April 7/Double Whammy!!: Poor jobs report/USA tomahawks Syrian airbase/Stockholm the scene of another terrorist attack/

Gold: $1254.30  UP $4.00

Silver: $18.13  DOWN 10  cents

Closing access prices:

Gold $1254.45

silver: $18.00!!!

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: $1278.75 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1268.20

PREMIUM FIRST FIX:  $10.55

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SECOND SHANGHAI GOLD FIX: $1274.90

NY GOLD PRICE AT THE EXACT SAME TIME: 1264.10

Premium of Shanghai 2nd fix/NY:$10.80

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LONDON FIRST GOLD FIX:  5:30 am est  1264.30

NY PRICING AT THE EXACT SAME TIME: 1266.70

LONDON SECOND GOLD FIX  10 AM: 1266.45

NY PRICING AT THE EXACT SAME TIME. 1266.90

For comex gold:

APRIL/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  25 NOTICE(S) FOR 2500 OZ. 

 TOTAL NOTICES SO FAR: 587 FOR 58,700 OZ    (1.8258 TONNES)

For silver:

For silver: APRIL

118 NOTICES FILED TODAY FOR 590,000 OZ/

Total number of notices filed so far this month: 641 for 3,205,000 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 just under 222,000 contracts or about 2,000 contracts below the record set last year. The price of silver is a good $2.44 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.

The volume on the silver comex was extremely high today at 126,689 contracts and  it is conceivable that on Monday, we may have a record open interest at over 225,000 contracts.

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  FELL BY A TINY 240 contracts DOWN to 221,862 WITH THE RISE IN SMALL PRICE RISE ( 6 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.  1.109 BILLION TO BE EXACT or 158% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED: 118 NOTICE(S) FOR 590,000 OZ OF SILVER

In gold, the total comex gold also ROSE BY 3,108 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.90 with YESTERDAY’S TRADING). The total gold OI stands at 428,795 contracts.

 

we had 25 notice(s) filed upon for 2500 oz of gold.

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

GLD:

We had a small changes in tonnes of gold at the GLD: a withdrawal of .28 tonnes from the GLD

Inventory rests tonight: 836.49 tonnes

.

SLV

We had a small change  in inventory at the SLV/ a withdrawal of 136,000 oz from the SLV

THE SLV Inventory rests at: 329.148 million oz

end

.

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

1. Today, we had the open interest in silver FELL BY 240 contracts DOWN TO  221,862 DESPITE THE FACT THAT SILVER WAS UP 6 CENT(S) with YESTERDAY’S trading. We no doubt had some considerable short covering but the longs keep piling on making it difficult for them to cover. In contrast, the gold open interest ROSE CONSIDERABLY BY 3,108 contracts UP to 428,795 WITH THE RISE IN THE PRICE OF GOLD TO THE TUNE OF $4.90  (YESTERDAY’S TRADING).

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c/ FRBNY earmarked gold report

(Harvey)

3. ASIAN AFFAIRS

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 5.61 POINTS OR 0.17%/ /Hang Sang CLOSED DOWN 6.42 POINTS OR .03%  . The Nikkei closed UP 67.57 OR 0.36% /Australia’s all ordinaires  CLOSED UP 0.09%/Chinese yuan (ONSHORE) closed UP at 6.8975/Oil UP to 52.22 dollars per barrel for WTI and 55.19 for Brent. Stocks in Europe MOSTLY IN THE RED   ..Offshore yuan trades  6.8930 yuan to the dollar vs 6.8976 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN STRONGER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE  STRONGER DOLLAR.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

Italy

Italy’s Target 2 deficit rises again to 420 billion euros from 386 billion euros. This is the amount of debt that Italy will owe surplus countries namely Germany and Holland

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia Warship is teaming towards the USA Destroyers off the Syrian Coast

A great reason for gold to be hammered by 10 dollars at 1 pm

( zero hedge)

6 .GLOBAL ISSUES

Downtown Stockman

Another terror attack:  Many dead and at least two suspects still on the loose

(courtesy zerohedge)

7. OIL ISSUES

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)Gold trading last evening: gold rises/stocks sink/bond yields sink as the uSA begin its Syrian operation:

( zerohedge)

ii)China;s Shandong Gold Corp. buys 1/2 Barrick’s Veladero mine for 960 million dollars

( Reuters)

iii)Low interest rates will cause free banking to disappear

(Szu Ping Chan/Reuters/GATA)

iv)Keith Barron is out of find the two lost big deposit areas that were producing gold during the 16th century

( McLeod/Gold Investing News)

v)A sensational speech given to the Mines and Money Conference, Hong Kong  today.

The theme has been a bee in my bonnet for years:  why invest in gold mining companies if they do not want to defend themselves

a must read..

( Chris Powell/GATA)

vi)As we reported to you last week, iron ore prices plunge again as China has a massive glut: and they talk about the reflation trade!!

( zero hedge)

10. USA stories

i)USA launches an airstrike on Syrian airbase. They deploy 60 tomahawk missiles

( zerohedge)

ii)NY trading early this morning;  stocks and the dollar falter after a disappointing jobs report.  The 10 yr bond yield 2.26%

Gold rises to 1268.00 per oz

( zero hedge)

iii)Trump’s statement on the Syrian Airstrike:

( zero hedge)

iv)Russia was notified in advance of the USA strike on Syria:

( zero hedge)

v)Watch the expression on the face of  this CNN anchor as a Congression questions what really happened with that Syrian chemical attack

( AntiMediaOrg)

vi)Congress generally happy with the USA strike on Syria

( zerohedge)

vii)And now the Russian Response: Russia suspends airspace pact with the USA

( zerohedge/two stories)

viii)Putin responds. He is not a happy camper as he states that the strike will cripple USA Russia relations.  He deploys a cruise missile frigate to Syria:

( zero hedge)

ix)First images show only 23 of the 59 tomahawk missiles struck.  According to pictures the the strike was “inefficient” but there was considerable damage:

( zero hedge)

x)And now the second big story of the day:  the jobs report

Instead of a gain of 180,000 jobs, the BLS reports only a 98,000 job gain with another surprising drop in the unemployment rate to 4.5%. What is also bad, is that the two prior months were revised lower by 22,000 jobs and  16,000 jobs.

( zero hedge)

 

xi)And  now the real story on the jobs report:

plunging retail workers offset by doormen  plus our usual waiters and bartenders (despite a declining restaurant industry).  Also of note: an increase in mining workers  (with the continual whacking of gold and silver)

( zerohedge)

 

xii)Rumours of a big shakeup at the White House with Bannon and Priebus on the chopping block

Looks like the elites are winning and they are not going to drain the swamp

( zerohedge)

xiii)Finally, we have Chris Hamilton comment as to who on earth is buying the USA treasuries.  Now we know: it is that suspect “other investor”

( Chris Hamilton/EconimicaBlog)

xiv)The new forecast for first quarter GDP:  only .6% and these bozos want to raise rates?

(courtesy zerohedge)

xv) Neil Gorsuch confirmed

(zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 3,108 CONTRACTS UP to an OI level of 428,175 WITH THE  RISE IN THE PRICE OF GOLD ( $4.90 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 1,958. We had 126 notices served yesterday so we lost another 57 contracts or 5700 oz will not stand for delivery in the active delivery month of April and these were cash settled via the EFP route highlighted by James Turk and myself on April 4/2017.

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 30 contract(s) and thus its OI is 2580 contracts. The next big active month is June and here the OI ROSE by 1977 contracts UP to 308,324.

We had 25 notice(s) filed upon today for 2500 oz

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And now for the wild silver comex results.  Total silver OI FELL BY A TINY 240 contracts FROM 222,102 DOWN TO 221,862 DESPITE YESTERDAY’S 6 CENT GAIN.  THE BANKERS SUPPLIED THE NECESSARY CONTRACTS TO OUR HEDGE FUND LONGS WHO CONTINUE TO PILE INTO SILVER ON THE LONG SIDE. HOWEVER THE BANKERS HAVE BECOME FRIGHTENED WITH RESPECT TO THE HIGH OPEN INTEREST SO THEY DECIDED TO SHORT COVER SOME OF THEIR HUGE SHORTFALL. 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 2,000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.06 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 GAINED  19 contracts. We had 0 notices filed yesterday so we GAINED 19 contracts or an additional 95,000 oz will stand for delivery.

The next active contract month is May and here the open interest SURPRISINGLY LOST ONLY 677 contracts DOWN to 154,285 contracts which is astonishingly high. The non active June contract GAINED 4 contracts to stand at 168. The next big active month will be July and here the OI gained 32 contracts up to 39,420.

FOR COMPARISON SAKE, ON APRIL 5/2016 WE HAD 108,102 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 118 notice(s) filed for 590,000 oz for the APRIL 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 354,517  contracts which is excellent.

Yesterday’s confirmed volume was 170,128 contracts  which is fair.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 7/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 3022.100 oz
SCOTIA
94 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
126 notice(s)
12,600 OZ
No of oz to be served (notices)
1832 contracts
183,200 oz
Total monthly oz gold served (contracts) so far this month
562 notices
56,200 oz
1.7480 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   268,532.8 oz
Today we HAD 1 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 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
i) Out of Scotia: 3022.100 oz
total customer withdrawal:  3022.100  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 25 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 10 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (587) x 100 oz or 58,700 oz, to which we add the difference between the open interest for the front month of APRIL (1958 contracts) minus the number of notices served upon today (25) x 100 oz per contract equals 239,400 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 (587) x 100 oz  or ounces + {(1958)OI for the front month  minus the number of  notices served upon today (25) x 100 oz which equals 239,400 oz standing in this non active delivery month of APRIL  (7.4463 tonnes)
we lost 57 contracts or an additional 5700 oz will not stand and these guys were cash settled via the EFP 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: 7.4463
total for the 16 months;  252.284 tonnes
average 15.767 tonnes per month
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Total dealer inventory 990,497.01 or 30.808 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,013,909.704 or 280.37 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 280.37 tonnes for a  loss of 23  tonnes over that period.  Since August 8/2016 we have lost 74 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 9 MONTHS  74 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
APRIL INITIAL standings
 April 7. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,928,721.785 oz
CNT
BRINKS
SCOTIA
DELAWARE
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 603,104.294 oz
JPMorgan
No of oz served today (contracts)
 118 CONTRACT(S)
(590,000 OZ)
No of oz to be served (notices)
147 contracts
(735,000  oz)
Total monthly oz silver served (contracts) 641 contracts (3,205,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  3,553,726.6 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 4 customer withdrawal(s):
i) Out of Brinks:  603,104.300 oz
ii) Out of CNT  1,230,478.890 oz
iii) Out of Scotia: 90,278.920 oz
iv) Out of Delaware: 4,859.675 oz
TOTAL CUSTOMER WITHDRAWALS: 1,928,721.785 oz
 We had 1 Customer deposits:
i) Into JPMorgan:  603,104.294
***deposits into JPMorgan have now resumed.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
total customer deposits; 603,104.294 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the APRIL. contract month is represented by 118 contract(s) for 590,000 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 641 x 5,000 oz  = 3,205,000 oz to which we add the difference between the open interest for the front month of APRIL (265) and the number of notices served upon today (118) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the APRIL contract month:  641(notices served so far)x 5000 oz  + OI for front month of APRIL.(265 ) -number of notices served upon today (118)x 5000 oz  equals  3,940,000 oz  of silver standing for the APRIL contract month. 
We gained 19 contracts or an additional 95,000 oz will stand for delivery in this non active delivery month of April
 

FOR COMPARISON

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

Volumes: for silver comex
 
Today the estimated volume was 126,689 which is GIGANTIC (633 million oz)
Yesterday’s  confirmed volume was 59,908 contracts  which is EXCELLENT!!.
 
Total dealer silver:  29.181 million (close to record low inventory  
Total number of dealer and customer silver:   188.468 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

At 3:30 pm we receive the COT which gives us position levels of our major players.

Last week, we saw a huge increase in short positions by the criminal commercial bankers

Let us see what today’s report brings us

First the GOLD COT:

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
239,061 83,625 49,043 96,115 267,131 384,219 399,799
Change from Prior Reporting Period
11,222 -6,394 -25,762 -8,645 10,257 -23,185 -21,899
Traders
168 87 78 45 52 246 186
 
Small Speculators  
Long Short Open Interest  
43,589 28,009 427,808  
1,575 289 -21,610  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, April 04, 2017
Our Large Speculators:
those large specs that have been long in gold added a huge 11,222 contracts to their long side.
those large specs that have been short in gold covered a large 6394 contracts.
Our commercials (criminal bankers)
those commercials that have been long in gold covered a huge 8645 contracts from their long side
those commercials that have been short in gold added a large 10,257 contracts.
Our small specs;
those small specs  that have been long in gold added 1575 contracts to their long side
those small specs that have been short in gold added a tiny 289 contracts to their short side.
MANAGED MONEY (HEDGE FUNDS/GOLD)
this is a subset of large/small speculators or hedge funds:
on the long side they increased their position by 933 contracts
on the short side they decreased their position by a tiny 93 contracts.
thus the hedge funds went net long by 1024 contracts.  (nothing exciting here!)
Conclusions:
the large specs go net long by 17614 contracts.
the commercials went net short by 18,902 contracts.
the hedge funds as a subset went net long by only 1024 contracts.
this is very bearish as the commercials have to raid  but the hedge funds are staying out of the game.
And now for silver;
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
126,524 25,142 21,540 47,639 159,985
14,327 3,633 2,694 -488 10,091
Traders
100 44 45 28 37
Small Speculators Open Interest Total
Long Short 219,160 Long Short
23,457 12,493 195,703 206,667
798 913 17,331 16,533 16,418
non reportable positions Positions as of: 149 112
Tuesday, April 04, 2017
Our large speculators:
those large specs that have been long in silver added 14,327 contracts to their long side
those large specs that have been short in silver added 3633 contracts to their short side.
Our commercials:
those commercials that have been long in silver pitched a tiny 428 contracts from their long side
those commercials that have been short in silver added a huge 10,091 contracts to their short side.
Small specs:
those small specs that have been long in silver added a tiny 798 contracts to their long side
those small specs that have been short in silver added 913 contracts to their short side.
MANAGED MONEY (WASHINGTON GENERALS RE TED BUTLER)
(*managed money = hedge funds a subset of large/small speculators)
As I have illustrated to you throughout the week:
those hedge funds that have been on the long side added another monstrous 14,327 contracts to their long side
those hedge funds that have been on the short side increased 2921 contracts to their short side.
Managed money went net long again by 11,904 contracts.
Conclusions:
the large specs went net long by 10,694 contracts
the commercials go net short by 10,579 contracts
yet the hedge funds went net long again by 11,904 contracts. The hedge funds are taking on the crooked banks.  They add hugely on whacking days and back off a bit on up days.  This is going to be quite a battle!
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 8.2 percent to NAV usa funds and Negative 7.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.3%
Percentage of fund in silver:39.6%
cash .+0.1%( April 7/2017) 
 SPROTT FUNDS NAV WILL BE UPDATED LATER TONIGHT
 
2. Sprott silver fund (PSLV): Premium FALLS  to -43%!!!! NAV (April 6/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to – 0.19% to NAV  ( April 6/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -43% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.19%/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 7/a small withdrawal of .28 tonnes from the GLD/Inventory rests at 836.49 tonnes

April 6/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

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

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
April 7 /2017/ Inventory rests tonight at 836.49 tonnes
*IN LAST 126 TRADING DAYS: 111.61 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 69 TRADING DAYS: A NET  15,82 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  41.25 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

April 7./ a withdrawal of 947,000 oz of silver from the SLV/Inventory rests at 328201 million oz.

April 6/a tiny withdrawal of 136,000 oz of silver from the SLV/Inventory rests at 329.148 million oz

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/
April 7.2017: Inventory 328.201  million oz
 end

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

Gold, Silver and Oil Spike After U.S. Bombs Syria

By Mark O’Byrne April 7, 2017

– Gold silver oil spike after U.S. bombs Syria
– Gold and silver spike 1% as oil rises 1.4%
– Gold breaks 200 day moving average, 4th week of gains
– Stocks fall after U.S. strikes in Syria rattle markets
– U.S. missiles hit airbase; Lavrov says no Russian casualties; Russia deploys cruise missile frigate to Syria
– Russia denounces ‘aggression’ & warns of ‘considerable damage’ U.S. ties
– “Aggression against a sovereign state in violation of international law” – Russia
– Iran warns “destructive and dangerous” strike
– China warns against “further deterioration” in Syria
– Trump sending message to China and Russia
– Concerns of wider war see World War III trend on Twitter
– Brexit and French elections sees robust demand for gold and silver bullion

Gold and silver prices spiked sharply higher today, as investors piled into the safe haven asset in the wake of U.S. bombing of Syria.

Gold and silver bullion rose more than 1% and oil prices rose 1.4% after the bombings.

