May 5/USA issues a fairy tale jobs report/Huge bank runs in Italy as its target 2 imbalances balloon/Russia, Iran and Turkey ban USA flights over safe zones in Syria/New York Fed lowers its estimate for 2nd quarter GDP to only 1.8%/

Gold: $1226.60  UP $.10

Silver: $16.28  UP 4  cent(s)

Closing access prices:

Gold $1228.50

silver: $16.34!!!

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

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

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

SHANGHAI FIRST GOLD FIX: $1238.24 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1228.35

PREMIUM FIRST FIX:  $9.83

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SECOND SHANGHAI GOLD FIX: $1242.10

NY GOLD PRICE AT THE EXACT SAME TIME: 1233.75

Premium of Shanghai 2nd fix/NY:$8.95

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LONDON FIRST GOLD FIX:  5:30 am est  $1239.40 ????

NY PRICING AT THE EXACT SAME TIME: $1233.00

LONDON SECOND GOLD FIX  10 AM: $1228.45

NY PRICING AT THE EXACT SAME TIME. $1228.60

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  27 NOTICE(S) FOR 1700 OZ. 

 TOTAL NOTICES SO FAR: 359 FOR 35900 OZ    (1.1166 TONNES)

For silver:

For silver: MAY

382 NOTICES FILED TODAY FOR 1,910,000  OZ/

Total number of notices filed so far this month: 4008 for 20,040,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

FEDERAL RESERVE EAR MARKED GOLD REPORT for April

In Feb we had $7,841,000 worth of gold housed at the FRBNY valued at 42.21 dollars per oz

Last month: we had the same;  $7,841,000  of gold valued at 42.21

thus 0 oz of gold moved out.

END

 

For 5 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing.  Tonight 21.1 million oz.  It sure looks like a sovereign is after physical silver and the comex is the place being raided.

 

stay tuned on this development..

 

Gold and silver held their own today despite continual pummeling by the bankers. The rise in the gold/silver shares plus the fact that Sprott’s physical silver fund went into positive territory bodes well for silver and gold pricing on Monday

 

 

 

 

 

Let us have a look at the data for today

.

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In silver, the total open interest FELL BY ONLY 1951  contracts DOWN to 188,527 DESPITE THE CONTINUAL PUMMELING IN THE PRICE ( 28 CENTS) THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING. HARDLY ANYBODY BUDGED!!.  In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.943 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 382 NOTICE(S) FOR 1,910,000  OZ OF SILVER

In gold, the total comex gold FELL BY ONLY 741 contracts DESPITE THE CONTINUAL FALL IN THE PRICE OF GOLD ($19.90 with YESTERDAY’S TRADING). The total gold OI stands at 458,526 contracts.

we had 27 notice(s) filed upon for 2700 oz of gold.

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

GLD:

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

Inventory rests tonight: 853.08 tonnes

.

SLV

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

THE SLV Inventory rests at: 334.777 million oz

end

.

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

1. Today, we had the open interest in silver FELL BY ONLY 1951 contracts DOWN TO 188,527, (AND NOW FURTHER FROM  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), DESPITE THE BIG FALL IN PRICE FOR SILVER ON YESTERDAY (28 CENTS).

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c) Federal Reserve Bank ear marked gold movement

(Harvey)

2d) COT report

(Harvey)

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 24.33 POINTS OR .78%  OR / /Hang Sang CLOSED DOWN 207.53 POINTS OR .84% .  The Nikkei closed HOLIDAY /Australia’s all ordinaires  CLOSED DOWN .69%/Chinese yuan (ONSHORE) closed DOWN at 6.9016/Oil DOWN to 45.49 dollars per barrel for WTI and 48.35 for Brent. Stocks in Europe OPENED IN THE RED   ..Offshore yuan trades  6.9058 yuan to the dollar vs 6.9016 for onshore yuan. NOW  THE OFFSHORE IS A LOT WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN:  MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA/USA

 

North Korea accuses the CIA of attempting a plot to kill Kim Jon un by a biochemical

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)The red flags that suggest we are much closer to a Chinese credit event

( zero hedge)

ii)Somebody (Financial Institution) in trouble?

( zero hedge)

4. EUROPEAN AFFAIRS

Italy

Funds are leaving Italy by the bucketful as target 2 imbalances skyrocket.  Foreign investors are also dumping bonds joining in on the capital flight

( Mish Shedlock/Mishtalk)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Oh Oh!! this will go over well.    Russia, Iran, and Turkey bans USA plans above Syrian “safe zones”  I wonder how long that will last?

( zero hedge)

6 .GLOBAL ISSUES

i)Toronto/Canada

Toronto housing is in a huge bubble and it can only end in “tears”

( zero hedge)

ii)Canada/USA

The Canadian dollar skyrocketed on news that Canada will retaliate against the USA on trade.

If British Columbia bans  thermal coal exports to the uSA that would surely hurt them.

( zero hedge)

 

 

7. OIL ISSUES

i)Oil had a flash crash last night from $45.00 to under $43.00.  It subsequently recovered but it is showing a signal that all is not well in commodity land especially in China.

( zero hedge)

ii)One of the world’s largest oil hedge funds just liquidated all of his position  (long) in oil  Based on the huge number of long speculative bets he will not be the only only throwing in the towel

( zero hedge)

iii)Not good for oil bulls:  the rig count rises for the 16th straight week which of courses leads to a rise in USA production.  USA production is now near record highs

(courtesy zero hedge)

 

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

10. USA stories

i)The phony jobs report showed a gain of 211,000 jobs but the February report showed a further loss of 19,000 so the number came largely as expected.  The average hourly earnings however disappointed the street

( zero hedge)

ii)And now the real jobs report:

Where the jobs went:  minimum wage jobs

( zerohedge)

( zero hedge)

iv)The NY Fed has now lowered its 2nd quarter GDP to 1.8% while the Atlanta Fed remains at 4.2%.  They will both lower their estimates once September comes along.

( NYFed/zero hedge)

v)The following will not end well:

Student loans now total 1.44 trillion dollars

Auto loans 1.12 trillion

total  $2.57 trillion

( zero hedge)

vi)And now finally with the last word of the fraudulent jobs report here is Dave Kranzler and it is a must read..

B/D “added” 255,000 jobs and even this number is seasonally adjusted..and all the commentators believe this garbage??

enjoy…

( Dave Kranzler/IRD)

Let us head over to the comex:

The total gold comex open interest FELL BY  ONLY 794 CONTRACTS DOWN to an OI level of 458,526 DESPITE THE FALL IN THE PRICE OF GOLD ( $19.90 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 134 contract(s) FALLING TO 84. We had 166 notices filed yesterday so we GAINED 32 contracts or an additional 3200 oz are standing for delivery and no contracts were cash settled through the EFP route where they receive a cash bonus plus a future gold contract.

The next big active month is June/2017 and here the OI LOST 11,537 contracts DOWN to 297,426.  The non active July contract gained another 102 contracts to stand at 246 contracts. The next big active month is August and here the OI gained 9821 contracts up to 72,892.

We had 27 notice(s) filed upon today for 2700 oz

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And now for the wild silver comex results.  Total silver OI FELL BY ONLY 1951 170 contracts FROM 190,478 DOWN TO 188,527  WITH YESTERDAY’S 28 CENT PRICE FALL. We probably had  some attempted short covering by the banks which did not succeed much.
We are in the active delivery month is MAY  Here the open interest LOST 432 contracts FALLING TO 606 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 600 notices filed on today, so we gained another 168 notices or an additional 840,000 oz will stand for delivery. In the last few years, I do not believe I have ever seen an active month increase in amount standing on day 2, day 3  day 4 , day 5 AND now today, day 6 of the delivery cycle. No wonder JPMorgan is getting reading for a physical attack at the comex. I have never seen anything like this!!

The non active June contract lost 19 contracts to stand at 912. The next big active month will be July and here the OI lost 2064 contracts down to 145,009.

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 382 notice(s) filed for 1,910,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 151,226 contracts which is fair

Yesterday’s confirmed volume was 363,748 contracts  which is excellent.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 5/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 nil oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
27 notice(s)
2700 OZ
No of oz to be served (notices)
57 contracts
5700 oz
Total monthly oz gold served (contracts) so far this month
359 notices
35,900 oz
1.1166tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month   41,325.9 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 0 customer withdrawal(s)
total customer withdrawal: nil 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 27 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (359) x 100 oz or 35,900 oz, to which we add the difference between the open interest for the front month of MAY (84 contracts) minus the number of notices served upon today (27) x 100 oz per contract equals 41,600 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 (359) x 100 oz  or ounces + {(84)OI for the front month  minus the number of  notices served upon today (27) x 100 oz which equals 41,600 oz standing in this non active delivery month of MAY  (1.2939 tonnes).  We gained 32 contracts or an additional 3200 oz are standing for delivery and 0 contracts were cash settled through the EFP route where they received a fiat bonus plus a futures contract in a private deal with the bankers.
 
 
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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/  1.2939 TONNES
total for the 17 months;  248.907 tonnes
average 14.641 tonnes per month
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Total dealer inventory 914,233.183 or 28.43 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,933,491.160 or 277.86 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.86 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 11 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
MAY INITIAL standings
 May 5. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 734,522.335 oz
CNT
415,671.130 oz
Scotia
total:
1.151,191.465 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
578,098.170 oz
Scotia
total:
578,098.170  oz
No of oz served today (contracts)
 382 CONTRACT(S)
(1,910,000 OZ)
No of oz to be served (notices)
224 contracts
( 1,120,000 oz)
Total monthly oz silver served (contracts) 4008 contracts (20,040,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  3,752,415.5 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of CNT: 734,522.335 oz
ii) Out of Scotia: 415,671,130 oz
TOTAL CUSTOMER WITHDRAWALS: 1,151,191.465  oz
 We had 1 Customer deposits:
 i) Into JPMorgan: nil. oz
***deposits into JPMorgan have now stopped 
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
 ii) Into Scotia:  578,098.170 oz
total customer deposits  578,098.170 oz
 
 we had 2 adjustment(s)
i) out of Brinks:  5225.87 oz was adjusted out of the customer and this landed into the dealer account of Brinks
ii) Out of CNT:  509,568.003 oz was adjusted out of the dealer account and this landed into the customer account of CNT
The total number of notices filed today for the MAY. contract month is represented by 382 contract(s) for 1,910,000 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 4008 x 5,000 oz  = 20,040,000 oz to which we add the difference between the open interest for the front month of MAY (606) and the number of notices served upon today (382) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4008(notices served so far)x 5000 oz  + OI for front month of APRIL.(606 ) -number of notices served upon today (382)x 5000 oz  equals  21,160,000 oz  of silver standing for the MAY contract month.
We actually gained another 168 contracts or an additional 840,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 21.16 million oz that is standing wants only physical metal and refuses a fiat bonus. This is identical to backwardation where the investor will not accept to roll to a futures month and receive a sure fiat profit (THROUGH THE EFP) but instead that investor holds onto his physical because he is not sure in the future he would receive his metal back if he engages in that future contract.  We have now had on 5 consecutive days, an increase in amount standing for silver.  For the past several years, this has never happened during an active silver delivery month.  Ladies and gentlemen:  the silver comex is being attacked for its physical metal!! 
 
