competitive from the oil price slump, according to a Wood Mackenzie report from last week. Global deepwater project costs have dropped by 20 percent since 2014, WoodMac has estimated. The energy consultancy reckons that “the playing field between tight oil and deepwater is about to get a lot more level”, with deepwater breakevens pushed down, while cost inflation is “back with a vengeance” in tight oil projects.

According to the IEA’s Mexico outlook report, the main source of future growth in crude production is projected to come from deepwater fields.

So Mexico’s hopes for offsetting production and reserves decline are pinned on higher oil prices, the landmark energy reform, and the international oil majors resuming deepwater investment after the downturn.

8. EMERGING MARKETS

VENEZUELA

Gunfire and riots break out as Venezuela’s national guard clashes with anti-maduro protesters

(courtesy zero hedge)

Gunfire Breaks Out As Venezuela National Guard Clash With Anti-Maduro Protesters

Venezuela security forces on Tuesday clashed with anti-government protesters seeking, in part, to remove justices from the Supreme Court accused of unconstitutionally favoring the ruling party, while supporting lawmakers locked in a bitter dispute with the administration of President Nicolas Maduro and the Supreme Court.

Previously, the opposition-controlled National Assembly had called for the march ahead of a vote by lawmakers to remove members of the country’s top court, less than a week after judges attempted to seize the power of Congress. The protest was the most violent since hundreds of thousands flooded the capital last year demanding the embattled president’s ouster.

Tuesday’s vote, however, was canceled after national guardsmen blocked the marchers as they attempted to cross Caracas’s main avenue, using teargas, pepper spray and water cannons to disperse the crowds. Ramon Muchacho, mayor of the Caracas Municipality of Chacao – an opposition stronghold – reported nine injuries including a gunshot victim, after the clashes with police and a rival protest by government sympathizers.

Security forces,  including the Bolivarian National Police, or PNB, and the Venezuelan National Guard, or GNB, fired tear gas, pepper spray and water cannons in attempts to disperse protesters in Caracas.

The gunshot was captured on the following video clip taken by a local activist.

URGENTE colectivos disparan nuestra manifestacion pacifica estamos en la autopista Auxilio!

Other clips also captured the noise of gunfire in the background.

Con la ballena y perdigones intenta dispersar a manifestantes en la Av. Libertador

It was unclear if the shooting was an isolated incident, and whether the national guard have now been given instructions to shoot at protesters, an escalation that would likely result in a violent mass uprising.

“PNB officials throwing tear gas and pepper against the demonstrators, especially affecting older adults,” the opposition-controlled National Assembly legislature said in a statement.

According to UPI, there were two protests on Tuesday: one called for by the opposition and one in support of President Nicolas Maduro’s regime, most of whom were made up of dozens of people moving through Caracas on motorcycles. The opposition demonstration was planned as a march from Caracas’ Plaza Venezuela to the National Assembly’s building, which is about a 3-mile march. But as the opposition prepared to participate, authorities closed several of Caracas’ subway stations and set up security checkpoints and roadblocks. Officials closed off access to Plaza Venezuela, opposition members said.

Clashes ensued as security forces attempted to repel protesters, some of whom began to throw rocks and other objects at the security officials. The Venezuelan opposition accused Maduro’s regime of preventing a peaceful protest from occurring.  “Hundreds of police and guards move to block access to Caracas for a mobilization, but against insecurity not a single one moves!” Henrique Capriles Radonski, governor of Venezuela’s Miranda state and a key opposition leader, said in a statement Tuesday.

As discussed last week, the protests come after Venezuela’s Supreme Tribunal of Justice, or TSJ, last week said it would assume the National Assembly’s duties – a ruling it later reversed, particularly after Venezuela’s chief prosecutor, Luisa Ortega, expressed “great concern” about the measure, which she said violated the constitution. The opposition said the TSJ’s move was akin to a coup d’etat in favor of Maduro’s regime.

The South American country is facing a political, security and economic crisis in which basic goods such as food and medicine are in short supply, unavailable or unaffordable. Venezuela has one of the highest homicide rates in the world. The opposition’s efforts to remove Maduro from power have been dismantled by the TSJ, which is accused of ruling in favor of Maduro’s regime.

Today’s protests are expected to continue. Earlier on Tuesday, President Maduro, speaking on state television, pledged to continue governing regardless of opposition actions.

“Venezuela’s fascist ring wing got orders from the north to fill the streets with blood and violence. Today they failed to flood the streets of Caracas” said Maduro. “I won’t waste time on this oligarchy.”

Maduro also said in the case of eventual elections, he expects the ruling party to easily defeat the opposition; he didn’t specify what elections he was referring to.

end

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

Euro/USA   1.0669 DOWN .0008/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 MIXED

USA/JAPAN YEN 110.79 DOWN 0.045(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 1.2481 UP .0039 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3399 DOWN .0002 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 8 basis points, trading now BELOW the important 1.08 level  FALLING to 1.0669; 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 FOR UP  47.79 POINTS OR 1.48%    / Hang Sang  CLOSED UP 139.32 POINTS OR 51%/AUSTRALIA  CLOSED UP 0.34%  / EUROPEAN BOURSES MIXED 

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED UP 51.02 POINTS OR 0.27%

Trading from Europe and Asia:
1. Europe stocks  ALL MIXED BUT POINTING SOUTH!

