April 28/Surprisingly silver inventory at the SLV remains constant for the past two days despite silver’s fall/gold withstands cartel attack and rises by $2.40/silver falls by 11 cents/ Silver OI hardly drops: (only by 7,000 contracts) North Korea fires an ballistic missile and it fails again!/Get ready for trade wars to commence with Canada/Trump ready to tackle to trading deficit with South Korea!! and he does this now???/Alasdair Macleod on what China will do..a must read!/Republican’s second attempt at Obamacare repeal fails again/

Gold: $1266.10  UP 2.40

Silver: $17.21  DOWN 11  cents

Closing access prices:

Gold $1268.70

silver: $17.21!!!










Premium of Shanghai 2nd fix/NY:$11.11


LONDON FIRST GOLD FIX:  5:30 am est  $1265.55




For comex gold:




For silver:

For silver: MAY


Total number of notices filed so far this month: 1421 for 7,105,000 oz



The silver OI has held up quite nicely with the $1.20 drop in price.  It’s OI is a touch under 200,000.  With options expiry now out of the way, you will see the OI rise along with silver’s price.  Gold will tag along.


Today the gold shares did nicely led by Agnico eagle which was up $4.35  or 10% to $47.83.

Let us have a look at the data for today





In gold, the total comex gold FELL SLIGHTLY BY 1,201 contracts DESPITE THE RISE IN THE PRICE OF GOLD ($1.60 with YESTERDAY’S TRADING). The total gold OI stands at 478,922 contracts.

we had 15 notice(s) filed upon for 1500 oz of gold.


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


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

Inventory rests tonight: 853.36 tonnes



Strange!!! We had no change in silver inventory at the SLV today

THE SLV Inventory rests at: 330.283 million oz



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

1. Today, we had the open interest in silver FELL BY 7,488 contracts DOWN TO 199,761,( AND FURTHER FROM  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), DESPITE THE RATHER SMALL FALL IN PRICE FOR SILVER YESTERDAY (3 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

2c) COT report



i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 2.47 POINTS OR 0.08%/ /Hang Sang CLOSED DOWN 83.35 POINTS OR 0.34%.  The Nikkei closed DOWN 55.13 OR 0.29% /Australia’s all ordinaires  CLOSED UP .05%/Chinese yuan (ONSHORE) closed DOWN at 6.8953/Oil UP to 49.38 dollars per barrel for WTI and 52.21 for Brent. Stocks in Europe  IN THE GREEN EXCEPT LONDON   ..Offshore yuan trades  6.8981 yuan to the dollar vs 6.8953 for onshore yuan. NOW  THE OFFSHORE IS A LITTLE WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN  A LITTLE STRONGER  TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS  HAPPY




Trump warns the world that there is a chance of a “major major conflict” with North Korea

( zero hedge)


The doorknob files a test ballistic missile..  It failed again..sabotage?

(courtesy zerohedge)


Next up in the batter’s box:  South Korea as Trump is now threatening to terminate its ‘horrible’ trade deal with that country:

( zero hedge)



The following may force Draghi to curtail QE:  core eurozone inflation surges to a 4 year high as they are now near their ECB target of 2%

( zero hedge)




get ready for trade wars:  Boeing accused Bombardier of dumping and of receiving huge tax payer subsidies  (and Boeing is not the beneficiary of the Em In Bank?). Canada may retaliate with import duties on uSA thermal coal which would be deadly to the USA coal industry

( zero hedge)


Rig counts continue to rise and that sets off a huge rise in USA production.  It is now at 20 month highs

( zero hedge)



Our weekly message from Alasdair Macleod/GoldMoney.com

The article is sensational and a must read for all of us as  Alasdair explains how gold will become an essential part of China and Russia’s strategy in dealing with the west

( Alasdair Macleod)

10. USA stories

i)The B.E.A. confirms the Atlanta Fed with their official reading on first quarter GDP at only.7%

( zero hedge)

ii)trading today:

this is not suppose to happen:

the 30 yr treasury yield jumps to 3% despite the dismal GDP growth

( zero hedge)

iii)Late last night, Trump’s second Obamacare repeal attempt was on the verge of collapse

( zero hedge)

iv)Republican’s second attempt to repeal has now officially failed

( zero hedge)

( Jeremiah Johnson)

vi)Trump is now angry and is calling Schumer’s bluff: “If there is a shutdown it is the Democrats to blame!”

( zero hedge)

vii)The house agrees to a one week spending bill which temporarily averts a government shutdown today. However they are still far apart and eventually the Republicans will not stand for the antics of the Democrats.

( zero hedge)

viii)It sure looks like USA home prices are in a bubble just like Toronto and Vancouver.

( zero hedge)

ix)More nonsense as soft data Chicago PMI jumps to 27 month highs

( zero hedge)

x)Soft data consumer confidence offers hope despite weak wages, lousy spending and slow growth

( zero hedge)

xi)David Stockman on the tax reform and on the stock market

(Craig Wilson/David Stockman)


Let us head over to the comex:

The total gold comex open interest FELL BY 1201 CONTRACTS DOWN to an OI level of 475,179 DESPITE THE  RISE IN THE PRICE OF GOLD ( $1.60 with YESTERDAY’S trading).   The longs still 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 MAY and it is one of the POORER delivery months  of the year. In this MAY delivery month  we had A LOSS OF 81 contract(s) FALLING TO 479. Thus by definition, the amount of contacts standing is the initial amount of gold standing for delivery or 47900 oz  (1.4898 tonnes)


The next big active month is June/2017 and here the OI LOST 2509 contracts DOWN to 336,256. The next big active month is August and here the OI gained 1124 contracts up to 52,690.

We had 15 notice(s) filed upon today for 1500 oz

We are in the active delivery month is MAY  Here the open interest LOST A WHOPPING 14,003 contracts FALLING TO 3360 contracts. That was the greatest amount of loss of contracts heading into a front month that I have ever seen.Thus by definition, the total initial amount of silver oz that are willing to stand is only 3360 contracts x 5000 oz = 16,800,000 oz.
I am now convinced that the entire comex is a paper game and no actual deliveries take place.

The non active June contract GAINED 87 contracts to stand at 798. The next big active month will be July and here the OI GAINED 54538 contracts UP to 156,597.


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)

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is 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:  234,787.

We had 1421 notice(s) filed for 7,105,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 91,527 contracts which is POOR.

Yesterday’s confirmed volume was 215,817 contracts  which is  good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 April 28/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 198.04 oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
15 notice(s)
1500 OZ
No of oz to be served (notices)
464 contracts
46,400 oz
Total monthly oz gold served (contracts) so far this month
15 notices
1500 oz
.0466 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   198.04 oz
Today we HAD  0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits: nil oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i Out of Delaware; 198.04 oz
total customer withdrawal: 198.04 oz
 we had 0 adjustments:
For MAY:

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

To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (15) x 100 oz or 1500 oz, to which we add the difference between the open interest for the front month of MAY (479 contracts) minus the number of notices served upon today (15) x 100 oz per contract equals 47,900 oz, the number of ounces standing in this  active month of MAY.
Thus the INITIAL standings for gold for the MAY contract month:
No of notices served so far (15) x 100 oz  or ounces + {(479)OI for the front month  minus the number of  notices served upon today (15) x 100 oz which equals 47900 oz standing in this non active delivery month of MAY  (1.4898 tonnes),
I have now gone over all of the final deliveries for this year and it is startling.
Here are the final deliveries for all of 2016 and the first 5 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
Nov.    8.3950 tonnes.
DEC/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 2.8678
MAY:2017/  1.4898 TONNES
total for the 17 months;  249.157 tonnes
average 14.65 tonnes per month
Total dealer inventory 914,233.183 or 28.43 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,954,376.878 or 278.52 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.52 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
MAY INITIAL standings
 April 28. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 5,925.100 oz
564,613,890 oz
595,876.885 oz
225,382.500 oz
981,758.900 oz
total: 2.373,557.275 oz
Deposits to the Dealer Inventory
537,649.760 oz
Deposits to the Customer Inventory 
915,221.752 oz
356,623.200 oz
579,357.330 oz
total:  1,851,202.282 oz
No of oz served today (contracts)
(7105,000 OZ)
No of oz to be served (notices)
1939 contracts
( 9,695,000 oz)
Total monthly oz silver served (contracts) 1421 contracts (7,105,000 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  1,851,202.282 oz
today, we had  1 deposit(s) into the dealer account:
i) Into Brinks  579,649.700 oz
total dealer deposit: 579,649.700 oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 5 customer withdrawal(s):
i) Out of Delaware:  5925.100 oz
ii) Out of Scotia:  564,613.890 oz
iii) out of CNT: 595,876.885 oz
iv) Out of HSBC: 981,758.900 oz
v) Out of Brinks: 225,382.500 oz
 We had 3 Customer deposits:
i) Into JPMorgan: 915,221.752 oz
ii) Into CNT:  356,623.200 oz
iii) Into Scotia;  579,357.330 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  1,851,202.282 oz
 we had 1 adjustment(s)
Out of the CNT vault:
2,842,649.620 oz was adjusted out of the customer and this landed into the dealer account of CNT
The total number of notices filed today for the MAY. contract month is represented by 1421 contract(s) for 7,105,000 oz. To calculate the number of silver ounces that will stand for delivery in MAY., we take the total number of notices filed for the month so far at 1421 x 5,000 oz  = 7,105,000 oz to which we add the difference between the open interest for the front month of MAY (3360) and the number of notices served upon today (1421) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the MAY contract month:  1421(notices served so far)x 5000 oz  + OI for front month of APRIL.(3360 ) -number of notices served upon today (1421)x 5000 oz  equals  16,800,000 oz  of silver standing for the MAY contract month. 
Volumes: for silver comex
Today the estimated volume was 32,209 which is very FAIR 
Yesterday’s  confirmed volume was 139,186 contracts which is humongous
Total dealer silver:  32.531 million (close to record low inventory  
Total number of dealer and customer silver:   196.561 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $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 7.8 percent to NAV usa funds and Negative 8.1% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.6%
Percentage of fund in silver:38.3%
cash .+0.1%( April 28/2017) 
2. Sprott silver fund (PSLV): Premium RISES TO   -.35%!!!! NAV (April 28/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.57% to NAV  ( April 28/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -.35% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.57%/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 28/no changes in inventory at the GLD/Inventory rests at 853.36 tonnes

April 27/a small withdrawal of .89 tonnes/Inventory is now at 853.36 tonnes

APRIL 26/we had no changes at the GLD/Inventory rests at 854.25 tonnes


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 28 /2017/ Inventory rests tonight at 853.36 tonnes


Now the SLV Inventory

April 28/Strange again!! no change in inventory at the SLV/Inventory remains at 330.283 million oz  (no liquidation with a drop in silver price??)

April 27.2017/Strange!! no change in inventory at the SLV/Inventory remains at 330.283 million oz  (no liquidation???)