 
Volumes: for silver comex
 
Today the estimated volume was 50,548 which is excellent
Yesterday’s  confirmed volume was 109,335 contracts which is gigantic
(TODAY’S CONFIRMED. VOLUME OF 109,335 CONTRACTS EQUATES TO 545 MILLION OZ OF SILVER OR 78% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.  
 
Total dealer silver:  33.541 million (close to record low inventory  
Total number of dealer and customer silver:   196.963 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
 
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.6 percent to NAV usa funds and Negative 6.8% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.4%
cash .+0.1%( May 5/2017) 
 
2. Sprott silver fund (PSLV): Premium RISES TO   +.57%!!!! NAV (May 5/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to -0.06% to NAV  ( May 5 /2017)
Note: Sprott silver trust back  into POSITIVE territory at +.57% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.06%/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

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

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

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

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

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

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

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

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

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

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

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

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

end

And now the Gold inventory at the GLD

May 5/no changes in inventory at the LD/Inventory rests at 853.08 tonnes

May 4/A tiny change in inventory at the GLD /a withdrawal of .28 tonnes to pay for fees/inventory rests at 853.08 tonnes

May 3/no change in inventory at the GLD/Inventory rest at 853.36 tonnes

May 2/no change in inventory at the GLD/Inventory rests at 853.36 tonnes

May 1/ no changes in inventory at the GLD/inventory rests at 853.36 tonnes

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 25/2017/A WITHDRAWAL OF 5.92 TONNES OF GOLD FROM 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 21/A DEPOSIT OF 4.44 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 858.69 TONNES

APRIL 20/A WITHDRAWAL OF 6.51 TONNES FROM THE GLD/INVENTORY RESTS AT 854.25 TONNES

April 19/ A DEPOSIT OF 11.84 TONNES INTO THE GLD/INVENTORY RESTS AT 860.76 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

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May 5 /2017/ Inventory rests tonight at 853.08 tonnes
*IN LAST 145 TRADING DAYS: 95.05 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 88 TRADING DAYS: A NET  32,38 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  57,72 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

May 5/Strange!! no change in silver inventory at the SLV/Inventory rests tonight at 334.777 million oz

May 4/a very tiny withdrawal of 144,000 oz to pay for fees/inventory rests tonight at 334.777 million oz/

May 3/strange!! with the drop in price of silver we had no change in inventory at the SLV/inventory rests at 334.921 million oz

May 2/extremely strange again/a huge 3.502 million oz deposit into the SLV despite silver being in the toilet for the past several trading days.Inventory 334.921 million oz

may 1/extremely strange/with silver being walloped these past several days, the inventory rises again by a huge 1.136 million oz/(maybe someone can explain this phenomena??)

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 21/A WITHDRAWAL OF 719,000 OZ OF SILVER AT THE SLV/INVENTORY RESTS AT 325.361 MILLION OZ/

APRIL 20/NO CHANGES IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.308 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
May 5.2017: Inventory 334.777  million oz
 end
At 3:30 pm we receive the COT report which gives us positions of our major players
First the Gold COT
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
276,032 86,398 42,037 99,054 303,040 417,123 431,475
Change from Prior Reporting Period
-11,436 -393 -1,476 -1,281 -11,875 -14,193 -13,744
Traders
160 96 78 46 58 241 201
 
Small Speculators  
Long Short Open Interest  
44,782 30,430 461,905  
113 -336 -14,080  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, May 02, 2017

Our large speculators:

those large specs that have been long in gold were fleeced for 11,436 from their long side.

those large specs  that have been short in gold covered 393 contracts from their short side.

 

Our commercials:

our commercials who are long in gold pitched 1281 contracts from their long side

our commercials who are short in gold covered as expected 11875 contracts from their short side.

Our small speculators

those small specs that have been long in gold added 113 contracts to their long side

those small specs that have been short in gold covered 336 contracts from their short side.

Managed money (hedge funds) 

those hedge funds which were long in gold pitched 12063 contracts while those being short added 4706 contracts

thus managed money went net short by 16769 which is huge!

Conclusion

I cannot believe it is the same story as always, the commercials cover on the massive raid over the past 7 days..

the hedge funds cannot be that stupid.

commercials go net long by 21,515 which is bullish

 

And now our silver COT

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
101,538 30,171 16,458 43,731 130,305
-19,480 2,766 -8,565 316 -21,199
Traders
97 38 40 38 35
Small Speculators Open Interest Total
Long Short 189,240 Long Short
27,513 12,306 161,727 176,934
2,187 1,456 -25,542 -27,729 -26,998
non reportable positions Positions as of: 149 102

Our large speculators: 

Those large specs that have been long in silver pitched a huge 19,480 contracts from their long side

those large specs that have been short in silver added 2766 contracts to their short side

 

Our commercials:

those commercials that have been long in silver added 316 contracts to their long side

those commercials that have been short in silver covered 21199 contracts from their short side

Our small speculators

those small specs that have been long in silver added 2187 contracts to their long side

those small specs that have been short in silver added 1456 contract to their short side.

Managed money (hedge funds)

those hedge funds that have been long pitched 12063 contracts and added 4706 short contracts as they went net short by 16,763  contracts.

or did they roll into EFP’s were they received calls in the money on future contracts?

Conclusion

I cannot believe it is the same story as always, the commercials cover on the massive raid over the past 7 days..

the hedge funds cannot be that stupid

commercials go net long by 20,883 contracts..which is bullish

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Keiser Report: Peak Gold, Silver On Small Finite Planet

By Mark O’Byrne May 5, 2017

Peak Gold and Silver On “Small Finite Planet” With Near Infinite Currency

Peak gold and silver and the case for peak precious metals on “our small, finite planet” was the topic for discussion on the latest episode of the the Keiser Report.

(Max Keiser interview of Mark O’Byrne of GoldCore in 2nd half of show at 13 min 15 seconds)

Topics covered in the interview

– Small planet with finite resources including gold, silver
– Resources finite but near infinite creation of currency
– Derivatives and fiat currency creation going exponential
– Primary gold production fell in 2016 – Thomson Reuters
Peak gold – “biggest gold story not reported”
– Harder to pinpoint peak silver as is mining byproduct
– South African gold production is ‘canary in gold mine’
– SA gold production collapsed over 80% – from over 1,000 metric tonnes in 1970 to just 167.1 metric tonnes in 2016

– Price manipulation suppressing precious metals
– Supply demand deficits should result in “much higher prices” in the medium and long term
– Investors beginning to “see through the artificial nature of the sell offs” and accumulating on dips

Max and Stacy discuss the all talk, no action of young people and the ‘we’re going to rise up one day generation’ in the first half of the show. Central banks have become all talk, all action with their monetary revolution and currency debasement on a scale that the world has never seen before. They also look at how the UK enslaved itself in massive debt and is now a wholly owned subsidiary of the City of London.

Watch Interview Here

http://www.goldcore.com/us/gold-blog/keiser-report-peak- gold-silver-small-finite-planet/

-END-

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

 
 

1 Chinese yuan vs USA dollar/yuan A LOT WEAKER  6.9016(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES MUCH WEAKER TO ONSHORE AT   6.9058/ Shanghai bourse CLOSED DOWN 24.33 POINTS OR .78%   / HANG SANG CLOSED DOWN 207.53 POINTS OR .84% 

2. Nikkei closed    /USA: YEN FALLS TO 112.41

3. Europe stocks OPENED ALL IN THE RED        ( /USA dollar index RISES TO  98.90/Euro DOWN to 1.0960

3b Japan 10 year bond yield: RISES TO   +.021%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.41/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  45.35 and Brent: 48.35

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.384%/Italian 10 yr bond yield DOWN  to 2.183%    

3j Greek 10 year bond yield FALLS to  : 5.87% ???  

3k Gold at $1232.20/silver $16.36 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 12/100 in  roubles/dollar) 58.50-

3m oil into the 45 dollar handle for WTI and 47 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 A BIG DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.41 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  .9894 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0842 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.384%

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 2.358% early this morning. Thirty year rate  at 2.998% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Oil Fireworks Unsettle Global Markets Ahead Of Payrolls Report

 

With all eyes on crude, following last night’s mini flash crash which sent WTI lower by 3% from just above $45 to under $43 in under 10 minutes, equity markets, generally quiet overnight, have taken on a secondary importance ahead of today’s key risk event, the April payrolls report (full preview here). In global equities, Asian and European stocks are lower, while S&P futures are little changed.

The main in the overnight session was oil’s sudden slide below $45 a barrel for the first time since OPEC agreed to cut output in November. As noted earlier, in less than 10 minutes on Friday, U.S. futures slumped more than $1 amid a surge in volume, launching a modest scramble into safe haven assets such as Treasurys, yen and gold. They have collapsed 8.6 percent this week, erasing all gains since the Organization of Petroleum Exporting Countries signed a six-month deal in November to curb production and ease a global glut.

Things only began to stabilize when Saudi Arabia’s OPEC chief did the usual jawboning routine, hitting the wires in European hours and saying there was a growing consensus among oil pumping countries that they needed to continue to “rebalance” the market. Specifically, the Saudi OPEC governor’s comments that: “A six-month extension (to production cuts) may be needed to rebalance the market, but the length of the extension is not firm yet.” Which while nothing new, provided a floor to the overnight dump and a signal to BTD.

As a result of the plunge, which has since mostly recovered, the Bloomberg Commodity Index slumped to lowest in a year, weighed by oil and iron ore. “Markets are losing faith that the global inventory glut will disappear on OPEC’s cuts,” said Michael Poulsen, an analyst at Global Risk Management Ltd.

Following the unexpected snap, stocks flinched both in Asia and Europe, catching investors that had been expecting to spend the day mostly looking ahead to U.S. jobs data and Sunday’s French elections, on the back foot. “The whole commodity complex has been affected by this and it could have some pretty big implications if it continues for much longer,” said Saxo bank’s head of FX strategy John Hardy. “If you look at global risk appetite, equities have been pretty quiet and that feeds into FX as well if carries on and there is a risk switch.”

As Reuters adds, oil wasn’t the only commodity that suffered, with Chinese iron ore futures falling almost 7% in Shanghai after tumbling 8% on Thursday. The Canadian dollar, the Australian dollar and Russia’s rouble – the world’s commodity- sensitive currencies – were all sent spinning, falling respectively to 14-month, four-month and seven-week lows.

Today’s key event is the April payrolls number. Following that soft 98k reading in March (which was more than likely weather-related) the market consensus for today’s print is a more sturdy 190k number. DB expects this rebound to be driven by two main factors. The first is initial jobless claims remaining near a roughly four-decade low and the second being that employee tax withholding receipts are growing at a very healthy rate, indicating a pick-up in income growth. It is worth adding though that while the ADP print earlier this week was fairly solid the employment components from the two ISMs has revealed some softening so that might sound some caution. As always keep an eye on the other components of the employment report including unemployment (expected to nudge up one-tenth to 4.6%), average hourly earnings (+0.3% mom expected) and the participation rate. The report is due out at 8.30am.

European shares declined and the dollar was mixed against its peers ahead of U.S. employment report. The Stoxx 600 index’s fall tracked declines in much of Asia and in U.S. futures. Gold climbed from a seven-week low and iron ore fell for a third day.

