April 25/Trade wars begin between Canada and the USA/Defaults on student loans soaring/Barrick gold produces less gold at higher costs/Gold open interest falls by a tiny 999 contracts but the silver OI falls by over 6,000 contracts/

Gold: $1265.60  DOWN 10.20

Silver: $17.58  DOWN 27  cents

Closing access prices:

Gold $1264.50

silver: $17.60!!!










Premium of Shanghai 2nd fix/NY:$7.15


LONDON FIRST GOLD FIX:  5:30 am est  $1270.50




For comex gold:



 TOTAL NOTICES SO FAR: 766 FOR 76600 OZ    (2.2835 TONNES)

For silver:

For silver: APRIL


Total number of notices filed so far this month: 906 for 4,530,000 oz



The open interest in silver  declined with today’s reading at 227,866 contracts (and further from Friday’s new record) or about 3000 contracts ABOVE the record set last year.


As I stated yesterday:

“Our precious metals will be under much pressure from today until Friday April 28 as we enter options expiry week.”


From the beginning of time, the crooked banks continue to raid on options expiry week and this week so no different

Comex options expiry: finishes tonight.  LBMA/OTC options Friday morning at around 11 am




Let us have a look at the data for today





In gold, the total comex gold FELL BY 999 contracts WITH THE FALL IN THE PRICE OF GOLD ($11.60 with YESTERDAY’S TRADING). The total gold OI stands at 481,395 contracts.

we had 38 notice(s) filed upon for 3800 oz of gold.


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


We had  A HUGE change in tonnes of gold at the GLD: A WITHDRAWAL OF 5.92 TONNES OF GOLD INTO THE GLD

Inventory rests tonight: 854.25 tonnes



We had  a huge changes in silver inventory at the SLV today/a deposit of 1.988 million oz into inventory

THE SLV Inventory rests at: 327.349 million oz



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

1. Today, we had the open interest in silver FELL BY A HUGE 6,692 contracts DOWN TO  227,866,( AND FURTHER FROM  THE NEW COMEX RECORD SET ON FRIDAY AT 234,787) DESPITE THE  RISE IN  SILVER ON FRIDAY (2 CENTS). We may have witnessed short covering by the bankers or we may again  have witnessed the power of that obscure EFP contract.  For the past few years, strangely we have seen the open interest collapse as we enter first day notice. The EFP allows the longs to liquidate his delivery contract month for a fiat bonus and the receipt of a future contract month once first day notice has occurred. That may have happened again today.

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg


i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 5.04 POINTS OR 0.16%/ /Hang Sang CLOSED UP 316.46 POINTS OR 1.31%.  The Nikkei closed UP 203.45 OR 1.08% /Australia’s all ordinaires  CLOSED UP .26%/Chinese yuan (ONSHORE) closed UP at 6.8847/Oil DOWN to 49.35 dollars per barrel for WTI and 51.65 for Brent. Stocks in Europe  IN THE GREEN   ..Offshore yuan trades  6.8847 yuan to the dollar vs 6.8847 for onshore yuan. NOW  THE OFFSHORE IS SLIGHTLY STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN ALSO MUCH STRONGER AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS HAPPY





Kim Jung Un conducts the largest ever fire drill as the USA sub docks in the south:

(courtesy zerohedge)


none today



i)Reuters is telegraphing the ECB is about to turn hawkish.  This caused the Euro to rise above the 1.09 mark:

( zerohedge)


Our resident expert on Greek affairs, Raul Meijer does a great job in explaining the massive deflation whacking Greece right now.  The IMF is no friend to Greece.  The austere demands of the Troika took out 4% of GDP and this is why deflation is ripping this country.

a must read…

(courtesy Raul Meijer)





Oh OH! Canada is in real trouble:  First Trump announces a 20% tariff on Canadian softwood lumber imports:

the trade between the countries: over 5 billion uSA

( zerohedge)

ii)Secondly, Trump warns Canada on the import tax on milk.  Trump states that we will not stand for this: the result is the Cdn dollar collapses to 1.36 to the dollar.

(courtesy zero hedge)

iii)And Canada’s angry response to its uSA neighbour:

(courtesy zero hedge)

iv)A tiny rise in mortgage rates will be devastating to Canadian housing:

( WolfStreet/WolfRichter)


Late in the day, WTI drops into the 48 dollar handle with a surprise crude and gasoline build

( zero hedge)


Jeff Thomas explains that former bus driver Maduro is selling the golden goose:  his oil. I believe that he also sold gold which is also his golden goose.

( Jeff Thomas/InternationMan.com)


i)As I explained to you yesterday, the French election has nothing to do with the fall in gold/silver.  It wasjust an excuse. In reality it was options expiry:
( John Embry/Kingworldnews)

ii)We wish Sweden all the luck in the world:  1/2 of its gold is stored in London and no doubt were used in swaps (leases)

No wonder they conceal the status of their reserves and refuse to give bar codes etc

( Ronan Manly/Bullionstar)

iii)It looks like our good friends over at Barrick are having their problems. Their costs are rising fast in their major new mine in Argentina named Veladero. Barrick is now producing only 1.33 million oz per quarter and with higher costs.  They earned only 14 cents per share in the quarter.

(Danielle Bochove/Bloomberg)

10. USA stories

i)The following showed up on a screen at Singapore’s big bank D.B.

Are we going to have two USA currencies:

  1. a lower valued USA dollar (USD)/ a currency only for the uSA
  2. USA dollar notes (USN) an external currency.

( Robert H)

ii)Defaults on student loans are soaring.  The total of all student loans is now in excess of 1.4 trillion uSA

( zero hedge)

iii)The great flip flopper Trump backtracks on the border wall. Thus there should be no obstacle to the continuing resolution.

( zerohedge)

( zero hedge)

v)Trump is now set to ban laptops on planes originating from Europe:

(c MacSlavo))

vi)Trade wars commence between Canada and the uSA.  Let’s see what happens with the USA runs out of water and needs Canadian water:

( zerohedge)

vii)This will be a far worse problem for the uSA:  USA Steel Corp crashes after it slashes guidance by more than 50%.  This sets the tone for the entire steel industry.  The real culprit is China but Trump is leaving out China and bashes Canada instead.

Let us head over to the comex:

The total gold comex open interest FELL BY  999 CONTRACTS DOWN to an OI level of 481,395 WITH THE  FALL IN THE PRICE OF GOLD ( $11.60 with YESTERDAY’S trading).  Surprisingly the open interest fell by a tiny bit despite gold’s whacking.  The longs continue to remain stoic as they refused to liquidate any of their contracts despite the constant torment.  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 A LOSS OF 1 contract(s) FALLING TO 553. We had 10 notices served yesterday so we GAINED 9 contracts or AN ADDITIONAL 900 oz that will stand for delivery in the active delivery month of April AND NO CONTRACTS WERE CASH SETTLED THROUGH THE OBSCURE EFT ROUTE DESCRIBED BY JAMES TURK. 

(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/2017 contract month LOST 207 contract(s) and thus its OI is 1673 contracts. The next big active month is June/2017 and here the OI FELL by 1825 contracts UP to 346,923.

We had 38 notice(s) filed upon today for 3800 oz

Koos Jansen wrote to me last night on the EFP issue.  He was the first to discover this mechanism but he is not sure as to how it is operating at the comex:
The line in the sand is $18.50 for silver.  Once pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  235.787.
 We are in the NON active delivery month is APRIL  Here the open interest LOST 14 contracts FALLING TO 11 contracts. We had 14 notices filed yesterday so we neither gained nor lost any silver ounces standing in this non active delivery month of April.  We lost 0 contracts through this route of ERP.

The next active contract month is May and here the open interest LOST ONLY 11,551 contracts DOWN to 56,807 contracts which is astonishingly high. It is this front month that the crooked bankers are targeting as they must be frightened to see such a mammoth amount of contracts still standing for metal. We have only 3 trading days before first day notice. The non active June contract LOST 56 contracts to stand at 404. The next big active month will be July and here the OI GAINED 4,569 contracts UP to 135,583.


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.(EFP ROUTE)


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

VOLUMES: for the gold comex

Today the estimated volume was 119,086 contracts which is fair.

Yesterday’s confirmed volume was 321,348 contracts  which is VERY good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 25/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 nil oz
Deposits to the Dealer Inventory in oz 2400.52 oz


Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
38 notice(s)
3800 OZ
No of oz to be served (notices)
515 contracts
51500 oz
Total monthly oz gold served (contracts) so far this month
766 notices
76600 oz
2.3825 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   453,188.2 oz
Today we HAD 0 kilobar transaction(s)/
Today we had 1 deposit(s) into the dealer:
 i) Into Brinks; 2400.52 oz
total dealer deposits: 2400.52 oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 0 customer withdrawal(s)
total customer withdrawal: nil oz
 we had 0 adjustments:

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 38 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 21 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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 (766) x 100 oz or 72,600 oz, to which we add the difference between the open interest for the front month of APRIL (553 contracts) minus the number of notices served upon today (38) x 100 oz per contract equals 128,100 oz, the number of ounces standing in this  active month of APRIL.
Thus the INITIAL standings for gold for the APRIL contract month:
No of notices served so far (766) x 100 oz  or ounces + {(553)OI for the front month  minus the number of  notices served upon today (38) x 100 oz which equals 128,100 oz standing in this non active delivery month of APRIL  (3.9844 tonnes)
we GAINED 9 contracts or an additional 900 oz will  stand and THERE WERE NO  cash settlements via the PRIVATE EFP route.
 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.
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: 3.9844
total for the 16 months;  248.788 tonnes
average 15.549 tonnes per month
Total dealer inventory 994,397.311 or 30.94 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,954,505.478 or 278.52 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.44 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 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.
And now for silver
 April 25. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 420,453,720 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
603,296.156 oz
1,199,026.904 oz
total:  1,802,323.060 oz
No of oz served today (contracts)
No of oz to be served (notices)
11 contracts
(55,000  oz)
Total monthly oz silver served (contracts) 906 contracts (4,530,000 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  14,472,831.9 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of HSBC: 420,453.72 oz
 We had 2 Customer deposits:
i) Into JPMorgan: 603,296.156 oz
ii) Into CNT: 1,199,026.904 oz
***deposits into JPMorgan have now resumed.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits; 1,802,323.060 oz
 we had 0 adjustment(s)
The total number of notices filed today for the APRIL. contract month is represented by 0 contract(s) for 70,000 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 906 x 5,000 oz  = 4,530,000 oz to which we add the difference between the open interest for the front month of APRIL (11) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the APRIL contract month:  906(notices served so far)x 5000 oz  + OI for front month of APRIL.(11 ) -number of notices served upon today (0)x 5000 oz  equals  4,585,000 oz  of silver standing for the APRIL contract month. 
We neither gained nor lost any silver oz (contracts) in this non active delivery month of April and NO CONTRACTS WERE CASH SETTLED THROUGH THE EFP ROUTE. However it is more than likely that a major number of contracts in May was settled through the ERP described above. 


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 79,677 which is very HUGE 
Yesterday’s  confirmed volume was 148,146 contracts which is humongous
Total dealer silver:  30.532 million (close to record low inventory  
Total number of dealer and customer silver:   194,574 million oz
The total open interest on silver is  now at record levels of 227,498 contracts with the price of $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

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 7.4 percent to NAV usa funds and Negative 7.8% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.0%
Percentage of fund in silver:38.8%
cash .+0.2%( April 25/2017) 
 will update Sprott later tonight
2. Sprott silver fund (PSLV): Premium FALLS TO   -.55%!!!! NAV (April 25/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.45% to NAV  ( April 25/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -.55% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.45%/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: Daily Dispatches

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


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.


I will update gold inventory and silver inventory (GLD and SLV) at 11 pm tonight.

And now the Gold inventory at the GLD


April 24/a deposit of 1.48 tonnes of gold into the GLD/inventory rests at 860.17 tonnes




April 18/no changes at the GLD/Inventory remains at 848.92 tonnes

April 17/no changes at the GLD/Inventory remains at 848.92 tonnes

April 13/a deposit of 6.51 tonnes into the GLD/Inventory rests at 848.92 tonnes

this no doubt is a paper deposit/

APRIL 12/no changes in gold inventory at the GLD/Inventory rests at 842.41 tonnes

April 11/a huge deposit of 4.12 tonnes into inventory/Inventory rests at 842.41 tonnes

this would no doubt be a paper gold entry. It would be difficult to find that amount of physical gold.

April 10/1.77 tonnes added into inventory at the GLD/inventory rests at 838.29 tonnes

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 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

April 25 /2017/ Inventory rests tonight at 854.25 tonnes


Now the SLV Inventory

April 25/a huge deposit of 1.98 million of into inventory/inventory rests at 327.349 million oz/

April 24/no changes in inventory at the SLV/Inventory rests at 325.361 million oz/



April 19/a withdrawal of 1.893 million oz/inventory rests at 326.308 million oz/

April 18/no changes in inventory at the SLV/Inventory rests at 328.201 million oz

April 17/no changes in inventory at the SLV/Inventory rests at 328.201 million oz

April 13/no changes in inventory at the SLV/Inventory rests at 328.201 million oz

April 12/no changes in inventory at the SLV/Inventory rests at 328.201 million oz/

April 11/a paper deposit of 11.131 million oz into the SLV/no doubt yesterday’s entry of a withdrawal of 11.231 million oz was in error/328.201 million oz

April 10/ a paper withdrawal of 11.231 million oz of silver from the SLV and this silver was used in the raid today. Inventory rests at 317.231 million oz

April 7./ a withdrawal of 947,000 oz of silver from the SLV/Inventory rests at 328.201 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 25.2017: Inventory 327.349  million oz

Major gold/silver trading/commentaries for TUESDAY


LePen Euro Frexit Panic Over – “For Now”

LePen Euro Frexit Panic Over – “For Now”

by John Stepek, Editor of Money Week

OK, drama’s over.