APRIL 26/2017/another huge deposit of 2.934 million oz into the SLV/Inventory rests at 330.283 million oz

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 28.2017: Inventory 330.283  million oz
At 3:30 pm we receive the COT report which gives us position levels of our major players:  First the gold COT:
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
287,468 86,791 43,513 100,335 314,915 431,316 445,219
Change from Prior Reporting Period
8,157 3,248 -4,848 2,566 6,082 5,875 4,482
174 100 76 44 60 251 206
Small Speculators  
Long Short Open Interest  
44,669 30,766 475,985  
-2,153 -760 3,722  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, April 25, 2017
Our Large Speculators:
Those large specs that have been long in gold added a large 8,157 contracts to their long side.
Those large specs that have been short in gold added 3248 contracts to their short side
Our commercials;
those commercials that have been long in gold added 2566 contracts to their long side
those commercials that have been short in gold added only 6082 contracts to their short side
Our small specs:
those small specs that have been long in gold pitched 2153 contracts from their long side
those small specs that have been short in gold covered 760 contracts.
Managed money (hedge funds)
this subset of large/small specs often referred to as hedge funds:
those hedge funds who have been long increased their position s by 8,393 contracts and those hedge funds who have been short covered a tiny 751 contracts.  Thus hedge funds had a net increase of 7652 contracts.  These guys were quite committed
commercials go net short by only 3516 contracts.  Still bearish and thus the raid this week. However I strongly believe that the EFP’s strongly distort the commitment of traders report as they “sell their longs” and receive a futures contract plus cash in a private deal.
And now for silver;
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
121,018 27,405 25,023 43,415 151,504
-7,360 2,914 -1,895 -3,463 -12,206
100 49 56 36 42
Small Speculators Open Interest Total
Long Short 214,782 Long Short
25,326 10,850 189,456 203,932
-484 -2,015 -13,202 -12,718 -11,187
non reportable positions Positions as of: 169 123
Tuesday, April 25, 2017   © SilverSeek.co
Our large specs:
those large specs that have been long in silver pitched a huge 7360 contracts from their long side
those large specs that have been short in silver added 2914 contracts to their short side.
Our commercials:
those commercials that have been long in silver pitched 3463 contracts from their long side
those commercials that have been short in silver covered 12,206 contracts from their short side
Our small specs
Those small specs that have been long in silver pitched 484 contracts from their long side.
Those small specs that have been short in silver covered 2015 contracts from their short side.
Managed money:
those hedge funds that have been long in silver unloaded 10,780 contracts from their long side
those hedge funds that have been short in silver added 5315 contracts to their short side.
hedge funds go net short by 16,095 contracts but this number will be greatly distorted by their holdings of EFP contracts.
the commercials go net long by 8743 contracts which is bullish.
I also strongly believe that the EFP’s strongly distort the commitment of traders report as they “sell their longs” and receive a futures contract plus cash in a private deal.

Major gold/silver trading/commentaries for FRIDAY



Silver price manipulation, is regulation putting a stop to it?

Fear of regulation may impede bank’s from manipulating London’s silver benchmark

  • New regulations in 2018 have spooked bullion banks and silver fix operators
  • Lack of liquidity in silver fix auction has lead to high volatility in the market
  • Silver benchmark has strayed from spot price multiple times since 2016
  • No new silver benchmark operator lined up to take over in the Autumn
  • No smoke without fire as actions point to silver price manipulation
  • Silver remains suppressed and at a low price for investors stocking up

Gold fixing in London at NM Rothschild and Sons began in September 1919

Simple economics tells us that markets and prices are driven by demand and supply. Unfortunately, this isn’t always the case in the silver market. However, the threat of new regulations may be putting a stop to some bullion banks from fiddling the London silver benchmark.

Silver price manipulation is always a thorny issue and one that has been taken on by academics, lawsuits, by veteran silver analyst Ted Butler and by the Gold Anti-Trust Action Committee (GATA). As we have reported previously, allegations of silver price manipulation are far past the point of rumours, in the last couple of years bullion banks have been called to account for their behaviour. Deutsche bank even agreed to settle out of court and pay $38m, in response to a class-action lawsuit.

But it seems the rising attention (and cost) of manipulation by silver bullion banks is not the only thing that is putting a stop to a behaviour that has been evident for over a decade. Reuters reported yesterday that fear of being accused by regulators of market manipulation has resulted in participating banks being reluctant to add liquidity during the daily auction.

Banks finally fear regulation

The low volume of orders and lack of liquidity has resulted in the benchmark price failing on multiple occasions to provide a fair and accurate snapshot of what is known as the ‘spot price’. The spot price is calculated based on a much wider and faster market. Huge divergences from this spot price have resulted in unexpected gains and losses, according to Thomson Reuters data, since at least January 2016.

Traditionally, the seven banks involved in the auction ensure the benchmark stays close to the spot price by adding liquidity and buying or selling silver during the auction. However, lawsuits regarding gold and silver manipulation as well as investigations into other markets such as Libor appear to have put the banks off from their usual antics for fear of drawing the attention of regulators.

Sources told Reuters that the ‘Banks are now unwilling to intervene beyond putting in orders beforehand, fearing this might be construed as price manipulation by regulators.’

As a result, unpredictable fluctuations in the silver benchmark price have plagued the market:

‘Between January 2016 and March this year volumes have risen as high as 12.9 million ounces and fallen as low as 200,000 ounces, while on seven occasions the benchmark has diverged from the underlying spot price by 10 cents or more. It has diverged by more than 5 cents on more than two dozen occasions, including five times in late March alone. This is highly unusual as the average divergence for the electronic auction is about 1 cent.’

The banks’ lack of action in the markets has reduced confidence in the market, reducing activity and increasing volatility. Evidence perhaps that the seven participating banks don’t know how to play nice and run an efficient market, when the regulators are in the shadows.

New tools please

It is not just the banks who are spooked by the regulators. The recent volatility has further complicated matters that were already threatening the future of the silver fix. Early last month the London Bullion Market Association (LBMA) announced that CME Group and Thomson-Reuters would no longer be the platform facilitators for the London Benchmark, despite both having two years left in their contracts.

The two companies stated that new regulations were the reason for their reviewing of their participation in the London Silver market, but no further explanation was given. There have been some suggestions that both CME Group and Thomson-Reuters left because they could see that the jig was up and the benchmark would no longer be able to operate in the way it has for so many years.

The fluctuations in the price and lack of liquidity has meant the LBMA is struggling to find a new operator, reports Reuters. The organisation is hoping that a new operator will shine a light on how the auction can continue. Whether they can do so with new regulation and banks finding it difficult to act honourably, is a question that remains to be answered.

New regulations on the horizon

Why are the banks and operators suddenly nervous about regulation? One would have thought that post-Libor and the financial crisis that they would have become wary. In truth they have been increasingly so over the last couple of years.

The push for more regulation has been going on since 2013 when a draft regulation was put forward “on indices used as benchmarks in financial instruments and financial contracts”. The final regulation was approved last April. The fact that the regulation specifically mentions benchmarks is pertinent.

On 1 January 2018 new regulations from the European Union will come into force. The regulations will make it harder for banks and platforms to manipulate financial markets such as Libor, Forex and obviously precious metals.

As we mentioned in the introduction, banks have purportedly manipulated the benchmark rather than allow precious metal markets to set the price through market forces. This has meant that price discovery has been hard to come by, leaving buyers and sellers as price takers. However price manipulation has been dismissed by the bureaucrats for many years. This has been going on under regulators’ noses, but increasing awareness by the legal system has meant it can no longer be ignored.

No smoke without fire

Whilst some academic research has concluded that evidence of gold and silver price manipulation is ‘at best suggestive’, events in recent years have led many to ask if there would be so much smoke without fire? After all, we have seen evidence that the majority of markets are rigged. See LIBOR and forex for recent examples, not to mention QE which amounts to the same thing.

Even in this very market, silver and gold, we have had plenty of smoke and arguably sparks. As we mentioned in the introduction, last year Deutsche Bank was named the lead defendant in a case that stated they had ‘illegally conspired with Bank of Nova Scotia and HSBC Holdings Plc to fix silver prices at the expense of investors’. The German Bank agreed to settle out of court and made a deal both financial and in terms of offering information.

In the letter detailing the deal, Deutsche Bank were happy to hang their contemporaries (including UBS AG Barclays Plc, BNP Paribas SA, Standard Chartered Plc, Bank of America Corp and HSBC) out to dry:

“Deutsche Bank has also agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement. In Plaintiff’s estimation, the cooperation to be provided by Deutsche Bank will substantially assist Plaintiffs in the prosecution of their claims against the non-settling defendants.”

This provision of ‘smoking gun’ evidence opens the door for further cases to be brought against the multiple banks involved in the bullion markets, this combined with new regulation is perhaps prompting banks to get their ducks in order.

The lack of liquidity and volatility in the London Silver Market shows that those banks involved are aware of what the future should hold both in terms of lawsuits and regulatory investigations. What this means for the future of the silver benchmark, time will tell.


Price manipulation, whether of precious metals, interest rates or forex is not a victimless crime. There are thousands of companies and individual investors who have seen losses on their investments, some as a direct result of this manipulation.

Ironically for those looking to manipulate the price, this behaviour is actually an opportunity for those who are keen to stock up on both gold and silver. With a suppressed price, investors can take the opportunity to accumulate more bullion.

The desire to hold more bullion will continue to grow as 2017 presses on. Since the beginning of the year it has perhaps felt as though every morning we have woken up to unsettling news from somewhere in the geopolitical sphere. Whether it’s North Korea, European elections, Syrian bombs or home-grown terrorists, it is as though unsettled uncertainty is all around. For this reason, we expect to see a growing in interest in holding precious metals and investors dedicating more of their portfolio to them.

What about the manipulated prices? Will they continue? We don’t know, but as we explained last year, artificially surpassing the pricing mechanism is akin to forcing a beach ball under water, it can only pop back up and often with great force.

“The further a beach ball is pushed under water in a pool – the higher it ultimately jumps out of the water. This creates a great opportunity for investors to accumulate precious metals at prices which will be viewed as very cheap indeed in the coming years.”


Our weekly message from Alasdair Macleod/GoldMoney.com

The article is sensational and a must read for all of us as  Alasdair explains how gold will become an essential part of China and Russia’s strategy in dealing with the west

(courtesy Alasdair Macleod)

End of empire


“Already, China dominates world trade. Her own economy is already significantly larger than that of the US on the PPP estimates. While being the largest consumer of raw materials, China also exports more finished goods by value than any other country.”…

In last week’s Insight article, America’s Financial War Strategy, I described how the Chinese government viewed the geopolitical scene. It is clear from earlier remarks by the Peoples Liberation Army’s senior strategist, Major-General Qiao Liang, that the view in Beijing is that America perpetuates her empire through the financial benefits to America from America’s actions against other nations, friend or foe. These actions can be either military or financial, or even both. This week, similar views were expressed in Moscow by Sergey Glazyev, a senior advisor to President Putin.i

There are many questions that arise from last week’s analysis that I chose not to address, in the interest of focusing on the main theme. It concentrated on geopolitics and economics as the Chinese see them, financial and currency issues mentioned in passing. This article addresses perhaps the most important subsidiary issue, and that is how China visualises the future, in terms of monetary policy.

China’s eventual objective

If nothing else, the Chinese have a sense of history and destiny. They have had a glorious past, stretching back millennia, and once controlled most of the Asian heartland in the days of Genghis and Kublai Khan. But even then, China was essentially inward-looking, protecting her own cultural values. Trade with Europeans in the centuries following Marco Polo’s visit was mostly at the behest of European travellers, not the Chinese. She exported her art and culture to visitors, and did not import European values.

This was a mistake, implicitly recognised by China’s current leadership. This time, China has embraced Western thinking and technology to further her own progress. The development of the Shanghai Cooperation Organisation in recent years is the platform for China in partnership with Russia to embrace the Asian continent through peaceful trade, improving the lives of all the citizens of the many nations who are and will become members. The SCO promises a revolution in the wealth and living standards of over 40% of the world’s population, and associated benefits for its supplier-nations on the other continents.

China’s approach is fundamentally different from that of America, which under President Trump appears to be envious of the success of non-Americans producing goods and services for the American consumer. Autarkic America has a GDP of $19 trillion. Eventually, China will have free trade agreements with the rest of the world, excluding for now the EU. On a purchasing power parity basis, this is a market with a GDP of about $70 trillion, out of a world total of about $125 trillion.ii

Already, China dominates world trade. Her own economy is already significantly larger than that of the US on the PPP estimates. While being the largest consumer of raw materials, China also exports more finished goods by value than any other country. As the Asian powerhouse, she has lifted the economies of all the countries on the Western side of the Pacific Ocean, which including her own between them have a GDP of $50 trillion. Her exports into Asia now exceed her exports to the US. Yet despite this dominance, most of China’s trade is conducted in US dollars, something China is bound to change, if she is to contain external economic risk and replace America as the dominant global empire. Both objectives can only be achieved by China replacing the dollar as a medium of exchange.