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 139.32 POINTS OR .57% / SHANGHAI CLOSED UP 47.79 POINTS OR 1.48%/Australia BOURSE CLOSED UP 0.34%/Nikkei (Japan)CLOSED UP 51.02 OR 0.27%  / INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1253.40

silver:$18.28

Early WEDNESDAY morning USA 10 year bond yield: 2.352% !!! UP 3 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.993, UP 4  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 100.55 UP 6  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.9254%  UP 3  in basis point yield from TUESDAY 

JAPANESE BOND YIELD: +.066%  DOWN 0  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.620%  UP 1/ 3 IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.271 DOWN 0 POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 65 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.258% DOWN 0 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.0651 DOWN .0026 (Euro DOWN 26 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.27 UP: 0.426(Yen UP 43 basis points/ 

Great Britain/USA 1.2474 UP 0.0035( POUND UP 35 basis points)

USA/Canada 1.3417 UP 0.0016(Canadian dollar DOWN 16 basis points AS OIL ROSE TO $51.28

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This afternoon, the Euro was DOWN by 26 basis points to trade at 1.0651

The Yen FELL to 111.27 for a LOSS of 43 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 35  basis points, trading at 1.2474/

The Canadian dollar FELL by 16 basis points to 1.3417,  WITH WTI OIL RISING TO :  $51.28

The USA/Yuan closed at 6.8919/
the 10 yr Japanese bond yield closed at +.066% DOWN 0 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1/2  IN basis points from TUESDAY at 2.364% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.005 UP 1/ 2  in basis points on the day /

Your closing USA dollar index, 100.68 UP 19  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 9.86 OR 0.13% 
German Dax :CLOSED DOWN 64.80  POINTS OR 0.53%
Paris Cac  CLOSED DOWN 9.28 OR 0.18%
Spain IBEX CLOSED UP 41.50 POINTS OR 0.40%
Italian MIB: CLOSED DOWN  3.73 POINTS OR 0.02%

The Dow closed DOWN 41.09 OR 0.20%

NASDAQ WAS closed DOWN 34.13 POINTS OR 0.58%  4.00 PM EST
WTI Oil price;  51.06 at 4:00 pm; 

Brent Oil: 54.08  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.09  UP 1/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS TO +0.258%  FOR THE 10 YR BOND  4.PM EST 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:$51.28

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: +.258%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Tumble: Fed Spooks Traders With Bubble Warning

 

Was today the Yellen Fed’s Irrational Exuberance moment?

It started off so well: the blistering ADP payrolls report, the highest in over two years (despite disappointing PMI and ISM reports), sent stocks soaring off the bat with the Dow jumping nearly 200 points higher, rising as high as 20,887, and the S&P knocking on the all time high 2,400 door again, and AMZN to new all tim highs, and making some wonder if the reflation trade had returned.

It was not meant to be, because while it took the market some time to digest the Fed’s minutes, the FOMC delivered one of its loudest warnings to date that it was focusing not so much on inflation or employment, but was seeking to deflate what even “some members” of the FOMC agree is a stock bubble, warning that stock prices are “quite high”, and warning that its forecasts face “downside risks” if “financial markets were to experience a significant correction.”

And while the dollar briefly spiked to the day’s highs in kneejerk reaction to the minutes, it then surrendered its gains after the minutes showed most officials backed a policy change that would begin shrinking the central bank’s balance sheet.

The weakness in the dollar meant that everyone’s favorite market-influencing carry pair would likewise suffer, and after breaking out above 111, the USDJPY tumbled as low as 110.70 once again threatening the key 110 support level.

Of course, with both the dollar and USDJPY tumbling, it was gold’s turn to shine and it did just that, surging virtually uninterrupted since its post-minutes kneejerk selloff.

 

Oil did not help, because after rising to multi-week highs this morning, WTI promptly tumbled after the DOE not only rejected yesterday’s API draw report, but showed yet another record in commercial oil stocks coupled with the latest weekly increase in US crude production. The result: crude slumped back under $51, once again driving a dagger through the heart of the reflation trade.

Across the rates complex, if it was the Fed’s intention to orchestrate a smooth selloff, it failed: having failed to selloff earlier in the day as RBC discussed, yields briefly spiked higher after the Minutes only to eventually grind to session lows.

As for stocks, with the most shorted universe soaring in early trading, dragging the Russell higher, this too was pummeled on all sides after the Fed’s stark warning, prompting an accelerated liquidation of the most overvalued stock group, as shorts reasserted themselves.

Not even that poster child of the Fed’s latest bubble, Amazon, could withstand the selling and after hitting all time highs in early trade, was aggressively sold off.

To be sure, the selloff could have been far worse if it wasn’t for some aggressive buying programs, emanating perhaps from the NY Fed’s arms-length market market Citadel, or some other central bank, which nonetheless was unable to prevent the day’s substantial gains from becoming losses.

In short: today was a mess for the bulls, although it could have been much worse. However with the reflation trade now hobbled again, with Trump set to meet Xi perhaps unleashing another diplomatic fiasco, with payrolls looming – and after today’s ADP number, Friday can only disappoint – there is a slew of downside risks on the immediate horizon, coming at a time when the Fed itself is warning that the S&P is too damn high. And in this painfully illiquid market, all that it would take is for someone big to start selling.

end

 

FOMC minutes:  highlights:

  1. the balance sheet to shrink  (Harvey: good luck)
  2. stock prices are too high

FOMC Minutes: Balance Sheet To Shrink This Year; Some Saw Stock Prices As “Quite High”

As previewed, the focus on the just released Fed minutes was on two things: the path of the rate hike, which the Fed said it can change its assessment if warranted, and on the future of the Fed’s balance sheet, where the FOMC said said a reinvestment shift was warranted, suggesting that a balance sheet reduction would likely begin later this year.