The French election has turned out pretty much exactly as expected.

For all that some of the papers are leading with “French revolution” headlines, the reality is that a face-off between the right-wing Marine Le Pen of the Front National and independent/socialist candidate Emmanuel Macron of En Marche! has been on the cards for months now.

So what happens now? And what does it mean for your money?

Looks as though Macron will win the French presidency

Emmanuel Macron, the French Tony Blair, won about 24% of the votes in yesterday’s first round of the French presidential election. Marine Le Pen, the French Nigel Farage, won around 22%.

They go through to the final round on7 May. The rest of the candidates are out of the race.

Who will win?

The polls say Macron. The markets also say Macron. The euro has leapt to a five-month high this morning. Bond markets are calming down – spreads across the eurozone region are tightening (for example, the gap between what it costs France to borrow money, compared to what it costs Germany to borrow money, is shrinking).

Stocks are likely to go higher too.

You might say: “Ah, but what about Trump?” and plenty of people have. I take your point – I’m a sceptic by nature, I don’t have a particular dog in this fight, and I’d never say never.

But sometimes the market and pollsters do get things right. And it does look highly likely that Macron will beat Le Pen in the second round.

Firstly, polls suggest a large gap. He’s on 62% versus 38% for her, and this sort of gap has been consistent across the election process. Secondly, the other candidates have largely now said: “Back Macron”.

Things can change, of course. Macron might not come across well during the debates. He might take all this for granted and be surprised on the night. His policies aren’t all that well defined, for a start.

Then again, Le Pen might be good on the rhetorical side, but she’s got her own tricky policy questions to answer. The sticky issue of currency is one that has derailed nationalist ambitions in the past (the Scottish independence referendum is a good example), and Le Pen’s idea of taking France out of the euro will give a lot of her own supporters pause.

So as it stands, I don’t think the market’s view of their relative chances is wildly complacent in the way that it was about the odds of Brexit and Donald Trump winning. That doesn’t mean that Le Pen can’t or won’t win. It just means that the odds look realistic, rather than overly discounting one outcome.

It’s also worth noting that at one point, both Le Pen and Macron would have been viewed as political “surprises”. Neither are mainstream candidates. I know I’ve compared Macron to Tony Blair, but Blair led a traditional party. Macron has created his own party (and I’m sure some of Jeremy Corbyn’s beleaguered New Labour hostages must be looking at him and thinking hard).

So regardless of who wins, this is an anti-establishment vote. France has voted for change. The big theme running through financial markets and political circles hasn’t stopped here – it’s just that in France, an anti-establishment globalist looks likely to win, rather than an anti-establishment nationalist.

Wider market doesn’t really care about French election details

Of course, whoever wins, they might struggle to get their agendas heard. The French parliamentary election in June comes hot on the heels of the presidential second round. As anti-establishment candidates, neither Le Pen nor Macron have particularly large power bases within the establishment.

So what does this mean? Well, it’s the usual story. You might have someone who’s ostensibly in charge, but has to make so many compromises with parliament, that any reforms are kept watery and weak.

But putting it bluntly, how France is governed is neither here nor there to most of the rest of the world, as long as it remains, broadly speaking, “business as usual”.

Stick with the euro, play nice with Germany, and the rest will take care of itself.

So as long as Macron does win come 7 May – and it seems likely that he will – then the biggest (currently scheduled) political frightener of the year is over.

Italy could still throw a few spanners in the works, and that would certainly rattle markets, but the biggest systemic risk now looks as though it’s on its way to being put aside.

That is all likely to mean a rebound for the euro (which we’ve seen already), a rally for eurozone stocks (which fund managers are itching to buy at the moment in any case), and attention returning to the US economy, and Trump’s travails.

On Trump, apparently we’ll be hearing the outlines of a big tax reform in the US on Wednesday – according to a weekend Tweet.

If we do, then combined with the market-friendly French election result, it could be just what we need to get us over the current wobble and onto the next round of the bull market.

If not – well, US markets will have to start justifying their valuations somehow. But that’s a topic for another morning.

John Stepek, is the editor of the best selling financial publication in the UK, MoneyWeek, and the full article can be read here


As I explained to you yesterday, the French election has nothing to do with the fall in gold/silver.  It wasjust an excuse. In reality it was options expiry:
(courtesy John Embry/Kingworldnews)

French election results just an excuse to kick gold, Embry tells KWN


12:35p ET Monday, April 24, 2017

Dear Friend of GATA and Gold:

Sprott Asset Management’s John Embry tells King World News today that while the results of the first round of France’s presidential election were entirely expected, they provided another excuse for central banks and governments to slap gold down, but it wasn’t very successful. Embry’s comments are excerpted at KWN here:


CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



We wish Sweden all the luck in the world:  1/2 of its gold is stored in London and no doubt were used in swaps (leases)

No wonder they conceal the status of their reserves and refuse to give bar codes etc

(courtesy Ronan Manly/Bullionstar)

Ronan Manly: Sweden conceals the status of its gold reserves


1:39p ET Monday, April 24, 2017

Dear Friend of GATA and Gold:

Gold researcher Ronan Manly reports today that Sweden’s central bank claims to make physical inspections of its gold reserve, much of which is held outside the country, but refuses to disclose a list of its gold bars with their weights, even as the central bank acknowledges that it holds gold in part for intervening in the foreign exchange markets. Manly concludes that the bar list is being withheld because some of Sweden’s gold is impaired by loans or swaps and full transparency would expose interventions in the markets.

Manly’s analysis is headlined “Sweden’s Gold Reserves: 10,000 Gold Bars Shrouded in Official Secrecy” and it’s posted at Bullion Star here:


CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


It looks like our good friends over at Barrick are having their problems. Their costs are rising fast in their major new mine in Argentina named Veladero. Barrick is now producing only 1.33 million oz per quarter and with higher costs.  They earned only 14 cents per share in the quarter.

(Danielle Bochove/Bloomberg)

Barrick Falls as Costs Rise More Than Expected on Argentina Mine

April 24, 2017, 5:36 PM EDTApril 25, 2017, 8:49 AM EDT
  • Quarterly adjusted profit of 14 cents a share missed estimates
  • The world’s largest gold miner lowers 2017 production forecast

Barrick Gold Corp. posted weaker-than-expected first-quarter earnings, revenue and production — and higher costs after expenses increased at mines in Argentina and Nevada. Shares slumped.

The world’s largest bullion producer also said it expects to produce less gold in 2017 after selling half of its core Veladero mine in Argentina during the quarter. Even as the company plans to sell the stake to a Chinese joint-venture partner, costs jumped at the mine, and for the company overall.

All-in sustaining costs in the first quarter were $772 an ounce, compared with $706 an ounce a year earlier, the Toronto-based company said Monday in a statement. Analysts expected costs of $747, the average of six estimates.

In the first quarter, about 90 percent of the increased costs, or roughly $58 an ounce, was “a result of higher sustaining capital expenditures compared to the prior-year period,” Barrick said in the statement. These included higher costs at Veladero and stripping costs in Nevada.

Barrick said it now expects all-in costs at Veladero to be $890 to $990 an ounce in 2017, higher than a previous forecast of $840 to $940.

Production Trails

Barrick produced 1.31 million ounces in the first quarter, missing the 1.44 million average of five analysts’ estimates. The company now expects to produce 5.3 million to 5.6 million ounces of gold in 2017, compared with a previous forecast of 5.6 million to 5.9 million.

Earlier this month, Barrick announced it will sell half its Veladero gold mine to Shandong Gold Mining Co. for $960 million. On Monday, Barrick said total production at the mine will fall to 630,000 to 730,000 ounces from a previous forecast of 770,000 to 830,000.

The week before the Veladero deal was announced, a pipe carrying cyanide solution at the mine ruptured. Although Barrick said there was no risk to the environment, it was the third incident involving cyanide solution at Veladero in two years. Senior management flew to Argentina as authorities threatened to rescind the mine’s license or suspend operations.

Barrick has presented a “comprehensive plan” to federal and provincial authorities in Argentina to improve Veladero’s operating systems, the company said in Monday’s statement. Barrick is assuming the leach pad will be operating normally in June.

Shares Fall

The company’s shares were down 3 percent at 8:46 a.m. in Toronto Tuesday, reducing a year-to-date gain to 16 percent.

The drop in production at Veladero comes as analysts are increasingly focused on how Barrick intends to replenish its existing pipeline. “Increasingly, analyst attention is shifting to the long term for Barrick,” Michael Siperco, an analyst at Macquarie Capital Markets, said last week by phone from Toronto.

Barrick had said it intends to maintain production of at least 4.5 million ounces a year through 2021 — with higher levels until 2019 — subject to divestments. Brownfield projects are expected to replenish production while the company studies the feasibility of other longer-dated projects.

If the latter end up not making sense, “it raises a question, not in the next five years but 10 years plus, what does the production profile look like?” Siperco said. He estimates Barrick can sustain production of at least 4 million ounces a year until 2027 without developing new projects. “The question is beyond that.”

Revenue Rises

The company reported first-quarter net income of $679 million, which compared with a net loss of $83 million a year earlier. Earnings excluding one-time items were 14 cents a share, missing the 20-cent average of 19 analysts’ estimates compiled by Bloomberg.

It was only the second earnings miss in seven consecutive quarters.

First-quarter revenue rose 3.3 percent from a year earlier to $1.99 billion, missing the $2.14 billion average estimate.

Barrick has emerged from a multiyear strategy to cut costs and sell assets to lower its debt. Unlike some of its peers, it has stressed that improving free cash flow is more important than adding ounces to its production pipeline.

Gold futures rose 3.1 percent from a year earlier to average $1,221 an ounce in the first quarter.

(Barrick scheduled a conference call for Tuesday at 4:30 p.m. New York time. U.S. and Canadian callers can call toll-free at +1-800-319-4610; international callers +1-416-915-3239.)

Your early TUESDAY 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  6.8847(   REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.8847/ Shanghai bourse up 5.04 POINTS OR 0.16%   / HANG SANG CLOSED UP 316.46 POINTS OR 1.31%

2. Nikkei closed UP 203.45 POINTS OR 1.08%   /USA: YEN RISES TO 110.49

3. Europe stocks opened IN THE GREEN  except spain      ( /USA dollar index FALLS TO  99.03/Euro UP to 1.0877


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  49.35 and Brent: 51.65

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.365%/Italian 10 yr bond yield UP  to 2.24%    

3j Greek 10 year bond yield FALLS to  : 6.45%   

3k Gold at $1268.65/silver $17.80 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 12/100 in  roubles/dollar) 56.04-

3m oil into the 49 dollar handle for WTI and 51 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 


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  .9950 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0820 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.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.337%

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 2.302% early this morning. Thirty year rate  at 2.954% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

World Stocks Hit All Time High, S&P Futures Rise To Within 1% Of Record


After yesterday’s violent gap up in stocks across the globe in response to the “expected” outcome from the French election, today the risk on sentiment has continued if to a lesser extent, with stocks in Europe, Asia all rising while S&P futures point to a higher open. Yen, gold decline, while the euro traded as high as 1.09 this morning before fading some gains; oil is up modestly.

While today’s surge may have been more muted, world stocks hit a new record high on Tuesday, with investors still cheering Macron’s victory in the first round of the French presidential election, supported by speculation about U.S. tax reform and the overnight report that Trump has conceded on the border wall, eliminating a government shutdown as a potential risk. As shown below, the MSCI All World Index has jumped to a new all time high, boosted by strong Asian markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%, hovering near its highest level since June 2015 hit earlier in the session, on its fourth straight day of gains. Japan’s Nikkei rose more than 1 percent to a three-week high aided by a weaker yen. South Korea’s also advanced 0.7 percent to its highest level since April 2015. China equities climbed from a three-month low on speculation that a selloff over concerns of a regulatory crackdown were overdone. Australia and New Zealand were closed for Anzac Day.

European stocks hovered near a 20-month high, with the Dax flirting with all time highs. The Stoxx Europe 600 index edged 0.2% higher after jumpin 2.1% on Monday to the highest since August 2015, with property and technology shares helping to underpin a global rally. French shares pulled back 0.1 percent, having risen 4.1 percent on Monday in their biggest daily gain since August 2012. Futures on the S&P 500 added 0.1 percent. The index climbed 1.1% Monday to within 1% of its all-time closing high.

These gains helped push MSCI’s world stocks index to a fresh all-time high after chalking up its biggest rise since shortly after Britain’s vote last June to leave the European Union.