Why gold is central to China’s future trade settlement policy

China’s challenge is the yuan as a purely fiat currency will take decades to replace the dollar, possibly never. And that assumes that China follows more stable monetary policies than the US. This has not been the case since the Lehman crisis, with China’s M2 broad money quantity expanding rapidly, accounting for much of the world’s monetary growth in recent years. The rate of monetary expansion is criticised as a dangerous credit bubble by western analysts, who are quick to condone monetary expansion in their own developed nations, but turn into hard-core monetarist critics over China. No, China will never replace the dollar with her own currency without a golden guarantee.

Therefore, China needs to deploy gold to displace the dollar. This might be done in one of two ways, one encouraging markets to evolve away from dollars towards gold, or alternatively by the state forcing the pace.

China provides the facility to convert yuan into physical gold in the Shanghai market through the Shanghai Futures Exchange. This gives an exporter of raw materials to China a sound-money option instead of being paid only in yuan or dollars. It does not require China to use state-owned gold, the physical gold being sourced through the market. In time, liquidity in the yuan futures contracts should improve, and Shanghai is already the largest physical gold market. Note that only last month it was announced that Russia’s central bank has opened an office in Beijing, and is tasked with resolving the technical aspects of gold deliveries from Russia into China. The importance of the Shanghai Gold Exchange will increase further through this link to Moscow. Using the Chinese market for physical gold delivery over time should impart some stability to the yuan relative to the dollar, particularly if American banks trading on Comex continue to discourage taking delivery of physical bullion.

That might take for ever. Alternatively, China could announce plans to make her currency convertible into gold at a fixed rate, but it would have to be at a far higher exchange rate than the current CNY8,700 to the ounce. If this course is followed, US Treasuries are bound to be displaced as the zero-risk bond standard, potentially creating chaos in western financial markets. China would also need to reveal her true holdings of gold bullion, transferring them into the currency reserves account, to give the foreign exchanges confidence over the scale of gold backing for the yuan.

So far, China’s policy has been to pursue the least disruptive route, preferring not to dislocate global trade, partly because she needs to co-exist with the rest of the world politically, and partly because it would affect her own trade adversely. It has also been very convenient to be able to direct the Chinese economy through the expansion of bank credit. The least disruptive route is still the default assumption.

China will also want to reduce her reserve exposure to the dollar and US Treasuries in an orderly fashion. The pace of selling, the degree to which dollar reserves are to be reduced, and the rate of accumulation of industrial materials and energy all determine the length of time to complete a currency reset. This course has been expected by informed observers to lead to a gradual decline in the use of the dollar as its role in global trade diminishes. The alternative, with China announcing its true gold reserves and a rate of exchange with its own currency was always viewed as an extreme option, only to be resorted to upon severe provocation.

North Korea might become the trigger for that event, but so would a domestic financial crisis in America, insofar as it might be expected to affect America’s foreign policy. Remember that the Chinese believe America periodically engineers a foreign crisis to fund its own economy, by encouraging dollars to buy US Treasuries, in preference to more risky employment. For this reason, China will be watching the US economy closely for signs that might impact on the dollar’s value.

After a long period of subdued growth, there are now signs that the US economy is suffering from overall debt fatigue. Bank lending is stalling, as the chart below of US M2 minus M1 money supply shows.

Money Supply M1 M2 Bank Lending

The yield on the long bond has fallen from 3.2% to as low as 2.9%, indicating a possible recession is on the cards, and the Atlanta Fed has also revised its expectations for economic growth sharply downwards.

Shortly, unless some miracle occurs, the US Government begins to shut down, the debt limit having been reached with no sign of an agreement to increase it. At the same time, America is escalating tensions over North Korea. Beijing is convinced that America’s belligerency is driven by financial factors, and it is possible that Trump is stoking up American patriotism to force Congress to increase the debt limit. In short, China probably believes America has become desperate.

Imagine how China feels about this. Will China bring forward an attack on the dollar’s status as a defensive warning shot? Will it be forced to abandon its softly-softly approach to easing the world away from dollar-dependency? Is it prepared to escalate the financial war with America, to the point of America’s financial immolation?

The answers to these questions are likely to be revealed in the coming months, possibly in only a matter of weeks, if North Korea hots up. But if China decides to revalue gold, western capital markets will be wholly unprepared for the fall-out. China itself will be affected, as will all other nations that trade with the US or trade with countries that trade with the US. The advanced welfare-driven nations dependant on capital markets are at risk. The great financial crisis of nine years ago will be a light rehearsal compared with what could follow.

The irony is that the countries isolated from the dollar, especially Russia and Iran, will come out best. Iran will be significantly stronger relative to Saudi Arabia, with important consequences for the power-play in the Middle East. Russia will also have an interest in pushing China for this action, partly because it should tip the balance in Syria in Russia’s favour, and partly because the destruction of US hegemony will free Western Europe from being tied to America’s apron strings.

This is the final prize for the two leading nations of the Shanghai Cooperation Organisation: a free trade area which will eventually include the whole Eurasian Continent, with the rest of the world acting as its feedstock. It has always been the ultimate logic behind the Russian-Chinese partnership. Despite all its military power, America will be isolated, unless, like Britain ditching her colonies in the 1960s, America accepts she no longer controls global commerce.

That is hard to imagine. Meanwhile, uppermost in Russia’s mind will be the continuing problem of oil prices tied to the dollar. There is some circumstantial evidence that America used the oil weapon to attack Russia by encouraging the collapse in oil prices in 2014. True or not, Russia will not want to be exposed to the continuing risks of her major export commodity being priced in dollars. She will almost certainly prefer to see oil priced in gold, or a currency linked with gold. Our next chart, which compares oil priced in dollars with oil priced in gold, illustrates the financial stability this can be expected to give Russia and the other Asian oil exporters as well, relative to the historic price volatility in dollars.

WTI Oil Price

Before the failure of the gold pool in the late sixties, and the subsequent abandonment of the dollar-gold standard in 1971, oil, in common with all other commodities, was effectively priced in gold, the dollar being merely the settlement medium. Since 1971, the oil price measured in gold has varied in a 350% range, while in dollars the range has been many magnitudes greater. If the dollar is to be undermined, the dollar-oil price may rise, but the dollar’s purchasing power eliminates any benefit. Russia will almost certainly want to revert to the pre-1971 regime, of oil priced in gold, allowing her to accumulate monetary reserves that retain their value.

So, we can begin to understand the importance of Sergey Glazyev sharing China’s geostrategic view. It confirms, that sufficiently provoked, the Shanghai Cooperation Organisation’s plan to operate without the US dollar, might have to be brought forward. The SCO’s economic stability cannot be guaranteed by replacing one fiat currency in its death throes with another. Some form of gold convertibility will be essential, so those plans will be brought forward as well.

Perhaps China and Russia no longer have the luxury of time. America’s increased military belligerence in Trump’s first hundred days might force their hand. Perhaps America, knowing her demise is becoming increasingly inevitable, has some dramatic plan under wraps to seize the financial initiative, as dramatic perhaps as the Nixon shock, when America abandoned the post-war gold standard. The instability brought into the geopolitical equation by the Trump presidency, and the early signs the US economy is grinding to a halt under the sheer weight of consumer and government debt, are increasingly likely to prompt China and Russia into firm financial action, if only to protect themselves in an unstable financial and monetary environment


iSee http://tass.com/politics/942643

ii https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)#cite_note-imf-5


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


1 Chinese yuan vs USA dollar/yuan SLIGHTLY WEAKER  6.8953(   DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.8981/ Shanghai bourse up 2.47 POINTS OR 0.08%   / HANG SANG CLOSED DOWN 83.35 POINTS OR 0.34%

2. Nikkei closed DOWN 55.13 POINTS OR 0.29%   /USA: YEN RISES TO 111.36

3. Europe stocks opened IN THE GREEN        ( /USA dollar index FALLS TO  98.82/Euro UP to 1.0932


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  49.38 and Brent: 52.21

3f Gold UP/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 FALLS TO  +.3450%/Italian 10 yr bond yield UP  to 2.304%    

3j Greek 10 year bond yield FALLS to  : 6.34%   

3k Gold at $1267.40/silver $17.39 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 31/100 in  roubles/dollar) 56.73-

3m oil into the 49 dollar handle for WTI and 52 handle for Brent/

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


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  .9908 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0831 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 FALLS to  +.3450%

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 2.307% early this morning. Thirty year rate  at 2.975% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Stocks Pause Ahead Of GDP Report; Nasdaq Hits Fresh Record High

Despite yesterday’s whopping beats by Amazon and Google which sent the Nasdaq to new record highs after hours, and brought Jeff Bezos “this close” to overtaking Bill Gates as the world’s richest man, this morning futures S&P futures are little changed ahead of the closely watched Q1 GDP report, European stocks and Asian equities are slightly lower, oil is higher after Russia’s energy minister Novak said Russia had reached the 300kbpd oil cut per the OPEC pact, and the dollar was modestly in the red.

Concern about global trade and Trump’s “America First” policies kept appetite for risk at bay on Friday, setting world stocks on the path to a sluggish end to what will still be their fifth straight month of gains, per Reuters. Key overnight data included a disappointing GDP print out of the UK, where Q1 growth came in at 2.1%, below the 2.2% expected, which however failed to dent the ongoing short squeeze in sterling, as well as the hot Eurozone CPI print, with headline inflation rising more than expected at 1.9%, while core CPI printed at a 4 year high of 1.2%.

Economic data and earnings took a back seat, and global equities retreated, trimming a sixth straight monthly advance, as geopolitical concerns lingered following the main overnight news which was a soundbite from a Trump interview with Reuters in which he warned that a “major, major” conflict with North Korea is possible.

In an interview with Reuters, Trump called the five-year-old trade pact with South Korea “unacceptable” and said it would be targeted for renegotiation after his administration completes a revamp of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. Trump’s comments stunned South Korean financial markets, sending Seoul stocks and the won into reverse.

Saturday marks Trump’s 100th day in office and his attacks on free trade and scepticism about his administration’s ability to see through tax and spending campaign promises has dented some of the enthusiasm in markets that followed his election win. “Trump is reaching the 100 day mark with nothing to show for it and these recent comments just coincide with that. They (the U.S. administration) are finding it hard to push through fiscal plans and all this rhetoric is probably related,” Kiran Kowshik, strategist at Unicredit.

In Europe, equities pared a third monthly gain as Barclays dropped the most since November, becoming the latest bank in the region with trading results to lag American peers. Banking results dominated early trading with Barclays shares sliding 5 percent after weak investment banking results at the UK bank while UBS jumped 2.6 percent after it handily beat analyst expectations.

Ironically, outside of banking, European corporate profits are ahead of the U.S. The euro was poised for its biggest weekly gain since July, lifted by higher-than-expected eurozone inflation. European government bonds fell. West Texas intermediate crude rebounded after a sharp fall on Thursday.

Bank of America Merrill Lynch noted that the $21 billion of inflows into European equity funds over the past week were the highest since December 2015. “The hard data for equities is earnings — and they are powering ahead. Q1 earnings season is very strong and revisions trends are positive and broad based,” said analysts at the U.S. broker

On the US domestic front, confusion also reigns with the government facing possible shutdown, even as Trump’s second attempt to pass Obamacare has been indefinitely postponed. The U.S. GDP data will be assessed to see whether the Federal Reserve’s resolve to raise interest rates two more times this year will materialize even as the prospect of a limited government shutdown looms.

“It’s a busy end to the week with a lot of data out of both Europe and the U.S.,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a note. “Ahead of tomorrow’s first 100 days of Trump today we’ll see if a shutdown can be avoided.”