Gold reached a 5-month high as risk aversion returned to markets leading to a sell off in stocks and oil prices rising. Brent crude futures surged more than 2% after the US attack and were last up 1.5% at $55.72 a barrel.

Gold earlier climbed as much as 1.4 percent to its highest since Nov. 10 at $1,269.30. Gold is now trading at levels not seen since the November election of Donald Trump as U.S. president.

Gold is on track for a fourth straight week of gains and this in conjunction with the higher 2016 close and the higher Q1, 2017 close is bullish from a technical and a momentum perspective.

Gold has not managed to close above the 200 day moving average – $1,257/oz – in recent days and a weekly close above that level today will be very bullish for gold. This is especially the case given the very uncertain geo- political backdrop.

The unilateral action by President Trump and the use of cruise missiles against a Syrian air base, has escalated tensions with Syrian allies Russia and Iran.

Russia has denounced the U.S. ‘aggression’ and warned of ‘considerable damage’ to ties with the U.S. The Kremlin warned that “aggression against a sovereign state is in violation of international law.”

China warned against “further deterioration” in Syria and Iran said that the U.S. bombing was “destructive and dangerous.”

Markets were already nervous as Trump met Chinese leader Xi Jinping for talks over flashpoints such as North Korea and the U.S. massive trade deficits with China and massive and continuously increasing national debt.

Other geo-political concerns such as Brexit and the upcoming French elections is leading to ongoing robust demand for gold and silver bullion.

http://www.goldcore.com/us/gold-blog/gold-silver-oil- spike-u-s-bombs-syria/

 

END

Gold trading last evening: gold rises/stocks sink/bond yields sink as the uSA begin its Syrian operation:

(courtesy zerohedge)

 

Gold Spikes To 5 Month Highs; Stocks, Bond Yields Sink As US Begins Syria Operation

While the initial reaction to Rex Tillerson’s statements was relatively understated, the actions of tonight have sparked a much more considerable move in stocks (lower), bonds (lower in yield), and gold (higher)…

Gold spiked to the highest since November 10th – erasing 90 % of the post-Trump election losses…

 

S&P is fading fast…

 

And 10Y Yields crashed through support to the lowest since Nov 17th…

end

 

China;s Shandong Gold Corp. buys 1/2 Barrick’s Veladero mine for 960 million dollars

(courtesy Reuters)

China’s Shandong Gold in $960 million deal for half of Barrick’s Veladero mine

Section:

By Adam Jourdan
Reuters
Thursday, April 6, 2017

China’s Shandong Gold Mining Co. Ltd. will pay $960 million for a 50 percent stake in Barrick Gold Corp.’s Veladero gold mine in Argentina, the Canadian miner said in a press release today.

The deal, which confirms an earlier Reuters report about the talks, will also see the two firms look at jointly developing the nearby undeveloped Pascua-Lama gold and silver project that straddles the border of Argentina and Chile.

Barrick added the two miners would also look at other additional investment opportunities on the El Indio Gold Belt. …

… For the remainder of the report:

http://www.reuters.com/article/us-barrick-gold-mine-shandong-gold-idUSKB…

END

As we reported to you last week, iron ore prices plunge again as China has a massive glut: and they talk about the reflation trade!!

(courtesy zero hedge)

Iron Ore Prices Plunge Into Bear Market Amid Record China Glut

Just a week ago we warned of China’s record glut of Iron Ore (enough to build 13,000 Eiffel Towers), and following warnings from Barclays and RBA of a likely pullback, futures in Dalian sank to lowest since November as steel sags.

Bloomberg reports that iron ore is getting beaten back down in a told-you-so rout after a procession of analysts, Australia’s central bank and miners themselves delivered warnings that gains were unsustainable, with the latest blow landed by the world’s top shipper saying prices are set to revisit the $50s.

Ore with 62 percent content in Qingdao fell 6.8 percent to $75.45 a dry ton, entering a bear market after declining more than 20 percent from a Feb. 21 peak, according to Metal Bulletin Ltd. The price has now erased all of this year’s gains, declining 3.1 percent. Earlier in Asia, futures in Dalian plunged 6.2 percent to the lowest close in five months as steel sank.

 

Iron ore is in retreat after hitting the highest level since 2014 in February amid concern that rising supplies from mines in Brazil, Australia and possibly China will again exceed demand, with warnings from Barclays and BHP Billiton  flagging losses. There’s also concern that additional curbs in China may hurt consumption.

“There’s an expectation that tighter credit conditions in China will lead to some downturn in property construction in the second half,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “At the same time, both seaborne and domestic Chinese iron ore supply looks likely to increase. With Chinese port inventories remaining high, traders are seeing downside risk.”

This is certainly not helping the concept of a global reflation trade as yet again, massive credit-fueled capital mis-allocation simply papers over short-term cracks leaving a bigger more damaging hangover in its wake… unless just a little more credit fueled zombification will help.

Low interest rates will cause free banking to disappear

(Szu Ping Chan/Reuters/GATA)

 

Free banking could disappear if global interest rates stay low, IMF warns

Section:

By Szu Ping Chan
The Telegraph, London
Thursday, April 6, 2017

Households face the end of free banking if the low-growth, low-interest rate environment persists, according to the International Monetary Fund.

The IMF said weak growth combined with ageing populations meant financial institutions around the world would be forced to overhaul their business models to adapt to a new normal.

Demographic change was likely to reduce demand for credit from households and businesses but increase the need for easy-access accounts, payments services and products such as health insurance.

“Consequently, in this scenario, domestic banking in advanced economies may generally evolve toward provision of fee-based and utility services,” the IMF said. …

… For the remainder of the report:

http://www.telegraph.co.uk/business/2017/04/06/free-banking-could-disapp…

 

 

END

Keith Barron is out of find the two lost big deposit areas that were producing gold during the 16th century

(courtesy McLeod/Gold Investing News)

 

Keith Barron of Fruta del Norte fame is back in Ecuador, and this is what he’s up to

Section:

By Charlotte McLeod
Gold Investing News, Vancouver, British Columbia, Canada
Tuesday, April 4, 2017

Exploration geologist Keith Barron is best known for discovering the colossal Fruta del Norte gold deposit in Ecuador, but if his new venture is successful he may soon have another claim to fame.

Barron is now at the helm of Aurania Resources, and it won’t be long before the company begins work at the Lost Cities project, also in Ecuador. His goal is a lofty one: to find Logroño de los Caballeros and Sevilla del Oro, two settlements that produced gold during the 16th century but have since been lost.

While searching for lost gold might sound like something out of a storybook, Barron has made it clear that Lost Cities is a serious project that Aurania will be approaching in a careful and well-considered manner. “We’re an exploration company for minerals,” he told the Investing News Network. “Our main focus is obviously to find mineral deposits.” …

… For the remainder of the report:

http://investingnews.com/daily/resource-investing/precious-metals-invest…

END

A sensational speech given to the Mines and Money Conference, Hong Kong  today.

The theme has been a bee in my bonnet for years:  why invest in gold mining companies if they do not want to defend themselves

a must read..

(courtesy Chris Powell/GATA)

Chris Powell: Why invest in gold miners if they won’t defend themselves?

Section:

Gold Market Manipulation Update

Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.

Mining Investment Asia Conference, Singapore
Thursday, March 30, 2017

Mines and Money Asia Conference, Hong Kong
Friday, April 7, 2017

Since we gathered here a year ago, gold and silver market manipulation has burst into the open and become undeniable. Even some mainstream financial news organizations have had to report it, if begrudgingly and only briefly. But the gold and silver mining industry itself keeps running away from it.

Fortunately, this conference allows it to be discussed anyway.

The biggest development in gold and silver market manipulation in the last year has been Deutsche Bank’s admission that its traders conspired with traders from other big investment banks to suppress gold and silver futures prices. This admission by Deutsche Bank came as part of its response to class-action antitrust lawsuits brought against it and its co-conspirators in U.S. District Court in New York. Deutsche Bank has provided the plaintiffs with transcripts of electronic messages between the traders showing them coordinating their trades to smash gold and silver prices down. The bank has agreed to pay nearly $100 million to the plaintiffs to settle the cases. The bank also has agreed to provide more evidence against the other conspiring banks:

http://www.gata.org/node/16964

But the U.S. Justice Department is seeking to intervene in the case to stop the plaintiffs from gathering more evidence, supposedly so the department can conduct its own investigation, as if the two investigations could not proceed concurrently

:http://www.gata.org/node/17157

This action by the Justice Department is suspicious because for many years the U.S. Commodity Futures Trading Commission announced repeatedly that it had investigated complaints of manipulation of the silver market and had found no actionable evidence, closing its investigation in 2013:

http://www.gata.org/node/13058

So it seems that the U.S. government just wants to stop exposure of gold and silver market rigging, perhaps because the U.S. government itself and other governments have been masterminding it, as GATA has documented extensively over the years at our internet site, GATA.org:

http://www.gata.org/node/14839

Much more evidence of government involvement in gold and silver price suppression has come out during the last year.

According to its own recent reports, the Bank for International Settlements, the central bank of the central banks and their gold broker, re-entered the gold swap business in a big way after having withdrawn from it for a time. Gold swaps allow central banks and their agent investment banks to move gold and gold derivatives around the world so that metal can be applied for price suppression where gold demand most threatens to get out of control. An increase in gold swapping by the BIS indicates greater strain in the gold market and more danger to government currencies from gold’s use as a competitive reserve currency.

http://www.gata.org/node/16704

Another indicator of stress in the gold market in the last year has come from the New York Commodities Exchange, the Comex. For many years the Comex has been almost entirely a “paper” market for gold, with very little real metal actually taken out of it. But in recent months gold offtake on the Comex has exploded:

http://www.gata.org/node/17226

Also in the last year, the Austrian and Netherlands central banks refused requests from gold researcher Koos Jansen, who writes for Bullion Star in Singapore, to disclose lists of the gold bars in their national reserves. Such disclosure might allow researchers like Jansen to ascertain how much of the gold in national reserves has been surreptitiously leased or swapped and put into the market for price suppression.

http://www.gata.org/node/16705

http://www.gata.org/node/16866

But a few weeks ago Mexico’s central bank, under pressure from financial journalist Guillermo Barba and Mexico’s national government auditors, did disclose its gold bar list. The list showed that much of Mexico’s gold reserves is held in an “unallocated” account at the Bank of England. That is, much of Mexico’s gold is leased or swapped out — which is exactly what the Austrian and Netherlands central banks and other central banks don’t want the world to know about their own reserves:

http://www.gata.org/node/17233

The International Monetary Fund has been touting the new “transparency” of its operations, but last September gold researcher Ronan Manly, who also writes for Bullion Star in Singapore, asked to see the records of the IMF’s gold transactions and the agency refused him:

http://www.gata.org/node/16722

The IMF’s hypocrisy about transparency was new but its refusal to disclose its gold transactions was the same old thing. For as GATA long has noted, the secret March 1999 report to the IMF’s board by its research staff, obtained by GATA and published in 2012, confirmed that central banks conceal their gold transactions to facilitate their surreptitious interventions in the gold and currency markets. That is, to conceal their market rigging. The secret March 1999 IMF staff report is posted at GATA’s internet site:

http://www.gata.org/node/12016

Last July a study by Dirk Baur, professor of accounting and finance at the University of Western Australia in Perth, concluded that central banks have been rigging the gold market by lending gold, just as GATA has long maintained:

http://www.gata.org/node/16611

Of course that gold lending is a primary mechanism of price control by central banks was admitted officially by Federal Reserve Chairman Alan Greenspan in his testimony to Congress in July 1998. Greenspan said: “Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over the counter, where central banks stand ready to lease gold in increasing quantities should the price rise.”

That is, Greenspan told Congress not to worry about the gold price because central banks had it under control with surreptitious leasing of their gold reserves.

https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

And in January this year a cable from the U.S. embassy in London to the State Department in Washington was discovered by the TF Metals Report in the secret U.S. government archives obtained by Wikileaks. The cable, sent in December 1974, shows that the U.S. government had just sought and received assurance from London bullion banks that the gold futures market that was about to open in the United States would create so much price volatility that ordinary investors would be scared away from gold. Of course the bullion banks, some of which are formally agents of the U.S. Treasury Department — primary dealers in U.S. government securities — were to become primary traders in that gold futures market and thus themselves primary creators of that frightening volatility:

http://www.gata.org/node/17081

During the last year the Indian government has urged Indians to convert their gold savings into paper financial instruments — to “paperize” their gold — purportedly to make it more useful to the country than mere individual savings. The Indian government’s scheme has failed spectacularly. A few days ago Reuters reported that the government’s program to issue interest-bearing securities in exchange for real metal had drawn out only seven of the estimated 24,000 tonnes of metal under private and temple ownership in India:

http://www.gata.org/node/17245

The Indian people’s attachment to gold as money and wealth seems as firm as their government’s desire to impoverish them by suppressing gold’s price as measured by government currencies. India is a developing country but imagine how wealthy it would be if central banks and governments, including India’s own government, stopped trying to suppress the measure of the money that Indians most want to use.

From the documentation GATA has compiled it is plain that governments and central banks are constantly operating in the gold market surreptitiously to defend their currencies and to control interest rates. This destroys free markets everywhere, since currencies and interest rates are measures of value.

For example, in a presentation to potential new member central banks in 2008, the Bank for International Settlements even advertised that its services include secret interventions in the gold market:

http://www.gata.org/node/11012

Lately central bankers have even been caught on video confirming these surreptitious interventions against gold.

Here is Peter Mooslechner, executive director of Austria’s central bank, inadvertently confessing during an interview with Kitco’s Daniela Cambone at the London Bullion Market Association meeting in Vienna in October 2015:

http://www.gata.org/node/15878

Mooslechner said Asian central banks are “intervening” in the gold market, though of course no such interventions have ever been announced. Unfortunately Cambone did not press Mooslechner about this, and when other journalists contacted the Austrian central bank in the hope of following up with Mooslechner about his comment to Kitco, the bank refused to make him available.

Here is William Dudley, president of the Federal Reserve Bank of New York, taking questions after his presentation at the Virginia Military Institute in March last year. First Dudley is asked by a GATA supporter in the audience, Ware Smith, about the German Bundesbank’s repatriation of gold reserves from the New York Fed’s vault and other central bank vaults. Dudley answers the German repatriation question in detail. Then Dudley is asked by Smith whether the Federal Reserve is involved with gold swaps. Dudley replies that he doesn’t want to talk about “individual customer kind-of transactions” — even though he had just talked at length about the Fed’s “individual customer transactions” with the Bundesbank.

http://www.gata.org/node/16341

But Smith’s second question did not ask Dudley about “individual customer transactions.” Smith asked Dudley only the general question, the question GATA itself put to the Fed in 2009: Is the Fed involved with gold swaps?

A few days after Dudley refused to answer the gold swaps question in Virginia, I e-mailed the question to the publicist for the New York Fed: Is the Fed involved with gold swaps? The New York Fed’s publicist directed me to video of Dudley’s speech in Virginia that was posted on the internet but refused even to acknowledge my question.

GATA has brought all this to the attention of The Wall Street Journal and many other mainstream financial news organizations and has urged them to put the gold swap question and other specific gold questions to the Fed and other central banks. The mainstream news organizations have refused to press these questions. These questions are just too sensitive. Honest answers to them or even publicity about the refusal of the Fed and other central banks to answer the questions would explode their surreptitious market rigging. Indeed, surreptitious market rigging has become the primary purpose of central banking throughout the world.

But thanks to GATA’s freedom-of-information litigation against the Federal Reserve in U.S. District Court for the District of Columbia in 2009, we obtained the answer to the gold swaps question from a member of the Fed’s Board of Governors, Kevin M. Warsh. Handling GATA’s formal request for information on gold swaps, Warsh replied, in writing to GATA’s lawyer, that the Fed possesses and refuses to disclose “information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System.” Gold swap information, Warsh explained, “is not the type of information that is customarily disclosed to the public.”

http://www.gata.org/node/7819

Can anyone wonder why this information is concealed? As the secret IMF staff report of March 1999 says, it is concealed to facilitate secret market interventions by governments and central banks.

Perhaps most remarkably, in January this year a major gold mining company executive acknowledged on video that he believes that governments are rigging the gold market. Here is Canadian billionaire Frank Giustra, a confidant of former President Bill Clinton, being interviewed by money manager Marin Katusa at the Vancouver Resource Investment Conference in January. Katusa asks Giustra why the gold price doesn’t match the political and financial turmoil in the world.

http://www.gata.org/node/17223

The gold price is lower than it should be, Giustra said, because governments have “managed” it. This raises questions that Katusa failed to put to Giustra:

First, if governments are suppressing the gold price, why should anyone invest in gold mining companies?

And second, if governments are suppressing the gold price and you’re an executive of and big investor in gold mining companies, are you going to try to do anything about it, or are you just going to sit there and quietly accept it?