So with attention to France fading, if only until the runoff round in the election, “attention will fast move over to Washington with the outline of the Trump tax plan likely tomorrow, the need to avoid the shutdown on Friday and the end of the first 100 days of Trump on Saturday” with the White House determined that higher growth can offset tax cuts, DB’s Jim Reid wrote in his overnight note.

Commerzbank currency strategist Thu Lan Nguyen in Frankfurt, however, said that “(the second round) is going to be a non-event for the market. Markets have pretty much priced out the risk of a Le Pen victory, and rightly so, because the first round of the elections has shown that the polls in France were correct…and this increases the confidence in the polls for the second round…It’s highly likely that (Macron) is going to win.”

With one of the year’s major risks to markets seen less acute, markets were also looking ahead to other factors, including U.S. President Donald Trump’s promise to announce on Wednesday “a big tax reform and tax reduction”. The Wall Street Journal reported Trump wanted to cut the corporate tax rate to 15 percent. The White House budget director told Fox News on Monday Trump’s announcement would focus on principles, ideas and rates. “I’m becoming little concerned over the President’s big announcements, especially since we haven’t seen any major legislative achievement so far and he will be marking his 100th day in the White House this Saturday,” said FXTM chief market strategist Hussein Sayed in a note.

Elsewhere, the ECB said in a quarterly survey of lenders that while banks would tighten access to credit for companies in the second quarter, lending volumes were still expected to rise.

The euro added to Monday’s gains against the dollar, rising 0.2 percent to $1.0884, albeit off Monday’s high of $1.0940. The yen, however, pulled back 0.6% to 110.39 per dollar. Sterling rose 0.1 percent to $1.2806. The Canadian dollar 0.5 percent to C$1.3561 per U.S. dollar after the United States announced new duties averaging 20 percent on Canadian softwood lumber imports.

French and German 10-year government bond yields rose and the spread between them hit its tightest since November at around 41 basis points. The two-year spread was its narrowest since late January. The yield on French 10-year notes rose two basis points to 0.85 percent, after tumbling 11 basis points in the previous session. German benchmark yields added four basis points to 0.37 percent. U.S. bonds headed for a fifth day of declines, with yields on 10-year Treasuries climbing three basis points to 2.31 percent.

Gold fell 0.4 percent to just under $1,270 an ounce. Copper reversed falls in Asia and headed higher, last trading 0.7 percent higher at $5,695 a tonne. Oil prices steadied after six straight days of losses. Brent crude, the international benchmark LCOc1, was just 4 cents down on the day at $51.59 a barrel.

Economic data include new home sales, April consumer confidence. Scheduled earnings include AT&T, Coca-Cola, McDonald’s. Alphabet Inc., Microsoft Corp., Amazon.com Inc., Twitter Inc., Intel Corp., Credit Suisse Group AG, Barclays Plc, Bayer AG, Daimler AG and Total SA are among major companies releasing results this week. The Bank of Japan is widely expected to keep the settings on its monetary easing program unchanged at the end of a two-day policy meeting on Thursday. Though inflation remains well below the central bank’s 2 percent target, it’s ticking up. The European Central Bank sets monetary policy later that same day. With officials indicating little chance of a policy change, the focus will be on any signals from President Mario Draghi that the ECB is starting to discuss an exit from its extraordinary stimulus.

Global Market Snapshot

  • S&P 500 futures up 0.1% to 2,372.75
  • STOXX Europe 600 up 0.1% to 386.57
  • MXAP up 0.8% to 148.90
  • MXAPJ up 0.9% to 485.69
  • Nikkei up 1.1% to 19,079.33
  • Topix up 1.1% to 1,519.21
  • Hang Seng Index up 1.3% to 24,455.94
  • Shanghai Composite up 0.2% to 3,134.57
  • Sensex up 0.8% to 29,898.45
  • Australia S&P/ASX 200 up 0.3% to 5,871.78
  • Kospi up 1.1% to 2,196.85
  • German 10Y yield rose 2.5 bps to 0.354%
  • Euro up 0.2% to 1.0888 per US$
  • Brent Futures up 0.1% to $51.67/bbl
  • Italian 10Y yield fell 8.0 bps to 1.888%
  • Spanish 10Y yield rose 4.4 bps to 1.649%
  • Brent Futures up 0.1% to $51.67/bbl
  • Gold spot down 0.5% to $1,270.54
  • U.S. Dollar Index down 0.1% to 99.00

Top Overnight News from Bloomberg

  • President Donald Trump’s plan to slash the corporate tax rate to 15 percent is setting up a showdown with House Speaker Paul Ryan, who has called for a tax plan to pay for itself
  • French billionaire Bernard Arnault moved to consolidate control over Christian Dior for about 12.1 billion euros ($13.2 billion), folding the fashion house’s operations into the LVMH luxury empire in one of his biggest transactions
  • Rising defaults in China are unearthing hidden debt at companies across the country
  • Warburg Pincus, the private equity firm where former Treasury Secretary Tim Geithner is president, is targeting $1.6 billion for its first fund dedicated to financial services
  • Credit Suisse Group, two years into a belt-tightening turnaround plan, splurged a bit last month in Texas
  • Trump Slaps Duty on Canada Lumber, Intensifying Trade Fight
  • Trump Signals Shift on Wall Funding to Avert Government Shutdown
  • U.S., North Korea Flex Military Muscles as Tensions Simmer
  • Netflix in China Licensing Deal With IQiyi, Variety Reports
  • Berkshire Hathaway Buys 3.88m Liberty Siriusxm Series C Shares
  • Diebold Nixdorf to Support TD’s 5,000 ATMs in North America

Asian equity markets maintained the positive momentum from the strong Monday close where the French election relief rally spilled over and tax cut hopes also buoyed sentiment. Nikkei 225 (+1%) was underpinned as USD/JPY reclaimed the 110.00 handle, while the KOSPI (+1%) also shrugged off geopolitical concerns amid no further signs of provocation from North Korea which conducted a firing drill to commemorate its 85th military anniversary. Elsewhere, Shanghai Comp. (+0.2%) and Hang Seng (+1.2%) were higher following an increased liquidity injection by the PBoC, although mainland bourses were somewhat restrained on trade concerns and the ASX 200 was shut for ANZAC day. Finally, 10yr JGBs continued to reclaim the losses seen from the French election with prices back above the 151.00 level, while today’s enhanced liquidity auction for 10yr, 20yr and 30yr maturities also drew greater interest. PBoC injected CNY 40bIn in 7-day reverse repos, CNY 20bIn in 14-day reverse repos and CNY 20bIn in 28-day reverse repos.

Top Asian News

  • China Markets Reel as Banks Unwind $1.7 Trillion in Shadow Funds
  • India’s Central Bank Chief Says Cash Ban’s Effects ‘Transitory’
  • Iron Ore Seen Slumping for Years After Hitting February Peak
  • Japan Post Books $3.6 Billion Charge on Toll Holdings Writedown
  • IRB InvIT Plans to Raise up to 50.4b Rupees Through IPO

European bourses have seen a tamer session with local markets trading in mixed fashion, CAC 40 slightly trims post-election gains, falling a meagre 0.1%, similarly with the DAX which hovers around record highs. In terms of equity specific newsflow, LVMH outperforms after reports that they are to simply the Christian Dior which would subsequently boost their earnings, while Peugeot shares slip this morning on news that French prosecutors are to conduct a formal investigation over diesel emissions. Across credit markets, OATs are marginally extending on their outperformance, with the 10yr tightening against German benchmark to around 41bps. The German curve has shifted to a bear steepening bias with the 30yr +0.25bps.

Top European News

  • LVMH to Buy Christian Dior Couture; Arnault Christian Dior Bid
  • Arnault to Buy Rest of Dior for $13 Billion, Bolstering LVMH
  • U.K. Faces $2 Billion EU Demand on Customs Failures, Times Says
  • U.K. Meets Borrowing Forecasts But Consumer Slowdown Hits VAT
  • Rocket Internet Narrows Losses, Boosts Sales at Key Startups
  • Oil Steadies After Six-Day Slide as U.S. Stockpiles Seen Falling
  • German-Only Power Futures Start Trading Ahead of Market Split
  • Dutch Minister Kamp Continues to Support Independent Akzo: BNR
  • Brexit Districts in Tory Sights as May Seeks Bigger Majority
  • Volvo AB Shares Hit 10-Year High on Construction-Equipment Sales

In currencies, the euro rose 0.2 percent to $1.0892, retreating from near the highest level in five months. The yen fell 0.6 percent to 110.47 per dollar. The currency dropped 0.6 percent in the previous session. The Bloomberg Dollar Spot Index was little changed, after slipping 0.5 percent Monday. It has been another trading session where London liquidity calms things down to (less than) a cantor. We continue the CAD under pressure in the wake of the US trade case against Canada, where they propose a tariff on lumber tax to the tune of 20% – worth USD 1.0bIn on current imports stateside. However, the first line of USD/CAD resistance looks to have held, but we will have to contend with North American trade ahead, so we factor in the broader resistance area from 1.3600 up to 1.3675. 1.3850 is the next lever to watch if we manage to work through here. Tariffs on dairy produce have also been threatened given Canadian reclassification on ultra-refined milk from the US, and this has had a clear impact on the NZD, which has slipped below .7000 against the USD, and through 1.0800 vs the AUD. In the meantime, the near-term calm in risk sentiment has allowed USD/JPY bulls some modest upside through the lower 110.00’s, but we start coming up against some tech resistance through 110.50, with the slow grind higher stalling in the last hour or so accordingly.

In commodities, gold lost 0.5 percent to $1,270.46 after slipping 0.6 percent on Monday. Oil advanced 0.3 percent to $49.40, rebounding from six straight days of losses before U.S. government data that’s forecast to show crude stockpiles fell for a third week.  Copper prices have seen some upside pressure as reports of the Chilean earthquake hit the wires. This is in tandem with the end of the strikes in the Cerro Verde mine in Peru. Market is now looking to test USD2.60 again, with the current risk on mood also supportive for base metals in general. Iron ore struggling though, as Chinese stockpiles weigh. Little risk related relief for Oil however, as US production tempers the impact of the current production cut agreement, the extension of which is still seen in the balance, but recent OPEC rhetoric remains hopeful. Below USD50.00, we see plenty of support ahead of USD45.00, the bottom end of the broader range in WTI. Precious metals still fading slightly, as Gold now floundering ahead of USD1270.00. Silver looks to have established near term footing, but risk/USD sentiment flighty at present to maintain a modicum of support.

US Event Calendar

  • 9am: FHFA House Price Index MoM, est. 0.4%, prior 0.0%
    • S&P CoreLogic CS 20-City MoM SA, est. 0.73%, prior 0.86%
    • S&P CoreLogic CS 20-City YoY NSA, est. 5.77%, prior 5.73%
    • S&P CoreLogic CS 20-City NSA Index, prior 192.8
    • S&P CoreLogic CS US HPI YoY NSA, prior 5.87%
    • S&P CoreLogic CS US HPI NSA Index, prior 185.5
  • 10am: New Home Sales, est. 583,500, prior 592,000; New Home Sales MoM, est. -1.44%, prior 6.1%
    • Conf. Board Consumer Confidence, est. 122.5, prior 125.6
    • Conf. Board Present Situation, prior 143.1
    • Conf. Board Expectations, prior 113.8
  • 10am: Richmond Fed Manufact. Index, est. 16, prior 22


Looking at the day ahead today, we got April confidence indicators out of France this morning (manufacturing confidence: 108 actual, 104 expected; 105 previous). Shortly after that we got the ECB’s bank lending survey numbers, which saw slightly tighter standards for business loans in Q2. In the US we will get housing market data in the form of the S&P/Case-Shiller house price index and FHFA house price index (+0.4% mom expected) for February. Thereafter we will see confidence indicators for the month ahead in the form of the conference board consumer confidence number (122.5 expected; 125.6 previous) and the Richmond Fed manufacturing survey (16 expected; 22 previous), both of which are expected to drop given growing policy uncertainty in the US.

DB’s Jim Reid concludes the overnight wrap

The only tears shed yesterday in markets were ones of pure joy as risk-on dominated following the first round of the French elections. Over in Europe the STOXX 600 (+2.1%) hit its highest levels since mid Aug 2015, while the CAC rallied by +4.1%. Every single sector within the STOXX index was safely in positive territory, with European banks leading the way with outsized gains of 4.8% on the day (Eurozone banks in particular were up by 7.4%). French banks were some of the best performers on the day with Credit Agricole (+10.9%), Societe Generale (+9.9%), Natixis (+9.0%) and BNP Paribas (+7.52%) all within the top ten gainers in Europe. Italian banks also benefited from the broader risk on sentiment as Unicredit (+13.2%) and UBI (+10.4%) both posted double digit returns. Other regional equity indices also reflected the broader relief rally as the FTSE, DAX, and FTSE MIB all gained by +2.1%, +3.4% and 4.8% on the day. Markets over in the US also benefited from the risk on sentiment as the S&P500 (+1.1%) and Dow (+1.05%) both posted gains, as financials were the top performer within the S&P with gains of 2.2% on the day. Market volatility measures also dipped aggressively yesterday with the VIX (-3.7pts; -26%) and VSTOXX (-8.9pts; -35%) giving up recent increases to drop to three week lows.