  • MOST FED OFFICIALS SAW REINVESTMENT SHIFT WARRANTED LATER IN YR
  • FED: BOTH TREASURIES, MBS SHOULD BE PART OF REINVESTMENT CHANGE
  • FED OFFICIALS READY TO CHANGE RATE-PATH ASSESSMENT IF WARRANTED
  • FOMC TO CONTINUE DISCUSSING REINVESTMENT SHIFT AT UPCOMING MTGS
  • FOMC OFFICIALS DIVIDED OVER LEVEL OF SLACK IN LABOR MARKET

Key excerpts:

  • “Provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the Committee’s reinvestment policy would likely be appropriate later this year.”
  • “Many participants emphasized that reducing the size of the balance sheet should be conducted in a passive and predictable manner. Some participants expressed the view that it might be appropriate for the Committee to restart reinvestments if the economy encountered significant adverse shocks that required a reduction in the target range for the federal funds rate.”
  • “An approach that ended reinvestments all at once, however, was generally viewed as easier to communicate while allowing for somewhat swifter normalization of the size of the balance sheet. To promote rapid normalization of the size and composition of the balance sheet, one participant preferred to set a minimum pace for reductions in MBS holdings and, if and when necessary, to sell MBS  to maintain such a pace.:”

To be sure, this is hardly the news the bond complex wanted, which has sold off following this latest warning that the Fed may begin shrinking its balance sheet. 

However the biggest surprise was in the latest caution by “some” Fed members that stock prices are quite high, and that the Fed is increasingly worried about asset bubbles, to wit:

  • SOME FED OFFICIALS VIEWED STOCK PRICES AS `QUITE HIGH’

Here is the section in question:

In their discussion of recent developments in financial markets, participants noted that financial conditions remained accommodative despite the rise in longer-term interest rates in recent months and continued to support the expansion of economic activity. Many participants discussed the implications of the rise in equity prices over the past few months, with several of them citing it as contributing to an easing of financial conditions. A few participants attributed the recent equity price appreciation to expectations for corporate tax cuts or to increased risk tolerance among investors rather than to expectations of stronger economic growth. Some participants viewed equity prices as quite high relative to standard valuation measures.

And this:

“Stock prices rose across most industries, and equity prices for financial firms outperformed broader indexes. Meanwhile, spreads of yields on bonds issued by nonfinancial corporations over those on comparable-maturity Treasury securities were little changed.”

And then the punchline, which confirms that the Fed is only focused on the S&P: The Fed explicitly warns of “downside risks” to its forecasts if “financial markets were to experience a significant correction.”   The passage in question:

… a number of participants remarked that recent and prospective changes in financial conditions posed upside risks to their economic projections, to the extent that financial developments provided greater stimulus to spending than currently anticipated, as well as downside risks to their economic projections if, for example, financial markets were to experience a significant correction. Participants also mentioned potential developments abroad that could have adverse implications for the U.S. economy.

* * *

Below are selected excerpts from the FOMC meeting minutes that concluded on March 15, via BBG:

  • When the time comes to implement a change to reinvestment policy, participants generally preferred to phase out or cease reinvestments of both Treasury securities and agency MBS.
    • The staff provided several briefings that summarized issues related to potential changes to the Committee’s policy of reinvesting principal payments from securities held in the SOMA. These briefings discussed the macroeconomic implications of alternative strategies the Committee could employ with respect to reinvestments, including making the timing of an end to reinvestments either date dependent or dependent on economic conditions.
    • The briefings also considered the advantages and disadvantages of phasing out reinvestments or ending them all at once as well as whether using the same approach would be appropriate for both Treasury securities and agency mortgage-backed securities (MBS).
    • Nearly all participants agreed that the Committee’s intentions regarding reinvestment policy should be communicated to the public well in advance of an actual change. It was noted that the Committee would continue its deliberations on reinvestment policy during upcoming meetings and would release additional information as it becomes available.
  • Some participants viewed equity prices as quite high relative to standard valuation measures. It was observed that prices of other risk assets, such as emerging market stocks, high-yield corporate bonds, and commercial real estate, had also risen significantly in recent months.
  • With their views of the outlook for the economy little changed, participants generally continued to judge that a gradual pace of rate increases was likely to be appropriate to promote the Committee’s objectives of maximum employment and 2 percent inflation.
    • In contrast, several other participants cited evidence that some slack remained in the labor market, such as still-modest aggregate wage growth and the unevenness of wage gains across industries, an elevated share of employees working part time for economic reasons, or other broad measures of labor underutilization.
    • In contrast, participants held different views regarding prospects for the attainment of the Committee’s inflation goal. A number of participants noted that core inflation was a useful indicator of future headline inflation, and the latest reading on 12-month core inflation suggested that it could still be some time before headline inflation reached 2 percent on a sustained basis.
  • Several participants now anticipated that meaningful fiscal stimulus would likely not begin until 2018. In view of the substantial uncertainty, about half of the participants did not incorporate explicit assumptions about fiscal policy in their projections. Nonetheless, most participants continued to view the prospect of more expansionary fiscal policies as an upside risk to their economic forecasts.
  • Participants generally viewed the downside risks associated with the global economic outlook, particularly those related to the economic situation in China and Europe, as having diminished over recent months.
  • Although motor vehicle sales had fallen early in the year and some other components of PCE had also declined, many participants suggested that the slowdown in consumer spending in January would likely be temporary. The slowing appeared to mainly reflect transitory factors like lower energy consumption induced by warm weather or delays in processing income tax refunds.
  • Nearly all participants judged that the U.S. economy was operating at or near maximum employment.
  • Participants emphasized that they stood ready to change their assessments of, and communications about, the appropriate path for the federal funds rate in response to unanticipated developments.