Suppression of the gold price supports government-issued currencies, helps suppress all commodity prices, and thereby destroys markets everywhere and expropriates the developing world. Gold price suppression thereby constitutes the primary mechanism of imperialism — a mechanism more effective than armies, since it is surreptitious and not generally understood.

So I would put two questions to all of you here, since you’re all involved in the commodity business one way or another. Can you at least acknowledge, as Giustra finally has done, that the governments of developed countries are waging war not only against your businesses but also against the developing world? And if you can acknowledge this, will you try to do anything about it?

If you would like to try doing something about it, GATA can make some suggestions and provide more information.

I will be glad to hear from you by e-mail at CPowell@GATA.org.

Thanks for your kind attention.

* * *

END

 

 

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

 
 

1 Chinese yuan vs USA dollar/yuan STRONGER  6.8975(   REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8930/ Shanghai bourse UP 5.61 POINTS OR 0.17%   / HANG SANG DOWN 6.42 POINTS OR .03%

2. Nikkei closed UP 67.57 POINTS OR 0.36%   /USA: YEN FALLS TO 110.68

3. Europe stocks opened MOSTLY IN THE RED HEADING: TO THE DOWNSIDE      ( /USA dollar index RISES TO  100,82/Euro DOWN to 1.0628

3b Japan 10 year bond yield: FALLS TO   +.061%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.68/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  52.22 and Brent: 55.19

3f Gold UP/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 FALLS TO  +.244%/Italian 10 yr bond yield DOWN  to 2.236%    

3j Greek 10 year bond yield FALLS to  : 7.01%   

3k Gold at $1263.25/silver $18.34 (8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 58/100 in  roubles/dollar) 56.89-

3m oil into the 52 dollar handle for WTI and 55 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.68 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  1.0060 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0693 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 (TODAY)

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.244%

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 2.325% early this morning. Thirty year rate  at 2.972% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

US Futures Rebound Sharply, Erase All Syrian Airstrike Losses

 

After initially tumbling in the aftermath of the U.S. missile attack on Syria which jolted financial markets, boosting haven assets and temporarily shifting investor focus from today’s jobs data , S&P futures have managed to recoup all losses (the Nikkei closed up 0.4% after sliding earlier in the session), with Europe also just fractionally lower and climbing fast.

A U.S. defense official told Reuters the missile strike was a “one-off”, helping to calm market nerves. “The U.S. missile strike on a Syrian air base overnight caused a knee-jerk shift into safe havens, although the impact was moderate as it is being interpreted as a one-off proportionate response,” said Ian Williams, a strategist at Peel Hunt in London.

Gold, crude and government bonds were among the biggest winners following the first military strike undertaken by Trump’s administration, as some traders sought safety and others judged increasing tension in the Middle East would spur crude. Russia’s ruble dropped the most in almost a month and its bonds fell as optimism over a detente with the U.S. evaporated. The lira and stocks retreated in Turkey, which shares a border with Syria.

The U.S. dollar recouped all of its losses against a basket of major currencies and was last trading little changed. S&P 500 futures were down 0.1%. European stocks fell 0.3% weighed down by weakness in mining stocks as investors locked in some profits following the sector’s stellar run this year.

While volatility also spiked across global stock markets in the wake of the attacks, the initial impact began to fade for some assets as investors resume digesting a week of developments, from a meeting between Trump and President Xi of China, to Fed signals it may reduce its balance sheet this year and the ECB underscoring its dovishness as Bloomberg notes. Attention now turns to payroll data, after a strong private reading and weak automaker sales gave conflicting signals on the U.S. economy.

As of 6:40am ET, S&P 500 futures slipped less than 0.1% percent, while the Stoxx Europe 600 Index dropped 0.3 percent. Volatility measures from Hong Kong to Europe increased. Asian stocks shook off declines to follow Japanese equities higher, with yen rallying along with Treasuries after Syria strikes. Gilt futures gained after soft U.K. manufacturing data, some buying from domestic accounts being seen, with Russia’s ruble falling most among major global currencies and the nation’s borrowing costs surging as U.S. airstrikes dash hopes for an improvement in ties under Donald Trump.

Spot gold was up a percent while high-rated euro zone government bonds edged lower. The yield on Germany’s 10-year government bonds fell to a one-month low. Overnight, U.S. Treasury yields dropped to their lowest level in over four months at 2.29 percent

“Safe-haven flows are always affected by political events, and when it affects countries where the U.S. and Russia are interested, then investors become even more nervous because of relations (between those two),” said DZ Bank strategist Daniel Lenz.

While it will be of secondary importance today, overnight China reported that its FX reserves rose fractionally for a second consecutive month.

Looking at the day ahead, non-farm payrolls may rise by 180k, according to economists (a full preview can be found here) slightly less than the six-month and 12-month averages. Fed’s Dudley speaks on financial regulation.  Elsewhere, euro zone finance ministers are due to meet with a discussion on Greece’s progress in implementing reforms needed to unlock aid part of the agenda.

Bulletin Headline Summary from RanSquawk

  • US launched cruise missiles against targets in Syria, with about 60 tomahawk missiles fired towards a military airfield in near Homs
  • European equities followed the soft lead from Asia, with all sectors trading in the red with the exception of energy names
  • Looking ahead, highlights include US and Canadian Jobs reports, Fed’s Dudley, ECB’s Coeure and Constancio

Market Wrap

  • S&P 500 futures down less than 0.1% to 2,351.25
  • STOXX Europe 600 down 0.3% to 379.17
  • MXAP up 0.3% to 146.61
  • MXAPJ down 0.1% to 479.55
  • Nikkei up 0.4% to 18,664.63
  • Topix up 0.7% to 1,489.77
  • Hang Seng Index down 0.03% to 24,267.30
  • Shanghai Composite up 0.2% to 3,286.62
  • Sensex down 0.2% to 29,867.43
  • Australia S&P/ASX 200 up 0.1% to 5,862.47
  • Kospi down 0.05% to 2,151.73
  • German 10Y yield fell 1.6 bps to 0.247%
  • Euro down 0.06% to 1.0638 per US$
  • Italian 10Y yield unchanged at 1.975%
  • Spanish 10Y yield fell 1.9 bps to 1.613%
  • Brent Futures up 1.4% to $55.67/bbl
  • Gold spot up 1% to $1,264.36
  • U.S. Dollar Index up 0.1% to 100.76

Top Overnight News

  • U.S. Strikes Syria After Gas Attack, Raising Stakes With Russia
  • Putin Calls U.S. Syria Strike Aggression, Stops Air Cooperation
  • Trump Hails ‘Friendship’ With China’s Xi Before Syria Attack
  • Carney Urges Banks to Prepare for All Potential Brexit Outcomes
  • U.K. Manufacturing, Construction Point to Loss of Momentum
  • Medtronic Says Heart Pump Prelim. Results Met Primary End Point
  • Medtronic Says Recall of Adjustable Valves, Shunts Began Feb. 22
  • Hologic Gets $721.1m Defense Logistics Agency Radiology Contract
  • GM China March Sales Volume Rise at Fastest Pace Since August
  • Alphabet Moves Two Top Google Fiber Executives Off Project
  • Arconic Reports Sale of Fusina, Italy Rolling Mill
  • TD Ameritrade Investors Sue Board Over Scottrade Acquisition

Asia markets shrugged off the early gains from the gains on Wall St. as sentiment in the region soured after the US conducted strikes in Syria. This saw ASX 200 (+0.1%) and Nikkei 225 (+0.4%) trimmed opening gains, although the latter staged a recovery with outperformance in Toshiba shares on reports Hon Hai is to submit a near JPY 3tln bid for the Co.’s chip unit. Hang Seng (-0.1%) and Shanghai Comp. (+0.2%) were mixed despite the PBoC continuing to hold off on open market operations which resulted to a weekly net drain of CNY 100bIn. 10yr JGBs and T-notes were underpinned by safe-haven demand resulting from the Syria strike, which saw the US 10yr yield drop to a 4-month low and under 2.3%. PBoC refrained from conducting open market operations for a weekly net drain of CNY 100bIn vs. Prey. net drain of CNY 290bn.

Top Asian News

  • China’s FX Reserves Pick Up for Second Month on Weakening Dollar
  • Philippines to Follow Indonesia With Tax Amnesty to Spur Revenue
  • Abe Adviser Calls for Push Back If U.S. Attacks Yen Policy: Rtrs
  • Dymon Said to Wind Down Aventia Hedge Fund in Restructuring Move
  • India Rising as Steelmakers to Beat Japan in Global Rankings
  • China Says Syria Issue Should Be Solved Via Political Means

European equities followed the soft lead from Asia, with all sectors trading in the red with the exception of energy names. Syria has dictated play here in a similar fashion to other asset classes amid light equity specific news, and with participants now awaiting the US jobs data or any comments from president Trump this afternoon on any future action in Syria, as well as continued attention on the progress of his talks with China President Xi. The miss of Exp. in UK data was relatively shrugged off by Gilts, which continued to trade in line with the rest of European paper. Bunds opened higher as European participants reacted to the aforementioned overnight developments, however the German benchmark has spent much of the session paring its opening gains, albeit remaining modestly higher by mid morning. Periphery yields continued to trade in a tight range, with participants keeping an eye on any Greece related developments from the Eurogroup meeting, although with volatility more likely to hold off until this afternoon’s NFP report from the US.

Top Asian News

  • Merkel, Hollande Say Assad Alone Bears Responsibility for Strike
  • Greece Bailout Deal Said to Be a Step Closer as Ministers Meet
  • German Industrial Output Unexpectedly Rose in February
  • Another Euro Peg Feels the Heat as Fixed Currency Regimes Fall
  • Linde’s Reitzle Avoids Trading Probe Amid Praxair Deal
  • Santander Proposes Dividend Hike as Botin Sees Brighter Future
  • EU Jobs Carve Up Starts Again With Dijsselbloem Under Threat
  • U.K. House-Price Growth Slows to Weakest in Almost Four Years
  • Diamond Miner Ends Large Gem Drought With 114-Carat Find
  • Kloeckner Pentaplast Said to Buy Linpac to Bolster Food Packaging

In currencies, the ruble dropped 0.9 percent as of 11:16 a.m. in London. The currency has been trading near the highest since July 2015. President Vladimir Putin believes the U.S. airstrikes caused “considerable damage” to relations with Russia, a Kremlin spokesman said. The Bloomberg Dollar Spot Index was little changed. The yen rose 0.2 percent, paring gains of as much as 0.6 percent. The euro slipped 0.1 percent, the British pound dropped 0.4 percent, and the Turkish lira pared losses to trade 0.5 percent lower. Focus today has fallen on the overnight airstrikes by the US on Syria, with safe havens the notable benefactors. The likes of JPY and CHF have both been the notable movers in FX markets in a flight to safety. Elsewhere in FX, the only notable data of the morning has come in the form of the UK industrial and manufacturing production, with the downbeat reading weighing on GBP as GBP/USD slipped back below 1.2450.

In commodities, West Texas Intermediate crude climbed 1.4 percent to $52.41, the highest in a month. Oil is up 3.6 percent for the week. Gold jumped 1.1 percent to $1,264.92, the highest since November, following two days of declines. As well as the safe haven currencies, the strikes in Syria also saw upside in gold, with the yellow metal reaching 5 month highs amid concerns of further aggression in the future. The strikes in Syria also pushed the energy complex higher, with WTI futures trading around USD 52.50/bbl amid concerns that global tensions could cause obstacles in the supply chain.

Looking at the day ahead, in the US the aforementioned March employment report will be the main point of focus while wholesale inventories and consumer credit data are the other releases due in the US. Away from the data the Fed’s Dudley is due to give a talk on the state of financial regulation in the US. Away from that BoE Carney speaks this morning at 10am BST while the Euro area finance ministers meeting also kicks off in Malta today. Clearly any headlines which emerge from Trump’s meeting with Xi Jingping are also worth watching.

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 180,000, prior 235,000
    • Unemployment Rate, est. 4.7%, prior 4.7%
    • Average Hourly Earnings MoM, est. 0.2%, prior 0.2%; Average Hourly Earnings YoY, est. 2.7%, prior 2.8%
    • Average Weekly Hours All Employees, est. 34.4, prior 34.4
    • Labor Force Participation Rate, prior 63.0%
    • Underemployment Rate, prior 9.2%
  • Wholesale Trade Sales MoM, prior -0.1%; Wholesale Inventories MoM, est. 0.4%, prior 0.4%
  • Consumer Credit, est. $15.0b, prior $8.79b

DB’s Jim Reid concludes the overnight wrap

We’re straight to breaking news this morning where overnight, President Trump has taken the first military action of his young Presidency, launching a cruise missile attack at Syria following the gas attack within the country earlier this week. The headlines emerged at about 2.15am BST and reports suggest that 59 missiles were fired, targeting an air base, with President Trump confirming the order a short time ago. Trump released a statement saying that it is in “the vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons. There can be no  dispute that Syria used banned chemical weapons and violated its obligations under the chemical weapons conventions”. According to Bloomberg the White House was said to have notified Russian forces in Syria prior to the attack. The attack also comes after US secretary of state Rex Tillerson warned last night that a “serious response” was needed and that “steps are underway” for the removal of Syria’s Assad regime. Since the attack we’ve seen House Speaker Ryan and Senator McCain both come out with messages of support.

Markets initially reversed early gains and moved into risk-off mode after the strikes but we are seeing a recovery as we go to print. At the time of writing, the Nikkei is back to +0.52% having been up as much as +1.00% initially then down as much as -0.44% following the news. The Shanghai Comp (+0.25%) is now at its highs after initially fluctuating between gains and losses while the Kospi is back to -0.07% after being down as much as -0.47%. The Hang Seng (-0.56%) has also partially recovered earlier heavier losses. The rebound is partly being helped by a further rally for Oil (WTI +1.62% to $52.23/bbl) following the news of the attack. Gold (+0.87%), the Yen (+0.20%) and 10y Treasuries (-3.0bps to 2.310%) are firmer but have also pared some initial stronger gains.

Needless to say it’ll be important to see how Europe opens on the back of the overnight news. In addition to digesting these developments, today is payrolls Friday in the US. As we said earlier in the week, it does seem the emphasis for the timing and pace of global hikes has shifted away from employment to inflation in recent months so it’s perhaps not as much of a focal point as some recent prints but the 263k on ADP on Wednesday creates some intrigue. The market is at 180k and DB at 150k with our economists below market on the basis of weather effects as a result of the Winter Storm Stella. As always keep an eye on the other components of the report including the unemployment rate (consensus for no change at 4.7%), average hourly earnings (+0.2% mom expected) and average weekly hours (expected to hold steady at 34.4hrs).

Moving on I’ve had a few emails saying that the story I told about my school partnership with golfer Paul Casey in yesterday’s EMR was one I’d told before so apologies for that. I’m either running out of anecdotes, losing my memory or spending too much time watching ‘In The Night Garden’. Or all three. Talking of repetition, yesterday I published a Credit Bites on a similar theme to that I’ve published on a couple of times already this year. Recycling anecdotes and research at the moment. The piece was called “Euro Credit – more expensive than it looks” and highlights that although EU IG spreads to Bunds  have been broadly flat since mid-August, Euro Stoxx 50 and peripheral equities are up around 15% and 20% respectively over the same period. US IG credit is also around 25bps tighter since mid August. So it looks as if there’s some catch up potential. However the reality is that the benchmark (bunds) has been the star performer in the DM government bond world over this period.

Against a ‘weighted’ government benchmark that we created that matches the geographical split of the corporate index, current spreads are actually fairly close to their post crisis tights and with it close to the tightest they’ve been in a decade. The point we’ve been trying to get across over the last few months is that although the technicals for credit are strong with CSPP, we think the technicals for Bunds are even stronger. See the note at around 1.15pm BST yesterday or ask Sukanto.Chanda@db.com for a copy.

It’s likely that the other focus for markets today will be the headlines that emerge from the meeting between President Trump and China President Xi Jingping. So far we haven’t heard much aside from some reports in the press suggesting that Xi will offer Trump a number of sweeteners including further opening of Chinese markets to US companies. Unsurprisingly the Syria news has taken over as the main story for now and it may make for interesting discussions on North Korea given Trump’s actions overnight and his comments last weekend about taking action on North Korea unilaterally if he had to. Separate to this but staying with politics, Supreme Court nominee Neil Gorsuch is expected to be confirmed by the Senate today after majority leader Mitch McConnell scrapped the requirement for nominees to receive 60 votes in the 100 seat Senate in what is called rather extremely the “nuclear option”. Instead a simple majority is all that is required now.