Credit markets also saw broad risk on moves. Main and Crossover tightened by -6bps and -16bps on the day, while Senior and Sub Financials tightened by -10bps and -20bps. French Bank Senior CDS also rallied as Societe Generale (-21bps), BNP (-18bps), and Credit Agricole (-16bps) all saw significant spread tightening. Over in the US CDX IG and HY also tightened by -3bps and -12bps.

Over in government bond markets German bunds (2Y: +10bps; 10Y: +8 bps) and US treasuries (2Y: +5bps; 10Y: +2.5bps) sell off across all maturities. On the other hand French OAT yields dropped across the curve (2Y: -14bps; 10Y: -11bp) as the OAT-Bund 10Y spread tightened by -19bps. Italian BTPs also saw yields drop across the term structure (2Y: -5bps; 10Y: -8bps) amid the rally. Over in currency markets the Euro ticked by +1.05% on the day after giving up larger gains at the open and then hardly moving all day. Commodity markets however remained largely unaffected by the risk on rally: WTI was down marginally at -0.7% while Gold remained fairly flat after falling slightly in the Asian session the night before.

Attention will fast move over to Washington with the outline of the Trump tax plan likely tomorrow, the need to avoid the shutdown on Friday and the end of the first 100 days of Trump on Saturday. The WSJ reported last night that Mr Trump has ordered aides to prioritise cutting taxes ahead of budget neutrality and in particular target a 15% corporate tax rate. Treasury Secretary Mnuchin was bullish by telling reporters at the White House that the tax plan will “pay for itself with economic growth” and that Mr Trump is determined to get sustained growth of 3% or higher. So all eyes on the US for the next few days.

Asian markets are generally in decent shape overnight with the Nikkei +0.8% higher, the Hang Seng +0.95% and the Shanghai Comp +0.45% as we go to print. Global bond yields are pretty flat as is the Euro against the Dollar.

Returning back to yesterday, the latest ECB CSPP numbers were released. They remain inconclusive as to whether the ECB have decided against tapering corporate purchases. The Easter period has created too many distortions to give a clear answer. If you assume the €1.482bn of buying is spread over 4 business days this averages €371mn per day very close to the daily average of €368mn since the program started. However if you feel the ECB would want to try to offset the loss of a day with more buying then the numbers are optically weaker. We should have a clearer view next Tuesday (after bank hols) as to where we stand as they’ll publish the full monthly numbers then for both CSPP and PSPP.

Away from the French elections there was little in way of data to drive markets yesterday. In Europe we got the April IFO survey in Germany which was mostly positive: the business climate indicator (112.9 vs. 112.4 expected) and the current assessment indicator (121.1 vs. 119.2 expected) both clocked in above expectations. However IFO expectations marginally disappointed by dropping to 105.2 (vs. 105.9 expected; 105.7 previous). Over In the US we got the April Dallas Fed manufacturing activity survey which ticked down marginally to 16.8 against expectations of a slight increase to 17.0 (16.9 previous).

Looking at the day ahead today, we will get the April confidence indicators out of France this morning (manufacturing confidence: 105 expected; 104 previous). Shortly after that we will get the ECB’s bank lending survey numbers. Over in the UK we will get public sector net borrowing data for March which is expected to rise to 1.5bn (1.1bn previous). Heading over to the US we will get housing market data in the form of the S&P/Case-Shiller house price index and FHFA house price index (+0.4% mom expected) for February. Thereafter we will see confidence indicators for the month ahead in the form of the conference board consumer confidence number (122.5 expected; 125.6 previous) and the Richmond Fed manufacturing survey (16 expected; 22 previous), both of which are expected to drop given growing policy uncertainty in the US.

Earnings will continue to be a big focus today, as we see AT&T and Caterpillar report today amongst others.


i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 5.04 POINTS OR 0.16%/ /Hang Sang CLOSED UP 316.46 POINTS OR 1.31%.  The Nikkei closed UP 203.45 OR 1.08% /Australia’s all ordinaires  CLOSED UP .26%/Chinese yuan (ONSHORE) closed UP at 6.8847/Oil DOWN to 49.35 dollars per barrel for WTI and 51.65 for Brent. Stocks in Europe  IN THE GREEN   ..Offshore yuan trades  6.8847 yuan to the dollar vs 6.8847 for onshore yuan. NOW  THE OFFSHORE IS SLIGHTLY STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN ALSO MUCH STRONGER AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS HAPPY



Kim Jung Un conducts the largest ever fire drill as the USA sub docks in the south:

(courtesy zerohedge)

North Korea Conducts Largest-Ever Live Fire Drill As US Nuclear Sub Docks In South

North Korea conducted what various media outlets have dubbed as its largest ever live-fire exercise on Tuesday to mark the 85th anniversary of the foundation of its military, as a U.S. submarine docked in South Korea in “a show of force” amid growing concern a showdown between the US and North Korea may be imminent.

The port call by the USS Michigan, first reported by Reuters, came as the USS Carl Vinson carrier group steamed toward Korean waters and is expected to arrive over the next 24 hours, while top envoys for North Korea policy from South Korea, Japan and the United States met in Tokyo.

The nuclear-powered submarine the USS Michigan, which arrived in the South Korean port of Busan, is built to carry and launch ballistic missiles and Tomahawk cruise missiles.

Some have speculated that North Korea would conduct another nuclear test or long-range missile launch in defiance of U.N. sanctions, perhaps on the Tuesday anniversary of the founding of its military, however the absence of such an event has led to speculation Trump’s hardline tactics, together with pressure from China may have paid off. So far, instead of a nuclear test or big missile launch, North Korea deployed a large number of long-range artillery units in the region of Wonsan on its east coast for a live-fire drill, South Korea’s military said. North Korea has an air base in Wonsan and missiles have also been tested there.

“North Korea is conducting a large-scale firing drill in Wonsan areas this afternoon,” the South’s Office of Joint Chiefs of Staff said in a statement. The South Korean military was monitoring the situation and “firmly maintaining readiness”, it said. The South’s Yonhap News Agency said earlier the exercise was possibly supervised by North Korean leader Kim Jong Un.

Meanwhile, North Korea’s state media maintained its jawboning and was defiant in a commentary marking the 85th anniversary of the foundation of the Korean People’s Army, saying its military was prepared “to bring to closure the history of U.S. scheming and nuclear blackmail”.

“There is no limit to the strike power of the People’s Army armed with our style of cutting-edge military equipment including various precision and miniaturized nuclear weapons and submarine-launched ballistic missiles,” the official Rodong Sinmun newspaper said in a front-page editorial.

Further adding to the pressure on its northern neighbor, South Korea’s navy said it was conducting a live-fire exercise with U.S. destroyers in waters west of the Korean peninsula and would soon join the carrier strike group approaching the region.

China, North Korea’s sole major ally which nevertheless objects to its weapons development, has repeatedly called for calm, and its envoy for Korean affairs, Wu Dawei, was in Tokyo on Tuesday.

We hope that all parties, including Japan, can work with China to promote an early peaceful resolution of the issue, and play the role, put forth the effort, and assume the responsibility that they should,” Chinese foreign ministry spokesman Geng Shuang told reporters in Beijing.

Japan’s envoy on North Korea, Kenji Kanasugi, said after talks with his U.S. and South Korean counterparts that they agreed China should take a concrete role to resolve the crisis and it could use an oil embargo as a tool to press the North. “We believe China has a very, very important role to play,” said the U.S. envoy for North Korea policy, Joseph Yun.

South Korea’s envoy, Kim Hong-kyun, said they had also discussed how to get Russia’s help to press North Korea. Japanese Prime Minister Shinzo Abe is expected to meet Russian President Vladimir Putin on April 27, the Kremlin said. It did not elaborate.

Still, despite the lack of a nuclear test or missile launch, clouds are gathering over Pyongyang. The State Department said on Monday U.S. Secretary of State Rex Tillerson would chair a special ministerial meeting of the U.N. Security Council on North Korea on Friday. Tillerson, along with Defense Secretary Jim Mattis, Director of National Intelligence Dan Coats and Joint Chiefs chairman General Joseph Dunford, would also hold a rare briefing for the entire U.S. Senate on North Korea on Wednesday, Senate aides said.

A North Korean foreign ministry spokesman said those meetings called by U.S. officials clearly reflected the U.S. pressure that could “ignite a full-out war” on the Korean peninsula.


“The reality of today again proves the decision to strengthen nuclear power in quality and quantity under the banner of pursuing economic development and nuclear power was the correct one,” the unidentified spokesman said in a statement issued by the North’s state media.

On Monday, Trump called for tougher U.N. sanctions on the North, saying it was a global threat and “a problem that we have to finally solve”.

Taking a softer line, the official China Daily said it was time for Pyongyang and Washington to take a step back from harsh rhetoric and heed calls for a peaceful resolution. “Judging from their recent words and deeds, policymakers in Pyongyang have seriously misread the U.N. sanctions, which are aimed at its nuclear/missile provocations, not its system or leadership,” the newspaper said in an editorial.

“They are at once perilously overestimating their own strength and underestimating the hazards they are brewing for themselves.”



none today




Our resident expert on Greek affairs, Raul Meijer does a great job in explaining the massive deflation whacking Greece right now.  The IMF is no friend to Greece.  The austere demands of the Troika took out 4% of GDP and this is why deflation is ripping this country.

a must read…

(courtesy Raul Meijer)

The IMF Is Not Done Destroying Greece Yet

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Austerity is over, proclaimed the IMF this week. And no doubt attributed that to the ‘successful’ period of ‘five years of belt tightening’ a.k.a. ‘gradual fiscal consolidation’ it has, along with its econo-religious ilk, imposed on many of the world’s people. Only, it’s not true of course. Austerity is not over. You can ask many of those same people about that. It’s certainly not true in Greece.

IMF Says Austerity Is Over

Austerity is over as governments across the rich world increased spending last year and plan to keep their wallets open for the foreseeable future. After five years of belt tightening, the IMF says the era of spending cuts that followed the financial crisis is now at an end. “Advanced economies eased their fiscal stance by one-fifth of 1pc of GDP in 2016, breaking a five-year trend of gradual fiscal consolidation,” said the IMF in its fiscal monitor.

In Greece, the government did not increase spending in 2016. Nor is the country’s era of spending cuts at an end. So did the IMF ‘forget’ about Greece? Or does it not count it as part of the rich world? Greece is a member of the EU, and the EU is absolutely part of the rich world, so that can’t be it. Something Freudian, wishful thinking perhaps?

However this may be, it’s obvious the IMF are not done with Greece yet. And neither are the rest of the Troika. They are still demanding measures that are dead certain to plunge the Greeks much further into their abyss in the future. As my friend Steve Keen put it to me recently: “Dreadful. It will become Europe’s Somalia.”

An excellent example of this is the Greek primary budget surplus. The Troika has been demanding that it reach 3.5% of GDP for the next number of years (the number changes all the time, 3, 5, 10?). Which is the worst thing it could do, at least for the Greek people and the Greek economy. Not for those who seek to buy Greek assets on the cheap.

But sure enough, the Hellenic Statistical Authority (ELSTAT) jubilantly announced on Friday that the 2016 primary surplus was 4.19% (8 times more than the 0.5% expected). This is bad news for Greeks, though they don’t know it. It is also a condition for receiving the next phase of the current bailout. Here’s what that comes down to: in order to save itself from default/bankruptcy, the country is required to destroy its economy.

And that’s not all: the surplus is a requirement to get a next bailout tranche, and debt relief, but as a reward for achieving that surplus, Greece can now expect to get less … debt relief. Because obviously they’re doing great, right?! They managed to squeeze another €7.3 billion out of their poor. So they should always be able to do that in every subsequent year.

The government in Athens sees the surplus as a ‘weapon’ that can be used in the never-ending bailout negotiations, but the Troika will simply move the goalposts again; that’s its MO.

A country in a shape as bad as Greece’s needs stimulus, not a budget surplus; a deficit would be much more helpful. You could perhaps demand that the country goes for a 0% deficit, though even that is far from ideal. But never a surplus. Every penny of the surplus should have been spent to make sure the economy doesn’t get even worse.

Greek news outlet Kathimerini gets it sort of right, though its headline should have read “Greek Primary Surplus Chokes Economy“.

Greek Primary Surplus Chokes Market

The state’s fiscal performance last year has exceeded even the most ambitious targets, as the primary budget surplus as defined by the Greek bailout program, came to 4.19% of GDP, government spokesman Dimitris Tzanakopoulos announced on Friday. It came to €7.369 billion against a target for €879 million, or just 0.5% of GDP. A little earlier, the president of the Hellenic Statistical Authority (ELSTAT), Thanos Thanopoulos, announced the primary surplus according to Eurostat rules, saying that it came to 3.9% of GDP or €6.937 billion.


The two calculations differ in methodology, but it is the surplus attained according to the bailout rules that matters for assessing the course of the program. This was also the first time since 1995 that Greece achieved a general government surplus – equal to 0.7% of GDP – which includes the cost of paying interest to the country’s creditors. There is a downside to the news, however, as the figures point to overtaxation imposed last year combined with excessive containment of expenditure.