In summary, the Stoxx Europe 600 Index slipped 0.1 percent as of 6:27 a.m. in New York, dropping for a second day after reaching the highest level since August 2015. Japan’s Topix fell 0.3 percent. The gauge gained 2.9 percent for the week, the best performance this year. Futures contracts on the S&P 500 were unchanged. The underlying gauge rose 0.1 percent on Thursday and the Nasdaq 100 Index jumped 0.5 percent to a record.

In commodities, oil prices rose but were still on track for a second straight weekly loss on concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.  WTI was at $49.43 per barrel at 0649 GMT, up 46 cents, or 0.94 percent, from their last close. However, WTI is still set for a small weekly loss and is around 8 percent below its April peak. Brent crude was at $51.91 per barrel, up 47 cents, or 0.91 percent. Brent is almost around 8.5 percent down from its April peak and is also on track for a second, albeit small, week of declines.

Key economic data include 1Q GDP, U. of Michigan consumer sentiment index. Scheduled earnings include Exxon, Chevron, Colgate.

Bulletin Headline Summary from RanSquawk

  • Large-cap bank earnings take focus in EU trade with the likes of Barclays and RBS reporting
  • UK GDP figures show a slowdown in quarterly growth, while Eurozone core inflation rises to 4yr high
  • Looking ahead, highlights include US and Canadian GDP figures

Global Market Snapshot

  • S&P 500 futures up 0.1% at 2,387.50
  • STOXX Europe 600 down 0.2% to 387.10
  • MXAP down 0.3% to 149.02
  • MXAPJ down 0.09% to 486.90
  • Nikkei down 0.3% to 19,196.74
  • Topix down 0.3% to 1,531.80
  • Hang Seng Index down 0.3% to 24,615.13
  • Shanghai Composite up 0.08% to 3,154.66
  • Sensex down 0.2% to 29,956.44
  • Australia S&P/ASX 200 up 0.04% to 5,924.06
  • Kospi down 0.2% to 2,205.44
  • German 10Y yield rose 2.4 bps to 0.32%
  • Euro up 0.2% to 1.0898 per US$
  • Brent Futures up 0.6% to $51.77/bbl
  • Italian 10Y yield fell 6.6 bps to 1.95%
  • Spanish 10Y yield rose 3.4 bps to 1.66%
  • Gold spot up 0.2% to $1,266.21
  • U.S. Dollar Index down 0.1% to 99.01

Top Overnight News from Bloomberg

  • Barclays dropped the most in almost six months after it became the latest European bank to post trading results that failed to live up to the gains American firms reported
  • Credit Suisse Group’s proposed bonuses for top executives may initially have been “insufficiently sensitive,” Chairman Urs Rohner said in prepared remarks to shareholders as they gathered for a binding vote on the pay packages
  • UBS Group saw clients return from the sidelines in the first quarter, boosting earnings at the wealth management business as they added 20.5 billion francs ($20.6 billion) of new money, the most in about a decade
  • Deutsche Bank is close to appointing Citigroup Treasurer James von Moltke as chief financial officer, replacing Marcus Schenck, according to people with knowledge of the matter
  • Goldman Debt Trader Savarese Has Cooled Off After a Red-Hot 2016
  • Third Point, the investment firm founded by Dan Loeb, took a stake in Honeywell International Inc. and called for the industrial manufacturer to spin off its aerospace business
  • Boeing accuses Bombardier of “dumping” jets amid trade tension, selling its C Series passenger jets in the U.S. at “absurdly low” prices
  • Euro-area inflation bounced back to a level in line with the ECB goal and underlying price growth surged, setting up a debate about an exit from unconventional stimulus that may lead to a policy signal in June

Asia equity markets traded negative after shrugging off the mildly positive lead from Wall Street where the Nasdaq posted fresh record highs amid strong tech earnings, although upside in the broader market was limited by commodity weakness and temperamental US politics. Nikkei 225 (-0.3%) weakened with Japanese exporters hampered by a firmer currency, while energy and mining names dragged on the ASX 200 (-0.1%). Shanghai Comp. (+0.1%) and Hang Seng (-0.3%) were also subdued ahead of the Labor Day weekend and after the PBoC’s weekly net liquidity injection was more than halved, while KOSPI (-0.1%) exporters were despondent on Trump comments to renegotiate or terminate the South Korea trade deal. 10yr JGBs saw minor gains amid a dampened risk tone seen in the region and after today’s 2yr auction showed the firmest demand since May last year with the b/c rising to 5.51 vs. Prey. 3.82.

Top Asian News

  • Tata Power Scouting for Stressed Thermal Power Plants, CEO Says
  • BOJ to Cut Purchases of 1-to-5-Year Bonds in May, Plan Signals
  • Daiwa Profit Rises on Overseas, Investment Banking Business
  • Sharp Reports Narrower Loss, Pushes Back Earnings Outlook
  • China Stock Slump Lures Buyers Pivoting Away From Hong Kong

European indices have traded in a broadly tentative manner as stock specific moves take focus over broader macro plays. More specifically, UK banking names have seen different fortunes this morning with RBS (+2.2%) at the top of the FSTE 100 in the wake of positive earnings with investors less-impressed by Barclays (-4.1%) who are at the foot of the index. Elsewhere in the banking sector, UBS (+2.9%) are the notable outperformer in the SMI after their earnings saw Q1 profits exceed expectations. Finally, other notable earnings include Renault (+3.5%) and Sanofi (+1.8%) who have lent a helping hand to the CAC 40. In fixed income markets, Bunds have tracked lower following the latest Eurozone inflation, in which the core inflation (that has been highlighted by the ECB as subdued) rose to levels last seen in 2013. Additionally, the headline figure is now tracking just below the ECB’s central bank target of 2% at 1.9%. Consequently, bolstering expectations that the ECB will change there rhetoric at the June meeting.


In currencies, the bulk of the activity today is centred on the EU wide CPI release which has seen EUR/USD rip back to retest 1.0950. Still strong resistance to note here, with 1.0970 and 1.1000 also drawing in sellers. Follow through seen in EUR/GBP also as the cross rate has been resilience on the move down into the low .8400’s. Month end demand will have been through the week, but in the wake of the softer UK GDP read on the month — yoy still better than the previous quarter at 2.1% vs 1.9% – this seems to be an obvious buy today given the momentum potential if EUR/USD breaks higher. As such, we expect even more volatility in the aftermath of this afternoon’s US GDP print, where consensus of 1.0-1.2% looks a little optimistic, and could spell some more USD weakness ahead. Portfolio rebalancing also suggests some modest USD selling today. USD/JPY is range bound still, but grinding higher to retest the 112.00 level. The independent agenda here is largely down to the BoJ stance, meaning outside of risk off episodes, JPY selling will be the default mode.

In commodities, all eyes on the Oil markets again as the OPEC talk on extending the production cuts dominates the radio waves. The EIA report earlier in the week delivered a larger draw down to send WTI back to USD50.00, but scepticism provided strong resistance there. We have since seen a dip back towards the low USD48.00’s, but key tech support has held firm and we are tentatively held mid range with traders also focusing on the USD50.00 level in Brent. Both base and precious metals trade has been relatively tight; risk sentiment balanced to prompt opposing forces, but to a very modest degree.
Gold has recovered a little as the USD index is under some pressure again, with losses in Silver also slowing in momentum. Copper remains range bound, but still struggles above USD2.60.

It is another busy session in the US with Q1 GDP number which is expected to expand at its slowest pace in a year (+1.0% annualized QoQ; +2.1% previous). Aside from that the Chicago PMI number for April (56.2 expected vs. 57.7 previous) will provide an early snapshot of how manufacturing activity is shaping up in Q2, and is followed by the final University of Michigan consumer sentiment number for April (98.0 expected) which is expected to remain unchanged. On the earnings data front we have General Motors, Chevron and Exxon Mobil reporting amongst others to round out earnings for this week.

US Economic Data

  • 8:30am: Employment Cost Index, est. 0.6%, prior 0.5%
    • GDP Annualized QoQ, est. 1.0%, prior 2.1%
    • Personal Consumption, est. 0.9%, prior 3.5%
    • GDP Price Index, est. 2.0%, prior 2.1%
    • Core PCE QoQ, est. 2.0%, prior 1.3%
  • 9:45am: Chicago Purchasing Manager, est. 56.2, prior 57.7
  • 10am: U. of Mich. Sentiment, est. 98, prior 98
    • U. of Mich. Current Conditions, prior 115.2
    • U. of Mich. Expectations, prior 86.9
    • U. of Mich. 1 Yr Inflation, prior 2.5%
    • U. of Mich. 5-10 Yr Inflation, prior 2.4%
  • 1:15pm: Fed’s Brainard Speaks About Fintech in Evanston, Illinois
  • 2:30pm: Fed’s Harker Speaks in Washington

DB’s Jim Reid concludes the overnight wrap

Ahead of tomorrow’s first 100 days of Trump today we’ll see if a shutdown can be avoided. The last shutdown in 2013 was big news at the time but even though it lasted 16 days markets in the end barely missed a beat and rallied over the period. So its perhaps more of an interesting story reflecting current political wrangling than anything else. It seemed like the shutdown was to be averted for at least a week as the House of Representatives introduced a continuing resolution to provide a week of stopgap funding to extend the deadline for a spending bill to May 5. However House Democrats have threatened to not vote on the continuing resolution if the Republicans tried to bring a revised health care bill up for consideration. To be honest after a rollercoaster few days for US politics I don’t think I quite know where we now stand on tax reform, Nafta, healthcare, the wall, the shutdown and geopolitics. It’s got a bit too much for me this week. Adding to the mix overnight Mr Trump told Reuters that there could be a “major, major conflict” with North Korea even if he prefers a diplomatic solution which he thinks will be very hard to reach. After the symbolic 100 days is behind us things should calm down a bit in Washington and we’ll have the slow “will they/ won’t they be able to” on tax reform through the spring and summer months. Also today is Q1 US GDP which we’ll preview at the end but are we going to repeat a common post crisis pattern of weak Q1 growth?

The key event yesterday was the ECB rate decision and press conference which we always thought would be a bit on the dull side this time. However given that a whole industry rests on over analysing every word of Mr Draghi then we have to follow suit. Policy rates remained unchanged as expected, and the press conference saw Mr Draghi discuss reduced downside growth risks but also note that inflationary pressures remained too subdued to consider paring back stimulus. DB’s European economists published a note on the meeting highlighting that although economic data has improved, the evidence of a recovery in underlying inflation remains unconvincing and hence the ECB remains cautious of a premature tightening of financial conditions. However, as political hurdles are cleared and core inflation starts to rise, arguments for exiting current policy can start to change. Our economists see economic growth at least sufficient to keep the recovery and reflation themes going, with expectations of the first ECB moves to exit the very accommodative policy stance from June. Hence their baseline remains unchanged with forward guidance to be adjusted in June, tapering to be pre-announced in September and a one-off deposit rate hike in December. However, there were a few issues at the press conference to suggest the change to forward guidance could (temporarily) be delayed beyond June.

The global risk rally faltered in line with the late Wednesday US sell-off yesterday as European markets dipped and US markets flat-lining. In Europe the STOXX (-0.2%) ended a six day winning streak, with Eurozone banks (-1.8%) being hit particularly hard. The FTSE (-0.7%), CAC (-0.3%) and DAX (-0.2%) were all down on the day. Over in the US the S&P500 closed +0.06% higher with earnings perhaps battling politics for the upper hand with lower Oil also influencing (see below). The NASDAQ (+0.39%) stood out and reached a new all time high after holding steady yesterday. We also saw strong earnings for Alphabet and Amazon after the bell.

It was however busier over in government bond markets as we saw German bunds (2Y: -5bps; 10Y: -6bps) and US treasuries (2Y: -1bp; 10Y: -3bps) rally across all maturities, with the former driven by the ECB’s message of continued weak inflation and the latter by risk off moves given the multifaceted uncertainty in Washington. The broad based rally in government bond markets also saw 10Y OAT and BTP yields fall by -6bps and -7bps respectively on the day.