Over in markets, geopolitical concerns and the prospect of a payrolls Friday looming helped to keep markets mostly in check yesterday. Both the S&P 500 (+0.19%) and Stoxx 600 (+0.18%) finished with similar modest gains helped by a bit of a boost from the energy sector after WTI Oil (+1.08%) headed back up towards $52/bbl again (above it this morning as we mentioned earlier). Credit indices were also marginally tighter although sovereign bond markets were incredibly muted. 10y Treasuries finished the day a small 0.5bps higher in yield at 2.342% while 10y Bunds were a similar amount higher at 0.259%.

Moving on. While markets weren’t particularly exciting yesterday there was plenty of focus on the ECB with the release of the March minutes and also comments from Draghi and his colleagues at the ‘ECB and its watchers’ conference. In terms of the minutes, the text revealed that “looking ahead, it was recalled that, if the euro area economy were to recover further and as inflation proceeded further on its path towards the Governing Council’s inflation aim in a sustained manner, a discussion on policy normalisation would become warranted in the future”. This passage was probably the most significant insofar as it suggested that a likely change to language is coming from the Bank. ECB President Draghi emphasised however that the ECB is still in a steady as we go mode for now after saying that “I do not see cause to deviate from the indications we have been consistently providing in the introductory statement to our press conferences” and that “we have not yet seen sufficient evidence to materially alter our assessment of the inflation outlook which remains conditional on a very substantial degree of monetary accommodation”. Meanwhile ECB Chief Economist Peter Praet said that “forward guidance implies a sequencing between the interest rate policy and the quantitative policy that can most efficiently internalize and exploit the intimate complementarities between these two key components of our current stance”.

For completeness, yesterday’s data did little to move the dial. In the US initial jobless claims fell to 234k last week which lowered the four-week average to 250k. In Europe the only notable data came from  Germany where factory orders printed at +3.4% mom in February following a sharp decline in January.

Looking at the day ahead, this morning in Europe the main focus will likely be on the February industrial production reports which are due to come from Germany, France and the UK. We are also due to get February trade data from those countries as well as house prices data in the UK. Over in the US the aforementioned March employment report will be the main point of focus while wholesale inventories and consumer credit data are the other releases due in the US. Away from the data the Fed’s Dudley is due to give a talk on the state of financial regulation in the US this evening at 5.15pm BST. Away from that BoE Carney speaks this morning at 10am BST while the Euro area finance ministers meeting also kicks off in Malta today. Clearly any headlines which emerge from Trump’s meeting with Xi Jingping are also worth watching.

3. ASIAN AFFAIRS

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 5.61 POINTS OR 0.17%/ /Hang Sang CLOSED DOWN 6.42 POINTS OR .03%  . The Nikkei closed UP 67.57 OR 0.36% /Australia’s all ordinaires  CLOSED UP 0.09%/Chinese yuan (ONSHORE) closed UP at 6.8975/Oil UP to 52.22 dollars per barrel for WTI and 55.19 for Brent. Stocks in Europe MOSTLY IN THE RED   ..Offshore yuan trades  6.8930 yuan to the dollar vs 6.8976 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN STRONGER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE  STRONGER DOLLAR.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

Italy

Italy’s Target 2 deficit rises again to 420 billion euros from 386 billion euros. This is the amount of debt that Italy will owe surplus countries namely Germany and Holland

(courtesy zerohedge)

Italy’s Target2 Deficit Hits Fresh All Time High, Above 25% Of Italian GDP

This morning, the Bank of Italy reported that Italy’s Target 2 deficit rose to new highs in March at €420bn, from €386bn in February. As a way of comparison, during the peak of the EU Sovereign crisis in 2012 crisis, Italy’s liabilities stood at Eur 290bn.

As Francesco Filia of Fasanara Capital notes, while we are told that record T2 balances are pure accounting values and should be viewed as a benign by-product of the decentralized implementation of the asset purchase program (APP) rather than renewed capital flight, and while Draghi refers to them as a form of solidarity within the European system, in a letter to Italian EU politicians Draghi also maintained that such debts should be settled in full should Italy decide to leave the euro. So, the number matters and represents a liability.

Target II liabilities are now above 25% of GDP In Italy (from 22% in January), and above 30% of GDP in Spain. 

Similarly to what happened in 2012, it is imaginable for Germany to soon start to feel uncomfortable with such levels of exposure and demand more vocally a reversal of the trend. At the time, it sufficed for Draghi to cheap talk about the ‘irreversibility’ of the EUR for the trend to reverse. In contrast, this time around, the ECB is tapering, on the presumption of economic growth to take firm hold, and on evidence of inflation having resurfaced. Tapering can be seen as a way to reverse those Target II flows, or at least prevent them from rising further. Incidentally, tapering is today also needed to prevent too heavy a tax on German savers / electorate, as they are hit hard by negative real rates, now that inflation spiked up for the first time in a while: with inflation at 1.9% and short term rates at almost -1%, real rates are negative by 2% to 3%, and the German electorate is paying for the EMU party more than ever before.

It should also be said that Target II deficit should be seen as one of the components of country risk, not the only one or the most relevant one. Take the case of Italy, for example, where the Target 2 euro system exposure at €420bn is to be added to BTP owned by foreigners (approx. €710bn at the end of 2016), funding (non-financial deposits and interbank funding) for Italian banks (in excess of €350BN), financing to Italian companies made by foreigners (€700bn+). On the side of public debt alone, Italy spends 5% of GDP in interest payments alone.

This is the background against which tapering enters the stage, and rates rise.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia Warship is teaming towards the USA Destroyers off the Syrian Coast

A great reason for gold to be hammered by 10 dollars at 1 pm

(courtesy zero hedge)

Russian Warship Steaming Toward U.S Destroyers Off Syria Coast

Early this morning we reported that as part of its response to the Syrian attack, in addition to suspending communication with U.S. forces designed to stop planes colliding over Syria, the Russian frigate Admiral Grigorovich would be deployed to the Tartus naval base in Syria. The Russian Black Sea Fleet’s frigate The Admiral Grigorovich, currently on a routine voyage, would enter the Mediterranean later on Friday, a military-diplomatic source in Moscow told TASS, adding that the ship would make a stop at the logistics base in Syria’s port of Tartus.

Russia wasted no time, and as FN reports, moments ago, the Russian frigate, Admiral Grigorovich RFS-494, crossed through the Bosphorus Strait “a few hours ago” from the Black Sea, according to a U.S. defense official.

BREAKING:Russia Admiral Grigorovich-class frigate armed w/ cruise missiles about to enter the Mediterranean heading to naval base in Tartus

The Russian warship is now in the eastern Mediterranean steaming in the direction of the U.S. warships. The Admiral Grigorovich is armed with advanced Kalibr cruise missiles.

According to the official version, the frigate was bound for the Syrian port of Tartus on a routine voyage, the Russian news agency TASS reported Friday, citing a military-diplomatic source.

“The Russian ship armed with cruise missiles Kalibr will visit the logistics base in Tartus, Syria,” the source said, according to TASS. The ship was currently near the Black Sea straits, Tass reported.  The ship left on a voyage after stopping at Novorossiisk for supplies and taking part in a joint exercise with Turkish ships in the Black Sea.

Meanwhile, Fox News adds that one of the American destroyers that launched the missiles into Syria started heading to an undisclosed location to rearm

end

 

ISRAEL/SYRIA/USA

William Enghdahl is one smart cookie.  Here is outlines what he believes is going with the Israeli occupation of the Golan Heights, the Syrians, the uSA, and Hezballoh

and the answer is oil has been found in the Golan by an Israel company. Now the fun begins

special thanks to Robert H for sending this to us

(courtesy William Engdahl, writing for New Eastern Outlook)

 

Golan Heights, Israel, Oil and Trump

139Events are moving rapidly to a possible new war involving Israel, the United States, Syria and Russia. Were it to take place, I honestly hope not, it would be yet another stupid war over oil. Only this oil war somehow feels far more dangerous than the US war against Iraq or Libya or previous oil wars. It’s about the part of Syria named the Golan Heights.

Israeli Prime Minister Benjamin Netanyahu was one of the first heads of government to go to the United States to meet Donald Trump on February 16, in Trump’s new role as President. After the event major media focused on the themes of Israeli settlements in the West Bank, the Iran nuclear deal or a Palestine two-state solution.

Virtually no mention was made by CNN or other US mainstream media of the most strategic point the two discussed. Netanyahu asked the US President to recognize the Israeli illegal occupation of Syria’s Golan Heights, something no US President has done since Israel openly declared it theirs in 1981.

What has unfolded in the region since Netanyahu’s February 16 Trump talks gives reason to believe the US and Netanyahu’s Israel covertly agreed to a strategy to allow Trump to recognize Israel as the de facto occupier of Golan Heights amid what they will call the growing chaos of the Syrian “civil war.”

Two weeks following Netanyahu’s Washington talks the Jerusalem Post wrote about the real issue discussed between the two leaders: “The biggest news to come out of Prime Minister Benjamin Netanyahu’s visit to Washington is not what’s grabbing most headlines. Rather, it’s his decision to ask the US to recognize Israel’s sovereignty over the Golan Heights.”

The Israeli paper went on to argue, “the risk of returning the Golan Heights should be measured against the fact that Iran is actively setting up another forward command along Israel’s border with Syria…Capitalizing on Netanyahu’s idea will help the US limit Russia’s reemergence as a Middle East power broker after a 40-year absence.”

Israel, in violation of the UN Charter, illegally occupied the Golan Heights after the Israeli army took it in the 1967 Six Days War. When Israel declared applicability of Israeli law in the territory and began Israeli settlements in a de facto act of annexation of Golan Heights in 1981, the UN Security Council passed UN Resolution §497, which declared that, “the Israeli decision to impose its laws, jurisdiction and administration in the occupied Syrian Golan Heights is null and void and without international legal effect.”

Until now the official US Government position has been that the Israeli occupation of the Golan Heights is a violation of the Fourth Geneva Convention’s prohibition on the acquisition of territory by force, and in contravention of the United Nations Security Council Resolution §242 passed in November, 1967 which mandates, “Withdrawal of Israeli armed forces from territories occupied in the recent (1967-w.e.) conflict.”

Location of the Syria Golan Heights annexed by Israel in 1981 in violation of UN Resolution 242

Some days after Netanyahu left Washington, in an OpEd in the Rupert Murdoch Wall Street Journal, Mark Dubowitz, Executive Director of the Washington pro-Israel think-tank, Foundation for the Defense of Democracies, argued that American recognition of Israel’s control of the Golan “would provide the Israeli government with a diplomatic win while helping the Trump administration signal to Russia and Iran that the US is charting a new course in Syria.” Dubowitz is an adviser to the Trump Administration on Iran and the Middle East. Other neo-conservative editorials echoed the theme. There is big change brewing in Washington and it looks ugly in terms of a possible US-backed war with Israel against Russia ally, Syria, over the Golan Heights. That immediately poses the question what Russia would do if it materializes.

Tillerson’s Strange ‘Global Coalition’

Against the backdrop of the Netanyahu talks on US recognition of Israel’s annexation of the Golan Heights, the ensuing events begin to make strategic sense, mad though they may be.

On March 22 in Washington US Secretary of State Rex Tillerson convened a US Ministerial conference of something the Trump Administration calls the Global Coalition Working to Defeat ISIS. The State Department said that a combined 68 nations and organizations were present. Washington explicitly stated that the three most important states with deep interest in defeating ISIS in Syria and the three parties essential to any serious move to dislodge ISIS in Syria– Russia, Iran and Syria–were not welcome. When asked, Secretary of State Tillerson quipped, “they’re not part of the global coalition.” Curious indeed.

In his remarks Tillerson declared that US policy of the Trump Administration will be to “the regional elimination of ISIS through military force. The military power of the coalition will remain where this fraudulent caliphate has existed in order to set the conditions for a full recovery from the tyranny of ISIS.” In other words, a US-led permanent occupation of the ISIS-controlled areas of Syria. That echoes a recent Pentagon RAND report calling for the permanent partition of Syria by Turkey, Syrian “opposition” and US.

Israeli intelligence, in a recent annual evaluation, concluded that Hezbollah was not interested in sparking a war in 2017, but it warned of the danger of a “dynamic of escalation” leading to conflict. The Times of Israel also reports that the Netanyahu government has drawn up something codenamed Operation Safe Distance in which “up to 250,000 civilians cleared out of border communities if they come under major attack by…Hezbollah.” That “dynamic of escalation” appears to be precisely what Netanyahu’s IDF is engaged in in the Golan Heights.

The next act in the clearly staged Netanyahu Golan Heights drama aimed at isolating Russia as defender of the Assad Syrian regime, was the illegal air strike by Israeli air force F-16 jets against a major site outside Damascus, Syria. Israel claimed the site was a Hezbollah weapons depot. Some hours alter on March 19 an Israeli drone hit a vehicle in the Golan Heights carrying Yasser al-Sayed who was killed on the spot. Sayed was reportedly a commander of a pro-regime militia and was close to Syrian President Bashar al-Assad. Bashar al-Assad responded to the Israeli strikes inside Syria by firing S-200 missiles at the Israeli air force planes.

When an Israeli Arrow air defense missile intercepted the Syrian SA-5 missile fired against the invading Israeli Air Force jets as they left Syria, Israel’s Defense Minister Avigdor Liberman declared to the press, Israel “will not hesitate” to destroy Syria’s air defense systems if that country ever again targets IAF jet fighters. That of course would bring Russia, provider of the Syrian air defense systems, into the developing fray.

DebkaFile.org, openly close to the Israeli military and Israeli intelligence, is claiming that Yasser al-Sayed was “on his way to join the Hezbollah forces” grouping at the Lebanon-Syria Golan Heights, under Iranian direction, preparing for a full war on Israel. DebkaFile writes, “Israel can be expected to intervene again to put a stop to this dangerous Russian-Iranian-Hezbollah ploy to exploit the turbulence in Syria for allowing Israel’s enemies to grab forward assault positions in Syria.”

A Revealing Moshe Dayan admission

Israel is carefully setting the propaganda stage that will now let it claim that a coalition of Russia, Iran, Syria and Hezbollah are preparing to forcefully retake the Syrian Golan Heights from the illegal Israeli occupiers. It’s a tried and tested Israeli IDF method of provoking an opponent, here Syria, then using the opponent’s predictable reaction to provocation as pretext for military strikes that escalate a confrontation they, the IDF, initiated in the first place.

In an off-record discussion with an Israeli journalist in 1976 before his death, Israeli General Moshe Dayan, who gave the order in the 1967 War to take the Golan Heights, admitted that it was deliberate Israeli provocations into Syrian Golan lands that gave Israel the manufactured pretext to invade and occupy.

Dayan told that to journalist Rami Tal, who kept his notes secret for 21 years until persuaded after Dayan’s death by Dayan’s daughter and others that it was important to publish the Dayan admission. The Israeli journalist wrote that when Tal claimed to Dayan that the Golan Heights were vital for Israeli security, Dayan interrupted him: “Never mind that. After all, I know how at least 80 percent of the clashes there started…It went this way: We would send a tractor to plow some area where it wasn’t possible to do anything, in the demilitarized area, and knew in advance that the Syrians would start to shoot. If they didn’t shoot, we would tell the tractor to advance farther, until in the end the Syrians would get annoyed and shoot. And then we would use artillery and later the air force also, and that’s how it was.”

Today a similar provocation game is clearly in motion with provocative illegal Israeli jet strikes near Damascus and drone attacks in Golan Heights. The new element this time is the decided more Israel-friendly stance of the Trump Administration compared to that of Obama.

But there is another element Dayan was not aware of in the Syrian Golan Heights. What no one is openly discussing is the treasure that Israel’s Netanyahu is lusting after in the Golan Heights–Oil, huge, recently-discovered reserves of black gold in the Golan Heights.

Genie Energy and Golan Oil

The Israeli subsidiary of a Newark, New Jersey oil company, Genie Energy, has been given permission to drill for oil on the Golan Heights.

As I noted in a piece published on NEO in 2015, Genie Energy is no “penny stock” run-of-the-mill oil company. Its board of Advisors includes Dick Cheney. It includes former CIA head and chairman of the above-mentioned Foundation for Defense of Democracies, James Woolsey. It includes Jacob Lord Rothschild of the London banking dynasty and a former business partner of convicted Russian oil oligarch, Mikhail Khodorkovsky. Before his arrest Khodorkovsky secretly transferred his shares in Yukos Oil to Rothschild.

Further this little-known Newark, New Jersey oil company board includes former US Energy Secretary Bill Richardson, pro-Israel media mogul and owner of Trump’s favorite Fox News TV, Rupert Murdoch. Also on the board are former Treasury Secretary Larry Summers and hedge fund billionaire Michael Steinhardt. Steinhardt, a philanthropic friend of Israel and of Marc Rich, is also a board member of Woolsey’s neo-con Foundation for the Defense of Democracies, which advises Trump among other things that it would be good for Washington to recognize Israel as legitimate owner of the Golan Heights lands taken by Dayan in the 1967 War.

The plot thickens indeed.