The amount of €6-6.5 billion collected in excess of the budgeted surplus has put a chokehold on the economy, contributing to a great extent to the stagnation recorded on the GDP level in 2016. On the one hand, the impressive result could be a valuable weapon for the government in its negotiations with creditors to argue that it is on the right track to fiscal streamlining and can achieve or even exceed the agreed targets. On the other hand, however, the overperformance of the budget may weaken the argument in favor of lightening the country’s debt load.

Eurogroup head Dijsselbloem sees no shame in admitting this last point :

Dijsselbloem Sees ‘Tough’ Greek Debt Relief Talks With IMF

“That will be a tough discussion with the IMF,” said Dijsselbloem, who is also the Dutch Finance Minister in a caretaker cabinet, “There are some political constraints where we can go and where we can’t go.” The level of Greece’s primary budget surplus is key in determining the kind of debt relief it will need. The more such surplus it has, the less debt relief will be needed.

That’s just plain insane, malicious even. Greek PM Tsipras should never have accepted any such thing, neither the surplus demands nor the fact that they affect debt relief, since both assure a further demise of the economy.

Because: where does the surplus come from? Easy: from Troika-mandated pension cuts and rising tax levels. That means the Greek government is taking money OUT of the economy. And not a little bit, but a full 4% of GDP, over €7 billion. An economy from which so much has already vanished.

The €7.369 billion primary surplus, in a country of somewhere between 10 and 11 million people, means some €700 per capita has been taken out of the economy in 2016. Money that could have been used to spend inside that economy, saving jobs, and keeping people fed and sheltered. For a family of 3.5 people that means €200 per month less to spend on necessities (the only thing most Greeks can spend any money on).

I’ve listed some of the things a number of times before that have happened to Greece since the EU and IMF declared de facto financial war on the country. Here are a few (there are many more where these came from):

25-30% of working age Greeks are unemployed (and that’s just official numbers), well over 1 million people; over 50% of young people are unemployed. Only one in ten unemployed Greeks receive an unemployment benefit (€360 per month), and only for one year. 9 out of 10 get nothing.

Which means 52% of Greek households are forced to live off the pension of an elderly family member. 60% of Greek pensioners receive pensions below €700. 45% of pensioners live below the poverty line with pensions below €665. Pensions have been cut some 12 times already. More cuts are in the pipeline.

40% of -small- businesses have said they expect to close in 2017. Even if it’s just half that, imagine the number of additional jobs that will disappear.

But the Troika demands don’t stop there; they are manifold. On top of the pension cuts and the primary surplus requirement, there are the tax hikes. So the vast majority of Greeks have ever less money to spend, the government takes money out of the economy to achieve a surplus, and on top of that everything gets more expensive because of rising taxes. Did I ever mention businesses must pay their taxes up front for a full year?

The Troika is not “rebalancing Greece’s public finances in a growth-friendly manner”, as Dijsselbloem put it, it is strangling the economy. And then strangling it some more.

There may have been all sorts of things wrong in Greece, including financially. But that is true to some degree for every country. And there’s no doubt there was, and still is, a lot of corruption. But that would seem to mean the EU must help fight that corruption, not suffocate the poor.

Yes, that’s about a 30% decline in GDP since 2007


The ECB effectively closed down the Greek banking system in 2015, in a move that’s likely illegal. It asked for a legal opinion on the move but refuses to publish that opinion. As if Europeans have no right to know what the legal status is of what their central bank does.

The ECB also keeps on refusing to include Greece in its QE program. It buys bonds and securities from Germany, which doesn’t need the stimulus, and not those of Greece, which does have that need. Maybe someone should ask for a legal opinion on that too.

The surplus requirements will be the nail in the coffin that do Greece in. Our economies depend for their GDP numbers on consumer spending, to the tune of 60-70%. Since Greek ‘consumers’ can only spend on basic necessities, that number may be even higher there. And that is the number the country is required to cut even more. Where do you think GDP is headed in that scenario? And unemployment, and the economy at large?

The question must be: don’t the Troika people understand what they’re doing? It’s real basic economics. Or do they have an alternative agenda, one that is diametrically opposed to the “rebalancing Greece’s public finances in a growth-friendly manner” line? It has to be one of the two; those are all the flavors we have.

You can perhaps have an idea that a country can spend money on wrong, wasteful things. But that risk is close to zilch in Greece, where many if not most people already can’t afford the necessities. Necessities and waste are mutually exclusive. A lot more money is wasted in Dijsselbloem’s Holland than in Greece.

In a situation like the one Greece is in, deflation is a certainty, and it’s a deadly kind of deflation. What makes it worse is that this remains hidden because barely a soul knows what deflation is.

Greece’s deflation hides behind rising taxes. Which is why taxes should never be counted towards inflation; it would mean all a government has to do to raise inflation is to raise taxes; a truly dumb idea. Which is nevertheless used everywhere on a daily basis.

In reality, inflation/deflation is money/credit supply multiplied by the velocity of money. And in Greece both are falling rapidly. The primary surplus requirements make it that much worse. It really is the worst thing one could invent for the country.

For the Greek economy, for its businesses, for its people, to survive and at some point perhaps even claw back some of the 30% of GDP it lost since 2007, what is needed is a way to make sure money can flow. Not in wasteful ways, but in ways that allow for people to buy food and clothing and pay for rent and power.

If you want to do that, taking 4% of GDP out of an economy, and 3.5% annually for years to come, is the very worst thing. That can only make things worse. And if the Greek economy deteriorates further, how can the country ever repay the debts it supposedly has? Isn’t that a lesson learned from the 1919 Versailles treaty?

The economists at the IMF and the EU/ECB, and the politicians they serve, either don’t understand basic economics, or they have their eyes on some other prize.





Reuters is telegraphing the ECB is about to turn hawkish.  This caused the Euro to rise above the 1.09 mark:

(courtesy zerohedge)

EURUSD Spikes Above 1.09 After Reuters Telegraphs ECB Hawkish Turn

EURUSD just ran stops above 1.09 after Reuters reports what appears to be an ECB strawman that it may shift its policy in June.

Reuters reports that three sources on and close to the bank’s Governing Council told Reuters that with the threat of a run-off between two eurosceptic candidates in France averted, and with the economy on its best run in years, many ratesetters see scope for sending a small signal in June towards reducing monetary stimulus.

There is, however, little appetite to change at this Thursday’s meeting the pledge to buy bonds at least until the end of the year and to keep rates at rock bottom until well after that. A move in June, however, might mean changing the wording of the ECB’s opening statement to reflect improved prospects for the economy. Some or all the references to prevailing downside risks to the outlook, to the possibility of further rate cuts or to larger asset purchases may be taken out, the sources said.

“The discussion will be on removing some of the easing biases,” one of the sources said. “I can’t say how quickly it will happen because that depends on the data.”

The ECB declined to comment.

The reaction is modest and appears more algo-driven stop-run than systemic…





Oh OH! Canada is in real trouble:  First Trump announces a 20% tariff on Canadian softwood lumber imports:

the trade between the countries: over 5 billion uSA

(courtesy zerohedge)

Trade Wars Begin: Trump Announces 20% Tariff On Canadian Softwood Lumber Imports

Speaking during a first of its kind meeting dedicated only to members of the U.S. conservative media, including Breitbart News, OANN and Daily Caller, President Trump told reporters to expect a 20% tariff on softwood lumber coming into Canada.

“We’re going to be putting a 20 per cent tax on softwood lumber coming in — tariff on softwood coming into the United States from Canada,”  tweeted Charlie Spiering of Breitbart Media.

Trey Yingst of OANN tweeted that according to Trump “Canada has treated us very unfairly” and also threatened a tax on Canada’s dairy industry.

According to the WSJ, Wilbur Ross said the tariff will be applied retroactively and imposed on Canadian exports to the U.S. of about $5 billion a year. He said the dispute centers on Canadian provinces that have been allegedly allowing loggers to cut down trees at reduced rates and sell them at low prices. “The determination that Canada improperly subsidizes its exports is preliminary, and the Commerce Department will need to make a final decision. In addition, the U.S. International Trade Commission will need to find that the U.S. industry has suffered injury. But even a preliminary decision has immediate real-world consequences, by discouraging importers from buying lumber from Canada.”

Or, as a WSJ associate editor put it, “Blame the Chinese, but tax the Canadians:”

“We tried to negotiate a settlement but we were unable,” Mr. Ross said, adding that previous administrations have also been unsuccessful in resolving the dispute.

Speaking to the FT, Wilbur Ross said that the US would impose tariffs ranging from 3 per cent to 24% on five Canadian lumber exporters. The Canadian companies are Canfor, J.D. Irving, Resolute FP Canada, Tolko Marketing and Sales and West Fraser Mills.

“This has been another long-standing dispute with Canada,” said Ross. “These duties will be applied retroactively, 90 days backward, because they were on notice that this was forthcoming and they didn’t change the practice of dumping subsidized lumber.”

Ross also told the FT that the Canadian provinces that own the forests from where softwood lumber is sourced were subsidizing logging activities, which allowed Canada to then dump the lumber in the US at below-market prices.

“It is around $5bn a year worth of lumber that comes in this way. And the Canadians have roughly a 31.5 per cent market share of the whole US softwood lumber (market),” Mr Ross added.

The Trump administration had already notified Canada of its intent to impose the tariffs, a measure which comes as Trump approaches his 100th day in office on Saturday and is another example of his intent to take a more protectionist approach to trade policy.

The tariffs have been anticipated since last week when Trump launched a barrage of criticism against Canada’s dairy, energy and lumber sectors. As Global News adds, the expected announcement from the U.S. Commerce Department on countervailing duties, a type of import tax meant to counter a subsidized export, is just the latest in the ongoing Canada-U.S. softwood row, which stretches back to the 1980s.

Previously, President Trump said the Canadian system of protectionist dairy quotas is harming U.S. farmers, and that he’ll press Canada for changes to its dairy system as part of North American Free Trade Agreement talks.

Last week, Prime Minister Justin Trudeau said the U.S. has a $400m dairy surplus with Canada adding “it’s not Canada that’s the challenge here.”

The dispute largely stems from the fact most Canadian lumber is harvested on government-owned land while American lumber comes mainly from private land. The American lumber lobby has long accused Canadian governments of allowing companies to cut wood for less than market prices, which they say is an unfair subsidy.

The announcement is also the latest escalation in US trade wars under the new administration, and comes just hours after China warned it would retaliate if the US imposed tariffs on its steel imports.

In separate comments, Breitbart’s Charlie Spireling reports that when asked about Assad’s existing stockpile of chemical weapons, Trump responded “Wait and see if he uses them again, OK?”

Trump also discussed the North Korean situations, and said  “this should have been done by Obama and it should have been done by every president since, really, Clinton.” Asked about Kim Jong-un’s military capacity, Trump replies: “I’m not so sure he’s so strong like he says he is, I’m not so sure at all.”

There was immediate selling in the Loonie.

Which just broke to the weakest in 4 months against the US dollar.


And with lumber prices already at 13-year highs, one can only imagine what this will do to the price of houses in America.

Canadians have had a tough time of it recently: they are getting inundated with illegal immigrants (thanks to Trudeau’s welcome) and not benefitting from the wholesale emigration north that so many liberals promised if Trump was elected; housing has become unaffordable due to Chinese hot money flows encouraged by the government; the Canadian energy industry is hosed because of US shale production-driven low prices; and now the US imposes trade tariffs on another of their biggest exports.



Secondly, Trump warns Canada on the import tax on milk.  Trump states that we will not stand for this: the result is the Cdn dollar collapses to 1.36 to the dollar.

(courtesy zero hedge)


Trump Warns Canada “We Will Not Stand For This”

Unable to engage in trade war with China – allegedly because he needs Beijing on his side as he tries to diffuse the North Korean situation – Trump has launched a trade war with Canada instead, and after announcing a 20% tariff on softwood lumber on Monday night, Trump followed up this morning with a tweet moments ago in which he lashed out at America’s northern neighbor, saying “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”

Or, as some summarized it far more simply nearly 20 years ago, “blame Canada.”

The Tuesday tweet echoed comments Trump made last week, when he called the dairy issue a “disgrace,” and blamed it on NAFTA. “What they’ve done to our dairy farm workers is a disgrace. It’s a disgrace,” the president said last week. The criticism of the tax is the latest in Trump’s criticisms of free trade agreements, which he railed against on the campaign trail.

The milk had previously been duty-free until Canada put the import tax in place.

In a separate tweet, Trump took offense with the categorization of his shift on the wall with Mexico, where as reported overnight he said he was willing to wait for funding until September instead of pushing for initial funding ahead of Friday, tweeting “Don’t let the fake media tell you that I have changed my position on the WALL. It will get built and help stop drugs, human trafficking etc.

Perhaps he is right, although if he can’t get funding now, one wonders how he will be able to succeed in 5 months when relations between Republicans and Democrats will be even more on edge.




And Canada’s angry response to its uSA neighbour:

(courtesy zero hedge)

An Angry Canada Responds To Trump’s Lumber Tariff… And What It Means For The Economy

After last night’s announcement of ~20% tariffs on softwood lumber imported from Canada, Prime Minister Justin Trudeau lashed out at the Trump administration saying the U.S. could suffer from a “thickening” border as trade tensions between the two countries escalated, sending the Canadian currency to a 14 month low.