Over in commodity markets we saw oil (WTI –1.4%) drop to a one month low yesterday over supply concerns as Libya reopened its biggest field and US crude production continued to climb. Trump’s overnight comments on North Korea have helped it rally back just over a percent this morning though. Gold (+0.2%) ticked up amid the general risk off moves to post its first gain for this week. In FX we saw the US dollar (+0.1%) climb marginally while the Euro traded choppily around Draghi’s comments at the ECB press conference to end the day essentially unchanged.

Asian markets continue to see softer sentiment for risk not helped by Mr Trump’s comments. The Nikkei is -0.2% lower with the Hang Seng and Shanghai Comp -0.4% and -0.67% lower respectively. We have China PMI over the weekend to look forward to before the other global PMIs early next week. Remember that Monday is a holiday across lots of Europe.

Staying with Europe, although slightly overshadowed by the ECB, we saw some positive numbers out of Europe yesterday. In Germany we got preliminary CPI numbers for April which came in at +2.0% YoY (vs. +1.9% expected; +1.5% previous) and the GfK consumer confidence survey indicator for May also ticked up more than expected to 10.2 (9.9 expected; 9.8 previous). We also got the final Euro area consumer confidence reading for April which was unrevised as expected (-3.6).

It was a busier day over in the US in terms of data which was mixed though tilted towards indicating some weakness. Preliminary March numbers for durable goods orders (+0.7% vs. +1.3% expected) and capital goods orders (+0.2% vs. +0.5% expected) came in below expectations while wholesale inventories (-0.1% vs. +0.2% expected) unexpectedly fell on the month. We also got March advance goods trade balance number that showcased the US merchandise trade deficit widening but less so than expected (-$64.8bn vs. -$65.2bn expected). Pending home sales declined in March by -0.8% mom (vs. -1.0% expected) following a +5.5% increase in February. We also saw initial jobless claims tick up more than expected (257k vs. 245k expected; 244k previous), although these numbers could be caused by the timing of the Easter holiday rather than a softening labour market. Finally the Kansas City Fed’s manufacturing survey for April fell more than expected to 7 (vs. 17 expected; 20 previous), with firms reporting an increase in activity but with some deceleration.

Before we look at the day ahead, with the Q1 European earning season off to a strong start, one bullish argument for European equities is the scope for a further rebound in earnings, with consensus now  expecting 15% earnings growth this year, after six years of essentially flat EPS. Our European equity strategist Sebastian Raedler is forecasting a more cautious 10%. He highlights that for European EPS growth to reach 15% would require GDP growth above our economists’ forecasts (with US GDP growth at 3%, Euro-area growth at 2% and China growth at 7%), the euro trade-weighted index falling by more than our  FX strategists expect (by 9%, rather than the projected 7%) and bond yields rising to 1% by year-end (rather than the 0.75% penciled in by our rates strategists).

He also notes that around 30% of the projected consensus EPS growth comes from the resource sectors (energy and mining), with the quarterly EPS figures implying an oil price above $70/bbl, suggesting downside risks for the consensus numbers if the oil price remains closer to the current $50/bbl.

It’s a busy end to the week with a lot of data out of both Europe and the US. In Europe we’ll get preliminary French CPI (+1.4% YoY expected; +1.4% previous) and Q1 GDP numbers (+0.9% YoY expected; +1.1% previous). We will also see the Eurozone CPI estimate for April (+1.8% expected; 1.5% previous) as well as credit and monetary aggregates for the Euro Area. Over in the UK we will see the Q1 GDP number as well (+2.2% YoY expected; +1.9% previous).

Following that we have a busy session over in the US with Q1 GDP number which is expected to expand at its slowest pace in a year (+1.0% annualized QoQ; +2.1% previous). However DB’s Joe Lavorgna notes that this soft growth should be short lived as real GDP growth is expected to rebound to 2.5% in Q2 and then rise to 3.5% in Q3 and 4.0% in Q4. The aforementioned growth profile would result in 2017 inflation-adjusted output growth of 2.8% (Q4/Q4), which would be a meaningful improvement from last year (2.0%) and the fastest pace since 2005 (3.0%). However this forecast assumes a substantial amount of fiscal stimulus and could be hindered by political developments over the last couple of months that have lowered the probability that tax cuts and spending increases will occur as soon as projected at the beginning of the year. As a result there remain downside risks to their GDP forecasts. Aside from that the Chicago PMI number for April (56.2 expected vs. 57.7 previous) will provide an early snapshot of how manufacturing activity is shaping up in Q2, and is followed by the final University of Michigan consumer sentiment number for April (98.0 expected) which is expected to remain unchanged. On the earnings data front we have General Motors, Chevron and Exxon Mobil reporting amongst others to round out earnings for this week.


i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 2.47 POINTS OR 0.08%/ /Hang Sang CLOSED DOWN 83.35 POINTS OR 0.34%.  The Nikkei closed DOWN 55.13 OR 0.29% /Australia’s all ordinaires  CLOSED UP .05%/Chinese yuan (ONSHORE) closed DOWN at 6.8953/Oil UP to 49.38 dollars per barrel for WTI and 52.21 for Brent. Stocks in Europe  IN THE GREEN EXCEPT LONDON   ..Offshore yuan trades  6.8981 yuan to the dollar vs 6.8953 for onshore yuan. NOW  THE OFFSHORE IS A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN  A LITTLE STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS  HAPPY



Trump warns the world that there is a chance of a “major major conflict” with North Korea

(courtesy zero hedge0

Trump Warns There Is A Chance Of “A Major, Major Conflict” With North Korea

While emoting sympathy for Kim Jong Un’s situation, President Trump told Reuters, during a lengthy interview ahead of his 100th day in office, that he’d “love to solve things diplomatically,” but warned that “there is a chance that we could end up having a major, major conflict with North Korea.”

Putting a somewhat human face on the North Korean leader, President Trump had an interesting response when asked by Reuters if he considered North Korean leader Kim Jong Un to be rational…

“He’s 27 years old. His father dies, took over a regime. So say what you want but that is not easy, especially at that age.


I’m not giving him credit or not giving him credit, I’m just saying that’s a very hard thing to do. As to whether or not he’s rational, I have no opinion on it. I hope he’s rational.

And that is perhaps why he stil holds out hope for a path that avoids the military option…

“We’d love to solve things diplomatically but it’s very difficult,”

Emphasizing the possibility of new sanctions, and in particular leverage from China..

“I have established a very good personal relationship with President Xi”


“I believe he is trying very hard. He certainly doesn’t want to see turmoil and death. He doesn’t want to see it. He is a good man. He is a very good man and I got to know him very well.”

Still, as Reuters notes, just a day after he and his top national security advisers briefed U.S. lawmakers  declaring North Korea “an urgent national security threat and top foreign policy priority;”  and one day before Secretary of State Rex Tillerson will press the United Nations Security Council on sanctions to further isolate Pyongyang over its nuclear and missile programs, it’s clear where this could lead…

“There is a chance that we could end up having a major, major conflict with North Korea. Absolutely.”

U.S. officials said military strikes remained an option but played down the prospect, though the administration has sent an aircraft carrier and a nuclear-powered submarine to the region in a show of force




The doorknob files a test ballistic missile..  It failed again..sabotage?

(courtesy zerohedge)


North Korea Ballistic Missile Test-Fire Fails; US Pacific Command Aware

Just when you thought it was safe to sink into a tall glass of beer as US government shutdown was avoided, South Korea’s Yonhap News reports that the South Korean military has confirmed that North Korea has test-fired another ballistic missile.

The missile was reportedly fired from an area just north of Pyongyang. South Korean military is currently analyzing the missile type and flight distance. Yonhap aditionally reports that the launch of one ballistic missile appears to have failed.

U.S. Pacific Command on reported North Korean missile test: “We’re aware of the event.”

This comes just hours after U.S. Secretary of State Rex Tillerson warned on Friday that failure to curb North Korea’s nuclear and missile development could lead to ‘catastrophic consequences,’ while China and Russia cautioned Washington against threatening military force.

Tillerson says North Korea “must dismantle its nuclear missile programs” before U.S. “can even consider talks” http://cbsn.ws/2k2WwLh 

As Reuters reports, Washington has recently lavished praise on Beijing for its efforts to rein in its ally Pyongyang, but Chinese Foreign Minister Wang Yi made clear to the U.N. Security Council it was not only up to China to solve the North Korean problem.

“The key to solving the nuclear issue on the peninsula does not lie in the hands of the Chinese side,” Wang told the 15-member council in remarks contradicting the White House belief that it does wield significant influence.


The ministerial meeting of the council, chaired by Tillerson, exposed old divisions between the United States and China on how to deal with North Korea. China wants talks first and action later, while the United States wants North Korea to curtail its nuclear program before such talks start.


“It is necessary to put aside the debate over who should take the first step and stop arguing who is right and who is wrong,” Wang told the council. “Now is the time to seriously consider resuming talks.”


Tillerson responded: “We will not negotiate our way back to the negotiating table with North Korea, we will not reward their violations of past resolutions, we will not reward their bad behavior with talks.”

North Korea did not take part in the meeting.

It seems we just got one step closer to “a major, major conflict.”




Next up in the batter’s box:  South Korea as Trump is now threatening to terminate its ‘horrible’ trade deal with that country:

(courtesy zero hedge)

The Next Trade War: Trump Threatens To Terminate “Horrible” Trade Deal With South Korea

Two days after launching a trade war with Canada by imposing tariffs on lumber imports, one day after nearly terminating NAFTA (but stopping just shy after an alleged phone call from the leaders of Mexico and Canada), Trump has finally turned his attention to the one nation whose GDP consists of roughly 60% net trade, and which we said several months ago, is far more likely to be punished for trade malpractice than China: South Korea.

Speaking to Reuters and WaPo, Trump – who earlier also told Reuters that a “major, major” conflict with North Korea is possible – Trump sharply criticized the U.S.-Korea Free Trade Agreement, known as Korus, the latest version of which was ratified in 2011 and said that he will “renegotiate or terminate” the “horrible” free trade deal. Next week marks an anniversary for Korus and triggers a review period to potentially renegotiate or ratify a new version of the agreement.

“It’s a horrible deal. It was a Hillary Clinton disaster, a deal that should’ve never been made,” Trump said. “It’s a one-way street.”

“We’ve told them that we’ll either terminate or negotiate,” Trump said. “We may terminate.”

Trump added: “I will do that unless we make a fair deal. We’re getting destroyed in Korea.”

On his trip to Asia last week, Vice President Pence said to an audience of business leaders in Seoul that the United States was looking to “reform” the Korus agreement because U.S. businesses “face too many barriers to entry, which tilts the playing field against American workers and American growth.”

The president explained that the process of termination of Korus is simpler than with the North American Free Trade Agreement. “With NAFTA, we terminate tomorrow; if we did, it ends in six months. With the Korean deal, we terminate and it’s over.”

* * *

Trump also said he wants South Korea to pay for the recent $1 billion deployment of the U.S. Terminal High Altitude Area Defense, or THAAD battery, a missile defense system deployed to South Korea to protect against accidental North Korean launches, and to antagonize China.

Hyundai Motor shares fell as much as 2.4% after Trump’s comments, while the South Korea’s won also dropped on the comments. South Korea’s automakers association said it was concerned about the possible revision of the country’s trade deal with the United States, an official of the industry group said on Friday.

“We are worried about the uncertainty of the deal,” Kim Tae-nyen, vice president at the Korea Automobile Manufacturers Association (KAMA), told Reuters by telephone.

As Reuters followed up, a senior South Korean finance ministry official said the country has not yet received official requests on renegotiation of its free trade pact with the United States.

“Talk and actual policy are different,” the official told Reuters. “They have not requested anything from us so we’ll have to wait and see.”