In Asia, the Shanghai Composite Index was down 0.8 percent at 3,103 after earlier dropping below 3,100. The gauge neared its lowest close this year

S&P 500 futures were steady ahead of the U.S. monthly jobs report, with energy shares understandably in the spotlight as oil prices remained volatile after dropping below $45 a barrel for the first time since November. S&P 500 contracts expiring in June were little changed at 2,386 at 6:30 a.m. ET. The benchmark has been moving in a tight range this week, despite relatively strong corporate results. Contracts on the Dow Jones Industrial Average were steady at 20,857.

The euro meanwhile touched six-months highs of almost $1.10 ahead of France’s weekend election, in which polls now expect centrist Emmanuel Macron to convincingly beat right-wing and anti-euro rival Marine Le Pen. The gap between French and German 10-year government borrowing costs also hit a six-month low and despite the dip on the day, European shares were heading for a healthy 1.2 percent rise for the week.

The dollar and U.S. government bond yields had both been nudged lower by the commodity market worries. It is set to be the fourth weekly fall on the trot for the greenback which is now at its lowest since November. The yen and gold rose in tandem as investors took refuge in safe havens, though the latter remained on track for its biggest weekly decline in nearly six months on bets that U.S. interest rates will rise again in the coming months.

A handful of bearish comments emerged overnight, such as Hermes chief economist Neil Williams who said that “I think the payrolls will be under consensus. It fits with my view that the U.S. is going to peak out at a far lower interest rate than markets expect. The Fed’s dot plots says 3 percent, but I’m going closer to 1.5 percent.”

Bulletin Headline Summary from RanSquawk

  • European equities trading in tentative fashion ahead of US NFP report.
  • GBP slightly firmer with the Conservative party receiving strong support in local elections.
  • Looking ahead, highlights include US NFP, Canadian jobs report as well as a slew of Fed speak.

Market Snapshot

  • S&P 500 futures little changed at 2,386.00
  • STOXX Europe 600 down 0.1% to 391.42
  • MXAP down 0.3% to 148.64
  • MXAPJ down 0.7% to 483.87
  • Nikkei up 0.7% to 19,445.70
  • Topix up 0.7% to 1,550.30
  • Hang Seng Index down 0.8% to 24,476.35
  • Shanghai Composite down 0.8% to 3,103.04
  • Sensex down 0.7% to 29,909.09
  • Australia S&P/ASX 200 down 0.7% to 5,836.56
  • Kospi up 1% to 2,241.24
  • German 10Y yield fell 1.8 bps to 0.376%
  • Euro down 0.2% to 1.0969 per US$
  • Brent Futures up 0.9% to $48.79/bbl
  • Italian 10Y yield fell 0.9 bps to 1.958%
  • Spanish 10Y yield fell 1.8 bps to 1.582%
  • Gold spot up 0.4% to $1,232.79
  • U.S. Dollar Index little changed at 98.81

Top Overnight News from Bloomberg

  • Within minutes of U.S. crude-oil futures tumbling through $45/barrel, signs of broader risk-off emerged, exacerbating what was already brewing as worrying week for commodities
  • Chinese stocks sank in Shanghai and Hong Kong as concern over Beijing’s efforts to reduce leverage in financial system persisted and as selloff in commodities spilled into equity
  • Trump Takeaway From Health Bill Fight: Do Your Own Arm- Twisting
  • Bosch Said to Win Some IPhone Orders in Blow to InvenSense
  • BHP Said Planning to Meet Tribeca in Investor Talks This Month
  • Nickel Drops to Lowest Since June as Supply Worries Fade
  • U.K. Local Votes Bode Well for May’s Bid for Bigger Majority
  • Decision Time for France as Polls Show Macron’s Lead Holding
  • InterContinental 1Q Revpar Grows, Names Keith Barr as CEO
  • VW Brand Sees ‘Substantial’ Improvement as Turnaround Takes Hold
  • Vestas Rises to 9-Year High as Quarterly Profit Quadruples
  • Thai Internet Providers to Pressure Facebook on Content: Nation

Asia equity markets traded negative amid commodity weakness in which oil continued its sell-off, while the looming US NFP data also added to the subdued tone. ASX 200 (-0.8%) was led lower by miners and energy names after metals remained weak and WTI crude futures extended on yesterday’s 5% drop amid oversupply concerns. However, telecoms outperformed as Telstra shares surged after ACCC ruled the Co. doesn’t need to share its network infrastructure with competitors. Shanghai Comp. (-0.7%) and Hang Seng (-0.4%) also reflected the downbeat tone amid tighter liquidity by the PBoC, after it refrained from open market operations which resulted to a CNY 60bIn net daily drain. Finally, Japan and South Korea remained closed for Children’s Day. PBoC refrained from open market operations today, for a net injection of CNY 10bIn vs. Prey. CNY 70bIn net injection last week. PBoC set CNY mid-point at 6.8884 (Prey. 6.8957)

Top Asian News

  • India Said to Be Concerned on Potential INR Carry Trade Reversal
  • Chinese Shares Tumble as Oil Slump Exacerbates Drop on Crackdown
  • China’s New Jet Takes Off to Challenge Boeing and Bolster Xi
  • BHP Hit With New Activist Plan From Top Hedge Fund Performer
  • Kuroda Confident Can Raise Wages, Prices ’Significantly’: CNBC

European equities have kicked off the final trading session of the week in modest negative territory (Eurostoxx 50 -0.1%) amid tentative trade ahead of NFP later today. In terms of sector specifics, energy names are the notable outperformers as European trade has seen a modest recovery in energy prices despite the market appearing to lose confidence in OPEC’s ability to continue to prop up prices. Elsewhere, European earnings have been on the light side today with markets pausing for breath ahead of NFP. Similar rangebound price action has also been observed in fixed income markets with Bunds trading in close proximity to recent losses seen in the wake of the FOMC on Wednesday. OATs are also relatively stable ahead of this weekend’s French election.

Top European News

  • Capital Levels Slide at Italy’s Paschi After Run of Losses
  • Czech Premier Withdraws His Offer to Resign in Surprise Move
  • European Company 1Q EPS Rises 27%, Heads for Beat: Deutsche Bank
  • Saxo Bank Co-Founder Agrees to Sell His 25% Stake to Geely
  • BofAML Expects Euro, Dollar Gain This Summer, Sees Sterling Dip
  • Vestas Climbs to 9-Year High After Quarterly Profit Quadruples
  • Iron Ore’s Brutal Week Opens Pathway for Retreat Into the $50s

In currencies, focus early was on GBP with the Conservatives cleaning up in local elections at the expense of their rivals ahead of next month’s general election with prices moving ever closer towards 1.3000. USD/JPY continues to attract the bulk of US data driven trade, but we saw 113.00 holding firm on Thursday before fading risk sentiment added to the pullback which now sees us trading in the low 112.00’s. AUD continues to edge lower, now sub 0.74, but momentum has been slowing. Base metals and Copper in particular have been the primary drag with Dalion iron ore futures slipping yet again, and this in light of an RBA strongly suggesting rates will stay on hold.

In commodities, a bulk of the focus has been on energy markets with WTI crude futures falling off a cliff overnight in extension of Thursday’s 4.8% losses. There was no fresh immediate catalyst for the decline but there are currently a multitude of bearish factors in the market, most notably; Increasing cynicism about OPEC’s ability to ease the global supply glut, Increasing output from US shale producers, Increasing production from Libya and demand-side concerns. That said, European hours have seen a modest recovery as buyers have entered the market ahead of the touted support zone seen in WTI at USD 44.00. Elsewhere, the majority of commodities remained subdued with Dalian iron futures down a further 6% in early trade to a near 4-month low, although gold found slight reprieve as the oil sell-off spurred safe-haven flows.

Looking at the day ahead, all eyes will be on the aforementioned US April employment report. Also due out today is the March consumer credit reading for the US. Away from the data both the EU’s Juncker and Tusk are scheduled to speak today while over at the Fed it is a packed day for Fedspeak with Fischer (4.30pm BST), Williams (5.45pm BST) and Yellen (6.30pm BST) all speaking at separate.

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 190,000, prior 98,000
    • Two-Month Payroll Net Revision
    • Change in Private Payrolls, est. 190,000, prior 89,000
    • Change in Manufact. Payrolls, est. 10,000, prior 11,000
    • Unemployment Rate, est. 4.6%, prior 4.5%
    • Average Hourly Earnings MoM, est. 0.3%, prior 0.2%
    • Average Hourly Earnings YoY, est. 2.7%, prior 2.7%
    • Average Weekly Hours All Employees, est. 34.4, prior 34.3
    • Labor Force Participation Rate, prior 63.0%
    • Underemployment Rate, prior 8.9%
  • 3pm: Consumer Credit, est. $14.0b, prior $15.2b

Central Banks

  • 11:30am: Fed’s Fischer Speaks at Hoover Event in Stanford
  • 12:45pm: Fed’s Williams Speaks in Keynote in New York
  • 1:30pm: Fed’s Rosengren, Evans and Bullard on Hoover Institution Panel
  • 1:30pm: Fed’s Yellen Speaks at Brown University

DB’s Jim Reid concludes the overnight wrap

The biggest news in the UK yesterday was that of Prince Philip who announced his retirement later this year at the age of 96 after seven decades of being at the Queen’s side. At this stage I can’t imagine still writing research for another 53 years but over the last few weeks I’ve compiled a spreadsheet of the extra costs that having twins will entail over the coming years (and maybe decades) and I can only conclude that I might need to marry the Queen myself to afford retirement. So here’s to the Early Morning Reid of 2070 where we’ll probably still be explaining that Bund yields are too low, US equities are overvalued, defaults remain structurally low and pondering why England haven’t won the World Cup for 104 years.

Back to the present and there’s been a fascinating face-off in markets over the last 24 hours between tumbling commodity prices but rising bond yields. On a day when 10y Bunds climbed +6.8bps to the highest yield in 5 and a bit weeks we saw WTI Oil slump -4.81%. It’s tumbled a further -2.99% this morning as well and at one stage went below $44/bbl for the first time since November last year. Needless to say the moves over the last 24 hours has seen Oil more than wipe out the post OPEC supply cut agreement gains (its currently at the lowest level since November 15th at $44.19/bbl). A few factors seem to be contributing to the move. Wednesday’s weekly EIA data provided further evidence of historically high crude stockpiles levels. Increasing production out of Libya is also contributing in addition to the shale production growth story in the US. There was also some chatter about Brent and WTI slicing through key support levels yesterday which only seemed to add fuel to fire.

It’s not just Oil which is having a rough time of late though as metals are also feeling the pain. Iron Ore tumbled -5.07% yesterday, Copper fell -1.02%, Aluminium -0.57% and Nickel -2.33% with the soft China PMIs in April following a soft Q1 GDP print in the US being billed as the main justification for the move, while tighter liquidity conditions in China is also contributing with onshore money-market rates at two-year highs. Gold (-0.81%) and Silver (-0.89%) also fell for a second day post the FOMC yesterday. Indeed the broad CRB commodity index closed down -1.88% last night and has now fallen 11 times in the last 14 trading days to the lowest level since April 2016.