As a reminder, the United States announced it would impose preliminary anti-subsidy duties averaging 20 percent on imports of Canadian softwood lumber, Commerce Secretary Wilbur Ross said on Monday, escalating a long-running trade dispute between the two neighbors. The move, which affects some $5.66 billion worth of imports of the construction material, sets a tense tone as the two countries and Mexico prepare to renegotiate the 23-year-old North American Free Trade Agreement.

Speaking to a technology company in Ontario, Trudeau said he would defend the national interest: “standing up for Canada’s interests is what my job is, whether it’s softwood or software,” Trudeau said, prompting applause and cheers.

“You cannot thicken this border without hurting people on both sides of it. Any two countries are going to have issues that will be irritants to the relationship and, quite frankly, having a good constructive working relationship allows us to work through those irritants.”

Elsewhere, Canada’s Natural Resources Minister Jim Carr said the U.S. move to set tariffs on softwood lumber shipments are an “unfair and unwarranted trade action.”  Speaking to reproters in Ottawa, Carr said that Canada is looking at an aid package for lumber industry and workers which could up to $300 million, and added that a court challenge of duties is possible, and that Canada has won all of those cases in the past.

Carr also said free trade is in the best interest of both nations: “There are irritants in the trading relationship, they aren’t new.”

Canada’s Liberal Party leader says the two countries are economically interconnected, but it’s not a one-way relationship. He said that millions of U.S. jobs depend on smooth flow of goods, services and people back and forth across the border. The Prime Minister also vowed to stand up for Canadian interests after Trump’s decision sent the Canadian dollar to a 14-month low.

Yet while the currency fell, shares in Canadian lumber companies rose as the level of the new tariffs came in at the low end of what investors were expecting. Shares in West Fraser Timber, which would pay the highest duty rate of the affected companies, rose 5.6 percent to C$59.50 and the Canfor stock gained 3.5 percent to C$18.82. The average 20 percent anti-subsidy duties announced late on Monday compared to a 20-30 percent range expected by RBC equity analysts.

As Reuters adds, softwood lumber joins dairy as a key target for U.S. President Donald Trump, who tweeted a new attack on Canada’s supply management system for dairy on Tuesday. Last week the president called Canada’s dairy protections “unfair.” “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!” Trump tweeted Tuesday morning.

* * *

So what does Trump’s announcement mean for the Canadian economy? Here is a summary of the key takeaways from a BofA note on the escalating trade war between the US and Canada.

  • Trade uncertainty back to the forefront after US announced preliminary duties on Canadian softwood lumber exports.
  • The announcement on tariffs was accompanied by negative comments regarding NAFTA, which may herald NAFTA renegotiation.
  • Downside risks to growth intensify as higher tariffs lower exports and higher uncertainty delays investment.

And the details:

Trade uncertainty back to the forefront

US wants to renegotiate NAFTA

The US is likely to open the North America Free Trade Agreement (NAFTA) for renegotiation and is willing to use tariffs to contest what it considers unfair trade. This has been our long standing view, but we  got clear evidence that the US will be very active on the trade front after Wilbur Ross, US commerce secretary, announced on April 24th the imposition of preliminary duties of almost 20% against Canadian  softwood lumber exports. Ross said that the US is using countervailing duties after it was “not able to achieve a fair result” through negotiation with Canada. He said that Canada benefits from a provision in NAFTA that allows Canada to supersede US sovereignty.

Downside risks to Canadian growth

The imposition of countervailing tariffs along with the comments on NAFTA increases uncertainty regarding trade policies for the North America region, which will likely delay investment. Although we believe that Canada is not the main target of US anti-trade policies, it is certainly very exposed to US trade. Higher tariffs will have a negative impact on production in the Canadian lumber industry (Lumber exports  are almost 1% of Canadian GDP). Growth in Canada has been surprising to the upside, in line with our more constructive view of the economy. But the likely renegotiation of NAFTA and an active US trade policy put downside risks on our 2.3% GDP growth expectation for 2017.

Renegotiation of NAFTA is positive, but…

We expect the US to send a notification to open NAFTA for renegotiation soon. That will open a 90 day window for countries to prepare. Any renegotiation is likely to be lengthy, going well into 2018. And an institutional renegotiation of NAFTA has a good chance of ending with an updated agreement that benefits the region by incorporating new sectors into the treaty (e.g., energy, ecommerce). Consider the TPP blueprint that the staffs of the three countries involved had already agreed on as a starting point. But in the meantime uncertainty will likely be high as countries take different postures or even actions such as the impositions of tariffs to improve their leverage. The risk is that it all ends in a trade war, although the strength of the value chains in North America makes the latter an unlikely scenario, in our view.

Back to dovish BoC

The increase on trade uncertainty will be highlighted by the BoC, which will support our strategists’ view of a weaker CAD, in our view.



A tiny rise in mortgage rates will be devastating to Canadian housing:

(courtesy WolfStreet/WolfRichter)


Late in the day, WTI drops into the 48 dollar handle with a surprise crude and gasoline build

(courtesy zero hedge)

WTI/RBOB Tumble After Surprise Crude, Gasoline Builds

After dropping to a $48 handle, WTI bounced off its 200DMA, but remains well down from last week’s levels before the DOE-reported surprise gasoline build. The initial kneejerk reaction lower in WTI/RBOB after API reported an unexpected crude build and yuuge gasoline build.



  • Crude +897k (-1.75mm exp)
  • Cushing -1.971mm
  • Gasoline +4.445mm (+500k exp)
  • Distillates -36k

Following last week’s surprise DOE reported build in gasoline inventories, API reports a huge build (bioggest in 3 months) and a surprise crude build (even as Cushing saw a big draw – the biuggest since feb 2014)


Prices are well down from last week’s API/DOE data prints, but bounced higher today into the API print. This initial reaction was a push lower in both WTI  and RBOB…


“A lot of it is technical here. It looks like we hit the support at the 200-day for WTI (~$48.91),” Bart Melek, the head of global commodity strategy at TD Securities in Toronto, says by phone. Market was “anticipating a further constructive decline in commercial crude oil inventories,” Tim Evans, energy analyst at Citi Futures Perspective in New York, writes in note.


Jeff Thomas explains that former bus driver Maduro is selling the golden goose:  his oil. I believe that he also sold gold which is also his golden goose.

(courtesy Jeff Thomas/InternationMan.com)


Venezuela’s Maduro – Selling The Golden Goose

Authored by Jeff Thomas via InternationalMan.com,

Venezuela is a naturally rich nation. It’s ranked seventh worldwide for biodiversity and has the world’s largest reserves of oil. This is a country that deserves, more than most, to thrive. However, as in all countries, it passes through economic cycles and, when on a downward curve, would-be leaders take the opportunity to claim that the “greedy rich” have sent the economy into a tailspin (which can sometimes be the case) and that the solution is to adopt a collectivist approach to governance.

In 1989, Venezuela was experiencing a downturn. Riots broke out, followed by two attempted coups in 1992. The following year, President Pérez was impeached for embezzlement of public funds and the red carpet of opportunity was rolled out for the charismatic former coup participant Hugo Chávez. He took office as president in 1998. A new constitution was drawn up in 1999 and, as in so many countries previously, the people enthusiastically welcomed the new collectivist regime.

When people can vote on issues involving the transfer of wealth to themselves from others, the ballot box becomes a weapon with which the majority plunders the minority. That is the point of no return, the point where the doomsday mechanism begins to accelerate until the system self-destructs. The plundered grow weary of carrying the load and eventually join the plunderers. The productive base of the economy diminishes further until only the state remains.”
– G. Edward Griffin

As in all collectivist experiments, the new entitlements meted out to the population had to be funded somehow and, as is customary, those who create the wealth in Venezuela were required to pay for its distribution to those who were less productive.

In the beginning, this form of theft appears to work well and, not surprisingly, many of the supporters of Mister Chávez saw him as the messiah of the common man. Unfortunately, as is always the case, bleeding the wealth from those who create it makes it increasingly difficult for them to continue to expand the creation of it and, as the wealth continues to be drained, contraction eventually takes place, making the entire nation poorer in every way.

At some point the collectivist system begins to unravel and, as luck would have it, the unravelling for Venezuela coincided with the death of its cherished leader.

In 2013, former bus driver Nicolás Maduro was elected as his successor. Two months earlier, the currency had been devalued to combat increasing shortages of basic goods and Venezuela fell into recession within a year of Mister Maduro taking office. By 2016, he declared a state of national emergency and proceeded to institute a series of knee-jerk responses to increasing economic decline, which would, to some degree, appease the struggling populace, but which would, ultimately, exacerbate the problem.

As conditions have worsened, Mister Maduro’s “solutions” have become increasingly desperate. (Editor’s note: Jeff Thomas has provided commentary on Venezuela’s decline in several editions of International Man: “Watch the Movie,” Jan. 2014, “Venezuela, the Sequel,” Dec. 2016, and “A Chicken in Every Pot,” Dec. 2016.)

In so doing, he hasn’t exactly been creative. He has, instead, resorted to all the classic measures that have been used by collectivists before him. The unfortunate conundrum for a collectivist leader is that the real solution is a return to the free-market system and no leader is going to admit that his entire raison d’être has been based upon a false premise.

It’s important to note that, in any nation, the populace tends to believe that their leader’s efforts, however flawed they may have been, were intended to serve the people well. However, this is almost never the case. I’ve known many political leaders personally and can attest that, regardless of the nation they represent, their concern is almost entirely for their own personal welfare and advancement. In fact, those who are pathological in this pursuit are very often the most successful in rising to the top, by virtue of their heightened determination and obsession with self-aggrandizement.

And so, Mister Maduro has relied on ever-increasing price controls, capital controls, devaluation of the national currency, takeover of private sector industry, and governance by decree. Each of these measures, in every instance, served to send the Venezuelan economy spiraling further downward.

The result has been a decline in the creation of wealth, the cessation of production of many essential goods, the overtaking of factories by the military, a dramatic increase in crimes of desperation, the alienation of overseas business partners, purchasers, and vendors, and an inability to pay international debt.

This last failure has led to an ironic situation. Although the national currency is in a state of hyperinflation, Venezuela cannot pay for the shipments of new, higher-denomination bank notes it has ordered from printers overseas, as the inflated currency is not trusted by the printers.

At this point, if the leader of a country truly had any loyalty to his country or compassion for his people, he would most certainly have resigned, as he is clearly unfit to lead.

But this almost never occurs. Whether the leader is Josef Stalin, Juan Perón, or Fidel Castro, no matter how dire the conditions become for the populace, the leader steadfastly refuses to relinquish the reins. What occurs instead is that he maintains his own personal level of lavish lifestyle, circles the wagons, continues or expands upon the measures that have caused the destruction, and becomes more autocratic.

It’s important to understand that it’s highly unusual for the leader to capitulate at this point. Almost invariably he will opt for the country to go down in flames around him rather than relinquish power.

That being the case, we now observe that Mister Maduro, having run out of rabbits to pull out of the hat, has made the decision to sell the golden goose that was responsible for the creation of wealth in the first instance—oil.

Seventy percent of Petropiar is owned by the state-run Petróleos de Venezuela, and 30% by its overseas partner, Chevron. The government has now offered to sell a portion of its shares to the Russian Rosneft, along with a stake in the rights to extract oil from the premium-grade Orinoco Oil Belt. This, of course, is no less than a stab in the back for Chevron. (Rosneft faces sanctions from the US, which, of course, Chevron does not.)

Venezuela has also expropriated shares belonging to ConocoPhillips, for which it has not yet paid, at the same time as they’re negotiating with a Japanese investment bank to obtain further funding.

Each of the above has been undertaken in a desperate attempt to pay external debt, which, until the present, has allowed the Venezuelan economy to continue to function. It also allows for the emergency delivery of gasoline to keep Venezuela in motion. Although Venezuela has eighteen of its own refineries, they’ve also fallen victim to the economic crisis and without emergency gasoline supply from overseas, thousands of workers will be unable to report for work to keep what remains of the economy functioning.

And so Mister Maduro, in order to buy a bit more time in the presidential mansion, is selling the golden goose. For those who wonder why it’s so often the case that a nation that’s been knocked down economically rarely rises up again within the same generation, the answer is manifestly clear in Venezuela. Leaders on the way out tend to sell or destroy virtually all that’s of value within the country, eliminating the resources through which a recovery may be possible, even if the country then returns to a free-market system.

*  *  *

The situation in Venezuela is extraordinarily toxic. But a similar pattern is playing out in major countries around the globe. For too long, careless governments have used shortsighted strategies to prop up major world economies and prolong their time in power. This can only go on for so long… In this urgent video, Doug Casey and his team reveal why an unprecedented global financial disaster is now inevitable—and what you can do to protect yourself. Click here to watch it now.