Genie Energy, tied to Netanyahu, to Trump, to a reportedly huge oil find in the illegally-occupied Syrian Golan Heights. Something very ugly is being brewed between Washington and Tel Aviv and Newark, New Jersey.

Genie Energy in 2013 was granted exclusive oil and gas exploration rights to a 153-square mile radius in the southern part of the Golan Heights by the Netanyahu government.

On October 8, 2015 only days after the surprise Russian announcement it had accepted the request of the elected Bashar al-Assad government to militarily intervene against ISIS, Al Qaeda and other terrorists in Syria, Genie Energy made a major announcement. Yuval Bartov, chief geologist from Genie Energy’s Israeli subsidiary, Afek Oil & Gas, told Israel’s Channel 2 TV that his company had found a major oil reservoir on the Golan Heights: “We’ve found an oil stratum 350 meters thick in the southern Golan Heights. On average worldwide, strata are 20 to 30 meters thick, and this is 10 times as large as that, so we are talking about significant quantities.”

On January 10, 2017, Genie Energy Ltd. announced it was creating a new company, Atid Drilling Ltd., an on-shore drilling services venture based in Israel to drill for oil in the Golan Heights among other places. They will expand the drilling by Genie Energy’s subsidiary Afek Oil & Gas which since the October, 2015 announcement has completed five exploratory wells in Golan Heights.

The creation of Atid Drilling by Genie confirms they are convinced based on the preliminary drilling results that there is something “big” in Golan. A month later, in mid-February soon after Trump is sworn in as President, Netanyahu flies to Washington to discuss US recognition of Israel’s annexation of Golan Heights.

A few weeks later, Israel violates the Syrian airspace in an act of war, escalating tensions over the Golan Heights. Then on March 22, in an appearance before the US Senate Defense Appropriations Committee, Defense Secretary James Mattis called for Congress to formally authorize use of US military force against ISIS/DAESH in Syria.

It is becoming increasingly clear than unless there is some very careful rethinking on the part of Washington and of Israel, we might find ourselves in another war for oil in of all places the Golan Heights, this one a war involving Syria, Russia, Iran, Lebanon’s Hezbollah on one side and Israel and Rex Tillerson’s 68 nation “anti-ISIS coalition” on the other side, another senseless war over control of oil.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”
http://journal-neo.org/2017/03/30/golan-heights-israel-oil-and-trump/

6 .GLOBAL ISSUES

Downtown Stockman

Another terror attack:  Many dead and at least two suspects still on the loose

(courtesy zerohedge)

“There Are Dead People In The Street” – Truck Hits Crowd In Stockholm – Live Feed

Running Summary:

  • Five are dead and dozens more hurt after a masked man hijacked a beer truck and ploughed into crowds outside Stockholm’s largest shopping centre
  • Three men were seen leaping from the lorry and opening fire on officers and pedestrians at around 3pm
  • Two terror suspects have reportedly been arrested after shootout – although moments ago in a press conferecne the police denied any detentions – while a third gunman may be hiding in city’s Central Station
  • Prime Minister Stefan Lofven says the truck crash ‘is an act of terror’ and asks people to stay off the streets
  • Authorities have released the following photo of a “person of interest” in today’s terrorist attack.

* * *

Update 12:01 pm: In a press briefing, the Swedish police says that there have been no arrests made after the truck incident in Stockholm.   It said it can’t confirm number of casualties or injured after the attack; refers to hospitals, and added that it is not “not in contact” with truck driver, or drivers.

Other details per Bloomberg:

  • The police also showed the below image of a person of interest, tied to the place of the truck crash around time of incident.
  • The Swedish Security Service has activated the international network.
  • Police has strengthened presence throughout country
  • No incidents after truck attack
  • Sweden had no indicitions that attack would come, Military not called in
  • Police comments in media briefing on the Stockholm attack

* * *

Update 11:25 am: While reports that a suspect has been arrested have been denied so far by the police, moments ago a clip was released which allegedly shows the moment a terror suspect is wrestled to floor by Swedish police after attack. An arrest has yet to be confirmed, as SVT state television reports that the truck driving suspect is still at large.

video: moment terror suspect is wrestled to floor by police after attack.

* * *

Update 11:25 am: While reports that a suspect has been arrested have been denied so far by the police, moments ago a clip was released which allegedly shows the moment a terror suspect is wrestled to floor by Swedish police after attack. An arrest has yet to be confirmed, as SVT state television reports that the truck driving suspect is still at large.

video: moment terror suspect is wrestled to floor by police after attack.

Update 11:02 am: Another statement from the Swedish police, which said it currently cannot rule out that attack in Stockholm is an act of terror, given recent events in the rest of Europe.  The police refutes a previous report, and say that no one has yet been arrested. They also note that there are reports of gun shots from different parts of Stockholm, although police can’t currently confirm those.

They add that many people are injured, and there are also deaths and that as reported earlier, Stockholm’s central station has been evacuated

* * *

Update 9:58 am: per the latest reports, up to 5 people have been killed with one of the suspects reportedly in custody, while Prime Minister Lofven says that the incident is a “terror attack.” As of this moment, all subway traffic in Stockholm has been shutdown.

* * *

Update 9:52am: according to Expressen,  three armed men jumped out of the truck that hit people at the department store. Additionally, Swedish police is urging people to stay away from Stockholm City.

* * *

In what appears to be the latest vehicle-based terrorist attack, a truck has rammed people on a street in central Stockholm, according to witnesses cited by Aftonbladet newspaper. The incident took place when a truck is said to have plowed into a department store, causing multiple casualties.

A worker at Ahlens department store said the truck drove into the store’s perfume department. He said an alarm went off inside the store and everyone was asked to leave the building, SVT reported.

A photo posted online shows the truck after it crashed into Åhlens department store, with the caption stating that the vehicle came from a direction in which trucks are not allowed.

Helicopters are circling above the area, a witness told SVT. Footage posted on Twitter shows panicked pedestrians fleeing the scene.

NBC Eyewitness Maria Nathalie was in the department store at the time of the incident. “People started running down the stairs when the fire alarm started,” she told NBC News. “And when we came down to the bottom of the building all we could see was a lot of smoke and there was someone who helped us get out on the other side of the building.

There is an unknown number of injured people in the incident, media reported citing Towe Hägg at Stockholm police. Swedish police have said that the Truck incident may be terror related.

A vehicle has run into (and killed) a number of people at Drottninggatan in central Stockholm, according to Aftonbladet.

There are dead people on the street, said a witness told Expressen.

Just nu: En lastbil ska ha kört in i en folkmassa på Drottninggatan i centrala Stockholm. Fordonet ska ha kört in i varuhuset Åhléns.

More details to follow…

end

 

7. OIL ISSUES

Oil Rigs Rise For 12 Straight Weeks; Threaten Oil Price Recovery

For the 12th week in a row, the number of US oil rigs rose (up another 10 to 672 – the highest since September 2015). US Crude production continues to track the lagged rig count, pouring more cold water on OPEC’s production cut party.

The rig count grows, tracking the lagged oil price in a self-defeating cycle.

And crude production appears to have plenty more room to run.

end

8. EMERGING MARKETS

end

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

Euro/USA   1.0628 DOWN .0016/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 MOSTLY IN THE RED EXCEPT LONDON

USA/JAPAN YEN 110.68 DOWN 0.201(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 1.2419 DOWN .0049 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3406 DOWN .0013 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS FRIDAY morning in Europe, the Euro FELL by 16 basis points, trading now BELOW the important 1.08 level  FALLING to 1.0628; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 5.61 POINTS OR 0.17%    / Hang Sang  CLOSED DOWN 6.42 POINTS OR 03%/AUSTRALIA  CLOSED UP 0.09%  / EUROPEAN BOURSES : MOSTLY RED EXCEPT LONDON 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED UP 67.57 POINTS OR 0.36%

Trading from Europe and Asia:
1. Europe stocks  IN THE RED BUT POINTING BADLY SOUTH!

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 6.42 POINTS OR .03% / SHANGHAI CLOSED UP 5.61 POINTS OR 0.17%/Australia BOURSE CLOSED UP 0.09%/Nikkei (Japan)CLOSED UP 67.57 OR 0.36%  / INDIA’S SENSEX IN THE  RED

Gold very early morning trading: $1263.00

silver:$18.38

Early FRIDAY morning USA 10 year bond yield: 2.325% !!! DOWN 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.972, DOWN 1  IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 100.82 UP 15  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.865%  DOWN 4  in basis point yield from THURSDAY 

JAPANESE BOND YIELD: +.061%  UP 1/10  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.6140%  DOWN 2 IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.222 DOWN 5 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 61 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.228% DOWN 4 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.0610 DOWN .0033 (Euro DOWN 33 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.75 DOWN: 0.136(Yen UP 14 basis points/ 

Great Britain/USA 1.2396 DOWN 0.0071( POUND DOWN 71 basis points)

USA/Canada 1.3385 DOWN 0.0034(Canadian dollar UP 34 basis points AS OIL ROSE TO $52.28

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This afternoon, the Euro was DOWN by 33 basis points to trade at 1.0610

The Yen ROSE to 110.10 for a LOSS of 14 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 71  basis points, trading at 1.2396/

The Canadian dollar ROSE by 34 basis points to 1.3385,  WITH WTI OIL RISING TO :  $52.24

The USA/Yuan closed at 6.8977/
the 10 yr Japanese bond yield closed at +.061% UP 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 3  IN basis points from THURSDAY at 2.336% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.975  DOWN 4  in basis points on the day /

Your closing USA dollar index, 100.91 UP 24  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 46.17 OR 0.63% 
German Dax :CLOSED DOWN 5.83  POINTS OR 0.05%
Paris Cac  CLOSED UP 13.84 OR 0.27%
Spain IBEX CLOSED UP 10.10 POINTS OR 0.10%
Italian MIB: CLOSED UP  3.09 POINTS OR 0.02%

The Dow closed DOWN 6.85 OR 0.03%

NASDAQ WAS closed DOWN 1.14 POINTS OR 0.03%  4.00 PM EST
WTI Oil price;  52.24 at 1:00 pm; 

Brent Oil: 55.28  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.03  DOWN 77/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS TO +0.228%  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:$52.31

BRENT: $55.23

USA 10 YR BOND YIELD: 2.384%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.01%

EURO/USA DOLLAR CROSS:  1.0591 DOWN .0052

USA/JAPANESE YEN:111.08   UP .193

USA DOLLAR INDEX: 101.10  up 44  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2368 : DOWN .0099  OR 99 BASIS POINTS.

Canadian dollar: 1.3403  DOWN .0037 (CAN DOLLAR UP 37 BASIS PTS)

German 10 yr bond yield at 5 pm: +.228%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Boring Equity Action Masks “Devastating Eurodollar Unwinds” After Dudley Speech

On the surface, and in equities, it was a painfully boring day.

Stocks tumbled overnight after yesterday’s Syrian airstrikes, then as it emerged that the conflict will likely be contained, futures ground higher and not even the worst jobs report in nearly a year managed to put a damper on today’s rebound, as the narrative shifted to the drop in the unemployment rate, which dropped to 4.5% on the back of a 400K+ increase in employment according to the BLS’ Household Survey.

A sharp bounce in the dollar/USDJPY/treasury yield complex during Bill Dudley’s speech around noon tried – and failed – to inspire a levitation in the S&P …

… which ended up closing the day small in the red, despite so much earlier drama.

And yet, while on the surface things appeared calm, below the surface, and especially in the Eurodollar complex there was a surge in activity, courtesy of the abovementioned Bill Dudley remarks.

What happened?

Recall the previously discussed Eurodollar 2018 (EDZ7/EDZ8) spread, which as we showed yesterday, had finally broken below a key support level…

 

… and was threatening to pull the technical support for the 10Y.

In fact, with the 10Y dropping as low as 2.28% in early trading during the overnight, risk-aversion phase, the reflation trade appeared all but dead.

That’s when Bill Dudley took the podium. This is what he said:

“Some people misconstrued what I said last week. I said a little pause. A pause is pretty short already, and I think a little pause is even shorter than that.  Presumably at the time that you make the decision on the balance sheet you might want to forgo the decision on short-term rates just to make sure that the balance-sheet decision doesn’t turn out to be a bigger decision than you thought you were making.  So, I would emphasize the words ’little pause.’

While those words were largely ignored by equity traders, momo chasers and various algos, they meant all the difference to Eurodollar traders, and anyone who had assumed that following Bill Dudley’s comments last week, that the Fed would “pause” its rate hikes during the balance sheet runoff phase.

We’ll start with the result, and show just how big the move in the EDZ7/EDZ8 trade was: what the chart below shows is that as a result of Dudley’s hawkish comments, the Eurodollar spread spiked to the highest level since the FOMC Minutes, where as a reminder the Fed’s balance sheet unwind was a primary topic.

So what happened? As RBC’s Charlie McElligott expains, Dudley delivered the “clarification heard ‘round the (global macro trading) world,” as Dudley, in a mid-Friday afternoon interview, sought to alter the market’s initial interpretation of his massively impactful comments made last week, in turn disrupting thematic trades across the macro landscape.

Those comments about the likelihood of a “little pause” in the Fed’s hiking trajectory as-and-when the FOMC begins the process of balance-sheet normalization sent shockwaves through the front-end of the US rates complex, forcing devastating stop-outs / unwinds in MEGA popular macro “reflation” trades like Eurodollar redpack shorts / EDZ7EDZ8 steepeners and the EDZ7-8-9 butterfly and a LOT pain at various and unconstrained funds over the course of the past week.

As McElligott adds, the pain seemingly-culminated in this morning’s Syria strike / NFP headline clunker / Stockholm terror attack trifecta, which sent markets into their initial ‘risk off’ spiral, driving a major UST bid.  Even as stocks recovered over the course of the morning (as per my note this morning), rates remained pinning near the high-profile psychological 2.30 level nearly all day.  Seemingly, the mix of new longs (after the momentum in the ‘short rates’ trade reversed 3 weeks ago) and capitulation from legacy shorts was behind the strength.  And then, Dudley “dropped the bomb” in his above-quoted “clarification.”

Essentially, Dudley said that the Fed will NOT be substituting B/S policy tweaks for Fed hikes, which as noted had quickly become the new market narrative in short-order.  He was clearly taken aback by the market reaction to his comments and viewing them as a statement on the Fed looking to reduce the scale of the overall 2018 hiking landscape.  In turn, the price-action via the stop-outs and unwinds in the front-end trades over the past week were violently reversed this afternoon.

Indeed, as the chart below shows, the vollume in the Eurodollar spread was the highest since election night!

Some other aftereffects: nominal yields turned sharply higher.  Breakevens turned off their worst levels too.  UST curves flattened.  The US Dollar screamed higher against everything from G10 to EM (everybody’s recent ‘fave’ high-yielding longs as it seemed the Dollar was ‘stuck’). 

In equities, the higher rates dynamic reinvigorate “cyclicals” and “value” factor, while “defensives” / “low volatility” / “anti-beta” factor market-neutral rolled over.  And as I’ve been pointing-out, “growth” logically settled-back too, as it had become a hyper-crowded “hiding-place” over the course of the year as investors sought stocks which could perform without fiscal policy and interest rate exposure.  Thus, FAANG and PANE (FB, AAPL, AMZN, NFLX, GOOGL and PCLN, AMZN, NFLX, EXPE story stocks in tech / consumer discretionary) lagged broad index on the day.  Thus ‘momentum’ market-neutral reversing lower on the day too.

McElligott’s conclusion:

As such, I’m getting sudden jolts of confidence from the last of the ‘reflation hold-out’ clients, now feeling really emboldened.  And for the folks who didn’t cover their rates shorts or unwind their ED$ curve trades, there are now STATUES being built for Dudley in various fund offices around midtown.

 

The one RISK that I see right now for ‘risk’ is this: that we are seeing the largest move TIGHTER in ‘real rates’ since the day post-March Fed hike.  This idea of “tightening faster than we are growing” / “inflating faster than we’re growing” continues to be a concern to monitor.

Bloomberg opined also, noting that Dudley comments benefited a fresh wave of hawkish Eurodollar Bets. Re-established downside options positioning across eurodollars unexpectedly benefited from Dudley comments Friday as focus shifts to clarity from Yellen on Monday.  Signs are emerging that traders are looking to re-establish eurodollar put positions across 2018 maturities, potentially a sign that the rally in reds — triggered by Dudley’s comments a week ago — may have been overdone. Friday’s CME open interest changes rose in June 2018 eurodollar puts by 106k contracts; largest gains across 9762 (+25k), 9800 (+30k) and 9812 (+48k) strikes consistent with downside trades initiated Thursday.