In terms of the move in Bunds, the early rise for yields can be attributed to some catch-up to the Treasury move following the FOMC however there was some interesting ECB speak yesterday which also caught the bond market’s attention. Specifically it was the comments from ECB Chief Economist Peter Praet who, on the topic of when a tightening in rates might follow the end of QE, said “we say ‘well past’ but this is a judgement which will be very much data dependent” and that “it can be long, it can be short”. The most important element of his speech however was his well highlighted flag that June is the meeting  where the ECB is likely to formally change its balance of risk assessment and possibly forward guidance. Indeed Praet said that “looking forward to our next monetary policy in June, we will be able to draw on a more expanded information set than is available today, organised around new projections and including an updated assessment of the distribution of risks surrounding the economic outlook”. ECB President Draghi also spoke yesterday but his comments were a bit of a nonevent for markets.

As well as the move for Bunds, Treasury yields edged up another 3.6bps to 2.355% and are now at the highest since April 10th. At the other end of the spectrum risk assets have proved to be incredibly  resilient to the selloff in commodities. Despite the energy sector doing its best to drag the broader index lower the S&P 500 closed +0.06% last night and has now moved up or down by less than 0.20% for each of the last 7 sessions which ties the longest ever run of such narrow ranges according to Bloomberg, set in 1972. US credit markets were similarly subdued with CDX IG fading into the close but still only closing 0.6bps wider. On the politics front, as expected the healthcare bill was voted on and was passed by House Republicans by a small majority of 217-213 votes, and so scoring a first big legislative victory for President Trump. The real test will now come in the Senate however where the bill’s passage is far from certain to be passed.

So these have been the key themes over the last 24 hours. A reminder that this Sunday brings the second round of the French elections with markets pricing in a very very low probability of anything other than a Macron victory which according to all the polls is fair enough. More immediate though is today’s US payrolls number. Following that soft 98k reading in March (which was more than likely weather-related) the market consensus for today’s print is a more sturdy 190k number while our US economists are a little bit above market at 200k. The team expect this rebound to be driven by two main factors. The first is initial jobless claims remaining near a roughly four-decade low and the second being that employee tax withholding receipts are growing at a very healthy rate, indicating a pick-up in income growth. It is worth adding though that while the ADP print earlier this week was fairly solid the employment components from the two ISMs has revealed some softening so that might sound some caution. As always keep an eye on the other components of the employment report including unemployment (expected to nudge up one-tenth to 4.6%), average hourly earnings (+0.3% mom expected) and the participation rate. The report is due out at 1.30pm BST.

Before we get there, overnight in Asia we’ve continued to see base metals remain under pressure and that, along with the move for Oil, is weighing on equity bourses with the ASX (-0.76%), Hang Seng (-1.07%) and Shanghai Comp (-0.85%) all in the red. Markets in Japan and South Korea are closed. Commodity sensitive currencies including the Aussie Dollar (-0.47%), Norwegian Krone (-0.42%) and Canadian Dollar (-0.27%) are also weaker in the early going. US equity index futures are also pointing towards a softer start.

With regards to the economic data yesterday, also helping the Bund move (and a strong session for European equities with the Stoxx 600 firming +0.67%) was a slight upward revision to the services PMI for the Euro area in April to 56.4 from 56.2, led by a big upward revision for Germany to 55.4 from 54.7. France was revised down 1pt to 56.7 while data in Italy (56.2 vs. 53.6 expected; 52.9 previously) was also a big upward surprise. Over in the UK the services PMI also printed at a better than expected 55.8 which was an increase of 0.8pts. That helped to push the composite to 56.2 and the highest since December.

Over in the the US yesterday Q1 non-farm productivity came in at a softer than expected -0.6% qoq (vs. -0.1% expected) which leaves through-year growth at just +1.1% yoy. Meanwhile unit labour costs were reported as rising +3.0% qoq which was a little more than expected. Away from that the March trade deficit of $43.7bn was marginally lower than what it was in February. Factory orders rose +0.2% mom in March (vs. +0.4% expected) while February orders were also revised up. Finally initial jobless claims were reported as declining 19k to 238k last week. Meanwhile the only other data in Europe aside from those  MIs came from the UK. Mortgage approvals in March fell to 66.8k (-1.1k decline) and a little bit more than expected while the M4 money supply rose +0.3% mom and +6.6% yoy (from +5.9%).

Looking at the day ahead, there’s nothing to report of in Europe this morning. Instead all eyes will be on the aforementioned US April employment report this afternoon. Also due out this evening is the March consumer credit reading for the US. Away from the data both the EU’s Juncker and Tusk are scheduled to speak today while over at the Fed it is a packed day for Fedspeak with Fischer (4.30pm BST), Williams (5.45pm BST) and Yellen (6.30pm BST) all speaking at separate events while Rosengren, Evans and Bullard are scheduled to take part in a panel debate on monetary policy at 6.30pm BST. On the earnings front it’s a quiet end to the week with Berkshire Hathaway the most notable release. Before we sign off, it goes without saying that the big event this weekend is the French election on Sunday. In terms of timing polls are due to close at 8pm BST in most of France and 9pm BST in the big cities

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 24.33 POINTS OR .78%  OR / /Hang Sang CLOSED DOWN 207.53 POINTS OR .84% .  The Nikkei closed HOLIDAY /Australia’s all ordinaires  CLOSED DOWN .69%/Chinese yuan (ONSHORE) closed DOWN at 6.9016/Oil DOWN to 45.49 dollars per barrel for WTI and 48.35 for Brent. Stocks in Europe OPENED IN THE RED   ..Offshore yuan trades  6.9058 yuan to the dollar vs 6.9016 for onshore yuan. NOW  THE OFFSHORE IS A LOT WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN:  MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/

North Korea accuses the CIA of attempting a plot to kill Kim Jon un by a biochemical

(courtesy zero hedge)

North Korea Accuses CIA Of Plotting A “Biochemical Attack” Against Kim Jong-Un

In the latest verbal fireworks involving the Pacific Rim’s most unstable nation, overnight North Korea accused the CIA and the South Korea National Intelligence service of supporting a terrorist cell plotting to kill its “supreme leadership” with a bio-chemical weapon and said such a “pipe-dream” could never succeed.

The North’s Ministry of State Security released a statement saying “the last-ditch effort” of U.S. “imperialists” and the South had gone “beyond the limits.”

“The Central Intelligence Agency of the US and the National Intelligence Service (NIS) of south Korea, hotbed of evils in the world, hatched a vicious plot to hurt the supreme leadership of the DPRK and those acts have been put into the extremely serious phase of implementation after crossing the threshold of the DPRK,” the North’s KCNA news agency quoted the statement as saying adding that “They hatched a plot of letting human scum Kim commit bomb terrorism targeting the supreme leadership during events at the Kumsusan Palace of the Sun and at military parade and public procession after his return home.”

“A hideous terrorists’ group, which the CIA and the NIS infiltrated into the DPRK on the basis of covert and meticulous preparations to commit state sponsored terrorism against the supreme leadership of the DPRK by use of biochemical substance, has been recently detected.”

In taking a page right out of the Turkish “shadow government” playbook, North Korea said the cell had “infiltrated” North Korea but the Ministry of State Security will “ferret out and mercilessly destroy to the last one the terrorists of the US CIA,” the local ministry said as cited by the state’s KCNA news agency. Pyongyang identified one of the people involved in the “vicious plot” as “Kim,” a timber worker who was allegedly bribed by the CIA while working in Russia in June 2014.

Kim reportedly received over $20,000 from South Korean agents on two occasions and reportedly planned to attack the North Korean leadership during a public event in Pyongyang. The cell planned to use an unspecified poison.

“The intelligence agents told him that assassination by use of biochemical substances including radioactive substance and nano poisonous substance is the best method that does not require access to the target, their lethal results will appear after six or twelve months…. [A North] Korean-style anti-terrorist attack will be commenced from this moment to sweep away the intelligence and plot-breeding organizations of the US imperialists and the puppet clique,” the ministry statement warned.

North Korea also gave lengthy details about the alleged plot but said it could never be accomplished.  “Criminals going hell-bent to realize such a pipe dream cannot survive on this land even a moment,” it said.

North Korea also threatened “its own kind of counter-terrorism strike” against the U.S. and South Korea.

The report did not provide any evidence of the alleged plot, however it noted that an assassination of Kim Jong-un and other senior government officials in Pyongyang is part of Seoul’s contingency plans for a possible major military confrontation between the two Koreas. The US is said to be lending its expertise to the plan.

That said, the mostly paranoid statement is not without foundation: two women accused of killing the estranged half-brother of North Korean leader Kim with a chemical weapon appeared in court in Malaysia last month. As a reminder, the women reportedly smeared his face with the toxic VX nerve agent, a chemical described by the United Nations as a weapon of mass destruction, at Kuala Lumpur airport on Feb. 13.

b) REPORT ON JAPAN

c) REPORT ON CHINA

The red flags that suggest we are much closer to a Chinese credit event

(courtesy zero hedge)

 

Axiom: “Red Flags” Suggest China Credit Event Is “Closer Than It Appears”

Submitted by Gordon Johnson of Axiom Capital

While we, as well as the few bearish peers we have, have warned of a pending “credit event” in China for some time now – admittedly incorrectly (China has proved much more resilient than expected) – the more recent red flags are among the most profound we’ve seen in years – in short, we agree with fresh observations made by some of the world’s most famous iron ore bears. Thus, while it is nearly impossible to pinpoint exactly when the credit bubble will definitively pop in China, a number of recent events, in our view, suggest the threat level is currently at red/severe.

WHERE IS CHINA AT TODAY VS. WHERE THE US WAS AT AHEAD OF THE SUBPRIME CRISIS? At the peak of the US subprime bubble (before the failure of Bear Stearns in Mar. ‘08, and subsequently Lehman Brothers in Sep. ’08, troubles in the US credit system emerged as early as Feb. ’07), the asset/liability mismatch was 2% when compared to the total banking system. However, in China, currently, there is a massive duration mismatch in wealth management products (“WMPs”). And, at $4tn in total WMPs outstanding, the asset/liability mismatch in China is now above 10% – China’s entire banking system is ~$34tn, which is a scary scenario. In our view, this is a very important dynamic to track given it foretells where a country is at in the credit cycle.

WHAT ARE THE SIGNS WE ARE SEEING? In short, we see a number of signs that point to what could be the beginning of the “popping” of the credit bubble in China. More specifically: (1) interbank rates in China are spiking, meaning banks, increasingly, don’t trust each other – this is how any banking crisis begins (Exhibit 1), (2) China’s Minsheng Bank recently issued a ghost/fraudulent WMP (they raised $436mn in funds for a CDO-like asset that had no assets backing it [yes, you heard that right] – link), (2) Anbang, the Chinese conglomerate who has used WMP issuance as a means to buy a number of assets globally (including the Waldorf Astoria here in the US),  is now having issues gaining approval for incremental asset purchases (link), suggesting global investors may be getting weary of the way in which Anbang has “beefed up” its balance sheet, (3) China’s top insurance regulator, Xiang Junbo, chairman of the China Insurance Regulatory Commission, is currently under investigation for “severe” disciplinary violations (link), implying some/many of the “shadow” forms of transacting in China could become a bit harder to maneuver (which would manifest itself in higher rates, which his exactly what we are seeing today), and (4) as would be expected from all of this, as was revealed overnight in China, bank WMP issuance crashed 15% m/m in April to 10,038 from 11,823 in March, a strong indicator that faith in these products is indeed waning.