* * *

And the full minutes (link):

 

end

 

Immediate reaction to the FOMC! Feds warning falls on deaf ears

(courtesy zero hedge)

Stocks Drop After Fed Minutes, Bonds Unchanged

Despite the warning by “some” Fed members that stocks are “quite high”, and another even more implicit warning, that the Fed may have to revise its forecast if “financial markets were to experience a significant correction“, the market’s initial reaction to the Fed’s warning was to ignore it, although in recent minutes there has been a modest acceleration to the downside across equity markets…

while bonds initially sold off in a kneejerk reaction to the Fed’s balance sheet reduction warning, only to recoup some of the losses.

 

Finally, despite the Fed’s attempt to tighten financial conditions – if indeed it is worried about a bubble – so far it has failed, with the market refusing to budge in its rate hike expectations, and even after the minutes, the Fed Fund Futures market still expects at most one more hike, in September 2017.

end

Then late in the afternoon:

both Obamacare repeal and the Trump tax reform are dead

(courtesy zero hedge)

 

Suddenly, Both Obamacare Repeal And Trump Tax Reform Are Dead

It was a one-two knockout punch for anyone still holding out hope that Trump’s domestic economic policies will take place in the near, or not even so near, future.

First, Rep. Patrick McHenry, a member of House Republican leadership, said on Wednesday afternoon that conservatives’ proposals to reach a compromise on healthcare are a “bridge too far” to win support from colleagues.  McHenry, the chief deputy whip, told reporters that calls from the conservative House Freedom Caucus to allow states to apply for waivers to repeal ObamaCare protections for people with pre-existing conditions are a “bridge too far for our members” and can’t get enough votes to pass.

The comments come after a late-night meeting among House GOP groups on Tuesday fell flat, and lawmakers appear to be heading home at the end of the week for a recess without any tangible progress toward a deal to revive their healthcare bill.

McHenry said lawmakers need a “cooling off period” over the two-week break. “We need people to stop, take a deep breath, and think through the way to yes,” he said.

In other words, despite the White House’s stated desire to get a vote off by Friday, Obamacare repeal is dead for the foreseeable future.

* * *

And then it was Ryan’s turn: the House Speaker, also on Wednesday afternoon, said that tax reform will take longer to accomplish than repealing and replacing Obamacare would, saying Congress and the White House were initially closer to agreement on healthcare legislation than on tax policy.

 

“The House has a (tax reform) plan but the Senate doesn’t quite have one yet. They’re working on one. The White House hasn’t nailed it down,” Ryan told an audience in Washington.

“So even the three entities aren’t on the same page yet on tax reform,” he added.

Translation: both healthcare and tax reform are now indefinitely dead, which means that a suddenly pivoting Trump, who earlier today said he had “changed his mind” on Syria, may have no choice but to begin war with Assad to distract from everything else that is going on in the US.

end

Another great commentary from David Stockman as he weighs in on the Susan Rice et al affair:

(courtesy zero hedge)

The Walls Close in on Team Obama

 

It goes without saying that conservatives and their Sean Hannity media megaphones hated Barack Obama with a passion, and now realize that his administration facilitated and orchestrated a smear attack on the GOP candidate for President.

For instance, the Daily Caller was all over the case today with even more inflammatory detail from a former U.S. Attorney and two White House National Security Council (NSC) veterans:

Former President Barack Obama’s national security adviser Susan Rice ordered U.S. spy agencies to produce “detailed spreadsheets” of legal phone calls involving Donald Trump and his aides when he was running for president, according to former U.S. Attorney Joseph diGenova.

“What was produced by the intelligence community at the request of Ms. Rice were detailed spreadsheets of intercepted phone calls with unmasked Trump associates in perfectly legal conversations with individuals,” diGenova told The Daily Caller News Foundation Investigative Group Monday.

“The overheard conversations involved no illegal activity by anybody of the Trump associates, or anyone they were speaking with,” diGenova said. “In short, the only apparent illegal activity was the unmasking of the people in the calls.”

Col. (Ret.) James Waurishuk, an NSC veteran and former deputy director for intelligence at the U.S. Central Command, told the Daily Caller News Foundation’s (DCNF)  that many hands had to be involved throughout the Obama administration to launch such a political spying program.

“We’re looking at a potential constitutional crisis from the standpoint that we used an extremely strong capability that’s supposed to be used to safeguard and protect the country,” he said. “And we used it for political purposes by a sitting president. That takes on a new precedent.”

Michael Doran, former NSC senior director, told the DCNF Monday that “somebody blew a hole in the wall between national security secrets and partisan politics.” This “was a stream of information that was supposed to be hermetically sealed from politics and the Obama administration found a way to blow a hole in that wall,” he said.

“That’s a felony,” he told the DCNF. “And you can get 10 years for that. It is a tremendous abuse of the system. We’re not supposed to be monitoring American citizens. Bigger than the crime, is the breach of public trust.”

Senator Rand Paul pointed the finger at Susan Rice. And now that Obama’s fingerprints are all over the Deep State’s 2016 election intrusions, there is an opening for junior GOP legislators to follow Senator Paul’s brilliant lead.

In pouncing on the Susan Rice smoking gun Rand has managed to meld a partisan attack on Team Obama with a spirited and cogent defense of constitutional liberties under the 4th Amendment; and to expose the Deep State’s frightening potential for abuse of power.