Trump’s aggressive trade stance was unveiled as tensions are rising on the Korean Peninsula and as South Korea’s increasingly more irrational neighbor is proving to be a major source of instability, and thus leverage for any future Trump negotiations.





The following may force Draghi to curtail QE:  core eurozone inflation surges to a 4 year high as they are now near their ECB target of 2%

(courtesy zero hedge)



Core Eurozone Inflation Surges To 4 Year High As CPI Nears ECB Target

Mario Draghi’s job just became a little more difficult, because one day after the head of the ECB surprised markets with a more dovish statement than expected stressing risks for European inflation, on Friday morning Eurostat reported that Euro zone inflation rose by more than expected to the European Central Bank’s target and core inflation increased to its highest level in four years.

Inflation in the 19 countries sharing the euro was 1.9 percent year-on-year, Eurostat estimated, up from 1.5 percent in March and just short of the four-year high of 2.0 percent recorded in February. The print was also above the 1.8% consensus estimate, even though German inflation data released on Thursday which also came in hotter than expected had prepared markets for a potential stronger figure for the bloc.

The April print (released before the month is even over) was also just shy of the ECB’s medium-term target for inflation of 2 percent.

Overall inflation was higher primarily because of a 7.5% rise in energy prices and of 2.2% for unprocessed food. Prices for food, alcohol and tobacco went up by 1.5% in April, slightly lower than the 1.8% figure for March. In the services sector, the largest in the euro zone economy, prices rose by 1.8 percent in April, compared with 1.0 percent in March.

Core inflation, excluding volatile prices of energy and unprocessed food and which the European Central Bank monitors even more closely, jumped to 1.2% year-on-year in April from 0.8% in March, above market expectations of 1.0 percent. The core level was at its highest level since September 2013.

According to Bloomberg Intelligence, an Easter-related surge in prices for package holidays, particularly in Germany, is likely the predominant reason for the acceleration in core inflation.

The rate will “eventually show some signs of life as the output gap closes,” David Powell, BI’s chief euro-area economist, wrote before the release. “That may allow the ECB to announce as soon as September that its asset purchases will be tapered by 10 billion euros ($11 billion) a month in January.”

The April inflation figures will put even more pressure on the ECB to wind down its monetary stimulus, . The central bank has slashed interest rates into negative territory and adopted a bond-buying program worth 2.3 trillion euros ($2.5 trillion) to counter the threat of deflation and revive growth in the 19-member currency bloc. As reported yesterday, the ECB on Thursday stuck to its ultra-easy policy stance, but explicitly acknowledged the improvement of the euro zone economy, now on its best run since the global financial crisis.

The last time European inflation underwent such a strong bounce was in 2011, on the heels of a dramatic credit-impulse driven export of inflation by China, when then-ECB president Jean-Claue Trichet hiked rates, only to unleash the sharpest sovereign debt crisis in Eurozone history, prompting the arrival of Mario Draghi and the eventual launch of QE and NIRP.





get ready for trade wars:  Boeing accused Bombardier of dumping and of receiving huge tax payer subsidies  (and Boeing is not the beneficiary of the Em In Bank?). Canada may retaliate with import duties on uSA thermal coal which would be deadly to the USA coal industry


(courtesy zero hedge)

Trade War, Round 2: Boeing Accuses Bombardier Of Dumping Jets; Canada Retaliates

Just days after the US Commerce Department imposed duties averaging 20% on Canadian softwood lumber, accusing Chinese timber companies of getting an unfair government subsidy, on Thursday round two of the trade war between the US and Canada broke out when Boeing asked the U.S. Commerce Department to investigate dumping, subsidies and unfair pricing for Canadian planemaker Bombardier’s new CSeries airplane, a competitor to the Boeing 737, confirming that the trade tensions between the two neighboring countries are set to get far worse.

Specifically, the Chicago-based aerospace giant has asking the International Trade Commission to rule that it has suffered injury to its business at the hands of Bombardier and to recommend that the Commerce Department impose duties on the Canadian jet builder (amusingly, Boeing also complained about the very existence of Bombardier itself, a company which has been aggressively bailed out by the Canadian government as recently as October 2015, when in exchange for $2.5 billion in taxpayer funds, the company fired 7,000 Canadian workers).

In its petition, Boeing said that Bombardier, determined to win a key order from Delta Air Lines after losing a competition at United Airlines, had offered its planes to the airline at an “absurdly low” $19.6 million each, well below what it described as the aircraft’s production cost of $33.2 million. “Propelled by massive, supply creating and illegal government subsidies, Bombardier Inc has embarked on an aggressive campaign to dump its CSeries aircraft in the United States,” Boeing said in its ITC complaint.

A comparable 737-700 model by Boeing has a list price of $83.4 million, with the new 737-MAX 7 priced at $92.2 million. While sales discounts from list prices are typically 40 percent to 50 percent in the industry, another question is just how much of that price is courtesy of the implicit taxpayer subsidy of the Ex-Im bank, but that is a topic for another post.

The spat between the two companies came to a climax in April 2016, whe Bombardier won the Delta order, its biggest yet, for 75 CS100 jets, worth an estimated $5.6 billion based on the list price of about $71.8 million.  And now that Trump has given the green light to challenge Canadian trade competitors, Boeing is certainly not wasting time.

In its complaint against Bombardier, Boeing argued that the CSeries program would not exist without hundreds of millions of dollars in launch aid from the governments of Canada, Quebec and Britain, nor the abovementioned $2.5 billion equity infusion from Quebec in 2015.

Boeing wasn’t finished: the company also took a shot at European rival Airbus, which it accuses of benefiting from similar “unfair” government subsidies in a long-running dispute before the World Trade Organization.

“Evidently taking a page out of the Airbus strategy book, Bombardier has blatantly and intentionally demonstrated its goal of muscling its way into the U.S. aviation market by offering its heavily subsidized planes at cut-rate pricing,” Boeing said.

A Commerce Department spokesman told Reuters that the petition would be given “a thorough review” and further comment was premature.

In recent week, Commerce Secretary Wilbur Ross has taken swift action to protect the U.S. steel and aluminum industries from foreign competition, launching national security investigations that could lead to import restrictions. An investigation could lead to duties on the aircraft to offset any below-cost pricing or any subsidies deemed unfair.

Shortly after the complaint was filed, the Canadian government issued a statement objecting to Boeing’s allegations and noted that the CSeries has many U.S. suppliers, including for engines, and supports thousands of U.S. jobs. “The Government of Canada will mount a vigorous defense against these allegations and stand up for aerospace jobs on both sides of the border,” it said. Full statement below:

The Government of Canada today made the following statement regarding the filing of a petition by Boeing Aerospace Corporation with the United States Department of Commerce, alleging the dumping of Bombardier aircraft in the United States market:


“The Government of Canada objects to the allegations made by Boeing. We are confident that our programs are consistent with Canada’s international obligations.


“The aerospace industries of Canada and the United States are highly integrated and companies on both sides of the border benefit from this close partnership. For example, many C Series suppliers are based in the United States and it is projected that more than 50 percent of the components for the C Series, including the engine, will be supplied by American firms directly contributing to high quality jobs in that country. The C Series is a great example of how the North American industrial base can develop and produce a globally competitive product with industry-leading clean technologies.


Bombardier also has a significant presence in the U.S. across its aerospace and transportation divisions, directly employing more than 7,000 workers. In addition, the company works with more than 2,000 suppliers headquartered in states across the country thereby generating thousands of well-paid, high-tech American jobs.


“The Government of Canada will mount a vigorous defence against these allegations and stand up for aerospace jobs on both sides of the border.”

Curiously, Bombardier’s chief executive conceded the company had been “aggressive” on pricing in order to win, and sources familiar with the deal pegged the discount closer to two-thirds off the nominal list price. It added that it was reviewing the petition and structures its dealings to ensure compliance with all relevant laws.

* * *

In a separate development, Premier Christy Clark of British Columbia, wrote a letter to Canadian Prime Minister Justin Trudeau Wednesday asking him to ban coal shipments from the U.S., sending shares of US coal giant Cloud Peak Energy (among others) tumbling. According to Bloomberg, Clark’s demand was in response to Trump’s lumber tariffs. Trudeau said he would consider the request “carefully and seriously.” Some context: a little over 6 million metric tons of U.S. thermal coal were shipped through the port of Vancouver in 2016.

Needless to say, it would be especially absurd if as a result of Trump’s Canadian tariffs, it is the US coal mining industry – the one which the president vowed to reincarnate – that suffers the most.

And now, we sit back and wait for round three in the increasingly hostile trade wars between the US and its peaceful northern neighbor.



Rig counts continue to rise and that sets off a huge rise in USA production.  It is now at 20 month highs

(courtesy zero hedge)

US Rig Count Rise Continues As Crude Production Hits 20-Month Highs

From the May 2016 lows, the number of US oil rig counts have only declined 3 times and this week was no exception. Up for its 15th week in a row (+9 to 697), its highest level since April 2015, the rig count continues to pull US crude production higher, stymying OPEC efforts at balance, leaving the bullish case for oil fading fast.

  • Texas added 11 rigs to 437, Oklahoma added 3 to 127

One might argue that the rig count – which tracks the lagged crude price – may begin to stabilize here…


But crude production – which lags the rig count – has plenty of room to run…


As OilPrice.com’s Nick Cunningham notes, the bullish case for oil is fading fast. Oil (and gasoline) prices have tumbled to their lowest since the OPEC deal was announced last year.

Major investors are also losing a bit of confidence in oil’s comeback. Hedge funds and other money managers took a breather in the buildup, buying up long positions in the most recent week for which data is available. Much of the rally in oil prices between the end of March and mid-April occurred as investors closed out short positions and took on bullish bets. Since then, however, hedge funds have slowed their net-long builds, a sign of waning confidence in higher oil prices.

Also, the futures market no longer looks all that encouraging. The contango is back, a sign of concerns about near-term oversupply. Front-month contracts are trading at a discount to later contracts, a situation that looks more bearish than it did just a few weeks ago. “Keep a wary eye on the Brent contango,” Jan Stuart, energy economist at Credit Suisse Securities LLC, told Bloomberg last week. “Bellwether Brent time-spreads have been counter-seasonally widening.” That is just oil jargon for: “there is too much oil still swashing around and the market is getting anxious.”

Recognizing that the task of balancing the market is far from complete, OPEC’s monitoring committee, which was charged with overseeing compliance with the collective production cuts, has endorsed a six-month extension of the deal. The endorsement means that unless something unforeseen happens, OPEC will push for a passage of an extension at its official meeting in May. The only roadblock to keeping the cuts in place through the end of the year at this point is Russia, although most analysts don’t expect them to stand in the way.

That should help push oil prices back up. However, the meeting is several weeks away. In the short run, oil prices are floundering amid growing concerns about oversupply.

As has been the case since the beginning of the year, the main dynamic is how the OPEC production cuts stack up against the pace of growth from U.S. shale and others.


By the end of the year, the U.S. could add 860,000 bpd of new supply, a sharp increase from expectations from just six months ago. The upward revision comes even as oil prices have failed to move much above the $50 per barrel threshold. In other words, U.S. shale drillers are “roaring back,” as Goldman Sachs recently put it, at a much faster clip than everyone expected. And the gains are coming even as oil prices are not rising as much as many had hoped.

On the other hand, the weakness in the market could be starting to deflate the momentum of U.S. shale – the blistering growth rate is starting to show some signs of slowing down. For the week ending on April 21, the shale industry only added 5 oil rigs back into operation, the lowest weekly figure since February. The previous five weeks saw rig count increases more than twice as high.

Luke Lemoine, an analyst at Capital One Securities in New Orleans, told Bloomberg that for the rig count, “the rate of change has slowed over the past several weeks. If commodity prices persist here, we expect the rig count to flatten out fairly soon.To some degree, the feverish uptick in drilling activity is killing off the rally at the industry’s own expense.