While open interest is starting to build again across June-18 eurodollar puts, there has been a sharp drop in Jun-17 open interest, reflecting position liquidation. Latest CFTC positioning data, covering week ending April 4, shows speculators adding $1.8M/DV01, to record eurodollar shorts. Earlier this week, a purge of eurodollar positions saw heavy losses, one of which included a trade liquidated Wednesday for a $15m hit, across Jun/Sept./Dec mid-curve eurodollar spreads from March 1. The purge came as a result of a collapse in eurodollar spreads, along with the Fed probability term structure which inverted as the rate-hike probability edged higher for June 2017 but then fell further out after Dudley’s comments last week.

If all of this sounds overly technical for regular equity traders, don’t worry it is, however the implications for the yield curve, and thus the reflation trade, or what’s left of it, are substantial.

It also means that as we pointed out yesterday, suddenly focus has intensified on Janet Yellen, who’s scheduled to speak at 4pm Monday at University of Michigan, taking questions from the audience and Twitter. What she says may roil if not the equity market, then certainly lead to a new set of big headaches for eurodollar traders.

end

USA launches an airstrike on Syrian airbase. They deploy 60 tomahawk missiles

(courtesy zerohedge)

US Launches Air Strike On Syria: 60 Tomahawk Missiles Hit Syria: LIve Feed

 

As previewed earlier tonight, the United States fired a barrage of cruise missiles into Syria on Friday morning in retaliation for this week’s alleged chemical weapons attack against civilians by the Assad regime, U.S. officials said. It was the first direct American assault on the Syrian government and Donald Trump’s most dramatic military order since becoming president. According to NBC, only tomahawks missiles fired, no fixed wing aircraft involved, for now.

As AP notes, the surprise strike marked a striking reversal for Trump, who warned as a candidate against the U.S. getting pulled into the Syrian civil war, now in its seventh year. But the president appeared moved by the photos of children killed in the chemical attack, calling it a “disgrace to humanity” that crossed “a lot of lines.”

The president did not announce the attacks in advance, though he and other national security officials ratcheted up their warnings to the Syrian government throughout the day Thursday.

The strike early Friday morning in Syria targeted hangars, planes and fuel tanks at one Syrian military airfield, according to a U.S. official. The U.S. attacked with about 60 Raytheon Co. Tomahawk cruise missiles fired from two Navy destroyers.

About 60 U.S. Tomahawk missiles, fired from warships in the Mediterranean Sea, targeted an air base in retaliation for a chemical weapons attack that American officials believe Syrian government aircraft launched with a nerve agent; hangars, planes and fuel tanks were targeted, a U.S. official sais. Two Navy destroyers launched Raytheon missiles against Syria two days after Bashar al-Assad’s regime used poison gas to kill scores of civilians

MORE: Nearly 60 cruise missiles launched from ships in eastern Mediterranean aimed at locations around Syrian airfield, @CBSDavidMartin says

NBC adds that a high ranking administration official says foreign countries from Arab states to Canada supported tonight’s strikes vs. Syria.

The decision to strike in Syria marks a stark reversal for President Trump, who during his presidential campaign faulted past U.S. leaders for getting embroiled in conflicts in the Middle East

MORE: U.S launches cruise missiles from ships in Mediterranean, targeting single airfield in Syria, @CBSDavidMartin reports.

The attack occurred while Trump was at his Florida estate after a dinner with Chinese President Xi Jinping, where they were to discuss what to do about North Korea’s nuclear program and U.S.-China trade disagreements. Traveling to Mar-a-Lago from Washington on Thursday, Trump spoke to reporters aboard Air Force One about Assad, saying “what happened in Syria is a disgrace to humanity. And he’s there, and I guess he’s running things. So something should happen.”

It was not immediately clear if Trump’s action had been precleared with Putin in advance.

Meanwhile, the market’s reaction was immediate:

  • S&P 500 FUTURES ERASE GAINS AFTER U.S. LAUNCHES SYRIA STRIKE
  • TREASURY 10-YR YIELD FALLS 4BPS TO 2.31% ON US STRIKES IN SYRIA

Developing.

end

NY trading early this morning;  stocks and the dollar falter after a disappointing jobs report.  The 10 yr bond yield 2.26%

Gold rises to 1268.00 per oz

(courtesy zero hedge)

Bonds & Bullion Bid, Stocks & Dollar Skid After Disappointing Jobs Data

10Y Treasury yields fell to a 2.26% handle – the lowest since Nov 18th and breaking the reflation-trade support – after a 4 sigma miss in payrolls this morning. Gold jerked higher once again – almost erasing the entire post-election loss, stocks and the dollar are under pressure.

 

 

The dollar was hit hard…

And 10Y yields broke reflation trade support…

 

And the EDZ7/EDZ8 spread signals more bond bear pain ahead…

Trump Statement On Syria Air Strikes

Shortly after he concluded his dinner with Xi Jinping at Mar-A-Lago, Trump authorized the airstrike against Syria in which at least 60 cruise missiles were launched, and delivered the following brief statement:

My fellow Americans, on Tuesday Syrian dictator Bashar al Assad launched a horrible chemical weapons attack on innocent civilians. using a deadly nerve agent, Assad choked out the lives of helpless men, women and children.

 

It was a slow and brutal death for so many, even beautiful babies were cruelly murdered in this very barbaric attack. No child of God should ever suffer such horror.

 

Tonight I ordered a targeted military strike on the airfield in Syria from where the chemical attack was launched. It is in this vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons.

 

There can be no dispute that Syria used banned chemical weapons violated its obligations under the chemical weapons convention and ignored the urging of the UN Security Council.

 

Years of previous attempts at changing Assad’s behavior have all failed and failed very dramatically. As a result the refugee crisis continues to deepen and the region continues to destabilize threatening the United States and its allies.

 

Tonight I call on all civilized nations to join us in seeking to end the slaughter and bloodshed in Syria. And also to end terrorism of all kinds and all types.

 

We ask for God’s wisdom as we face the challenge of our very troubled world. We pray for the lives of the wounded and for the souls of those who have passed and we hope that as long as american stands for justice then peace and harmony will in the end prevail. Goodnight and God bless America and the entire world. Thank you.

end

 

Russia was notified in advance of the USA strike on Syria:

(courtesy zero hedge)

“Russian Forces Were Notified In Advance”: Pentagon Statement On Air Strikes In Syria

Pentagon Spokesman Capt. Jeff Davis has issued the following statement on the U.S. strike in Syria in which US ships launched 59 Tomahawk cruide missiles at Syria.

Statement from Pentagon Spokesman Capt. Jeff Davis on U.S. strike in Syria

 

At the direction of the president, U.S. forces conducted a cruise missile strike against a Syrian Air Force airfield today at about 8:40 p.m. EDT (4:40 a.m., April 7, in Syria). The strike targeted Shayrat Airfield in Homs governorate, and were in response to the Syrian government’s chemical weapons attack April 4 in Khan Sheikhoun, which killed and injured hundreds of innocent Syrian people, including women and children.

 

The strike was conducted using Tomahawk Land Attack Missiles (TLAMs) launched from the destroyers USS Porter and USS Ross in the Eastern Mediterranean Sea. A total of 59 TLAMs targeted aircraft, hardened aircraft shelters, petroleum and logistical storage, ammunition supply bunkers, air defense systems, and radars. As always, the U.S. took extraordinary measures to avoid civilian casualties and to comply with the Law of Armed Conflict. Every precaution was taken to execute this strike with minimal risk to personnel at the airfield.

 

The strike was a proportional response to Assad’s heinous act. Shayrat Airfield was used to store chemical weapons and Syrian air forces. The U.S. intelligence community assesses that aircraft from Shayrat conducted the chemical weapons attack on April 4. The strike was intended to deter the regime from using chemical weapons again.

 

Russian forces were notified in advance of the strike using the established deconfliction line. U.S. military planners took precautions to minimize risk to Russian or Syrian personnel located at the airfield.

 

We are assessing the results of the strike. Initial indications are that this strike has severely damaged or destroyed Syrian aircraft and support infrastructure and equipment at Shayrat Airfield, reducing the Syrian Government’s ability to deliver chemical weapons. The use of chemical weapons against innocent people will not be tolerated.

And moments after the Pentagon statement, House speaker Paul Ryan said that the US action was “appropriate and just.”

NEW: “This action was appropriate and just,” @SpeakerRyan says of U.S. military strike against Assad regime in Syria http://cbsn.ws/2oP6FPn 

 

end

 

Watch the expression on the face of  this CNN anchor as a Congression questions what really happened with that Syrian chemical attack

(courtesy AntiMediaOrg)

 

CNN Anchor Speechless After Congressman Questions Syria Chemical Attack Narrative

Via TheAntiMedia.org,

A CNN anchor was left speechless Wednesday during a televised interview when a congressman questioned the mainstream narrative that Bashar al-Assad attacked his own people with chemical weapons this week.

“It’s hard to know exactly what’s happening in Syria right now. I’d like to know specifically how that release of chemical gas, if it did occur — and it looks like it did — how that occurred,” Representative Thomas Massie toldCNN’s Kate Bolduan.

Continuing, the Kentucky congressman asked the question so many who doubt the established line have asked in the past: Why?

Because frankly, I don’t think Assad would have done that. It does not serve his interests. It would tend to draw us into that civil war even further.”

Note that the corporate anchor’s expression snaps to attention the instant she realizes Massie is doubting the narrative.

Bolduan, visibly taken aback by what the man is saying — as though it were inconceivable a U.S. lawmaker might have an original opinion on matters — fumbled for words a few moments before managing a simple: “Who do you think is behind it?”

Massie began to answer, but Bolduan cut him off. Unsurprisingly, she asked him directly if he was saying he believes what the Russians are saying — that Assad had nothing to do with the attack that killed dozens in Syria on Tuesday. Reutersreported Wednesday that the attack has sparked renewed calls to oust the country’s president.

The Kentucky congressman stuck to his guns, however, reiterating his earlier position:

“I don’t think it would’ve served Assad’s purposes to do a chemical attack on his people…It’s hard for me to understand why he would do that — if he did.”

The CNN anchor, clearly at a loss for words, thanked Massie for his time.

end

 

Congress generally happy with the USA strike on Syria

(courtesy zerohedge)

Trump Unites Congress: US Lawmakers Largely Support Syria Air Strikes

Eleven weeks into his administration, Trump’s Syrian airstrikes appear to have achieve what until last night appeared impossible: unite much of Congress in support of a Trump decision.

As Bloomberg report, U.S. lawmakers mostly expressed support for Trump’s strike against a Syrian airfield in response to an alleged chemical weapons attack, though some cautioned that Congress needs to be consulted on a comprehensive strategy if the strike is a harbinger of things to come.

It’s a contrast from 2013, when President Obama sought authorization for force against Syria but was met with widespread opposition. That effort was later abandoned for lack of support. Defense hawks and those who’ve warned against foreign military entanglements responded as expected. However, the bulk of lawmakers sought more details, with several seeking a new authorization of force specific to Syria.

Below is a full breakdown of the Congressional response so far, courtesy of Bloomberg

SUPPORTIVE, SEEKING STRATEGY DETAILS

  • House Speaker Paul Ryan says U.S. response to Syria’s “barbaric chemical weapons attack” is “appropriate and just”: “I look forward to the administration further engaging Congress in this effort”
  • Republican Sens. John McCain, Lindsey Graham: “Building on tonight’s credible first step, we must finally learn the lessons of history and ensure that tactical success leads to strategic progress. That means following through with a new, comprehensive strategy in coordination with our allies and partners to end the conflict in Syria”
  • Senate Democratic Leader Chuck Schumer says “making sure Assad knows that when he commits such despicable atrocities he will pay a price is the right thing to do” “It is incumbent on the Trump administration to come up with a strategy and consult with Congress before implementing it”
  • Republican Sen. Marco Rubio: “What must follow is a real and comprehensive strategy to ensure that Assad is no longer a threat to his people and to U.S. security, and that Russia no longer has free reign to support his regime”

NEW AUTHORIZATION NEEDED

  • House Democratic Leader Nancy Pelosi: “If the president intends to escalate the U.S. military’s involvement in Syria, he must to come to Congress for an Authorization for Use of Military Force which is tailored to meet the threat and prevent another open-ended war in the Middle East”
  • Democratic Sen. Elizabeth Warren says “use of chemical weapons ‎against innocent Syrian men, women, and children is a clear violation of international law”; Says expanded military intervention would require congressional approval and “if President Trump expects such an authorization, he owes the American people an explanation of his strategy to bring an end to the violence in Syria”; “We should not escalate this conflict without clear goals and a plan to achieve them,” Warren says in statement
  • Oregon Democratic Sen. Jeff Merkley says it’s “essential” that “before the U.S. undertakes any ongoing military campaign in Syria, the president consult with Congress and seek congressional authorization, in accordance with Article I of the Constitution and the War Powers Resolution”
  • “Many Americans are deeply wary of being drawn into another war in the Middle East. We owe the nation full consideration of the complete range of options, including pursuit of an international agreement to end the war and end Assad’s reign of terror,” Merkley says in statement

SEEKING A COMPREHENSIVE TRUMP PLAN:

  • Democratic Rep. Seth Moulton and Republican Rep. Steve Russell, leaders of the Warrior Caucus, say can’t stand by in silence as dictators murder with chemical weapons, though “military action without clear goals and objectives gets us nowhere”
  • Republican Sen. Ben Sasse: “The president should propose to Congress a comprehensive strategy to protect American interests from a humanitarian crisis that threatens to destabilize our regional allies and create vacuums for jihadi sanctuaries”
  • Rep. Adam Schiff, ranking member of House Intelligence Committee, says actions “will not displace Assad, but may deter” use of chemical weapons in statement on Twitter: “Need a vote”: Schiff
  • Rep. Eliot Engel, top Democrat on House Foreign Affairs Cmte:‘‘It’s incumbent on the administration to work toward a long-term strategy that will stop the wholesale slaughter of the Syrian people and hold accountable those who have committed war crimes. Tomahawk strikes are not a long-term strategy”; Urges support for his bill, H.R. 1677, which seeks sanctions on entities supporting Bashar Al-Assad’s Syria govt

SUPPORT FOR SHOW OF STRENGTH:

  • Rep. Kay Granger, chairwoman of the House Appropriations Defense subcmte: “I cannot more strongly applaud President Trump’s decisive actions against the Government of Syria”
  • Republican Rep. Martha McSally praised the “measured, yet decisive” response, adding the attack showed the critical need for Raytheon’s Tomahawk production in Tucson, within her Ariz. district
  • Republican Sen. Johnny Isakson: “I support the president’s swift and decisive action to punish this dictatorship for the atrocities committed”
  • GOP Reps. Adam Kinzinger, Luke Messer and Lynn Jenkins were among those with similar statements calling the strike strong or decisive, and adding it shows the U.S. won’t sit on sidelines after atrocities

AGAINST THE STRIKE:

  • Sen. Rand Paul, R-Ky.: “While we all condemn the atrocities in Syria, the United States was not attacked”
  • Republican Rep. Justin Amash: “Airstrikes are an act of war,” he says on Twitter; “Atrocities in Syria cannot justify departure from Constitution, which vests in Congress power to commence war”
  • Democratic Sen. Tim Kaine, who was Hillary Clinton’s running mate in the 2016 presidential election: “President waging military action against Syria without a vote of Congress? Unconstitutional,” he says in Twitter post “Assad is a brutal dictator who must be held account for atrocities. But the president’s failure to seek congressional approval is unlawful”
  • Rep. Barbara Lee, D-Calif., who was lone vote against the 2001 AUMF: “Syria strikes are far beyond the scope of this war authorization,” she says in Twitter post, adding that Speaker Ryan “needs to bring a vote”
  • Democratic Rep. Jim McGovern: “Every president must obtain congressional authorization to launch military strikes”; Trump’s “attack on Syria is no exception”; “We all agree Assad attacks on people of Syria must stop, but it doesn’t justify a rush to military action without consulting Congress,” McGovern says on Twitter
  • Hawaii Sen. Brian Schatz, a Democrat, says Assad’s chemical weapons usage “abhorrent, but a military response is not the answer”

Source: BBG

END

 

And now the Russian Response: Russia suspends airspace pact with the USA

(courtesy zerohedge/two stories)

Russia To Upgrade Syria Air Defenses, Suspends Airspace Pact With U.S.

If Trump wanted to provoke the Kremlin – an odd decision considering all the daily “press coverage” that the Kremlin controlled the president – he has achieved just that: Russia said it will reinforce Syria’s air defences and, as reported previously, is sending a missile carrying warship to the eastern Mediterranean in response to a US cruise missile strikes on a Syrian government airbase.

The Russian ministry of defence said in a statement that “to protect key Syrian infrastructure a range of measures will be taken reinforce and improve the effectiveness of the Syrian armed forces air defence.” The announcement came as the Admiral Grigorevich, a cruise missile carrying frigate, passed through the Bosporus en-route to Russia’s Syrian navy base at Tartus.