Exhibit 1: Interbank Rates in China

Source: Bloomberg.

DOES CHINESE PRESIDENT XI JINPING HAVE ALL OF THIS UNDER CONTROL? In a word, increasingly, it seems the answer is no. What’s the evidence? Well, in March, interbank rates spiked WAY past the upper corridor of 3.45% to ~11% (Exhibit 2), a strong indicator that the PBoC is losing its ability to “maintain order”. And, admittedly, while there are levers the PBoC can pull, FX reserves are at scary low levels (discussed below), suggesting the PBoC is quickly running out of bullets. Furthermore, corporate bond issuance in China was negative in C1Q, which means M2 is going to be VERY hard to grow (when MO is negative); at risk of stating the obvious, without M2 growth in China, economic growth (i.e., GDP) will undoubtedly slow – this is not the current Consensus among market prognosticators who think things are quite rosy right now in China; yet, while global stock markets are soaring, the ChiNext Composite index is down -7.5% YTD vs. the Nasdaq Composite Index being up +12.8% YTD. In our view, given China’s importance to the global commodity backdrop, we see this as a key leading indicator (the folks on the ground in China are betting with their wallets, while global investors continue to place their hopes on: [a.] a reflationary tailwind that we do not believe is ever coming [China is now destocking], and [b.] hope that President Trump will deliver everything he’s promised [which, in this political environment, we see is virtually impossible]).

Exhibit 2: Overnight Reverse Repo Rate

Source: Bloomberg.

CHINA’S FOREIGN EXCHANGE (“FX”) RESERVES ARE DANGEROUSLY CLOSE TO LOW LEVELS THAT WILL LIKELY CAUSE AN INFLECTION LOWER IN THE CURRENCY. Based on a fine-tuning of its formula to calculate “reserve-adequacy” over the years, the International Monetary Funds’ (“IMF”) approach can be best summed up as follows: Minimum FX Reserves = 10% of Exports + 30% of Short-term FX Debt + 10% of M2 + 15% of Other Liabilities. Thus, for China, the equation is as follows: 10% * $2.2tn + 30% * $680bn + 10% * (RMB 139.3tn ÷ 6.6) + 15% * $1.0tn = $2.7tn of required minimum reserves. Furthermore, when considering China’s FX reserve balance was roughly $4tn just 2 years ago, we find it concerning that experts now peg China’s unofficial FX reserve balance somewhere in the $1.6-$1.7tn range. Why does this differ from China’s $3.0tn in reported FX reserves as of Feb. 2017? Well, according to our contacts, when adjusting for China’s investment in its own sovereign wealth fund (i.e., the CIC) of roughly $600bn, as well as bank injections from: (a) China Development Bank (“CDB”) of roughly $975bn, (b) The Export-Import Bank of China (“EXIM”) of roughly $30bn, (c) the Agricultural Development Bank of China (“ADBC”) of roughly $10bn, as well as capital commitments from, (d) the BRICs Bank of roughly $50bn, (e) the Asian Infrastructure Investment Bank (“AIIB”) of $50bn, (f) open short RMB forwards by agent banks of $300bn, (g) the China Africa Fund of roughly $50bn, and (h) Oil-Currency Swaps with Russia of roughly $50bn, the actual FX reserve balance in China is closer to $1.69tn (Exhibit 3).

Stated differently, based on the IMFs formula, sharply contrasting the Consensus view that China has years of reserves to burn through, China is already below the critical level of minimum reserve adequacy. However, using expert estimates that $1.0tn-$1.5tn in reserves is the “critical level”, and also considering that China is burning $25bn-$75bn in reserves each month, the point at which the country will no longer be able to support the renminbi via FX reserves appears to be a 2017 event. At that point, there would be considerable devaluation in China’s currency, sending a deflationary shock through the world’s commodity markets; in short, we feel this would be bad for the steel/iron ore stocks we cover, yet is being completely un-discounted in stocks today (no one ever expects this event to occur).

Exhibit 3: China’s Adjusted Official Reserve Balance

(courtesy zero hedge)

China FinMin Unexpectedly Skips Asian Trade Summit To Attend “Emergency Meeting”

Coming a time when traders and analysts are looking with growing concerns toward Beijing, riddled by deja vu memories of the China-induced near-bear market of 2016 when in a similar episode China’s credit impulse tumbled – something which even Pimco highlighted earlier this week, when it reposted a chart first shown here in February

 

… worries that not all may be well in China – for the second time in two years – grew this morning after the country’s Finance Minister, Xiao Jie, unexpectedly skipped a summit conference with his Japanese and South Korean peers on Friday to attend an “emergency domestic meeting”, a senior Japanese finance ministry official said quoted by Reuters. The official told reporters during a ministry press briefing that Xiao’s absence was not related to any diplomatic matters, adding that Xiao was expected to attend the Japan-China finance dialogue in Japan scheduled for Saturday.  He did not elaborate on the nature of the minister’s emergency meeting.

“I don’t think this is rude,” the official said, when asked about Xiao’s absence. “I heard an emergency meeting was called and the Chinese finance minister had to attend,” he said. “We can understand the situation. We don’t see any deeper diplomatic meaning to this.”

While of secondary importance, at the meeting of the finance leaders they agreed to resist all forms of protectionism, taking a stronger stand than G20 major economies against the protectionist policies advocated by Trump. The senior Japanese finance official said he did not see any diplomatic implications from Xiao’s absence, saying the minister was likely to arrive in Yokohama Friday evening.  With the US taking an increasingly hardline stance on free-trade, Asia’s mega exporters among which China, Japan and South Korea have been seeking to ringfence themselves and promote regional trade agreements. More details from Reuters:

The trilateral meeting was held on the sidelines of the Asian Development Bank’s annual gathering in Yokohama, eastern Japan. China’s increasing presence in infrastructure finance and the threat that poses to Japan’s economic influence in the area are expected to be a topic of debate at the conference.

 

A Japanese Ministry of Finance official said the Chinese delegation was represented by its deputy finance minister and a senior official from the Chinese central bank at the trilateral summit where finance officials from the three countries met and pledged to resist protectionism.

 

In an attempt to reduce the region’s vulnerability to dollar swings, Japan also proposed forming $40 billion in bilateral currency swap arrangements with Southeast Asian nations that would allow it to provide yen funds in times of financial stress.

 

“We agree that trade is one of the most important engines of economic growth and development, which contribute to productivity improvements and job creations,” the finance leaders and central bank governors of the three nations said in a communique issued after their meeting.  “We will resist all forms of protectionism,” the communique said, keeping a line that was removed – under pressure from Washington – from a G20 communique in March when the group’s finance leaders met in Germany.

But back to Xiao’s “emergency meeting” which took place just as prices of commodities traded in China plunged by the most in over a year, with iron ore falling limit down on Thursday, and then continuing to slide the next day, and with Chinese stocks falling to three-month lows as concerns about tighter financial regulations amid a crackdown on shadow banking weighed on banking shares.

Speaking to Reuters, an official in the news department of China’s Ministry of Finance said that Xiao had missed the trilateral meeting, which took place on Friday morning, but that he had departed for Japan in the afternoon. The ministry official did not say why Xiao missed the meeting, prompting speculation among some desks that following the sharp decline in local asset prices, one or more Chinese financial institutions could be in trouble again, due to the latest commodity turmoil. Anyone hoping for more clarity on what transpired at said meeting is urged not to hold their breath.

4. EUROPEAN AFFAIRS

Italy

Funds are leaving Italy by the bucketful as target 2 imbalances skyrocket.  Foreign investors are also dumping bonds joining in on the capital flight

(courtesy Mish Shedlock/Mishtalk)

Italy Dependent On ECB “Buyer Of Last Resort” As Foreign Investors Dump Bonds Amid Capital Flight

Authored by Mike Shedlock via MishTalk.com,

Italy is increasingly dependent on the ECB to hold down bond yields as foreign investors dump Italian bonds like mad.

Eurointelligence bills this as Further Evidence of Capital Flight in Italy“. 

In a column earlier this week, Federico Fubini notes that, according to the Bank of International Settlements, in 2016 international banks reduced their exposure to Italy by 15%, or over $100bn, half of it in the last quarter of the year.

 

The counterpart to this exposure reduction is the increase in the negative Target2 balance of Italy, which the ECB has already attributed to foreign investors selling into its asset purchase programs, and reinvesting the proceeds away from Italy.

 

As a result of all this, Italy’s financial stability is increasingly dependent on the ECB.

The Capital Flight article by Federico Fubini is in Italian. Here is an unmodified snip from the article.

Distrust Widespread

 

Clearly, therefore, there is a conspiracy, but a widespread distrust of the direction being taken in the third euro area economy. Especially the banking system in Germany seems to have developed a deep-seated distrust. His exposure to the country late last year is worth little more than a quarter of that of the French banks, and now has dropped so much that is 30% below that that German institutions had on Italy at Euro 1999 debut. No other major banking system has implemented a retreat of these proportions, as if the integration of the single currency had never even begun.

 

The loss of one hundred billion dollars by large foreign banking investors would be a blow, not for purchases of Italian bonds by the European Central Bank. Throughout 2016 we continued at the rate of about ten billion Euros per month, on corporate bonds and especially on sovereign bonds. In fact the release of foreign banks is linked to the ECB intervention, because those have the opportunity to sell at the Institute of Frankfurt good part of their Roma government bonds. It is no coincidence if the public debt held abroad fell by 42 billion in just the first nine months of 2016, according to Bruegel. The irruption of the ECB in the market and the withdrawal of foreign banks are thus two sides of the same coin. The result is that the Italian financial stability is becoming more and more dependent on the support of an international institution, that next year will almost certainly cease.

I spoke about this process before in Target2 and Secret Bailouts: Will Germany be Forced Into a Fiscal Union with Rest of Eurozone.

One person I highly respect is adamant (or at least was) that rising Target2 does not represent capital flight.

But what else do you call it when foreign investors dump Italian bonds to ECB, the buyer of only resort?

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia/Iran/Turkey vs USA

Oh Oh!! this will go over well.    Russia, Iran, and Turkey bans USA plans above Syrian “safe zones”  I wonder how long that will last?

(courtesy zero hedge)

Russia, Iran, Turkey Ban US Planes Above Syrian “Safe Zones”

Russia said it’s ready to send peacekeepers to Syria after Turkey and Iran agreed on Thursday to Russia’s proposal for “de-escalation zones” in Syria. The move, welcomed by the United Nations, has been met with scepticism from the United States as the so-called safe-zones will closed for warplanes of the United States and those of the U.S.-led coalition.

As Bloomberg reports, the three countries signed a memorandum on the creation of so-called de-escalation areas on Thursday after two days of talks in Kazakhstan that also included representatives of the Syrian government and rebel groups.  

Opposition leaders distanced themselves from the plan, saying they can’t accept Iran as a guarantor of the truce and that they want “clear and tangible” guarantees the deal will be enforced.

The U.S. also expressed doubts, as State Department spokeswoman Heather Nauert said Thursday that the U.S. has “concerns” about the accord, “including the involvement of Iran as a so-called “guarantor,”’ and said Russia should do more to stop violence.