At the moment, the pro-establishment spinners and their boosters in the mainstream editorial pages are trying desperately to distract from the case they can no longer deny.

That is to say, yes, Susan Rice — and probably CIA Director Brennan and others — did “unmask” the names of Trump associates. But it was all done, they maintain, in the pursuit of their duties to acquire “foreign intelligence information” and was in no way improper.

Likewise, they are loudly insisting that the Deep State surveillance apparatus was just going about its ordinary business of monitoring nasty foreigners when Trump associates — or even the Donald himself — became an inadvertent victim of “incidental” surveillance. So there is nothing sinister about that, either.

It’s not gonna wash.

There can be little doubt that the whole Russian hacking narrative was invented by the Deep State, and then massaged and leaked by top Obama officials including Rice, Brennan and numerous others for one purpose alone that had nothing to do with national security.

That is, to prevent the election of an impetuous, strong-willed anti-globalist that the establishment deeply disapproved and then to re-litigate the election once the unthinkable happened on November 8th.

So not only is the whole hacking story essentially a glorified piece of opposition research peddled by the DNC and its affiliates, whatever “forensic evidence”  that may exist was undoubtedly manufactured by the Deep State itself.

That’s right. Owing to the latest Wikileaks disclosures of March 2017 via a trove of leaked CIA documents it calls “Vault 7,” it now appears that all of the other dubious IC’s claims and “assessments” about Russian hacking have been ash-canned.

Your Social Security Is Running Dry

 

That is, Vault 7 suggests the CIA has the ability to manufacture and deposit electronic trails to “misdirect attribution” by leaving false cyber fingerprints.

Using a library of foreign malware and hacking tools, the CIA can plant Russian, Chinese, Iranian or other hackers’ fingerprints to make the hackers appear to be from one of those countries — even as they do the job from the comfort of their offices in Langley, VA.

Needless to say, that explains how the alleged Russian hackers could be so “clumsy” as to leave obvious and damning fingerprints on their work.

So it is probable that the Russians were “clumsy” because they weren’t actually “Russians”. They were undoubtedly CIA operatives from the Center for Cyber Intelligence.

But every single dirty deed of this illicit campaign will come out because the Deep State is not a monolith; it’s still populated with whistleblowers and operators with a score to settle.

I actually have some authoritative experience on this matter.

As an aide to a top House GOP leader back in the day, I had an insider’s bird’s-eye view of the Watergate drama between early 1973 and August 1974 when Nixon famously boarded the helicopter and bugged out of town with a pardon soon thereafter. And there was virtually nothing that didn’t come out once people started covering their backsides and settling scores.

If the Donald has the courage of his convictions, he will authorize the Department of Justice (DOJ) to unleash one or more ambitious U.S. Attorneys against Susan Rice, Brennan and others. Owing to their massive leaking campaign from the illicit Trump surveillance operation, they are all surely felons.

But I also expect that the dueling narratives about the election meddling of “Vlad versus Barry” will expose the soft underbelly of the Deep State and the toxic anti-constitutional essence of its operations.

I am speaking of NSA’s bulk collection of all the email, voice and data bits which pass through the internet and communications arteries of the nation.

Here’s the thing. The most pressing danger the nation faces arises from a few thousand barbarous jihadis bumping around the rubble-strewn cities and villages of the middle east that Imperial Washington has destroyed. But even this remnant no longer uses cell-phones or any other digital devices.

If they need to be tracked, it can be done the old-fashioned way with greenbacks on the barrel. Human intelligence (HUMINT) wouldn’t cost even 1% of the $75 billion now spent on the intelligence agencies annually, and would give the American constitution and our process of democratic self-government another lease on life.

In the meanwhile, the coming war of the two election hacking narratives –Vlad v. Barry — will absolutely dominate the Imperial City.

That beltway brawl will result in absolute paralysis and dysfunction in Washington soon — if it has not arrived already.

And so nothing constructive will happen on the Trump Stimulus, and a continuous Fiscal Bloodbath around continuing resolutions and debt ceiling increases will become the order of the day.

So, as I keep saying, get out of the casino. Now!

Regards,

David Stockman
for TheDaily Reckoning

end

Now the Wall Street Journal reports that Susan Rice was not alone in the “unmasking’ of the Trump transition team

(courtesy zero hedge)

 

WSJ reports that Susan Rice Was Not Alone In “Unmasking” Team Trump

As part of its daily wrap of the Susan Rice news flow, which focused on her first media appearance since she was “outed” as the persona responsible for “unmasking” members of team Trump, the WSJ provides two new pieces of incremental information: i) in addition to Michael Flynn, at least one more member of the Trump transition team was “unmasked” in intelligence reports due to multiple foreign conversations that weren’t related to Russia; and ii) Rice wasn’t the administration official who instigated Mr. Flynn’s unmasking, confirming there is at least one more high-level official giving “unmasking” orders.

But first, a brief detour.

“Unmasking” is a term used when the identity of a U.S. citizen or lawful resident is revealed in classified intelligence reports. Normally, when government officials receive intelligence reports, the names of American citizens are redacted to protect their privacy. But officials can request that names, listed as “U.S. Person 1,” for example, be unmasked internally in order to give context about the potential value of the intelligence. Unmasking is justified for national security reasons but is governed by strict rules across the U.S. intelligence apparatus that make it illegal to pursue for political reasons or to leak classified information generated by the process.

It is the accusation that Rice unmasked members for purely political reasons – ostensibly in coordination with president Obama – that has gotten Republican smelling blood in the water.  Republicans have for weeks signaled that they saw unmasking as the key to investigating the source of media leaks damaging to the Trump administration — such as the exposure of former Trump national security adviser Michael Flynn, who was forced to resign in February after media reports revealed that he misled Vice President Pence about the contents of his discussions with the Russian ambassador.