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



GBP/USA 1.2829 UP .0053 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS TUESDAY morning in Europe, the Euro ROSE by 12 basis points, trading now ABOVE the important 1.08 level  RISING to 1.0853; 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 5.04  POINTS OR 0.16%    / Hang Sang  CLOSED UP 316.46 POINTS OR 1.31%/AUSTRALIA  CLOSED UP .26% / EUROPEAN BOURSES IN THE GREEN EXCEPT SPAIN 

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 TUESDAY morning CLOSED UP 203.45 POINTS OR 1.08%

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 316.46 OR 1.31%  / SHANGHAI CLOSED UP 5.04 POINTS OR 0.16%/Australia BOURSE CLOSED UP .26% /Nikkei (Japan)CLOSED UP 203.45 OR 1.08%  / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1270.25


Early TUESDAY morning USA 10 year bond yield: 2.302% !!! UP 3 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.954, UP 2  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 99.03 DOWN 6  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING


And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.606%  up 5  in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.026%  UP 2/5   in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.675%  up 7  IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.266 up 7   POINTS  in basis point yield from MONDAY 

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





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

Euro/USA 1.0944 UP .0070 (Euro UP 79 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.05 UP: 1.423 (Yen DOWN 143 basis points/ 

Great Britain/USA 1.2783 DOWN 0.0020( POUND DOWN 20 basis points)

USA/Canada 1.3612 UP 0.0067(Canadian dollar DOWN 67 basis points AS OIL FELL TO $49.09


This afternoon, the Euro was UP by 79 basis points to trade at 1.0944


The POUND rose BY 59  basis points, trading at 1.2834/

The Canadian dollar fell by 67 basis points to 1.3612,  WITH WTI OIL FALLING TO :  $49.09

The USA/Yuan closed at 6.8847/
the 10 yr Japanese bond yield closed at +.026% UP 2/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 5 IN basis points from MONDAY at 2.312% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.964 UP 5  in basis points on the day /

Your closing USA dollar index, 98,78 DOWN 31  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 TUESDAY: 1:00 PM EST

London:  CLOSED UP 10.96 POINTS OR 0.10% 
German Dax :CLOSED UP 12.06 POINTS OR .10% 
Paris Cac  CLOSED UP 9.03 POINTS OR 0.17%
Spain IBEX CLOSED UP 16.30 POINTS OR 0.15%
Italian MIB: CLOSED UP 121.11 POINTS OR 0.59%

The Dow closed UP 232.23 OR 1.12%

NASDAQ WAS closed UP 41.47 POINTS OR 0.70%  4.00 PM EST
WTI Oil price;  49.09 at 1:00 pm; 

Brent Oil: 51.49 1:00 EST




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:


BRENT: $51.98


USA 30 YR BOND YIELD: 2.989%


USA/JAPANESE YEN:111.12  up 1.494

USA DOLLAR INDEX: 98.78  down 31  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2830 : up .0053  OR 53 BASIS POINTS.

Canadian dollar: 1.3566  UP .0017 (CAN DOLLAR DOWN 17 BASIS PTS)

German 10 yr bond yield at 5 pm: +.378%


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


Trade War Sparks Stock Surge Amid Biggest Short Squeeze Since Trump’s Election



Stocks continue to soar…but once again it was the overnight gap open –  Trannies were red on the day but Nasdaq record highs above 6,000; Dow over 21,000, Small Caps record high


Nasdaq broke above 6,000 to new record highs.. because fundamentals…


Despite further collapse (to 10-week lows) in ‘soft’ survey data…


Amid the biggest short-squeeze since the election…


With USDJPY taking over today from VIX (crushed yesterday) as the momentum igniter…


And meanwhile 3m implied vol for the S&P 500 (not VIX) dropped to a 9 handle – lowest we could find…


The Dow was supercharged by CAT and MCD earnings (over 100 Dow points)… which makes u wonder…


Financials have notably surged in the last few days (bouncing off unchanged for the year) but Tech is the biggest winner…


Bonds and stocks remain decoupled but bonds sold off hard today relative to yesterday…


Despite a strong 2Y auction, bonds were offered all day (with notable steepening)… yields rose quite aggressively into the close


The dollar index was relatively flat today (with some modest vol intraday)…


But EURJPY surged after fading from post-Macron spike yesterday…biggest 2 day jump since July 2016


WTI tagged a $48 handle briefly before bouncing higher…ahead of tonight’s API data…


As the decoupling between stocks and oil continues to grow…


Gold and Silver slipped lower…


Following the Lumber tariff headlines, The loonie tumbled… and so did Lumber prices (limit down)


And about the tariff driving home prices higher… well, no!


And finally, Bitcoin rallied back above gold (on SEC ETF review headlines)


The following showed up on a screen at Singapore’s big bank D.B.

Are we going to have two USA currencies?:

  1. a lower valued USA dollar (USD)/ a currency only for the uSA
  2. USA dollar notes (USN) an external currency.

what if the external dollar (USN) is 25% more than the internal USA dollar?

I would imagine that gold and silver will trade 25% higher and the comex would then paper settle and then go out of business.

(courtesy Robert H)


Currency Exchange Rate

Last updated 2017-04-25 22:34:15
The information is indicative only and is provided solely for reference purposes.The actual exchange rates for currency exchange transactions will be determined by our Bank at the time such transactions are effected.


Buy Rate (HKD)

Sell Rate (HKD)

Buy Rate (USD)

Sell Rate (USD)

AUD 5.821200 5.919400 0.746300 0.762500
CAD 5.686800 5.773600 1.349701 1.366301
CHF 7.713800 7.966800 0.974800 1.010400
CNY(OnShore) 1.122500 1.137600 6.837046 6.934813
CNY(OffShore) 1.124600 1.135400 6.847908 6.924009
DKK 1.129100 1.156500 6.739407 6.878809
EUR 8.411300 8.595800 1.079100 1.106500
GBP 9.805000 10.149000 1.257400 1.306900
JPY 0.069850 0.070750 109.69 111.69
NOK 0.896600 0.923100 8.481405 8.624110
NZD 5.370700 5.468900 0.688800 0.704200
PHP 0.159900 0.172900 44.521615 48.721072
SEK 0.872100 0.898600 8.704508 8.873666
SGD 5.559700 5.616100 1.384401 1.400701
THB 0.216500 0.231500 33.721126 35.540392
USD 7.765600 7.797300 1.000000 1.000000
USN 7.719900 7.843000 N/A N/A






Trade wars commence between Canada and the uSA.  Let’s see what happens with the USA runs out of water and needs Canadian water:


(courtesy zerohedge)

Trump: “I Don’t Fear A Trade War With Canada”

While Trump tried to downplay concerns about a trade with with Canada, after his administration slapped tariffs on Canadian softwood lumber, he may have succeeded in fanning the flames when on Tuesday Trump told reporters that “No,” he does not fear a trade war with Canada adding “they have a tremendous surplus with the United States. Whenever they have a surplus, I have no fear.”

President Trump says he does not fear that there will be a trade war with Canada

Trump’s decision to impose tariffs of as much as 24 percent on Canadian softwood imports ignited a trade dispute – let’s not call it war at least until Canada retaliates – between the two close trading partners.

Combined with his saber rattling on the Canadian dairy market and the North American Free Trade Agreement (NAFTA), Trump’s deeds, words and tweets have sparked concerns about a broader trade conflict that could have significant effects on the U.S. economy, not to mention on Canada’s. As The Hill notes, Canada is the second-largest U.S. trading partner, with $575 billion in two-way goods exchanged in 2015.

Still, despite Trump’s allegation that Canada has a “tremendous” surplus with the US, its trade relationship is rather balanced: the U.S. only had a $15 billion trade deficit with Canada in 2015, according to figures compiled by the Office of the U.S. Trade Representative.

Meanwhile, as Bloomberg puts it in almost deadpan humor, “Trudeau’s Reward for Courting Trump Is a Trade War on Lumber

Justin Trudeau has always played nice with Donald Trump. The refugee-hugging liberal bit his tongue, flooded Washington with envoys, feted Ivanka Trump on Broadway and relentlessly talked up Canada-U.S. ties. It hasn’t worked.

Canada pledged legal action while criticizing the “unfair and punitive duty,” saying it will raise the cost of U.S. homes. It’s also threatening to pivot away, responding to duties by highlighting efforts to sell more lumber to China. All to be expected as two neighboring countries launch in a trade spat.

“Canada will continue to press their American counterparts to rescind this unfair and unwarranted trade action,” Freeland and Carr said Monday night in a statement. “We remain confident that a negotiated settlement is not only possible, but in the best interests of both countries.”


Canada looks set to stick to its play-nice strategy, and Trudeau had fair warnings on all this. His father, former prime minister Pierre Trudeau, famously described Canada-U.S. relations as “sleeping with an elephant,” with Canada “affected by every twitch and grunt.”

As Bloomberg concludes, “this elephant is now wide awake, but Trump’s commerce chief says the softwood dispute is strictly business. Describing Canada as “generally a good neighbor,” Ross distanced Trump from the softwood decision during a White House briefing Tuesday. “I don’t think it has anything to do with the personal relationship between Mr. Trudeau and the president.”

As for the winners from the sudden break out of a trade war between the US and Canada, these are China, Germany and North Korea, the countries that actually deserve retaliation for their trading practices, but are far too important to openly antagonize.

As for Canada…


Defaults on student loans are soaring.  The total of all student loans is now in excess of 1.4 trillion uSA

(courtesy zero hedge)

Baby Boomers Borrowed $100BN In Student Loans For Their Snowflakes; Now Defaults Are Soaring

America’s snowflake millennials aren’t used to being told ‘no’, especially by their parents.  Perhaps that’s why, as we pointed out a few days ago, more millennials than ever are now living at home with mom and roughly one quarter of them don’t even both to enroll in classes and/or find a job (see “A Quarter Of Millennials Living At Home Neither Work Nor Study“).  But, when it comes to racking up massive student loans for their lazy, millennial, snowflakes, we suspect a healthy portion of about 3.5 million Baby Boomers are wishing they had a do-over to do just that.

Unfortunately, rather than making some difficult decisions about affordability and/or forcing their kids to pay for their own education, Baby Boomers have incurred nearly $100 billion in student loans so that little Johnny and/or Susie could get that Anthro degree they always wanted.

In fact, as the Wall Street Journal notes today, so-called “Parent Plus Loans” have soared over the past 15 years as parents have increasingly found it impossible to cover college tuition costs.

Parent Plus, created by Congress in 1980, allows parents to borrow to cover tuition and living expenses—often after their children borrow the maximum in undergraduate federal loans, capped by law at $5,500 a year for freshmen, $6,500 for sophomores and $7,500 for juniors and seniors. There is no limit to how much parents can borrow. Supporters say the program ensures students can go to schools of their choice.


When it comes to federally subsidized student loans the underwriting standards put even the no-income, no-doc mortgages of 2005 to shame.  Just take the case of Sherry McPherson as an example.  Per the WSJ, McPherson was able to secure $100,000 in student loans for her son and herself to attend a trade school  despite “her shaky credit and unemployment.”  Adding insult to injury, for taxpayers at least, McPherson has already refinanced her loans into one of Obama’s “income-driven plans” which “sets her payments at zero while she is unemployed.”

Sherry McPherson took out Parent Plus debt in 2006 so her son could enroll in a seven-month certificate program at a Seattle for-profit school that teaches commercial diving. She was an unemployed single mother with thousands of dollars in credit-card debt, a car loan and a subprime credit score. She had just retired from the Army after suffering an injury in Iraq.


The school, the Divers Institute of Technology, told Ms. McPherson she needed to borrow nearly $16,000 to cover remaining tuition after her son maxed out on undergraduate federal loans, she recalls.


Ms. McPherson, now 50, remembers telling the school’s financial-aid administrator she wouldn’t be approved because of her shaky credit and unemployment.


“She looked at me and said, ‘Look, all we need is your Social Security number,’ ” recalls Ms. McPherson. “They approved me in three minutes.”


She hasn’t worked since, partly because she attended college and graduate school herself. Her Parent Plus balance has more than doubled. Combined with her own student loans, she now owes more than $100,000 to the federal government.


Ms. McPherson has refinanced into an income-driven plan, which sets her payments at zero while she is unemployed.

And while it may sound outrageous, McPherson’s story is hardly an anomaly with over 40% of student loans originated in 2009 – 2013 going to subprime borrowers, more than double the subprime mix of the mortgage market in 2005.


Now, just as these parents are entering their retirement years, a record number of them are having their Social Security and pension payments garnished to pay for student loans that they never had a prayer of being able to afford.  In fact, as of September 2015, more than 330,000 people, or 11% of borrowers, had gone at least a year without making a payment on a Parent Plus loan and over 40,000 of them were having their income garnished by the federal government. 

The number of Americans who had wages, tax refunds or Social Security checks reduced because of unpaid student debt increased 71% between September 2010 and September 2015, according to the GAO. About 41,000 Parent Plus borrowers were among one million student-loan recipients who had checks garnished in the 2015 fiscal year. The government garnished the Social Security checks of 173,000 borrowers from student-loan programs in 2015, up from 36,000 in 2002.


Of course, it’s not just parents that are defaulting on student loans.  Roughly eight million Americans owing $137 billion are at least 360 days delinquent on federal student loans, nearly the number of homeowners who lost their homes because of the housing crisis.