The four safe zones to be established in Syria will be closed for flights by US-led coalition warplanes, said the Russian envoy to the Astana peace talks, where the zones were agreed upon.

“Russia is ready to send its observers” to help enforce the safe zones, President Vladimir Putin’s envoy to Syria, Alexander Lavrentiev, told reporters in the Kazakh capital, Astana. “We believe the Syrian crisis can only be resolved through political methods.”

 

“As for [the coalition] actions in the de-escalation zones, starting from now those zones are closed for their flights,” Aleksandr Levrentyev told journalists in the Kazakh capital.

The Russian Ministry of Defense notes that the deal on safe zones in Syria wil come into effect 21:00 GMT on May 5.

We wonder how long Washington will stand for a “no-fly-zone”

end

6 .GLOBAL ISSUES

Toronto/Canada

Toronto housing is in a huge bubble and it can only end in “tears”

(courtesy zero hedge)

 

The Toronto Housing Market Is About To Collapse By This Measure

With the collapse of Home Capital Group focusing the world’s attention on the Canadian real estate market, nowhere is the subprime debt time bomb more likely to go off than Toronto, which as we recently noted “has gone nuts.”

Even Bank of Canada Governor Stephen Poloz(who declined to comment on questions about Home Capital Group and whether he’s worried about contagion), noted that Toronto is out control tonight while answering questions following a speech in Mexico City…

pretty sure recent gains in Toronto home prices were not sustainable and that the city’s housing market had elements of speculation

 

“Financial stability is part of the Bank of Canada’s monetary policy decision making, but the central bank’s primary mission is inflation targeting,... it would be odd to use interest rates to target home prices in just one city.”

Perhaps Mr. Poloz… But, as we noted previously,it doesn’t take a genius to figure out that this will end in tears.  Even the big Canadian banks are fretting. “Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,” Bank of Montreal Chief Economist Doug Porter warned clients. But the bubble’s deflation would push the city into a fiscal and financial sinkhole

 

Jason Mercer, TREB’s Director of Market Analysis, explained the basic supply and demand problem:

“Annual rates of price growth continued to accelerate in March as growth in sales outstripped growth in listings,” he said.

 

“A substantial period of months in which listings growth is greater than sales growth will be required to bring the GTA housing market back into balance.”

And that is exactly what Capital Economics is pointing out is occurring – in a very accelerated manner… as listings flood the market and an extreme lack of affordability means homes remains unattainable to all but the oligarchs seeking safe-haven for their ‘hard’-hidden gains, prices will have to adjust rather rapidly.

Additionall, Mercer told policy makers to tread carefully: “As policy makers seek to achieve this balance, it is important that an evidence-based approach is followed,” he said. This is a gravy train, and it must be allowed to speed on until the last cent has been extracted.

What we don’t know yet is when it will end in tears, and whose tears it will end with. But we already know: When it does end in tears, real estate organizations will first be denying it, and then they’ll be clamoring for a bailout of their stakeholders – so it will end in the tears of others.

end

The Canadian dollar skyrocketed on news that Canada will retaliate against the USA on trade.

If British Columbia bans  thermal coal exports to the uSA that would surely hurt them.

(courtesy zero hedge)

Canada Retaliates, Threatens Multiple Trade War Actions Against The US

The trade war between North America’s two biggest economies is just getting started.

Ten days after Trump unexpectedly imposed duties on Canadian softwood exports drawing loud protests from domestic lumber companies, the Canadian government has threatened to retaliate with multiple trade actions against the US, demanding a long-term deal without which several American industries could soon be targeted.

Canada’s Prime Minister Justin Trudeau said he would launch the first salvo in a letter to B.C. Premier Christy Clark, informing her that he’s seriously considering her request for a ban on thermal coal exports and that it’s being explored by federal trade officials. The second threat: a direct tit-for-tat escalation, with possible duties against Oregon-based industries. That also happens to be the home state of a Democratic senator, Ron Wyden, who has been a hardliner on the lumber dispute.

“The government of Canada is considering this request carefully and seriously. I have asked federal trade officials to further examine the request to inform our government’s next steps,” Trudeau said, cited by Reuters.

Furthermore, the Canadian government has also found several Oregon business-assistance programs it says may constitute illegal subsidies and is considering a process that could lead to retaliatory duties on imports from that state’s products, such as plywood, flooring, wood chips, packaging material and wine.

While the action taken by Canada is a clear retaliation to Trump’s recent tariffs, two government sources quoted by the Canadian Press insist the threat has nothing to do with U.S. President Donald Trump; and say it’s a one-off, specific action related to one dispute, and one Democratic senator in one state. They added that a long-term deal on softwood lumber would be the best way to prevent the dispute from escalating. “We hope we don’t have to act,” said one source, speaking on condition of anonymity in order to discuss matters not yet made public. “We hope this dispute can be resolved.”

However, suggesting that Trudeau’s escalation is nothing les than a retaliation to Trump, CP notes that the course of action being reviewed by the Canadian government “is similar to the process used in the U.S. that slapped a 20-per-cent duty on northern lumber. It involves a request to the Canada Border Services Agency to study illegal subsidies in Oregon, a process that would take several months.”

The government says it has zeroed in on nine programs in Oregon that assist businesses, primarily in lumber.

They include: the Oregon Underproductive Forestland Tax Credit, the Oregon Forest Resource Trust, the Oregon Tree Farm Program, the Pacific Forest Trust, property tax exemptions for standing timber, a small winery tax exemption program and other tax credits.

 

“It’s a real thing. Our officials have already been looking at this,” said one government official familiar with the plan. ”Wyden has been a chief proponent for years of the baseless and unfounded claims against the Canadian softwood lumber industry.”

 

Another official said there’s no intention of changing the low-drama, co-operative posture Trudeau has taken toward the White House: ”This is not about the president. This is about the state… The strategy (with Trump) is still one of positive engagement… ”(But) we still have to respond to these issues as they come.”

Previously, Trudeau’s Liberal government has said it would defend Canada’s lumber industry against what it calls an unfounded and unfair U.S. decision last month to impose the tariffs, and today’s action is merely the first step as Ottawa carries out its threat. It remains to be seen if Trump will agree to negotiate after today’s threat or will slap even more escalating sanctions on Canada.  One thing is certain: the growing trade war threatens to make a mockery of the NAFTA rengotiation talks which are set to start this year.

end

7. OIL ISSUES

Oil had a flash crash last night from $45.00 to under $43.00.  It subsequently recovered but it is showing a signal that all is not well in commodity land especially in China.

(courtesy zero hedge)

 

As Oil Flash Crashes, One Trader Says The Commodity Selloff Is “The Single Largest Macro Factor” Right Now

It was a very ugly night for the Andy Halls, Pierre Andurands and other crude longs, after oil flash crashed just before midnight ET, dragging WTI from above $45/bbl to below $44 in seconds on a surge in volume, to the lowest price since OPEC agreed to cut output in November.

As shown in the chart below, in less than 10 minutes futures slumped more than $1 as volume surged 14 times.

And while WTI eventually rebounded from its overnight snap, and was back above $45, putting this week’s rout in context, oil prices have collapsed by more than 10% %, sliding to lowest since Nov. 15, or two weeks before OPEC signed 6-month deal to curb production aimed at easing global glut. The decline has been driven by expanding U.S. output before OPEC is set to decide whether to prolong its cuts.

To frame the collapse of oil in particular, and commodities in general, here is Bloomberg’s macro commentator Mark Cudmore, explaining why “the commodities selloff of the past two months is arguably the single largest macro factor shifting the view on how to play the months ahead. There are consequences for FX, rates, credit and equities markets.

From his overnight Macro View note

Commodities’ Micro Catalysts Have Macro Consequences

 

Commodities have had yet another terrible week. This is a great example of how individual and largely unrelated micro triggers can combine to have severe macro consequences.

 

The Bloomberg Commodity Index has fallen more than 8% from its February peak, to an 11-month low.

 

Our commodities team have been at pains to highlight the idiosyncratic factors driving the moves: oil is being hit by rising U.S. production, copper’s fall was triggered by the whopping LME stockpile-build, iron ore slumped on China concerns, agricultural commodities reversed after a U.S. storm caused less damage than originally feared, and gold is getting hit by the marginally more hawkish Fed and the perceived reduction in European political risk.

 

The point to note is that any of these assets has the potential to start rallying in isolation, which is a valid warning against trying to attribute a catch-all explanation for the commodities rout.

 

But even if the drivers are unique for each commodity, there are macro implications of this all occurring at once.

 

Global inflation will not sustainably rise while core input prices are tanking. That’s got a negative knock-on for financial markets sentiment. There’s genuine detrimental wealth effects, not to mention the message it’s sending about the state of global aggregate demand.

 

As a whole, the commodities selloff of the past two months is arguably the single largest macro factor shifting the view on how to play the months ahead. There are consequences for FX, rates, credit and equities markets.

 

Sometimes over-simplification of a complex issue can help you focus on the most important conclusions. That’s not to say there aren’t money-making opportunities for those who choose a more granular approach, but it doesn’t negate the validity of taking a macro view.

 

 

end

 

One of the world’s largest oil hedge funds just liquidated all of his position  (long) in oil  Based on the huge number of long speculative bets he will not be the only only throwing in the towel

(courtesy zero hedge)

One Of The World’s Biggest Oil Hedge Funds Just Liquidated All Its Longs

Earlier in the week we shared Pierre Andurand’s hedge fund note blame-casting his fund’s dismal drawdowns on “CTA flows eclipsing the gradual improvement in fundamentals.”

The market sell-off is missing the larger picture, he proclaims.

“Market participants remain extremely focused on micro developments like US crude inventories while the big picture has been telling us a different supply story for quite some time,” he wrote. “In fact, the gradual tightening of crude oil spreads has led to the release of expensive onshore and offshore inventories globally.”

So what could be driving prices lower? Andurand looks at the algorithmic traders and places blame on their non-economic outlook for the price movements. “Without consistent and significant draws invisible onshore inventories, we remain stuck in a trendless and choppy market with CTA flows eclipsing the gradual improvement in fundamentals,” he wrote, pointing to an oddity.

Of course, the permabullish trader had a great year in 2016 (up 22.1%) as oil soared…

Pierre Andurand

But, in what now seems like a moment of supreme irony, we noted earlier that ‘it was a very ugly night for the Andy Halls, Pierre Andurands and other crude longs’ as WTI flash-crashed.

And, courtesy of Reuters’ David Gaffen, we may have found one major culprit (among many we suspect) for the recent rapid collapse in crude oil prices)…

HEDGE FUND MANAGER PIERRE ANDURAND LIQUIDATED LAST REMAINING LONG POSITIONS IN OIL LAST WEEK – MARKET SOURCE

As Reuters reports,

Pierre Andurand, who runs one of the biggest hedge funds specialising in oil, liquidated the fund’s last long positions in oil last week and is running a very reduced risk at the moment, a market source familiar with the development said.

 

The fund, Andurand Capital is a renowned oil price bull and has been reducing its positions gradually over the course of 2017, the source said, while adding that it remained fundamentally bullish on oil.