To that end, earlier this month, Rep. Trey Gowdy (R-S.C.) pressed FBI Director James Comey in a public Intelligence Committee hearing: “It would be nice to know the universe of people who have the power to unmask a U.S. citizen’s name… because that might provide something of a roadmap to investigate who might’ve actually disseminated a masked U.S. citizen’s name.”

He went on to press Comey on whether specific Obama officials, including Rice, would have had the authority to request that a name be unmasked. “Yes, in general, and any other national security adviser would, I think, as a matter of their ordinary course of their business,” Comey answered.

Shortly thereafter, The Hill notes Nunes made his shocking announcement that he — and he alone — had viewed documents that showed inappropriate unmasking by Obama-era officials.

Today, Susan Rice came out to defend herself and told MSNBC that “the allegation is that somehow, Obama administration officials utilized intelligence for political purposes,” Rice told Mitchell. “That’s absolutely false.”

She added that “The notion, which some people are trying to suggest, that by asking for the identity of the American person is the same is leaking it — that’s completely false. There is no equivalence between so-called unmasking and leaking.”

And yet, that is precisely what many republicans are suggesting because otherwise there is no explanation for how the WaPo and NYT received, on a virtual silver platter, stories about Mike Flynn’s communications with intel-level detail.

Perhaps Rice is simply lying as she lied on March 22 when in a PBS interview she said “I know nothing” about unmasking Trump officials. Less than two weeks later, we learn that she did.

But perhaps there is more to the story than what we know so far.

* * *

And this is where the WSJ comes in, with the new info that according to a Republican official familiar with deliberations by GOP lawmakers on the House Intelligence Committee said that the names of two U.S. citizens who were part of Mr. Trump’s transition team have been unmasked in intelligence reports. One is Mr. Flynn and the other hasn’t been identified. The report involving Mr. Flynn documented phone conversations he had in late December with the Russian ambassador to the U.S.

The WSJ then reports that Rice had requested the unmasking of at least one
transition official — not Mr. Flynn —
who was part of multiple foreign
conversations that weren’t related to Russia.

And the punchline: “The Republican official and others said Ms. Rice wasn’t the administration official who instigated Mr. Flynn’s unmasking.

In other words, the story that Susan Rice is the unmasker is incomplete as there is at least one more person exposing the identities of people in Trump’s circle, and that the NSA and other intel agencies have been surveiling, accidentally or otherwise,  at least one, so far unnamed individual, from Trump’s circle. It may well be someone that the WaPo and NYT have already published about, or it may be someone who has yet to hit the newswire, delivering the latest twist of the ongoing intelligence-fed news cycle.

For now the answer is unknown, although when Rice testifies under oath before the House Intel Committee, we hope that all outstanding questions will finally get answers.

end

Trump says Susan Rice likely committed a crime in unmasking key Americans. I really think the crime is the release to the press, not the unmasking

(courtesy zero hedge)

Trump Says Susan Rice Likely Committed A Crime In “Unmasking” Scandal

Tyler Durden's picture

Update 1:  When Trump goes low, Susan Rice apparently goes silent:

SUSAN RICE SPOKESWOMAN: WON’T COMMENT ON ‘LUDICROUS’ CHARGE

* * *

As new details surrounding the Susan Rice “unmasking” scandal continue to slowly leak out, President Trump told a group of reporters at the White House earlier today that he is convinced that the former national security adviser to President Obama may have committed a crime by seeking the identities of his associates who were ‘incidentally surveilled.”

Per the New York Times, while Trump refused to offer any additional details pending an ongoing investigation, he described the scandal as “one of the big stories of our time” and vowed to follow-up “at the right time.”

“I think it’s going to be the biggest story,” Mr. Trump said in an interview in the Oval Office, declining repeated requests for evidence for his allegations or the names of other Obama administration officials. “It’s such an important story for our country and the world. It is one of the big stories of our time.”

 

He declined to say if he had personally reviewed new intelligence to bolster his claim but pledged to explain himself “at the right time.”

 

When asked if Ms. Rice, who has denied leaking the names of Trump associates under surveillance by United States intelligence agencies, had committed a crime, the president said, “Do I think? Yes, I think.”

Of course, as we noted earlier, if anyone expects former National Security Advisor Susan Rice, the same Susan Rice who “stretched the truth” repeatedly about Benghazi, to unilaterally admit she did something wrong they will be severly disappointed. Instead, just yesterday she took an interview on the always Obama-friendly Andrea Mitchell show on MSNBC to categorically deny that the Obama administration inappropriately spied on members of the Trump transition team.

“The allegation is that somehow, Obama administration officials utilized intelligence for political purposes…That’s absolutely false…. My job is to protect the American people and the security of our country.”

 

“There was no such collection or surveillance on Trump Tower or Trump individuals, it is important to understand, directed by the White House or targeted at Trump individuals.”

EXCLUSIVE: Susan Rice says the claim that intelligence was used for political purposes is “absolutely false” Watch:

 

Rice also flatly denied exposing President Trump’s former national security advisor Michael Flynn, who was forced to resign in February after media reports revealed that he misled Vice President Pence about the contents of a phone call with the Russian ambassador.

Asked by Mitchell if she sought to unmask the names of people involved in the Trump campaign in order to spy on them, Rice says: “absolutely not, for any political purpose, to spy, expose, anything.” And yet, that is what happened. She was then asked if she leaked the name of Mike Flynn: “I leaked nothing to nobody.”