On top of too much supply from the U.S., some demand figures are raising some red flags as well. “It’s the sense that too much gasoline and really a drop in U.S. demand in particular, but a little bit of softness in India and some other places, is going to lead to an undertow for refinery runs,” Tom Kloza, who co-founded the Oil Price Information Service, told CNBC. “Back to the drawing board for crude oil prices,” he said on Friday, at the close of a week that saw crude drop by 7 percent. Kloza added that the oil bulls that expect WTI and Brent to move into the $60 to $70 range are going to have to “come back to Earth.

The silver-lining for them, however, is that because the market is showing some cracks in it, OPEC almost has no choice but to extend the production cuts for another six months, for fear of risking a slide deeper into the low-$40s.



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



GBP/USA 1.2944 UP .0053 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS FRIDAY morning in Europe, the Euro ROSE by 67 basis points, trading now ABOVE the important 1.08 level  RISING to 1.0932; 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 2.47  POINTS OR 0.05%    / Hang Sang  CLOSED DOWN 83.35 POINTS OR 0.34%/AUSTRALIA  CLOSED UP .05% EUROPEAN BOURSES ALL IN THE GREEN EXCEPT LONDON 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED DOWN 55.13 POINTS OR 0.29%

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 83.35 OR 0.34%  / SHANGHAI CLOSED UP 2.47 POINTS OR 0.08%/Australia BOURSE CLOSED UP .05% /Nikkei (Japan)CLOSED DOWN 55.13 OR 0.29%  / INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1267.25


Early FRIDAY morning USA 10 year bond yield: 2.307% !!! DOWN 0 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

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

USA dollar index early FRIDAY morning: 98.82 DOWN 26  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING


And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.545%  up 11  in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.018%  DOWN 1/2   in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.648%  UP 2  IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.282 UP 4  POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 63 points HIGHER than Spain.





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

Euro/USA 1.0893 UP .0028 (Euro UP 28 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.46 UP  .550 (Yen DOWN 55 basis points/ 

Great Britain/USA 1.2946 UP 0.0055( POUND UP 55 basis points)

USA/Canada 1.3665 UP 0.0041(Canadian dollar DOWN 41 basis points AS OIL FELL TO $48.68


This afternoon, the Euro was UP by 28 basis points to trade at 1.0893


The POUND rose BY 55  basis points, trading at 1.2946/

The Canadian dollar fell by 41 basis points to 1.3665,  WITH WTI OIL RISING TO :  $49.01

The USA/Yuan closed at 6.8935/
the 10 yr Japanese bond yield closed at +.018% DOWN 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1 IN basis points from THURSDAY at 2.307% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.978 UP 1  in basis points on the day /

Your closing USA dollar index, 99,10 UP  3  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 33.23 POINTS OR 0.46% 
German Dax :CLOSED DOWN 5.78 POINTS OR .05% 
Paris Cac  CLOSED DOWN 4.37 POINTS OR 0.08%
Spain IBEX CLOSED UP 31.90 POINTS OR 0.30%
Italian MIB: CLOSED UP  11.82 POINTS OR 0.06%

The Dow closed DOWN 40.82 OR 0.19%

NASDAQ WAS closed UP 1.33 POINTS OR 0.02%  4.00 PM EST
WTI Oil price;  49.01 at 1:00 pm; 

Brent Oil: 51.76 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: $51.84


USA 30 YR BOND YIELD: 2.9580%

EURO/USA DOLLAR CROSS:  1.0891 up .0026

USA/JAPANESE YEN:111.48  UP 0.256

USA DOLLAR INDEX: 99.04  down 4  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2944 : up .0053  OR 53 BASIS POINTS.

Canadian dollar: 1.3649  UP .0025 (CAN DOLLAR DOWN 25 BASIS PTS)

German 10 yr bond yield at 5 pm: +.317%


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


Stocks Have Best Week Of The Year As Economy Grinds To A Halt

Yeah, this happened…


And so did this…


So this…


April was a volatile month in markets – bonds, bullion, and stocks higher; crude, copper, and base commodities all tumbled

  • US Equities up for 5th of last 6 months (highest monthly close ever)
  • S&P Tech Sector up 5 months in a row – longest streak since Aug 2014 (record monthly close)
  • S&P Energy Sector down 4th month in a row (lowest monthly close since July)
  • Treasury Yields fell for the 3rd of the last 4 months (lowest monthly close in yields since October)
  • WTI fell for 2nd month in a row (lowest monthly close since August)
  • Copper down for 3rd month in a row – longest losing streak since Oct 2015 (lowest monthly close since December)
  • Dollar Index fell for 3rd of last 4 months (lowest monthly close sine October)
  • GBPUSD has risen for 6 of the last 7 weeks (and April was GBP’s best month since April 2015)
  • Gold was up for the 4th month in a row – longest winning streak since Aug 2012 (highest monthly close since October)

Bonds, Bullion, and Stocks all rose around 1.25% on the month, but Banks were down in April (and March) for the worst 2-month drop since Feb 2016.


Tech led the month, Energy lagged…


Dollar Index fell for the 2nd month in a row (3rd of 4) erasing most of the gains post-Trump

*  *  *

It was a tough week for ‘soft’ data and reality-checks – who do you trust to forecast reality?


But stocks were all higher (apart from Trannies)…The best week of the year for The Dow!!! But it ended on a weak note…

Small Caps were hit hard today as “Most Shorted” stocks’ squeeze seemed to end…


Utes were the only sector red on the week, Healthcare and Tech led (with Financials solid post-Macron)…


Breadth has remained weak in this entire recent surge…


Volume has been abysmal the last two days (lowest of the year)


VIX was crushed this week – by the most since the post-Trump-election – but dsid bounce back a little today…


Finally today was all about the Nasdaq… except all that hope faded fast as it clung to unch. Small Caps and Trannies were hit hard…


The Good (AMZN), The Bad (MSFT), and The Ugly (INTC) in Nasdaq-land today…


Notably, bank stocks have slumped since Trump unveiled his tax plan this week…


And pretty clear picture of the safe haven buying after Trump tax plan…


Big week for EUR (France elections) and JPY was sold…


The Dollar Index scrambled back to unchanged from the Macron-drop but ended the week lower…


EURUSD surged on the heels of the Le Pen loss to the highest since Trump’s election…


Cable has risen for 6 of the last 7 weeks (and April was GBP’s best month since April 2015)


Treasury yields ended the week higher but below the kneejerk opening yields from Sunday night after the French election relief…


30Y Yields tested 3.00% fives times this week and rallied back each time (30Y ended down 1.5bps today after being up 4bps after GDP… oddly)


Gold (and Silver) suffered it’s worst week in the last 7 but copper rallied most in 6 weeks…


The B.E.A. confirms the Atlanta Fed with their official reading on first quarter GDP at only.7%

(courtesy zero hedge)


US GDP Collapses To 0.7%, Lowest In Three Years; Worst Personal Spending Since 2009

The Atlanta Fed was right once again, and slashing its forecast over the past 3 months today the BEA confirmed that in the first quarter US economic growth tumbled to just 0.7%, down from 2.1% in the last quarter and below the 1.0% expected, and the lowest print in three years going back all the way to Q1 2014.

Broken down by components, the disappoing number reflected increases in business investment, exports, housing investment, offset by a big slowdown in consumer spending. The increase in business investment reflected increases in both structures and equipment, notably a significant increase in mining exploration, shafts, and wells.

These positive contributions were offset by decreases in private inventory investment, state and local government spending, and federal government spending.

The increase in exports reflected an increase in nondurable industrial supplies and materials, notably petroleum. Also on trade, imports, which are a subtraction in the calculation of GDP, increased in the first quarter of 2017. As the chart below shows, the dramatic drawdown in trade as a result of the soybean export surge giveback is now over, and net trade contributed a modest 0.1% to Q1 GDP.

But the biggest culprit for the atrocious GDP print was the collapse in consumer spending, which rose at just 0.23% annualized, the lowest increase since 2009, and reflected an increase in services offset by a decrease in motor vehicles and parts. In short: for whatever reason, spending in the first quarter imploded.

Elsewhere, looking at PCE, prices rose 2.6% Q/Q, above the 2.3% expected, and higher than last month’s 2.0%. Core PCE rose 2.0%, in line with expectations.

Once again, the bulk of the PCE growth came from rising healthcare service prices, with the rest barely registering.

Food prices increased in the first quarter following a decrease in the fourth quarter of 2016. Energy prices increased in the first quarter of 2017 following a larger increase in the fourth quarter of 2016. Excluding food and energy, prices increased 2.3 percent in the first quarter of 2017, compared with an increase of 1.6 percent in the fourth quarter of 2016.


trading today:

this is not suppose to happen:

the 30 yr treasury yield jumps to 3% despite the dismal GDP growth

(courtesy zero hedge)

30Y Treasury Yield Jumps Near 3.00% Despite Dismal GDP Growth

Nothing says sell bonds like the worst quarterly growth for a Fed rate hike since 1980


but that’s what is happening…

Here’s why – Treasuries under pressure after 1Q employment cost index rose 0.8%, largest gain since Q1 2007, a sign of inflationary wage pressures as both pay and benefits accelerated.

Late last night, Trump’s second Obamacare repeal attempt was on the verge of collapse

(courtesy zero hedge)

Trump’s Second Obamacare Repeal Attempt On The Edge Of Collapse

Exactly one month after Trump was humiliated by his own party, when in the last moment the House failed to get the number of votes to pass a Republican healthcare bill due to holdouts from the conservative Freedom Caucus, the president’s second attempt to repeal Obamacare before his first 100 days in office run out, appears on the edge of failure. However, whereas the latest effort succeeded in appealing to the conservatives who caused the first vote to be pulled in the last moment, this time is the moderates who are about to pull the plug on Trump’s – and Paul Ryan’s – second attempt to overhaul Obamacare.

As a reminder, in order to appeal to conservatives, the revised bill was negotiated by centrist Rep. Tom MacArthur (R-N.J.) and conservative Rep. Mark Meadows (R-N.C.) and was meant to allow states to opt out of some of ObamaCare’s requirements, which however could result in people losing their current health coverage or facing much higher premiums. While the changes aimed at winning over conservatives, proved successful, in the process the new bill might have lost just as many centrists. According to the latest roll call by The Hill, at least 21 Republicans have said they would vote no on the revised GOP healthcare bill. Only 23 votes are required to kill the bill.

“The mood is still guardedly optimistic,” said Representative Chris Collins, a moderate and Trump ally who supports the bill. “There are, I’m going to say, still some ‘lean no’s’ that we’ve just got to get over the hurdle …”

The “no” votes include Reps. Patrick Meehan (Pa.), Ryan Costello (Pa.), Barbara Comstock (R-Va.), Jaime Herrera Beutler (Wash.) and John Katko (N.Y.), all centrists who had reservations about the previous ObamaCare repeal bill that was pulled from a floor vote last month because of a lack of GOP support. The Hill adds that on top of that, a trio of usually reliable Republicans — Foreign Affairs Committee Chairman Ed Royce (Calif.), Adam Kinzinger (Ill.) and Mario Diaz-Balart (Fla.) — said that they were undecided on the new bill after saying they were yes votes on the earlier legislation.

“I’m absolutely undecided,” Diaz-Balart, a member of the GOP whip team, told The Hill. “I was a yes before, but there are a lot of red flags” with the revised bill.

It also remains unclear how dozens of other Republicans would vote this time, but the number of Republicans publicly opposed or leaning against the bill is enough to raise doubts about whether the House would pass it in its current form. In fact, just two more no votes would be sufficient to end the latest push.

Centrists opposed to the new bill are largely echoing Rep. Charlie Dent (R-Pa.), who said the negotiations between Meadows and MacArthur only exacerbated his earlier problems with the bill. Dent, in an interview on MSNBC’s “Morning Joe” on Thursday, said he worried that people with pre-existing health conditions might be left without insurance because of the changes, something supporters of the bill have fiercely denied.