Also on Friday Russia announced it had halted its air safety agreement with the US, meant to avoid “air incidents” with the US over Syria, saying US air strikes had caused “considerable” damage to Moscow-Washington relations. The memorandum, signed in October 2015, was designed to avoid clashes in the crowded airspace over Syria, with each side giving the other warning over planned strikes.

The defense ministry also said that six MiG-23 fighter jets were destroyed in the US missile strike on a Syrian airfield in Homs province, but the runway remained intact.  The strike on the Shayrat airfield in Syria’s Homs Province destroyed a material storage depot, a training facility, a canteen, six MiG-23 aircraft in repair hangars and a radar station.

Two Syrian servicemen are missing as a result of the US attack on an airfield in the country, while four were killed and six were injured extinguishing the flames, Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said Friday. “According to the information of the leadership of the Syrian airbase, two Syrian servicemen went missing, four were killed and six received burn injuries during the firefighting,” he said.

The runway, taxiways and the Syrian aircraft on the parking apron remained undamaged, Russia’s Defense Ministry spokesman said in a statement. The ministry described the combat efficiency of the strike as “quite poor.”

“On April 7, 2017, between 3:42am and 3:56am Moscow time, two US Navy destroyers (USS Porter and USS Ross) fired 59 Tomahawk cruise missiles at Shayrat airfield in Homs Province, Syria, from an area near the Island of Crete in the Mediterranean Sea.

“According to our sources, only 23 of them reached the Syrian airbase,” Russian Defense Ministry spokesman Major-General Igor Konashenkov said, adding that the points of impact of the other 36 cruise missiles remain unknown.

The ministry also slammed the US actions as “a gross violation” of the memorandum of understanding signed by Moscow in Washington back in 2015 to prevent flight incidents in Syrian airspace.

All justifications for the strike are “groundless claims,” the ministry continued.

“The administrations of the United States are changing, but the methods of unleashing wars have remained the same since Yugoslavia, Iraq and Libya. And again, the pretext of aggression is not an objective investigation, but allegations, fact manipulation, showing photos and pseudo-vials at international organizations,” Konashenkov said.

“Russia made an earlier statement that the Syrian forces did not use chemical weapons. We are waiting for clarification from the US on undisputed – as they claim – evidence that it was the Syrian Army that deployed chemical weapons in the town of Khan Sheikhoun.”

The ministry also pointed to the events that followed the strikes, a large-scale offensive against the Syrian Army carried out by Islamic State and Al-Nusra Front terrorists. “We hope that this offensive was in no way coordinated with the US,” the ministry said.

“A number of measures aimed at strengthening and improving the effectiveness of the Syrian air defense system will be implemented in the near future in order to protect the vital parts of the Syrian infrastructure,” Konashenkov said.

 

end

Putin responds. He is not a happy camper as he states that the strike will cripple USA Russia relations.  He deploys a cruise missile frigate to Syria:

 

(courtesy zero hedge)

Putin Responds: Syria Strikes “Cripple US-Russia Relations”; Deploys Cruise Missile Frigate To Syria

Responding to Trump’s unexpected military attack on Syria in which 59 cruise missiles were launched (of which only 23 allegedly hit their target), Russian President Vladimir Putin “regards the strikes as aggression against a sovereign nation,” his spokesman Dmitry Peskov said, noting that the president believes the strikes were carried out “in violation of international law, and also under an invented pretext.”

The Kremlin spokesman insisted that “the Syrian army doesn’t have chemical weapons,” saying this had been “observed and confirmed by the Organization for the Prohibition of Chemical Weapons, a special UN unit.”

The Russian president said he sees the US missile strikes as an attempt to distract attention from civilian casualties in Iraq, Peskov added.

“This step deals significant damage to US-Russian ties, which are already in a deplorable state,” Peskov said and added that the US has been ignoring the use of chemical weapons by terrorists and this is dramatically aggravating the situation, in Putin’s opinion.

“The main thing, Putin believes, is that this move [by the U.S.] doesn’t draw us nearer to the end goal in the fight with international terrorism and on the contrary, deals a serious setback to the creation of an international coalition in the fight with it,” Peskov said.

* * *

Other Russians took the opportunity to opine as well, led by Russian foreign minister Sergey Lavrov who said the US missile attack on a Syrian airbase is an act of aggression under a far-fetched pretext and is reminiscent of the 2003 invasion of Iraq.

Quoted by Tass, the top Russian diplomat said “It is an act of aggression under a completely far-fetched pretext. This is reminiscent of the situation in 2003, when the US and the UK, along with some of their allies, invaded Iraq without the consent of the UN Security Council and in violation of international law.”

“When speaking about the military intervention in Iraq many years after it happened, Tony Blair (who served as the Prime Minister of the United Kingdom from 1997 to 2007) acknowledged that they had misled everybody,” Lavrov emphasized. “Now they did not even bother to provide any facts referring only to photos,” he noted. “They indulged in speculations on children’s photos, on evidence provided by various non-governmental organizations, including the so-called White Helmets, which staged various ‘incidents’ to instigate action against the Syrian government.”

Moscow will demand truth of Idlib events, Lavrov stressed. “It is regrettable that all these causes do more harm to the already damaged relations between Russia and the United States. Hope remains that these provocations will not entail irreversible effects,” Lavrov said.

Russian lawmakers also took to the microphone on Friday, warning that the U.S. airstrikes in Syria could lead to an escalation of conflict in the Middle East and dash any plans for a U.S.-Russian coalition against terrorism.

“It’s a new round of escalation in the Middle East. These ill-judged, irresponsible actions don’t contribute to global security, security in the Middle East,” Andrei Krasov, the first deputy head of the defense committee in the Russian lower house of parliament, told state news agency RIA. “Other military conflicts, an expansion of military conflicts, are entirely possible,” he added.

Russian Senator Konstantin Kosachev said the airstrikes meant the possibility of a broad antiterror coalition in Syria “bites the dust before it was even born.”

He said the aim of the U.S. strike was to “rubber stamp” responsibility on Mr. Assad’s for the chemical attack in Idlib province on Tuesday. “‘The walls of Trump’ are multiplying. And everything started so well. It’s a real shame,” said a post on the Facebook page of Mr. Kosachev, head of the international relations committee in Russia’s upper house of Parliament.

Another lawmaker, Mikhail Emelyanov, warned against the risk of clashes between Russian and U.S. forces. “The U.S. is being dragged into the war in Syria in the full knowledge that Russia is supporting Syria and our troops are there, which means it’s fraught with direct clashes between Russia and the U.S. and the consequences could be the most serious, even armed clashes and exchanges of strikes,” Mr. Emelyanov told Interfax news agency.

* * *

In immediate response, Moscow suspended its memorandum of understanding on flight safety in Syria with the US following the missile strike, calling the attack “a demonstration of force.” The Russian military has supported the Syrian government’s version of the events in Idlib, saying that Damascus attacked an arms depot where chemical weapons had been stockpiled by Islamic State and Al-Nusra Front militants.

“Without bothering to investigate anything, the US went forward with a demonstration of force, a military confrontation with a country that is fighting international terrorism,” the Foreign Ministry’s statement reads.

“Obviously, the cruise missile attack was prepared beforehand. Any expert can tell that the decision to strike was made in Washington before the events in Idlib, which were used as a pretext for a demonstration,” the statement reads.

The Memorandum on air safety was signed in October 2015, after Russia came to Syria to fight international terrorism at the invitation of the country’s government. The document of understanding was designed to prevent possible mishaps between the Russian and US Air Forces operating independently in the region.

Russia’s Foreign Ministry has condemned the attack as an example of the “reckless attitude” that has only worsened “existing world issues” and created a “threat to international security.”

* * *

Additionally, according to Tass, in response to the strikes, the Russian frigate Admiral Grigorovich armed with Kalibr cruise missiles will be deployed to the Tartus naval base in Syria. The Russian Black Sea Fleet’s frigate The Admiral Grigorovich, currently on a routine voyage, will enter the Mediterranean later on Friday, a military-diplomatic source in Moscow told TASS, adding that the ship would make a stop at the logistics base in Syria’s port of Tartus.

“The Russian ship armed with cruise missiles Kalibr will visit the logistics base in Tartus, Syria,” the source said.

The Admiral Grigorovich is currently near the Black Sea straits. It is scheduled to enter the Mediterranean at about 14:00 Moscow time. The ship left on a voyage after replenishing supplies at Novorossiisk and taking part in a joint exercise with Turkish ships in the Black Sea. Tass’s source said the frigate’s presence off Syria’s shores will depend on the situation.

end

 

First images show only 23 of the 59 tomahawk missiles struck.  According to pictures the the strike was “inefficient” but there was considerable damage:

(courtesy zero hedge)

 

First Images Of Aftermath Of “Inefficient” US Missile Strikes Emerge

Russia’s Rossiya 24 news channel has revealed the first footage from the Shayrat airbase, which the United States hit with a volley of 59 Tomahawk missiles after an alleged “chemical attack” in Idlib earlier this week.

Russian Defence Ministry spokesman Maj. Gen. Igor Konashenkov said “the combat efficiency of the US strike was very low”, adding that only 23 of the 59 Tomahawk cruise missiles reached the Shayrat air base in the province of Homs and as the following images suggest, they were not as damaging as some may have hoped…

Runway, taxi way, parked jets weren’t damaged as a result of U.S. airstrikes, Interfax reports, citing Russian Defense Ministry.

However, there was some significant damage…

Additionally, Russia says Syrian air defense systems will be bolstered after 6 jets and the radar system was destroyed in the airstrike. 4 Syrian military are reported dead and 2 missing after strike.

end

The obvious:  “The USA is on the brink of a military clash with Russia”

Dmitry Medvedev/Prime Minister Russia

Russian PM: “US On Brink Of Military Clash With Russia”

In a statement on Friday morning, Russian Prime Minister Dmitry Medvedev said that the US missile strike violated not only international, and added that the attack “was on the brink of military clashes with Russia.”

“Instead of their much-publicized thesis about a joint fight with a common enemy, Islamic State [IS, formerly ISIS/ISIL], the Trump administration has proven that it will fiercely fight against the legal government of Syria,” Medvedev wrote on his Facebook page.

Meanwhile, the International Committee of the Red Criss told Reuters that the situation in Syria “amounts to an international armed conflict” following U.S. missile strikes on a Syrian airbase.

Any military operation by a state on the territory of another without the consent of the other amounts to an international armed conflict,” ICRC spokeswoman Iolanda Jaquemet told Reuters in Geneva in response to a query.

“So according to available information – the U.S. attack on Syrian military infrastructure – the situation amounts to an international armed conflict.”

Previous air strikes on Syrian territory by a U.S.-led coalition have been against only the militant group Islamic State, which is also the enemy of the Syrian government. Russia has carried out air strikes in tandem with its ally Syria since Sept. 2015, while Iranian militias are also fighting alongside the troops of Syrian President Bashar al-Assad. ICRC officials were raising the U.S. attack with U.S. authorities as part of its ongoing confidential dialogue with parties to the conflict, Jaquemet said, declining to give details.

The ICRC, guardian of the Geneva Conventions setting down the rules of war, declared Syria an internal armed conflict – or civil war, in layman’s terms – in July 2012.

Under international humanitarian law, whether a conflict is internal or international, civilians must be spared and medical facilities protected. Warring parties must observe the key principles of precaution and proportionality and distinguish between combatants and civilians.

end

 

And now the second big story of the day:  the jobs report

Instead of a gain of 180,000 jobs, the BLS reports only a 98,000 job gain with another surprising drop in the unemployment rate to 4.5%. What is also bad, is that the two prior months were revised lower by 22,000 jobs and  16,000 jobs.

(courtesy zero hedge)

March Payrolls Crumble: Only 98K Jobs Added Despite Slide In Unemployment Rate

And so the reflation trade is dead once again.

So much for that blockbuster ADP report. As we cautioned previously in our payrolls preview, the big risk to today’s payrolls report was to the downside, mostly as a result of the unseasonably cold March weather, and moments ago the BLS confirmed that indeed something snapped in March when only 98K jobs were added, roughly half of the 180K expected. This was the lowest monthly jobs number since May of 2016.

Worse, both prior months were revised lower. The change in total nonfarm payroll employment for January was revised down from +238,000 to +216,000, and the  change for February was revised down from +235,000 to +219,000. With these revisions, employment gains in January  and February combined were 38,000 less than previously reported.

What is surprising is that the poor Establishment Survey number was on the back of a very strong Household Survey, which saw employment rise by 472,000 to 153 million, while the number of unemployed Americans reportedly declined by 326K to a seasonally adjusted 7,202K.

Also confusing, the unemployment rate tumbled to 4.5% vs prior 4.7%; and below the 4.7%, estimate, in a range 4.6%-4.8% from 82 economists surveyed. The underemployment rate 8.9% vs prior 9.2%

There were no changes to the participation rate, which remained at 63% with the number of people not in the labor force barely changed at 94,213 million.

That other closely watched indicator, average hourly earnings, rose in line with expectations at 0.2% m/m, while the annual increased also matched expectations of Y/y 2.7%, dipping modestly from last month’s 2.8%.

Some other details:

  • Nonfarm private payrolls rose 89k vs prior 221k; est. 170k, range 125k-270k from 42 economists surveyed
  • Manufacturing payrolls rose 11k after rising 26k in the prior month; economists estimated 17k, range -5k to 32k from 22 economists surveyed

And from the report:

Total nonfarm payroll employment edged up by 98,000 in March, following gains of 219,000 in February and 216,000  in January. Over the month, employment growth occurred in professional and business services (+56,000) and in  mining (+11,000), while retail trade lost jobs (-30,000).

In March, employment in professional and business services rose by 56,000, about in line with the average monthly  gain over the prior 12 months. Over the month, job gains occurred in services to buildings and dwellings (+17,000) and in architectural and engineering services (+7,000).

Mining added 11,000 jobs in March, with most of the gain occurring in support activities for mining (+9,000). Mining employment has risen by 35,000 since reaching a recent low in October 2016.

In March, employment continued to trend up in health care (+14,000), with job gains in hospitals (+9,000) and outpatient care centers (+6,000). In the first 3 months of this year, health care added an average of 20,000 jobs per month, compared with an average monthly gain of 32,000 in 2016.

Employment in financial activities continued to trend up in March (+9,000) and has increased by 178,000 over the past 12 months.

Construction employment changed little in March (+6,000), following a gain of 59,000 in February. Employment in construction has been trending up since late last summer, largely among specialty trade contractors and in residential building.

Retail trade lost 30,000 jobs in March. Employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016.

Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, information, leisure and hospitality, and government, showed little or no change over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in March. In manufacturing, the workweek edged down by 0.2 hour to 40.6 hours, and overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.5 hours.

In March, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents to $26.14, following a 7-cent increase in February. Over the year, average hourly earnings have risen by 68 cents, or 2.7 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.90.

end

 

And  now the real story on the jobs report:

plunging retail workers offset by doormen  plus our usual waiters and bartenders (despite a declining restaurant industry).  Also of note: an increase in mining workers  (with the continual whacking of gold and silver)

(courtesy zerohedge)

Where The March Jobs Were: Plunging Retail Workers Offset By Doormen Hiring Surge

March was a month of giving back: after a very strong, if downward revised start to the year, with both January and February payrolls revised lower by a total of 38,000 jobs, March saw the worst job gains since May 2016, with only 98,000 jobs added. While many have claimed it was the weather’s fault, the BLS reported that 164K people said they were unable to work in March due to poor weather conditions. This was just fractionally more than the 143K long-term average.

This is where the job gains, and losses, were:

While most job sectors performed in line with recent trends, there were three major outliers: growth in the Education and Health jobs category tumbled from +66K to +16K; Construction jobs dropped from +59K to +6K, while the big detractor was Retail Trade, where for the second month in a row, 30K jobs were lost. Worse, employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016, which confirms the recent speculation that “bricks and mortar” stores and malls in general may be the next big short.

A smaller, if perhaps more painful to Donald Trump, drop was experienced in the manufacturing sector, where last month’s gain of 26K jobs was revised to just 11K.  According to SouthBay Research, the supply chain is still waiting for real demand, and now that the destocking/restocking wave over, factories are waiting for new demand to emerge. He notes that there will be no hiring without order momentum, which means that the manufacturing economy euphoria has indeed stalled and is now manifesting itself in poor job numbers.  This is how Southbay puts it:

Possible over-stocking creating additional drag: many companies bought into the Trump rhetoric and kicked-off production early in the quarter, only to slow again as that demand has yet to materialize

The one bright category was Professional and Business Services, where March saw an increase in monthly payrolls from 27.1K to 45.5K, however of this the biggest category was the odd “Services to buildings and dwellings”, i.e. Doormen and Supers.

Some other notables:

Mining added 11,000 jobs in March, with most of the gain occurring in support activities for mining (+9,000).  Mining employment has risen by 35,000 since reaching a recent low in October 2016.