Meanwhile, the Obama administration recognized that the Parent Plus loan program was saddling 1,000s of people with loans they could never repay back in 2011 and took steps to curb lending to “high-risk” individuals.  Then, Cheryl Smith of the United Negro College Fund apparently reminded Obama that making financial decisions based purely on financial metrics is racist, so he promptly reversed his own rules.

The program checks only a borrower’s past five years of credit for major blemishes such as bankruptcy or foreclosure, and the past two years for delinquency on debts of more than $2,085.  Consumer counselors are hearing from borrowers who make as little as minimum wage but borrowed tens of thousands of dollars and now can’t repay.


Obama administration officials, worried Parent Plus was heaping debt on high-risk borrowers, put in place tighter restrictions in 2011. But after schools argued stiffer underwriting would prevent many students from covering tuition, thus reducing college access for minorities and poor students, the administration rolled back the new rules.


“Without this program, our fear is that many of these families would be getting private loans at less-favorable terms or less-favorable repayment options,” or they wouldn’t be able to cover tuition at all, says Cheryl Smith, head of government affairs for the United Negro College Fund.

Of course, we suspect the Obama administration decided it was better to seek taxpayer forgiveness than permission as James Kvaal, Obama’s top education advisor and a man who undoubtedly was part of the decision to loosen lending standards admits: “At some point, we’re going to have to realize that a bunch of loans that have been made are not going to be repaid.”




The great flip flopper Trump backtracks on the border wall. Thus there should be no obstacle to the continuing resolution.

(courtesy zerohedge)

(courtesy zero hedge)

Caterpillar, McDonalds Shares Surge After Smashing Estimates

Dow component Caterpillar and McDonalds are both spiking in the premarket after smashing expectations, in both cases reporting numbers above the highest Wall Street estimate.

Confirming the rebound in global sales, its first up month since 2012, Caterpillar reported 1Q adjusted EPS $1.28, more than double the consensus estimate of 62c, on revenue of $9.82b, higher than the estimate of $9.27 billion, and above the highest Wall Street forecast of $9.59BN.  That said, on a GAAP basis, EPS fell to $0.32 from $0.46 a year earlier.

Despite the strong quarterly performance, in the first earnings statement since federal agents raided three of its offices in March, CAT cut its full year EPS forecast, and now it expects earnings per share of $2.10 for 2017, down from a previous full year forecast of $2.30, citing higher restructuring costs. On the other hand, CAT boosted its top line guidance, and now sees full year revenues of $38b-$41b, up from the previous guidance of $36b-$39b, and above Wall Street’s estimate est. $38.2 billion.

“Restructuring costs expected in 2017 are significantly higher than the prior outlook primarily due to ongoing manufacturing facility consolidations,” CAT said in its earnings report, adding that it expects to incur about $1.25bn in restructuring costs this year, up from $750m in its previous outlook, including recently announced plant closures in Illinois and in Belgium.

What the market focused on was CAT’s upbeat statement on rising sales, driven by strength out of China, as reported yesterday:

“There are encouraging signs, with promising quoting activity in many of the markets we serve and retail sales to users turning positive for both machines and Energy and Transportation for the first time in several years,” said outgoing chief executive Jim Umpleby in a statement. “While we are raising the full-year outlook for sales and revenues, there continues to be uncertainty across the globe, potential for volatility in commodity prices, and weakness in key markets.”

As discussed on Monday, Caterpillar announced stronger than expected global machine retail sales for March, up 1%, the first increase in more than four years.


CAT shares surged over 6% in early trading on the strong results. The company’s sales have been hit by the prolonged global commodities and mining slumps but President Donald Trump’s promise of an infrastructure spending boom boosted the company’s shares after his election.

* * *

Eslewhere, McDonald’s similarly smashed estimates, reporting 1Q EPS of $1.47, higher than the consensus estimate of $1.34, and above the highest forecast of $1.45.  The company reported 1Q revenue of $5.68b, which beat the consensus of $5.53b and tied the highest forecast of $5.68b, even if it was down from $5.90 billion reported a year prior.

Traffic metrics were impressive, with Q1 US comp. sales of +1.7% rising well above the estimate of -0.8%. Global Q1 comp. sales rose +4.0%, above the est. +1.3%, with 1Q International lead market comp. sales +2.8%, est. +1.7%, driven by momentum in the U.K. and the Canada launch of All-Day Breakfast. MCD also reported 1Q High-growth market comp. sales +3.8%, est. +2.7%, Foundational and Corp. comp. sales +10.7%, est. +4.3%.

The strong sales trends, seemingly taken from other fast-food retailers, led to Q1 operating income of $2.03b, also above the estimate of $1.83bn.

McDonald also reported that total Q1 franchised restaurant margin rose to 81% vs 80.7% y/y. Additionally, total co-owned restaurant margin 17.5% vs 15.4% y/y. U.S. franchsided margin 81.6% vs 82.1%; reflects higher occupancy costs, partly offset by positive comparable sales.

For full-year 2017, costs for total basket of goods are expected to increase about 0.5%-1.5% in U.S., and increase about 2.0% in the International segment.

The company expects full-year 2017 SG&A expenses to decrease about 7%-8% in constant currencies with fluctuations expected between quarters; includes incentive-based compensation costs of <$300m.

McDonalds also said it sees a full year effective income tax rate 31%-33%; sees year capex ~$1.7b, 1/3 of which will be used to open new restaurants.  MCD expects to open ~900 restaurants, including ~500 in affiliated, developmental licensee markets where co. generally does not fund any capital expenditures.

As a result, MCD shares were also up nearly 3% in the premarket, and boosting Dow futures up over 160 points.


And now their “real earnings”:

(courtesy zerohedge)

About Caterpillar’s “Tremendous Earnings Growth”, There Is Just One Thing…

With CAT and MCD accounting for over 100 of the 250+ Dow points today, one would think that, as CNBC has repeatedly stated today, these two companies are posting “tremendous earnings growth.”

And, in a way they are… a non-GAAP way. Because while CAT reported adjusted EPS of $1.28, up exactly 100% from a year ago  – almost as if it was goalseeked – something far less appetizing emerges when looking at CAT’s actual, GAAP EPS, which happen to be exactly one quarter of the non-GAAP number, or $0.32, a 30% drop from a year ago.

And another quick look at these “one-time restructuring costs”, which not only plague every single CAT earnings release, but were enough to eliminate more than 100% of the company’s stated organic growth in the past year.


Finally, for those who – like CAT management – claim that the company’s adjustments are non-recurring and one-time, here is the chart that will show that when it comes to “one-time charges” for CAT recurring earnings are more rare than actual addbacks, highlighting just one fact:

  • LTM Non-GAAP EPS: $4.05
  • LTM GAAP EPS: $(0.27)

In other words, CAT’s entire per share “profit” in the last 12 months was due to adding back some $4.32 in very much recurring restructuring charges.


After the Ontario government raised a foreign tax on home purchases, it looks like the next destination for Chinese citizens to park their overvalued yuan is USA homes

(courtesy zerohedge)

US Home Prices Rise At The Fastest Pace Since July 2014

While it is unclear if the Chinese, tired of fighting regulations in Canada, are behind the latest jump in home prices, today Case-Shiller reported that its index of Top 20 cities rose at a 5.9% annual rate, the highest increase since July 2014, citing tight supply and growing housing demand.

The S&P CoreLogic Case-Shiller Index reported a 5.8% annual gain in February, up from 5.6% last month and posting a new 32-month high. The 10-City Composite posted a 5.2% annual increase, up from 5.0% the previous month. The broader 20-City Composite reported a year-over-year gain of 5.9%, up from 5.7% in January, higher than Wall Street expectations of a 5.8% increase.

On a monthly basis, prices increased by 0.7%, slightly less than last month’s 0.9% increase.

Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In February, Seattle led the way with a 12.2% year-over-year price increase, followed by Portland with 9.7%. Dallas replaced Denver in the top three with an 8.8% increase. Fifteen cities reported greater price increases in the year ending February 2017 versus the year ending January 2017

“Housing and home prices continue to advance,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The S&P Corelogic Case-Shiller National Home Price Index and the two composite indices accelerated since the national index set a new high four months ago. Other housing indicators are also advancing, but not accelerating the way prices are. As per National Association of Realtors sales of existing homes were up 5.6% in the year ended in March. There are still relatively few existing homes listed for sale and the small 3.8 month supply is supporting the recent price increases. Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates.

Blitzer added that “Housing’s strength and home building are important contributors to the economic recovery. Housing starts bottomed in March 2009 and, with a few bumps, have advanced over the last eight years. New home construction is now close to a normal pace of about 1.2 million units annually, of which around 800,000 are single family homes. Most housing rebounds following a recession only last for a year or so. The notable exception was the boom that set the stage for the bubble. Housing starts bottomed in 1991, drove through the 2000-2001 recession, and peaked in 2005 after a 14-year run.”

A report on new home sales at 10am ET is expected to give a more detailed picture of the March housing market.



Trump is now set to ban laptops on planes originating from Europe:

(courtesy MacSlavo))

Security Forces Put On Alert As Trump Set To Ban Laptops On Planes Originating From Europe

Authored by Mac Slavo via SHTFplan.com,

In late March U.S. intelligence sources announced that terrorist organizations have found a novel and deadly way to smuggle explosives onto airplanes utilizing everyday laptops. Though officials declined to provide additional details, some believe that the intelligence highlighting the new threat was the result of President Trump’s raid on an Al Queda compound in Yemen that left at least 14 Al Queda fighters. Navy SEAL Ryan Owens was also killed in the raid. The President called it a “winning mission,” and officials said the mission’s stated purpose, to gather information, had been accomplished.

If the information they deemed from the raid as revealed by U.S. intelligence sources to CNN is accurate, then travelling on airlines is about to get a lot more difficult for most modern-day passengers, who often carry electronic devices like phones, tablets and laptops when on the go.

Such devices have already been banned on all flights originating from Turkey, Lebanon, Egypt, Saudi Arabia, Jordan and Tunisia and now British Intelligence sources have said they are bracing for more widespread implementation that could ban the devices on every flight leaving Europe for the United States, including those originating from major airline hubs in London.


Source: The Sun UK

Passengers flying from Britain to the US face a ban on carrying laptops in aircraft cabins, The Times has learnt.


Under the restrictions, devices larger than a mobile phone — including laptops, tablets and e-readers — must be checked in and stored in the hold. The ban has worried passengers that the gadgets may be damaged. It can also be difficult to obtain insurance for items in the hold. British security chiefs have been put on alert that the US is planning to impose its laptop ban on incoming flights from some parts of Europe…


Full report: The Times

A CNN report from March explains how the new ban from middle east countries and Africa works. Similar restrictions are likely to be placed on passengers in Europe:

Though the official story is certainly plausible, as terrorist organizations are always innovating and creating new ways to kill as many people as possible, Mid east airlines immediately mocked the ban:

A short video from Bloomberg even suggests that Trump’s decision was based on protectionist policies designed to inflict financial pain on airlines operating out of the middle east:

According to The Sun, the new ban may be in place in as little as three weeks and would likely affect all travelers to the United States, including American citizens vacationing in Europe.



This will be a far worse problem for the uSA:  USA Steel Corp crashes after it slashes guidance by more than 50%.  This sets the tone for the entire steel industry.  The real culprit is China but Trump is leaving out China and bashes Canada instead.


(courtesy zero hedge)

U.S. Steel Crashes After Slashing Guidance By More Than 50%

One day after Trump slammed Canada with a lumber tariff, somehow managing to send lumber future prices limit down on the CME, he is faced with another, far more credible crisis: the terrible guidance just released by US Steel in particular, and the fate of the US Steel industry – and China’s adverse impact – in general.

Here is the bloodbath just reported by US Steel:

  • Loss per share $1.03
  • Adj. loss/share 83c
  • Net Revenue $2.73b, est. $2.95b
  • EBITDA $74m, est. $254.7m

But it was the company’s guidance that was the real shocker:

  • 2017 net earnings of approximately $260 million, or $1.50 per share, more than 50% below the prior forecast of $3.08, and below the sellside estimate of $3.05
  • Adjusted EBITDA of approximately $1.1 billion; also far below consensus of $1.39 billion

And the cherry on top: the terrible guidance was in the context of a generally optimistic outlook. This is what the company said:

Commenting on U. S. Steel’s Outlook for 2017, Longhi said, “Market conditions have continued to improve, and we will realize greater benefits as these improved conditions are recognized more fully in our future results.  This remains a cyclical industry and we will not let favorable near-term business conditions distract us from taking the outages we need to revitalize our assets in order to achieve more reliable and consistent operations, improve quality and cost performance, and generate more consistent financial results.

Well, if X cuts EPS by 50% in “improving” market conditions, one wonders what EPS would look like if conditions were actually worse.

Surprisingly, the word China was not used once in the press release, when it is quite clear that is China’s aggressive exporting and dumping of steel that is causing US-based steel makers to see their stock trade as follows…

This is the lowest level for X since the day after Trump was elected.

Will Trump dare to respond to what is truly a malicious trading practice by China? Somehow we doubt it, which is why Canada may want to be really careful – the country is rapidly emerging as a scapegoat for Trump’s China-directed impotence.


Well that is all for today

I will see you tomorrow night


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