It has been a tough few weeks for Andurand…As Mark Constantine tweeted, a few weeks ago Andurand was predicting oil prices to hit $70 later this year

But, of course, Andurand is not alone, in fact it is safe to say that virtually every other commodity trader is on the same side of the boat:

Hedge funds and other big money managers amassed a record number of bullish bets on Brent crude last month, according to the Intercontinental Exchange Inc…. having traded in a narrow range for most of this year, oil posted its biggest two-day selloff since June last week. Oil inventories in the U.S. have recently hit a record high in a sign that the massive glut that has depressed prices for more than two years is still plaguing the market. The U.S. Energy Department expects American oil production to rebound past 9.7 million barrels a day in 2018, breaking the record output level set in 1970.

Should the oil drop continue, given the massive surge in open interest, we suspect Andurand will not be the last to capitulate…

 

Of course the hope that the capitulation is over has sparked a BTFD off the overnigth flash crash lows… WTI back above $46…

 

(courtesy zero hedge)

Rig Count Rises For 16th Straight Week; Leads US Crude Production Near Record Highs

The US oil rig count has now risen over 120% from its May 2016 lows, having dropped only 3 of the weeks since…

This is the 16th straight week of oil rig count rises (up 6 to 703)…

 

Sending US Crude Production to just 3% short of record highs

 

Notably, WTI fell back to $46 and RBOB $1.50 right before the rig count print…

8. EMERGING MARKETS

end

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

Euro/USA   1.0960 DOWN .0009/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES IN THE RED

USA/JAPAN YEN 112.41 DOWN 0.131(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2932 UP .0006 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3777 UP .0024 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro FELL by 9 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0960; 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 DOWN 24.33 POINTS OR .78%     / Hang Sang  CLOSED  DOWN 207.53 POINTS OR .84% /AUSTRALIA  CLOSED DOWN .69% / EUROPEAN BOURSES CLOSED IN THE RED

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 HOLIDAY 

Trading from Europe and Asia:
1. Europe stocks  OPENED IN THE RED 

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 207.53 POINTS OR .84%  / SHANGHAI CLOSED DOWN 24.33 POINTS OR .78% /Australia BOURSE CLOSED DOWN .69% /Nikkei (Japan)CLOSED  HOLIDAY    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1233.40

silver:$16.35

Early FRIDAY morning USA 10 year bond yield: 2.358% !!! UP 1/2 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.998, DOWN  1/2  IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 98.90 UP 10  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.39%  DOWN 3  in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.021%  PAR   in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.558%  DOWN 4  IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.165 DOWN 5  POINTS  in basis point yield from THURSDAY 

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

GERMAN 10 YR BOND YIELD: +.418% up 3 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.0988 up .0008 (Euro UP 8 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.64 DOWN  .092 (Yen UP 9 basis points/ 

Great Britain/USA 1.2959 UP 0.0036( POUND UP 36 basis points)

USA/Canada 1.3706 DOWN 0.0046(Canadian dollar UP 46 basis points AS OIL FELL TO $46.08

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This afternoon, the Euro was UP by 8 basis points to trade at 1.0988

The Yen FELL to 112.64 for a LOSS of 9 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 36  basis points, trading at 1.2959/

The Canadian dollar ROSE by 46 basis points to 1.3706,  WITH WTI OIL RISING TO :  $46.08

The USA/Yuan closed at 6.903/
the 10 yr Japanese bond yield closed at +.021% PAR IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from THURSDAY at 2.349% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.984 DOWN 2  in basis points on the day /

Your closing USA dollar index, 98,68 DOWN 12  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP  49.33 POINTS OR .68%
German Dax :CLOSED UP 69.11 POINTS OR .55% 
Paris Cac  CLOSED UP 59.98 POINTS OR 1.12% 
Spain IBEX CLOSED  UP 112.50 POINTS OR 1.11%

Italian MIB: CLOSED  UP 313.94 POINTS/OR 1.48%

The Dow closed UP 55.47 OR 0.03%

NASDAQ WAS closed UP 25.42 POINTS OR 0.42%  4.00 PM EST
WTI Oil price;  45.92 at 1:00 pm; 

Brent Oil: 48.83 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.34 DOWN 96/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD REMAINS AT  +0.418%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 4:45 PM:$46.46

BRENT: $49.36

USA 10 YR BOND YIELD: 2.351%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.988%

EURO/USA DOLLAR CROSS:  1.0992 UP .0013

USA/JAPANESE YEN:112.78  UP 0.230

USA DOLLAR INDEX: 98.58  DOWN 22  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2976 : UP .0055  OR 55 BASIS POINTS.

Canadian dollar: 1.3641  DOWN .0111(CAN DOLLAR up 111 BASIS PTS)

German 10 yr bond yield at 5 pm: +.418%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Calmest Market In 75 Years Hits Record Highs – Ignores Dismal Data, Commodity Carnage

Massive liquidity issues in China wealth product liquidation, commodities crashing, oil plunging, US macro data disappointments, US earnings disappointments, and Buffett dumping Big Blue – only makes sense that The Dow just had its quietest 8 days since 1952!!!

 

US Macro data has negatively surprised for 7 straight weeks – dropping to its weakest since October…

 

But stocks don’t care about fun-durr-mentals…

 

Or commodities…

 

Or earnings…

 

Mixed Payrolls data started everything off bid (Dow hurt by IBM), but late on came the buying panic…

 

Did Tim Cook start buying-back AAPL to save the world?

 

Small Caps ended the week red…

 

S&P hit a new record high close today, even as breadth diverges…

 

Dow was ‘managed’ up to break 21,000… (notice VIX glued betweemn 10 and 11 all week)…

 

The Dow and S&P were into their 8th session of moving less than 0.2% in either direction, before the late-day panic buying…

Last time this happened was 1964 for the S&P 500…

 

And 1952 for the Dow…

 

Financials were best on the week, Energy stocks worst…

 

Bank stocks were mixed this week though, with JPM and MS red, BAC and GS green…with MS a notable laggard post-Fed

 

Treasury yields rose on the week… with bonds rallying post-payrolls after a post-fed selloff

 

But the 30Y Yield ended back below 3.00% again…

 

But while corporate bonds were bid, we note that there is a growing divergence between credit and equity protection costs…

 

One wonders how long before energy credit markets realize its lower-for-longer for crude…

 

The USD Index pushed lower after payrolls today, erasing the Fed spike and ending the week almost unchanged…

 

Despite an unch dollar, metals were massacred this week – from Iron Ore to copper…

 

Ugly – This was gold’s worst week since the election

 

Overnight saw a significant flash-crash in the energy complex (and in fact hit stocks too)…banging WTI briefly to a $43 handle and RBOB to $1.45!

 

As yesterday saw a big spike in volumes…

 

Gold and Silver were smashed lower this week…

 

BUT… SLV broke its 14-day losing streak…

 

But we note that the tendency to punch gold prices into the London Fix is becoming just a little too obvious…

 

 

end

 

The phony jobs report showed a gain of 211,000 jobs but the February report showed a further loss of 19,000 so the number came largely as expected.  The average hourly earnings however disappointed the street

(courtesy zero hedge)

 

 

April Payrolls Jump By 211K, Beating Expectations Although Average Hourly Earnings Disappoint

Well, the Fed said the recent disappointing economic data would be “transitory” and based on the just released jobs report, it may have been somewhat right, because after growing only by a revised 79,000 jobs in March, payrolls rebounded in April, rising by more than the expected 190K to 211K, in line with the optimistic whisper estimates. The not so great news: March payrolls were revised materially lower, and denying expectations of a solid upward revision, March payrolls were said to rise by only 79K, below the 98K initially reported.

Nonfarm private payrolls rose 194k vs prior 77k; est. 190k, range 155k-270k from 39 economists surveyed. Manufacturing payrolls rose 6k after rising 13k in the prior month; economists estimated 10k, range 0k to 15k from 23 economists surveyed

The change in total nonfarm payroll employment for February was revised up from +219,000 to +232,000, and the change for March was revised down from +98,000 to +79,000. With these revisions, employment gains in February and March combined were 6,000 lower than previously reported.

The change in household employment was up 156k vs the prior +472k.

The unemployment rate unexpectedly dropped, declining from 4.5% to 4.4%, below the 4.6% expected and to the lowest level since May 2007, as the participation rate declined.  Underemployment rate 8.6% vs prior 8.9%

In April, the number of Americans not in the labor force rose by 162K to 94.375MM, the highest of 2017.

Perhaps the most important indicator the Fed is looking at, Average Hourly Earnings, was somewhat soft, with the Y/Y number missing expectations of a 2.7% increase, rising only 2.5%, even as the monthly increase of 0.3% came in line with expectations, although here too the March monthly increase was revised downward from 0.2% to 0.1%, suggesting wage growth remains very much elusive for most workers.

The silver lining here is that average weekly hours rose fractionally to 34.4 from 34.3, in turn helping drive average weekly earning up to 2.6%, the highest since December,

Finally, some details from the report:

Total nonfarm payroll employment increased by 211,000 in April. Employment rose in leisure and hospitality, health care and social assistance, financial activities, and mining.

 

In April, leisure and hospitality added 55,000 jobs. Employment in food services and drinking places continued to trend up over the month (+26,000) and has increased by 260,000 over the year.

Employment in health care and social assistance increased by 37,000 in April. Health care employment continued to trend up over the month (+20,000). This is in line with the industry’s average monthly job growth during the first quarter of this year but below the average gain of 32,000 per month in 2016. Social assistance added 17,000 jobs in April, with all of the gain in individual and family services.

 

In April, financial activities added 19,000 jobs, with insurance carriers and related activities accounting for most of the gain (+14,000). Over the year, financial activities has added 173,000 jobs.

 

Employment in mining rose by 9,000 in April, with most of the increase in support activities for mining (+7,000). Since a recent low in October 2016, mining has added 44,000 jobs, with three-fourths of the gain in support activities for mining.

 

Employment in professional and business services continued to trend up in April (+39,000). The industry has added 612,000 jobs over the past 12 months.

 

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government, showed little change over the month.

 

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours in April. In manufacturing, the workweek edged up by 0.1 hour to 40.7 hours, and overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours.

 

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $26.19. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. In April, average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $21.96.

 

The change in total nonfarm payroll employment for February was revised up from +219,000 to +232,000, and the change for March was revised down from +98,000 to +79,000. With these revisions, employment gains in February and March combined were 6,000 lower than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 174,000.

end

And now the real jobs report:

Where the jobs went:  minimum wage jobs

(courtesy zerohedge)

Where The April Jobs Were: It Was All About Minimum Wage Again

April was a month of economic recovery: after a disappointing March, jobs rebounded strongly last month, rising from a downward revised 79K to 211K, providing some validation to Yellen’s claim that the recent economic weakness was transitory. And yet, wages once again disappointed, with annual hourly earning growth declining to 2.5% from 2.7%.

How is it that with the labor market supposedly near full employment, and the unemployment rate sliding to another post-recession low of 4.4%, wages simply can not rise?

The answer was once again to be found in the quality of jobs added, because despite the poor headline payrolls print in March, the quality of jobs added that month was actually quite better than recent trends. This is where April disappointed: according to the BLS, the bulk of jobs added were once again in low or minimum-wage sectors such as leisure and hospitality, which added +55,000 jobs of which food services and drinking places workers, aka waiters and bartenders, added another +26,000. Another low-paying sector – education and health – added 41,000 jobs in April.