Many members of the centrist Tuesday Group members complained that the MacArthur-Meadows amendment pushed the bill too far to the right, and they privately griped that MacArthur had shifted blame for the stalled healthcare effort from conservatives to centrists.

The White House has kept the pressure on GOP leaders to hold a vote by President Trump’s 100th day in office, Saturday. But they say they won’t bring their revised bill to the floor until they secure the 216 needed GOP votes. And right now, they acknowledge, they don’t have them.

Speaking earlier on Thursday, Paul Ryan said that “I think we’re making very good progress. … We’re going to go when we have the votes, but that’s the decision we’ll make when we have it.” For now, however, there is no indication of progress, in fact quite the opposite.

There are other considerations among voting republicans, many of whom are up for reelection next year and are “running scared.” According to the Hill, one moderate Republican was overheard in a House cafeteria this week telling an aide: “If I vote for this healthcare bill, it will be the end of my career.”

Finally, there are significant doubts about whether the legislation would go anywhere in the Senate.

Several Senate Republicans have raised questions about the bill, making it unclear whether it could win 50 votes in the upper chamber.


And Senate Democrats have said that parts of the bill, including the new language, would run afoul of special budget rules the GOP is using to avoid a filibuster. That means those sections might have to be ripped out of the bill to prevent it from being dead on arrival in the Senate.

Should Friday come and go with no healthcare vote, there won’t be dramatic consequences, but it will mean even more embarrassment for Trump, who will have been defied by his own party twice in the span of 100 days.

There is a silver lining, if only for markets: with Democrats warning they “will not support a stop gap bill” to fund the government after Saturday if there is a healthcare bill this week – thus potentially resulting in a government shutdown –  at least the government will stay open for one more week. How a long-term deal can be achieved in one week, however, with animosity between the left and right growing by the day, remains very much unclear.





Republican’s second attempt to repeal has now officially failed

(courtesy zero hedge)

Republicans Fail In Second Attempt To Repeal Obamacare

If Trump was hoping to at least vote on Obamacare repeal before his first 100 days are up, he was up for more disappointment.

Late on Thursday night, House Majority Leader Kevin McCarthy confirmed that, as expected, the GOP leadership would not bring up a revised ObamaCare repeal bill to the floor this week, after it became clear Thursday night that the 216 GOP votes needed to pass the healthcare bill had not materialized. At least 21 Republicans had come out against the bill, with many more undecided. Leaders can only afford 22 GOP defections.

After a two-hour meeting in Speaker Paul Ryan office in the Capitol, McCarthy told reporters that the GOP had again failed to whip enough support for the bill: “we are not voting on healthcare tomorrow or Sunday.”

He promptly then downplayed the adverse healthcare development, saying leaders had been discussing the short-term stopgap funding bill to avert a government shutdown. “We’ve been making great progress, and when we have the votes we’ll vote on it.”

Just not yet.

So yes, another embarrassing failure for the President and House speaker. But what makes this one unique is that as Bloomberg notes, House republicans appear to be getting wise to the Senate’s trickery:

Several moderate Republicans are visibly frustrated about the renewed push to pass the bill after leaders made changes aimed at winning over conservatives.


“We’ve been through this before,” Republican Representative Charlie Dent of Pennsylvania said Thursday. “The business model around here is to load the bill up, make it as conservative as possible, send it to the Senate and have the Senate clean it up and send it back, and the very people who are placated on the first launch won’t be there on the final. And that dog ain’t hunting anymore.”

Meanwhile, the House is expected to pass a one-week continuing resolution (CR) on Friday, buying bipartisan negotiators more time to pass a bill to fund the government for the rest of the 2017 fiscal year. If for whatever reason it fails, the government will be shut as of midnight tonight.



Trump is now angry and is calling Schumer’s bluff: “If there is a shutdown it is the Democrats to blame!”

(courtesy zero hedge)

Trump Calls Schumer’s Bluff: “If There’s A Shutdown, There’s A Shutdown… Democrats Would Be To Blame”

With Democrats seemingly unsatisfied with Republicans dropping border wall funding and adjusting on Obamacare-related items, it appears President Trump is calling Schumer’s and Pelosi’s bluff, proclaiming “If there’s a shutdown, there’s a shutdown,” adding that Democrats would be to blame if the federal government was left unfunded.

Schumer today:


Pelosi added:


And so, as Reuters reports, President Donald Trump downplayed the severity of a potential government shutdown, making it clear who will be to blame

“We’ll see what happens. If there’s a shutdown, there’s a shutdown,” Trump told Reuters in an interview, adding that Democrats would be to blame if the federal government was left unfunded.


Trump added that a shutdown would be a “very negative thing” but that his administration was prepared if it was necessary.

As part of the budget negotiations, Democrats have called for financial support to prop up Puerto Rico’s Medicaid program covering health insurance for the poor, but many Republicans are opposed to the idea. Trump also said it would be unfair to offer a debt bailout to Puerto Rico, a U.S. territory, because it was unfair to people in U.S. states.

“I don’t think that’s fair to the people of Iowa, and I don’t think it’s fair to the people of Wisconsin and Ohio and North Carolina and Pennsylvania that we should be bailing out Puerto Rico for billions and billions of dollars,” Trump said. ” No I don’t think that’s fair.”

Notably, while equity markets are whistling complecentlypast the graveyard, USA sovereign risk has surged back to its highest (relative to Germany) since Trump’s election as the threat of a government shutdown gets priced into a non-manipulated market…

(courtesy zero hedge)

House Passes Stopgap Spending Bill Averting Government Shutdown; Senate Next

The US House of Representatives passed a one week stopgap spending bill to keep the government funded through next Friday, as lawmakers continue work to finish legislation that extends funding through the rest of the fiscal year.

Next, the bill will go to the Senate, which is also expected to clear the vote later today, and then send it to President Trump for his signature.

It remains unclear just how Dems and GOP will agree on a long-term spending bill over the next 7 days if they were unable to do so as of today, especially with Trump conceding in virtually all controversial items such as the Wall along the Mexican border. However, we do know that Democrats may now hold government hostage, passing weekly bills to ensure that Republicans do not pass some version of Obamacare repeal, although as reported earlier today, even that effort appears to be too loft for House republicans at this moment.

(courtesy Jeremiah Johnson)

Retired Green Beret Warns: “We’re At The Threshold Of War…The Choice Is Not Up To Us Anymore”

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

As reported Monday, April 25 on almost all mainstream and alternate news sites, Britain’s Defense Minister Michael Fallon has openly declared that his country will carry out a preemptive nuclear strike even if not attacked, as such:

“In the most extreme circumstances we have made it very clear that you can’t rule out the use of nuclear weapons as a first strike.”

Michael Fallon, BBC Today, 4-25-17

This is very serious and no longer simply rhetorical, as the Russians responded to the effect that the UK could be wiped off the face of the globe if they were to provoke the wrong party.  The U.S. now has a submarine in position in South Korea that is carrying Tomahawks armed with nuclear warheads and the American Naval armada continues to sail toward the region.  The North Koreans have been conducting artillery drills, as South Korea and Japan are preparing their citizens for war to break out.  The United States just test-launched an ICBM from California that splashed into the South Pacific.

In the U.S., President Trump has convened a meeting in the White House for all 100 U.S. senators as reported yesterday throughout the alternative media.  The mainstream media (MSM) is being notoriously silent about the whole matter, although it is plain to see the focal point of the meeting is North Korea, as announced by the White House.

Deflection has been rendered partially by the MSM by the endless barrage regarding the 9th Circuit Court trying to sabotage the Executive Order signed by the President to withhold federal funding from “sanctuary” cities trying to circumvent federal law and procedure with the illegal aliens.  The “First 100 Days” of the Trump Administration is the new catch-phrase the MSM is focusing upon, much as they did with the “47 million on food stamps” phrase that virtually stayed the same for more than 3 years.  Underreporting and obfuscation (if not outright lies) are the MSM’s way of keeping the public in the dark nationally and globally.

In the meantime, the Russians are beginning to redeploy ground troops to Syria.  It appears that the U.S. is going to be pushed into a war in one theater or another by the progressives masquerading as conservatives.  This brings to mind the ratiocination for the initiation of hostilities in either theater.  For North Korea, it is simple: The North Koreans are one of the three nations not involved in the global banking cartel.  In addition, a war will increase U.S. hegemony in the area regardless of what happens to South Korea or Japan in the aftermath.

Regarding Syria, the Obama administration started a proxy/indirect war with Russia over Syria, with Russia backing Bashar al-Assad and the United States its own “created boogeyman” of ISIS/ISIL.  Obama did not take Russia on directly, and Russia out-maneuvered him by suggesting he fight against his own creation…which he did…and then the Russians bombed the daylights out of them.  Russia then declared the bombing campaign to be over and did a “drawdown,” while still leaving enough of a force to deter Obama, who fizzled out in pusillanimous splendor.

Syria is still on the table, though, because we don’t have that pipeline running out of Qatar through Northwestern Syria to cut off Gazprom and the Russians from supplying Europe with natural gas.  In addition, the House of Saud wants Assad out of Syria, and in addition to this, the U.S. needs to take Syria if it wants (and it does want) to invade Iran.  The Russians bombing ISIS/ISIL prevented any more oil from being stolen from Northwest Syria and trucked across the border, where it was sold to Erdogan and his brother.

The Military Industrial Complex (MIC) and their paid-for congressmen and senators (such as McCain, Graham, Ryan, ad infinitum) are the ones who stand to benefit, either in stocks held or in kickbacks to either advance or snafu legislation or policy (depending on which benefits the firms).  They did it with Ukraine, as well, but the threat of directly confronting Russia was as good as an orchiotomy for Obama, and we have a stalemate between the U.S.-created Kiev government of Poroshenko and the separatists of the Eastern Ukrainian provinces.

The powers that be are intent on having a war, regardless of the consequences and effects on noncombatants.  A war would also be a way to prop up the administration’s flagging ratings.  Domestically we have not emerged from the “soft” police state and liberal “legislative” powers of the Courts to remake Constitutional law and circumvent Congress and the President through selective interpretation of anything and everything: These things are the true “legacy” of Obama.

Now, where from there?  We are at the threshold of another major war that could erupt in any of these areas.  The choice is not up to us anymore, and it is surely being decided upon at this very moment.


It sure looks like USA home prices are in a bubble just like Toronto and Vancouver.

(courtesy zero hedge)


High Alert on North Korea, Economy Down Again and Trump Tax Plan

By Greg Hunter’s USAWatchdog.com

Secretary of State Tillerson and other top U.S. officials have issued a dire warning on North Korea. In a press release this week, the Trump Administration says, “North Korea’s pursuit of nuclear weapons is an urgent national security threat and top foreign policy priority.”  This release was issued after a White House briefing to 100 Senators that detailed the possible threat.  Another ominous sign was the test firing of an unarmed ICBM at Vandenberg Air Force Base in California.  Meanwhile, North Korea has been making provocative videos showing a military nuclear strike on the United States and also a live fire drill with North Korean artillery.  Many of North Korea’s artillery can easily reach Seoul, South Korea.

President Trump revealed a skeleton tax plan that his Administration says will be business friendly, spur growth and jobs. It proposes a top corporate tax rate of just 15%, and it doubles the standard deductions for most individuals, while taking away most private and corporate deductions.

Meanwhile, the real economy continues to show disintegrating results. The Atlanta Fed is now downgrading the growth in the first quarter to just .2 %.   On top of that, store closings are projected to surpass 8,000 nationwide.  At the top of the 2008 Great Recession, the store closings topped only 6,000 in the U.S.

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

(There is much more in the video newscast.)

After the Wrap-Up:

Mike Maloney from goldSilver.com will be the “Early Sunday Release

Well that about does it for this week

I will see you Monday night





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