Employment in financial activities continued to trend up in March (+9,000) and has increased by 178,000 over the  past 12 months.

Finally, everyone’s favorite job category, waiters and bartenders, aka “Food services and drinking places” leisure workers, continued their relentless rise, adding another 21.7K jobs in March.

The complete breakdown of changes in key job categories in February and March is shown in the chart below.

end

Rumours of a big shakeup at the White House with Bannon and Priebus on the chopping block

Looks like the elites are winning and they are not going to drain the swamp

(courtesy zerohedge)

Atlanta Fed Slashes Q1 GDP To Just 0.6%, Lowest In Three Years

Remember when the Fed was “data dependent”? Well, if the Atlanta Fed is right, Janet Yellen will have hiked the Fed’s interest rate in a quarter in which GDP has grown by a paltry 0.6%, down from 1.2% as of its latest estimate. If confirmed, this would be the lowest quarterly GDP growth in three years, since Q1 of 2014.

Incidentally, just over two months ago, the same forecast stood at 3.4%, it has since fallen by over 80%.

From the source:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.6 percent on April 7, down from 1.2 percent on April 4. The forecast for first-quarter real GDP growth fell 0.4 percentage points after the light vehicle sales release from the U.S. Bureau of Economic Analysis and the ISM Non-Manufacturing Report On Business from the Institute for Supply Management on Wednesday and 0.2 percentage points after the employment release from the U.S. Bureau of Labor Statistics and the wholesale trade release from the U.S. Census Bureau this morning. Since April 4, the forecasts for first-quarter real consumer spending growth and real nonresidential equipment investment growth have fallen from 1.2 percent and 9.7 percent to 0.6 percent and 5.6 percent, respectively.

Visually:

And now back to those “animal spirited” soft surveys which have also been sliding in the past few months.

end

 

This is the reason for the sudden gold/silver drop at 1 pm. Shear nonsense!

(courtesy zero hedge)

Sudden USDJPY Spike Sends Yields, Stocks To Session Highs

Shortly before 1pm ET, a sharp spike in the USDJPY on high volume, which has since moved the USDJPY up by over 50 pips on short notice…

… and sent TSY yields well above the key 2.30% quadruple (or maybe quintuple bottom) support level…

… as well as pushing stocks ro session highs. The jerk higher in the USDJPY also slammed gold to overnight session lows.

It was not clear what was the catalyst for the sharp move, however shortly before the move Bill Dudley spoke, discussing the future of the Fed’s balance sheet:

  • FED’S DUDLEY: RATES WILL BE PRIMARY POLICY TOOL, NOT ‘GRADUAL’ BALANCE SHEET REDUCTION
  • FED’S DUDLEY: PORTFOLIO RUN OFF WILL NOT BE ‘ACTIVE’ TOOL OF MONETARY POLICY
  • FED’S DUDLEY: ONE REASON TO SHED BONDS IS TO LEAVE OPEN OPTION TO EXPAND BALANCE SHEET IN FUTURE
  • FED’S DUDLEY: LIKELY WON’T RETURN TO PRE-CRISIS SIZE BOND PORTFOLIO
  • FED’S DUDLEY: PREFERS RETAINING CURRENT ‘FLOOR’ POLICY MECHANISM IN FUTURE, WITH PERHAPS $500 BLN – $1 TRLN IN EXCESS RESERVES
  • FED’S DUDLEY: REPEATS EXPECTS TO BEGIN SHEDDING BONDS LATER THIS YEAR OR NEXT YEAR

in which he pointed out that balance sheet normalization would likely lead to only a “little pause” in rate hikes to avoid concurrent policy moves.

  • FED’S DUDLEY: SHEDDING BONDS MAY LEAD ONLY TO ‘LITTLE PAUSE’ IN RATE HIKES; PERHAPS AVOID SIMULTANEOUS POLICY MOVES

As discussed before, the reason why the Fed is contemplating a concurrent approach is to prevent a flattening or outright inversion of the curve, and as the short end rises, selling the long end by the Fed would lead to a parallel steepening in rates, something which would be critical for US banks.

And while it is unclear if Dudley was the catalyst for today’s move higher, what is clear is that some algos bought because some other algos bought.

 

 

end

  Now for the first time USA credit card debt rises above one trillion USA

 

US Credit Card Debt Rises Above $1 Trillion For The First Time In A Decade

Unlike last month’s unexpectedly weak consumer credit report, which saw a plunge in revolving, or credit card, debt moments ago the Fed, in its latest G.19 release, announced that there were few surprises in the February report: Total revolving credit rose by $2.9 billion, undoing last month’s $2.6 billion drop – the biggest since 2012 – while non-revolving credit increased by $12.3 billion, for a total increase in February consumer credit of $15.2 billion, roughly in line with the $15 billion expected.

However, while in general the data was uneventful, there was one notable milestone: in February, following modest prior revisions, total revolving/credit card debt, has once again risen above the “nice round number” of $1 trillion for the first time since January 2007…

…. where it now joins both auto ($1.1 trillion) and student ($1.4 trillion) loans, both of which are well above $1 trillion as of this moment.

If The Fed Sells Treasuries… Who Will Be Buying? Answer: “Other” (Seriously)!

 

Authored by Chris Hamilton via Econimica blog,

From 1776 through 2007, the US issued just over $9 trillion in US Treasury debt to pay for stuff which “we” wanted but “we” were unwilling to tax ourselves to pay for.  The buyers during that period are depicted in the first column of the chart below.  During that time, the majority buyer of that debt was the Intra-Governmental Surplus funds (primarily Social Security) as depicted by the green area in the first column below.  These funds were mandated to buy “governmental accounting series” non-marketable debt.  The remainder of the issuance and holdings were fairly evenly split between foreigners and domestic buyers (primarily institutional buying) with a minor portion of primarily short term Notes and Bills held by the Federal Reserve.

From 2008–>2014, the US Treasury nearly issued as much debt as it had in the previous 230+ years.  But the proportions bought and held by these creditors significantly changed (depicted by middle column in the chart below).  Intra-Governmental surplus funds were dwindling so the buyer of nearly half of all Treasury debt up to that point took a back seat, buying only 8% of the new issuance.  No surprise, it was the Federal Reserve and Foreigners that bought 2/3rds of the issuance, maintaining a strong bid.  The Fed sold all it’s short term bills and notes and went large and long.  And foreigners apparently just couldn’t get enough.

But since QE ended in late 2014, the make-up of the new buyers / holders of US Treasury debt is totally different (depicted in the right column of the chart below).  Obviously, the Fed Reserve has purchased nothing (on a net new basis…of course they have been buying to replace bonds rolling off, but no net new buying) and since the Fed ceased buying, Foreigners (net) have sworn off US Treasury debt and sold $200+ billion.  So the only buyers for the continuing issuance and the portion not rolled over by foreigners  is the domestic public (with an assist by the dwindling Intra-Governmental surplus).

On a % basis of who bought / held the debt over different periods?  The chart below highlights how completely different the current period is with the domestic public buying 87%, IG buying 25%, and foreigners net selling.

Well, this should beg the question, who among the domestic public is buying all those still near record low yielding Treasury’s?  Great question, and according to the latest Treasury Bulletin we have our answer, “Other Investors” (with an assist from mutual funds) are the primary buyers (chart below).  Banks bought a little, private parties less, and insurers even less.  State/local funds sure aren’t being used to buy US Treasury’s…and US savings bonds are a thing of the past.  Interestingly, the “other” category has nearly doubled since September of 2014 from less than a trillion to $1.8 trillion.  So the Treasury market is supported by “other investors” which unfortunately the Treasury Bulletin provides no more detail about plus mutual funds.  And all this while stock and real estate markets are flush with cash, leveraging indices to record highs despite the trillion plus being pulled away from these sectors to buy Treasury’s???  All makes sense to me and I’m sure there’s no reason to look further (and I’m pretty sure nobody will)!

And just to play this out, where exactly has that Intra-Governmental surplus (that has made up a quarter of Treasury demand since QE ended) come from?  Clearly not from America’s #1 creditor, the aging boomer and their dwindling Social Security surplus.  They are on the verge of turning from a source of credit to deficit (chart below).

Shocker, “Other” is the primary buyer within the Intra-Governmental Surplus, again coming from the Treasury and highlighted in an older post HERE.

I’m not exactly expecting rates to rise anytime soon despite CBO claims that rates are inevitably going up as deficits sky rocket.  Just consider, when the largest Treasury holder (IG) began to slow it’s accumulation in ’08 coincident with subsequent record ’08–>’12 Treasury issuance, foreigners and the Fed took over and rates went down.  As China and the BRICS ceased net buying Treasury debt in July 2011 (and never returned), the BLICS appeared and rates went down (Detailed HERE)As the Fed ceased QE1 and all economists knew rates must rise…rates shocked 100% of economists and fell by a third.  As the Fed tapered and ceased QEIII and foreigners likewise ceased buying Treasury’s from ’14 onward, “other” took over and rates hardly budged!?!  Not exactly the hallmarks of a “free market”.

So no, by hook or by crook, I don’t think Treasury rates will be rising anytime soon and are far more likely to fall significantly…despite the Federal Reserve claiming it will start systematically selling off it’s trillions in Treasury’s…concurrent with foreigners selling…and simultaneous with fast rising Treasury issuance…all while Social Security turns from a surplus to deficit!?!  I don’t think the Federal Government nor the Federal Reserve are about to let a “so called free-market” determine the yields paid on America’s debt.

end

Neil Gorsuch confirmed to the Supreme Court after the nuclear option was triggered yesterday

(courtesy zerohedge)

Neil Gorsuch Officially Confirmed To The Supreme Court

Update: After weeks of endless rhetoric and party bickering over the controversial usage of the ‘nuclear option’, Neil Gorsuch has officially been confirmed to the Supreme Court of the United States with a largely partisan vote.

* * *

Following a series of procedural votes yesterday to invoke the so-called ‘nuclear option’, the Senate is expected to vote shortly to confirm Neil Gorsuch as the 113th justice to serve on the Supreme Court.

Given the rule changes implemented yesterday, Republicans require only a simple majority vote to confirm Gorsuch, and with Republicans holding a 52-48 majority in the Senate, today’s vote is all but a foregone conclusion.  And while it will mostly be a partisan vote, 3 Democrats are also expected to support Gorsuch for a final vote tally of 55-45.

The official roll call can be watched here:

* * *

Here is our summary from yesterday on the Senate’s move to invoke the ‘nuclear option’:

In a historic vote, Senate Republicans on Thursday crushed “a Democratic blockade” – in Reuters’ words – of Trump’s Supreme Court nominee Neil Gorsuch, in a fierce partisan brawl, approving a rule change dubbed the “nuclear option” to allow for conservative judge Neil Gorsuch’s confirmation by Friday.

The Senate voted 52-48 along party lines to repeal a rule allowing filibusters against Supreme Court nominees,invoking the so-called nuclear option, and clearing the way for Gorsuch confirmation who now needs a simple majority for nomination. Shortly thereafter, the Senate voted 55-45 to end debate on Gorsuch’s nomination, setting up a final vote expected Friday. Thanks to the new rule enacted earlier Thursday, a simple majority was needed.

“This will be the first and last partisan filibuster of the Supreme Court,” Republican Senate Majority Leader Mitch McConnell said on the Senate floor, accusing Democrats of trying to inflict political damage on Trump and to keep more conservatives from joining the high court.

“In 20 or 30 or 40 years, we will sadly point to today as a turning point in the history of the Senate and the Supreme Court, a day when we irrevocably moved further away from the principles our founders intended for these institutions: principles of bipartisanship, moderation and consensus,” Senate Democratic leader Chuck Schumer said on the Senate floor.

McConnell initiated the rules change by raising a point of order asserting that simple-majority votes should advance Supreme Court nominees to final confirmation votes. Democrats tried to delay it by offering motions to postpone a vote and to adjourn the chamber, but both fell short as Republicans stayed unified.

Earlier Thursday, McConnell said the rules change would restore the Senate’s tradition of considering a Supreme Court nominee based on credentials instead of ideology. He called the Democratic filibuster of Goruch “a radical move” and something “completely unprecedented in the history of our Senate.”  “This threatened filibuster cannot be allowed to succeed or to continue for the sake of the Senate, for the sake of the court and for the sake our country,” he said.

Gorsuch

Earlier in the day, Democrats successfully blocked Gorsuch’s nomination from getting 60 votes earlier Thursday morning, prompting Republicans to go “nuclear” and change the rules to allow Gorsuch and future Supreme Court nominees to clear the Senate with only a simple majority.  Democrats tried to delay the rules change vote by offering motions to postpone a vote and to adjourn the chamber, but both fell short as Republicans stayed unified.

Democrat senators Joe Manchin (W.Va.), Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) voted with Republicans to allow President Trumps’s pick to move forward. 

Republicans defended the party-line vote on the nuclear option, saying Democrats were to blame for blocking Gorsuch, who they believe is eminently qualified to sit on the Supreme Court.  Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) argued that Democrats should “come to their senses.”

“The truth of the matter is that throughout this process, the minority led by their leader has been desperately searching for a justification for their preplanned filibuster,” he said ahead of Thursday’s votes.

McConnell added that the current stalemate was part of a decades-long Democratic effort to “politicize the courts and the confirmation process.”  “The opposition to this particular nominee is more about the man that nominated him and the party he represents than the nominee himself,” he said.

Republicans hinted for weeks that President Trump’s nominee would be confirmed one way or another. McConnell confirmed during a leadership press conference that he had the votes to go “nuclear” if needed.

According to The Hill, Republicans appeared resigned to the tactics, arguing if Democrats won’t support Gorsuch — who received the American Bar Association’s highest rating — they won’t allow any GOP nominee to join the Supreme Court.

* * *

The Republican-backed rule change on Thursday maintains the ability to filibuster legislation. In the past, the nuclear option has been averted when moderates in the two parties compromised to avoid a showdown, but the ferocious partisanship in Washington now made that impossible.

Experts said eliminating the filibuster for Supreme Court appointments could make it more likely that presidents, with little incentive to choose centrist justices who could attract support from the other party, will pick ideologically extreme nominees in the future.

Ending the filibuster also would make it easier for future Supreme Court nominees to be confirmed when the president and Senate leadership belong to the same party.

With the failure of Republican healthcare legislation in Congress and with federal courts blocking the president’s ban on people from several Muslim-majority nations from entering the United States, securing Gorsuch’s confirmation took on even greater importance for Trump, who took office in January.

* * *

Senate confirmation of Gorsuch, 49, would restore the nine-seat court’s 5-4 conservative majority, enabling Trump to leave an indelible mark on America’s highest judicial body and fulfill a top campaign promise by the Republican president. Gorsuch could be expected to serve for decades.

The court’s ideological leaning could help determine the outcome of cases involving the death penalty, abortion, gun control, environmental regulations, transgender rights, voting rights, immigration, religious liberty, presidential powers and more.

The nine-seat Supreme Court has had a vacancy since conservative Justice Antonin Scalia died in February 2016.

end

Let’s close with this week’s wrap up courtesy of Greg Hunter of USAWatchdog

(courtesy Greg Hunter)

Trump Attacks Syria, Spying on Trump Worse than Watergate, Fed Dumping Debt

By Greg Hunter’s USAWatchdog.com 

The “War Card” has been flipped over as President Trump orders an attack on Syria. The attack came as a response to the chemical weapons attack in Syria allegedly by the Assad regime.  Not everyone is buying the story it was Assad that ordered a gas attack on his own people.  Former Congressman Ron Paul thinks it was a false flag to get the U.S. to make a move against Assad.  Now, the U.S. foreign policy in Syria has gone from destroying ISIS to removing Bashar al-Assad from power in Syria.  Russia will surely weigh in.  Will the Russians stand by and allow Assad to be attacked and removed by the U.S.?

One of President Obama’s top advisors has admitted to “unmasking” members of the Trump transition team. Rice says she did nothing wrong and did not do it for political reasons.  Republicans think differently and say Rice should testify under oath because this is a huge Constitutional crisis of an outgoing administration spying on an incoming administration to embarrass and undermine it.  Other former top Obama Administration officials have also admitted to spying on Trump and leaking classified information.  The spying was done for the so-called Russian collusion investigation, but after 8 months, the FBI and investigators have zero to show and no wrongdoing has been found.

The Federal Reserve has announced it will be shrinking its balance sheet. During the last housing meltdown in 2008, it bought the underwater assets of big banks.  It has more than two trillion dollars in mortgage-backed securities that are now worth something because of the latest housing boom.  Gregory Mannarino of TradersChoice.net says the Fed is signaling a market top in housing.  It pumped up the mortgage-backed securities it bought by inflating another housing bubble.  Now, the Fed is going to dump the securities on the market.  Mannarino predicts housing prices will fall and interest rates will rise.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

After the Wrap-Up:

Clif High from HalfPastHu

Well that does it for the week

I will see you Monday night

H/

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