Surprisingly, of the 39K professional and business services – traditionally a well-paying job category – for the second month in a row employees providing “services to buildings and dwellings”, aka “doormen” dominated the category, with 9.9K jobs added.

Looking at retail workers, recall that one of the main reasons for the big March jobs drop was a plunge in retail (also minimum wage) employment, which saw over 27K jobs losses last month, and another 29K in February. That has now reversed, and in April 6,300 retail workers were added.

Another notable observation: last month’s gain of 13K manufacturing jobs was cut in half to just 6K well-paying mfg jobs.

It wasn’t just low-paying jobs of course:

  • Financial activities added 19,000 jobs, with insurance carriers and related activities accounting for most of the gain (+14,000). Over the year, financial activities has added 173,000 jobs.
  • Mining jobs rose by 9,000 in April, with most of the increase in support activities for mining (+7,000). Since a recent low in October 2016, mining has added 44,000 jobs.
  • Government workers increased by 27,000 in April

The only job category that saw a decline in employment in April was Information where 7,000 jobs were lost, following a loss of 6,000 jobs the month prior.

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

(courtesy zero hedge)

With 86 Months Of Consecutive Job Gains, This Is The “Best” Job In The U.S.

Well over 5 years ago, we first dubbed the economy under Barack Obama as the “Waiter and Bartender recovery”, because while most other job categories had grown at a moderate pace at best, the growth in the category defined by the BLS as “Food Service and Drinking Workers” has been nothing short of spectacular.

How spectacular? As the chart below shows, starting in March of 2010 and continuing through April of 2017, there have been 86 consecutive month of payroll gains for America’s waiters and bartenders, an unprecedented feat and an all time record. Putting this number in context, total job gains for the sector over the past 7 years have amounted to 2.345 million or just under 15% of the total 16.3 million in new jobs created by the US over the past 86 months.

As a tangent, putting the “waiter and bartender” recovery in the context of America’s manufacturing sector, the following chart shows that while nearly 800,000 “food service and drinking places” jobs were created since 2014, over the same period the number of manufacturing jobs created has been just 105,000.

 

end

And now finally with the last word of the fraudulent jobs report here is Dave Kranzler and it is a must read..

B/D “added” 255,000 jobs and even this number is seasonally adjusted..and all the commentators believe this garbage??

enjoy…

(courtesy Dave Kranzler/IRD)

Another Fraudulent Jobs Report

“Willing suspension of disbelief” is defined as a willingness to suspend one’s critical faculties and believe the unbelievable; sacrifice of realism and logic for the sake of enjoyment.  First off, I want to state upfront that there’s nothing enjoyable about the monthly non-farm payroll report unless you enjoy being subjected to brain damage.

Each month the Government asks us to suspend our critical faculties and accept the headline-reported number of new jobs created by the economy as well as the unemployment rate.   Once again the Government did not disappoint, as it headline-flashed the alleged creation of 211,000 jobs and an unemployment rate of 4.4%.

Unfortunately, for the mindless masses who consume fast-food style news from mainstream news sources, once the headline numbers are absorbed and the “experts” reaffirm them with their idiotic psycho-babble, the numbers as reported miraculously become The Numbers.

To say that the latest non-farm payroll report stretches the ability to suspend one’s disbelief is an understatement.  The Government wants us to believe that 211,000 new jobs were created in April – “seasonally adjusted,” of course.    A cursory glance reveals that 162,000 working age civilians decided to just leave the labor force, which explains the alleged decline in the unemployment rate.  Either those folks who walked away were bequeathed with Social Security disability, took out a big student loan and enrolled for an online degree program at one of the many online universities or, most likely, their jobless benefits expired and they simply gave up looking for a job that pays more than minimum wage (Note:  the latter explanation is supported by the recent spike up in auto loan, credit card and mortgage delinquency rates).

As for the 211k alleged jobs created…The Government appears to have generated those jobs via its “create-a-job” program otherwise known as the “birth/death model.”  The birth/death model assumes that every month new businesses are created and terminated. New businesses hire employees and terminated businesses fire employees.  You can read more about it here:  birth/death modelling technique.   The b/d sausage grinder for April produced 255,000 new jobs, before seasonal adjustments (note:  most people assume the 255k jobs were the actual number of jobs added into the headline count, but the 255k is run through the “seasonally adjusted” total jobs blender and folded into the final number).

On the surface, the Government wants us suspend our disbelief and buy into the assumption that significantly more new businesses were started in April than were shuttered.  Unfortunately, according to the Census Bureau’s own numbers, new business creation is at a 40-year low.  In other words, the number of jobs that can be accounted for in the 211k headline number by the b/d model were never really created.  In fact, judging from the estimated 8,640 retail stores to be closed in 2017, added to the 10 retail chains that have already closed down this year, it’s more likely that more jobs were lost by deaths than were created by start-ups.    Yet, here’s the Government’s b/d estimate for retailing:

As you can see, the Government credits the retail industry with creating 5,000 new jobs in April from new business start-ups. But look at the leisure/hospitality category. It shows 84,000 jobs created by that sector. Again, suspension of disbelief is impossible when you consider that the restaurant industry alone is shedding jobs on a “net” basis, as private data sources show that restaurant sales have declined in 11 of the last 12 months (LINK). In fact, the restaurant industry is experiencing its worst period of sales since 2009.  I could go through each line item and annihilate the report, but for the sake of time  I would urge the Government to take a closer look at its assumptions underlying the b/d model job creation calculus.

John Williams of Shadow Government Statistics has been presenting the Conference Board Help Wanted Online Index (HWOL).  This  is the online transformation of a data series that measures help-wanted advertising going back to 1919.  This series has accurately correlated with every economic recessionary period in the post-WW1 era.  The graph presented by Williams in his latest newsletter shows that the HWOL index peaked in mid-2010 and has been declining ever since – both total HWOL ads and new HWOL ads.  Rate of year over year growth for the metric went negative in 2016, suggesting that the economy has not only not produced jobs since the beginning of 2016 but has in fact lost jobs.   The rate of decline in HWOL advertising  currently is contracting at a 20% year over year rate.  The last time it was contracting at this rate was in 2008.

Without question, it can be shown even with cursory analysis that the Government’s monthly non-farm payroll is fraudulent, serving no purpose than other than for political propaganda.  Looked  at another way, if the true unemployment rate was truly 4.4%, not only would the Fed be raising interest rates at a rapid pace, but it would also be shrinking its balance sheet in order to remove the threat of an accelerating rate of inflation stimulated by an acute labor shortage (4.4% is well below the economically defined long-run 5% natural rate of unemployment).

end

 

The NY Fed has now lowered its 2nd quarter GDP to 1.8% while the Atlanta Fed remains at 4.2%.  They will both lower their estimates once September comes along.

(courtesy NYFed/zero hedge)

Here We Go Again: NY Fed Cuts Q2 GDP To 1.8% From 2.3% (Atlanta Fed Still At 4.2%)

It appears that the Atlanta Fed and NY Fed GDP trackers have decided to flip.

While last quarter, it was the Atlanta Fed which started off optimistic, predicting just shy of 3% in Q1 GDP growth, only to slash it all they way down to 0.4%, the NY Fed kept its exuberance – in big part due to reliance on soft data – until the bitter 0.7% Q1 GDP announcement by the BEA last week.

But, it’s now a new quarter, and everything resets, and while the Atlanta Fed has once again started off strong, expecting 4.3% initially although modestly trimming its exuberance to 4.2% in Q2 GDP yesterday – a number which we expect to decline materially once again – this time the NY Fed, perhaps wishing to avoid another quarter of mockery, is far more cautious, and in its latest just released Nowcasting report, the NY Fed now expected Q2 GDP to grow by only 1.8%, down from 2.3% due to “negative surprises from the ISM manufacturing survey as well as import and export data only partly offset by positive surprises from the employment report.”

Meanwhile, the consensus Wall Street estimate is currently at 2.7%, ranging from roughly 2.1% to 3.2%. If this again proves overly optimistic, one can always blame the weather. Again.

 

 

end

 

The following will not end well:

Student loans now total 1.44 trillion dollars

Auto loans 1.12 trillion

total  $2.57 trillion

(courtesy zero hedge)

US Student, Auto Loans Hit New All Time High Of $2.6 Trillion

One month after we, and every other financial media, reported that US credit card debt had risen back over $1 trillion for the first time since January 2017, the Fed demonstrated just how meaningless such reports are when in its latest consumer credit report it revised the total stock of revolving debt back under $1 trillion for the month of March, while boosting December’s amount to $1,000.1 billion, meaning that all those “$1 trillion in credit card” debt headlines were about 4 months late.

Fed screwing around with the financial reporters aside, the latest monthly report showed that total consumer credit rose by $16.4 billion, more than the $14 billion expected, an increase which was offset by a downward revision to the February consumer credit number from $15.2 billion to $13.8 billion. Revolving credit accounted for $2 billion of the increase with the rest, or $14.4 billion, in the form of auto and student loans.

And speaking of student and auto loans, the Fed also released its latest quarterly estimate for the two series as of March 31, and as one would expect, the numbers rose to new all time highs, and as of the end of the first quarter, US consumers owed $1.44 trillion in student loans, an increase of $32 billion for the quarter and $80 billion for the year, as well as $1.12 trillion in auto loans, an increase of $8 billion Q/Q and $73 billion Q/Q. This means that as of March 31, Americans owed two and a half times as much on their auto and student loans, as on their credit cards, a new all time high.

end

Well let’s wrap up with week with this offering courtesy of Greg Hunter of USA Watchdog

(courtesy Greg Hunter)

Economy Sucks and Trump Knows It, Trump Buys Time, Clergy Ungagged by Trump

By Greg Hunter On May 5, 2017 In Weekly News Wrap-Ups

All the economic data says the real economy is in big trouble, and it will not get better on its own. Factory orders tumble, automakers turn in negative results, and productivity is plunging all at the same time. The Trump Administration knows this and cannot risk imploding the financial markets. So, he choked down a $1.1 trillion spending bill that gave Democrats much of what they wanted. Trump signed the bill to keep the government running until September to buy some time. Trump will be putting together his first real budget soon, and that will take effect on October 1st. Trump got a big win today when the House of Representatives passed legislation that guts Obama Care and puts a new healthcare system in place. The Bill now moves to the Senate for passage.

It’s not just the U.S. that has a big problem with North Korea’s nuclear missile program. China has been telling North Korea to back off for weeks and has threatened to shoot down North Korea’s test missiles. North Korea has reportedly threatened China with “grave consequences over what it calls China’s “betrayal.” This week, China reportedly issued a “final warning” to North Korea. It’s unclear that that means.

Trump signed a new executive order on the National Day of Prayer that will strengthen religious freedom. The order allows clergy to talk politics from the pulpit without the fear of losing religious tax exempt status. This penalty has been in place since the 1960’s Johnson Administration.

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

Video Link

http://usawatchdog.com/economy-sucks-and-trump- knows-it-trump-buys-time-clergy-ungagged-by-trump/

Renowned Economist David Stockman will be the guest for the “Early Sunday Release.” He’s going to explain the federal budgets and consequences of America’s debt. Don’t miss it.

-END-

Well that does it for the week

I will see you Monday night

H.

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