WATCH: Susan Rice insists “I leaked nothing to nobody”

 

Of course, only time will tell which version of the truth proves to be accurate and/or whether this is just another attempt by Republicans to “criminalize behavior that is normal.

I really have no faith whatsoever in the ADP report. The private payroll report showed a huge 263,000 job gain on expectations of only 185,000. The February number was downgraded by 43,000 jobs

(courtesy zero hedge)

Trump Effect: ADP Employment Surges To Highest Since 2014 As Manufacturing Hiring Spree Continues

After last month’s private payrolls scorcher, when ADP reported that a whopping 298K jobs were added, the biggest increase in 6 years on a record surge in good producing jobs, this morning ago the momentum continued when ADP reported that in March the US generated 263,000 jobs, smashing expectations of a 185,000 gain, and after a downward revision to the February number from 298K to 245K, this was the highest print since December 2014.

Goods producers added 82,000 while construction jobs swelled by 49,000 and manufacturing added 30,000.

Broken down by firm size:

  • Small firms (1-49) added 118k jobs in March
  • Medium firms (50-499) added 100k jobs in March
  • Firms with over 500 employees added 45k jobs

The details:

The U.S. labor market finished the first quarter on a strong note,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Consumer dependent industries including healthcare, leisure and hospitality, and trade had strong growth during the month.”

Mark Zandi, chief economist of Moody’s Analytics said, “Job growth is off to a strong start in 2017. The gains are broad based but most notable in the goods producing side of the economy including construction, manufacturing and mining.

Judging by the market’s reaction the reflation trade may be making a comeback, with the dollar rising ahead of Friday’s payrolls release which according to ADP may be another blockbuster report.

Some more visual details:

Change in Nonfarm Private Employment


Change in Total Nonfarm Private Employment

Change in Total Nonfarm Private Employment by Company Size

Finally, the infamous ADP infographic:

<br /> ADP National Employment Report: Private Sector Employment Increased by 263,000 Jobs in March<br />

The “Soft Data” Euphoria Is Over: Non-Manufacturing ISM Slides To Pre-Election Lows/

 PMI Reveals Weakest Business Activity Growth In Six Month

The “soft”, i.e., survey data, rollover accelerated this morning, when Markit reported that in March the Service PMI posted a second consecutive decline, dropping from 53.8 to 52.8, missing expectations of a 53.1 print. This was the lowest reading since September 2016. 

New Business falls to 51.7 vs 53.6 in Feb, and was the lowest reading since March 2016. Additionally, the Outstanding Business index also fell vs last month.  Latest data showed input costs rising at a solid rate, although a desire to strengthen profitability meant higher costs were passed onto clients wherever possible, according to Markit.

According to Markit’s Chris Williamson “the March PMI numbers add to the picture of a relatively modest opening quarter to 2017 for the US economy. The surveys of manufacturing and services are running at levels consistent with GDP expanding by 1.7% in the first quarter.

Growth of business activity appears to have peaked in January, sliding to a six-month low in March. The loss of momentum is linked to weaker inflows of new work, with the surveys providing some evidence that demand is being dented in part by higher prices.”

 

“However, business confidence, although up on February, has failed to regain the levels seen at the start of the year, suggesting a less ebullient mood has developed among companies than seen in the immediate aftermath of the presidential election”

This lower degree of business optimism has translated into weaker hiring, with the March surveys indicating the smallest net gain in private sector employment since last October, continuing the trend of baffle with BS, and refuting this morning’s stellar ADP report.

end

Steve Bannon kicked off of Trump’s National Security Council:

(courtesy zero hedge)

Steve Bannon Kicked Off Trump’s National Security Council

In what may be the most dramatic shake-up at the White House since Mike Flynn resigned in February, moments ago Bloomberg reported that President Trump has reorganized his National Security Council on Wednesday, removing his chief strategist, Stephen Bannon as well as downgrading the role of his Homeland Security Adviser, Tom Bossert, while elevating national intelligence director, Dan Coats, and the chairman of the Joint Chiefs of Staff, Marine Corps General Joseph Dunford, who will again be “regular attendees” of the NSC’s principals committee.

According to Reuters, Bannon’s removal from the NSC was seen as a boost to national security adviser H.R. McMaster,who officials said has struggled to work together with Bannon.

Wednesday’s change means Mr. Bannon is no longer part of the NSC. He is still permitted to attend such meetings but won’t automatically be invited to each one.

The WSJ adds that “the decision to boot Bannon was made by Trump’s new national security adviser, Lt. Gen. H.R. McMaster.”

Bannon said in a statement: “Susan Rice operationalized the NSC during the last administration. I was put on to ensure that it was de-operationalized. General McMaster has returned the NSC to its proper function.”

Additionally, the Joint Chiefs chairman and intelligence director are having their roles on the principals committee restored, the report said.

Bloomberg adds that Susan Rice’s successor, National Security Adviser H.R. McMaster, was given responsibility for setting the agenda for meetings of the NSC or the Homeland Security Council, and was authorized to delegate that authority to Bossert, at his discretion, according to the filing.

A White House official said that Bannon was placed on the committee in part to monitor Trump’s first national security adviser, Michael Flynn, and attended just one meeting. He’s no longer needed with McMaster in charge of the council, the official said.

In other words, perhaps Bannon simply saw no point in being on the committee with Flynn gone; on the other hand this could merely be a justification of the shake up.

The memorandum also makes the director of the Central Intelligence Agency a permanent member of the principals committee and restores the chairman of the U.S. military’s Joint Chiefs of Staff and the Director of National Intelligence as permanent members after they were initially downgraded from that status.

As a reminder, back in January, in the first of many unexpected shakeups, Bannon was elevated to a position on the NSC principals committee. The move drew criticism from some members of Congress and Washington’s foreign policy establishment. Republicans and Democrats questioned whether Mr. Bannon’s addition would politicize the White House’s national-security decisions.

The WSJ adds that White House officials had said if Mr. McMaster wanted to change Mr. Bannon’s status, he had the authority to do so. The senior administration official said Mr. Bannon had worked with Mr. McMaster to implement changes in the NSC, and now that they were well underway, he could step aside.

END

 

We have been bringing you details on the total collapse in USA car demand.  Now we hear from Industry week on the disastrious sales from all car companies

(courtesy IndustryWeek)

 

/and special thanks to Robert H for sending this to us:

http://m.industryweek.com/competitiveness/us-car-demand-collapse-jeopardizes-trump-s-auto-factory-push?NL=IW-07&sfvc4enews=42&cl=article_1&utm_rid=CPG03000007765711&utm_campaign=18445&utm_medium=email&elq2=5076846105aa45e7af33bc1762d3314c

US Car Demand Collapse Jeopardizes Trump’s Auto Factory Push

A row of Ford Escapes.

Ford Fusion: down 37%. Chevrolet Malibu: down 36%. Toyota Prius: down 29%.

As those grim numbers suggest, the U.S. auto industry was blindsided last month by just how fast sedans have fallen out of favor with Americans now embracing roomier sport utility vehicles. Family-friendly crossovers may be more profitable, but the quick shift is causing headaches.

The swerve in consumer taste is just one of the forces — along with slumping used-car values and a pullback in subprime auto lending — that are changing the equation for manufacturers as President Donald Trump leans on the industry to build new plants and boost hiring. That’ll be hard to pull off: A glut of both new and used vehicles on the market has sparked an incentives battle, meaning new production lines are the last thing the companies need.

Industrywide deliveries in March were supposed to show a rebound following small dips in January and February. But the annualized sales pace, adjusted for seasonal trends, slowed to 16.6 million vehicles, from 16.7 million a year earlier, according to researcher Autodata Corp. Analysts had projected the rate would accelerate to about 17.2 million. (Automakers set a record in the U.S. last year, with 17.6 million vehicles sold.)

“I’ve been expecting a slowdown for a while,” Morningstar Inc. analyst David Whiston said. “It shouldn’t be a surprise. Once you hit peak sales, it seems like you only have bad news ahead.”

Ample discounts have failed to spur demand for models like General Motors Co.’s Chevrolet Malibu and Ford Motor Co.’s Fusion, which are being surpassed by crossovers as the new American family vehicle of choice. The Toyota Prius sedan model continued its slump despite a thorough makeover in late 2015 that improved the staid hybrid’s ride.

In March, sales of crossovers including the Chevrolet Equinox and Ford Escape were up 11%, while mid-size cars like the Fusion fell 16%, according to Woodcliff Lake, New Jersey-based Autodata.

SUVs are keeping profits afloat. Cheap gasoline and more efficient engines are allowing buyers to get into the bigger people-movers they love. With an average sticker price of more than $38,000, a truck or SUV costs about $10,000 more than the average car. The incentives needed to sell them amount to an 8.8% discount, compared with 11% for cars, according to Edmunds.com, an industry research firm.

The problem is that even popular SUVs need more and more incentives to keep sales moving.

“Higher incentives have pushed demand about as far as it can go,” Joe Spak, an auto analyst with RBC Capital Markets, wrote in a report Monday.

While the pace of overall auto sales is plenty for companies to make money, investors aren’t buying. The March figures hit carmakers hard, with GM falling 3.4% and Ford declining 1.7% on Monday. AutoNation Inc., the nation’s largest car dealer, dropped 3.4%.

The one U.S. automaker to see its shares rise was Tesla Inc., whose upcoming mass-market Model 3 sedan gives the company a shot a real growth. The electric-car maker’s market capitalization surged past Ford for the first time.

For the auto industry’s incumbents, inventories are high and incentives are at near-record levels. That’s prompting companies to spend more on discounts just to stay close to 2016’s record results. Jessica Caldwell, an analyst with Edmunds.com, said odds are slim the U.S. market finishes at last year’s level, particularly as interest rates start to rise and leasing growth stalls.

“Last year, it seemed like ‘Oh, there’s still probably room for it to grow, all the other metrics look good,”’ Caldwell said. “But this month it seems like things are pointing to a slowdown.”

While industry sales probably won’t fall by much — they’re down 1.5% through March — profits could slip as automakers cut production. Trump will have a hard time getting the new investment he’s been demanding, even with consumer confidence strong and unemployment low.

“You’re not going to see the U.S. get new plants,” Mark Wakefield, who heads the automotive practice for consulting firm Alix Partners, said by phone. “The market went from pull to push nine months ago. We don’t see it going upward from here.”

GM has already made cuts since late last year at passenger car plants in Michigan and Ohio, laying off more than 3,000 workers who build Chevy Cruze compacts and Impala sedans. In January, Ford canceled plans to build a $1.6 billion factory in Mexico, after deciding it didn’t need to boost output of Focus compacts.

Wakefield projects sales will slip by about 300,000 units this year, as a typical cyclical decline of 15% to 20% begins.

“When it drops, it drops sharply,” he said. “It doesn’t fade down.”

By David Welch and Jamie Butters, with assistance from Melinda Grenier.

end

Well that is all for today

I will see you tomorrow night

Harvey

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