May 10/Eight consecutive trading days sees the amount standing for silver increase/On first day notice: 16.8 million oz, today 22.12 million oz/Trump administration believes that 3% GDP growth in 2017 and 2018 is unattainable/The real reason why Comey was fired: he asked for more funds to investigate the Russian involvement in the USA election/A massive 3.833 million oz of silver added to the SLV despite the constant shellacking of this metal/

Gold: $1219.60  UP $3.05

Silver: $16.21  UP 12  cent(s)

Closing access prices:

Gold $1219.40

silver: $16.20

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: $1232.78 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1221.75

PREMIUM FIRST FIX:  $11.03

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SECOND SHANGHAI GOLD FIX: $1233.12

NY GOLD PRICE AT THE EXACT SAME TIME: 1221.86

Premium of Shanghai 2nd fix/NY:$11.64

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LONDON FIRST GOLD FIX:  5:30 am est  $1222.95

NY PRICING AT THE EXACT SAME TIME: $1222.60

LONDON SECOND GOLD FIX  10 AM: $1222.95

NY PRICING AT THE EXACT SAME TIME. $1223.90

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  43 NOTICE(S) FOR 4300 OZ. 

 TOTAL NOTICES SO FAR: 455 FOR 45500 OZ    (1.4155 TONNES)

For silver:

For silver: MAY

39 NOTICES FILED TODAY FOR 195,000  OZ/

Total number of notices filed so far this month: 4231 for 21,155,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

For 8 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 21.91 million oz. It looks to me that sovereign China wants its silver back.

stay tuned on this development..

Let us have a look at the data for today

.

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In silver, the total open interest SURPRISINGLY ROSE BY 2,496  contracts UP to 196,083  DESPITE THE  FALL IN PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (DOWN  18 CENT(S). In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.980 BILLION TO BE EXACT or 140% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 39 NOTICE(S) FOR 195,000  OZ OF SILVER

In gold, the total comex gold FELL BY 4,325 contracts WITH THE HUGE FALL IN THE PRICE OF GOLD ($11.05 with YESTERDAY’S TRADING). The total gold OI stands at 433,033 contracts.  We are only 43,000 contracts away from rock bottom OI.

we had 43 notice(s) filed upon for 4300 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: 851.89 tonnes

.

SLV

Strange!!!  For 17 straight trading sessions, silver was down on 16 and up on only one and that was a few cents. Today: inventory rose by 3.833 million oz!!!!

THE SLV Inventory rests at: 338.610 million oz

it is also strange that during these past two weeks no silver left the silver vaults.

end

.

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

1. Today, we had the open interest in silver ROSE BY 2,496 contracts UP TO 196,083, (AND NOW CLOSER TO  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), DESPITE THE  FALL IN PRICE FOR SILVER YESTERDAY (18 CENT(S)).

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 27.72 POINTS OR .90%  OR / /Hang Sang CLOSED UP 126.39 POINTS OR 0.51% .  The Nikkei closed UP 57.09 POINTS OR 0.29%/Australia’s all ordinaires  CLOSED UP .62%/Chinese yuan (ONSHORE) closed UP at 6.9028/Oil UP to 46.41 dollars per barrel for WTI and 49.23 for Brent. Stocks in Europe OPENED IN THE RED EXCEPT LONDON   ..Offshore yuan trades  6.9088 yuan to the dollar vs 6.9028 for onshore yuan. NOW  THE OFFSHORE IS A LOT STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS A LITTLE HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

I)SOUTH KOREA/

ii)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)Chinese stocks have fallen once again and this is accompanied by sell offs in the bond market as well. No doubt it is the deleveraging from the commodity fallout which is causing this fallout

( zero hedge)

ii)The plunge in commodity prices especially iron ore causes the Chinese producer prices to slide for the 2nd  month in a row.  PPI came in at 6.4% down from 6.8% last month and 8% from the start of 2107 as the bursting commodity bubble spills into their economy

( zero hedge).

4. EUROPEAN AFFAIRS

i)A great look at what will be facing France and Germany with the election of Macron.  Macron wants a shared Eurobond i.e. a fiscal bonding whereby Germany accepts Italian risk.  He wants a European deposit insurance and most importantly wants Germany’s current account surplus to be lowered.  Good luck to him

( Mish Shedlock/Mishtalk)

ii) GREECE

Greek stocks are soaring for the past 12 days and the bond yields have dropped into the column percent column. What is strange is the fact that the demands of their creditors to cut pensions is unconstitutional according to their supreme court

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Well that did not take long:  Turkey warns the USA as to their decision to arm the Syrian Kurds:  They consider it a crisis but they also gave Trump time to reconsider his decision or else..

(y zero hedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

Both WTI and Gasoline jump after a huge crude inventory draw

( zerohedge)

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)the following will be of great interest to us:  the LBMA will report on their London gold vault holdings this summer.
(courtesy Ronan Manly./Bullionstar)

ii)Bill Murphy discusses the continual attacks on both gold and silver(courtesy GATA/Bill Murphy)

10. USA stories

i)The Trump administration now admits that 3.% GDP growth is not attainable:

( zero hedge)

ii)As David Stockman advised us:  the House is in a mess and will not pass anything: today 3 Republicans joined all Democrats in the failure to repeal a methane gas emission rule initiated by Obama:

( zero hedge)

no wonder he was canned:

( zero hedge)

iv) The Dow gets whacked today due to one stock Boeing which crashes after disclosing engine issues

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 4,325 CONTRACTS DOWN to an OI level of 433,033 DESPITE THE  FALL IN THE PRICE OF GOLD ( $11.05 with YESTERDAY’S trading).   The longs I guess had had enough  as they finally liquidated some more of their contracts with the constant torment they received over the past two weeks.  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 3 contract(s) FALLING TO 75. We had 38 notices filed yesterday so we GAINED 35 contracts or an additional 3500 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 11,715 contracts DOWN to 244,085.  The non active July contract gained another 87 contracts to stand at 425 contracts. The next big active month is August and here the OI gained 5965 contracts up to 96,528.

To give you a good idea of the devastation of open interest contracts, last year on May 10 2016 we had at this exact time:  384,588 contracts open and that is compared to this years: 244,085.  On May 11.2016 we had 368,855 contracts open.

We had 43 notice(s) filed upon today for 4300 oz

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And now for the wild silver comex results.  Total silver OI ROSE BY A HUGE 2,496 contracts FROM 193,587 UP TO 196,083  DESPITE YESTERDAY’S 18 CENT PRICE FALL. We again probably had  some attempted short covering by the banks which AGAIN did not succeed much.
We are in the active delivery month is MAY  Here the open interest LOST 42 contracts FALLING TO 232 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 85 notices filed on today, so we gained another 43 notices or an additional 215,000 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 for 8 straight days of the delivery cycle starting immediately after first day notice. No wonder JPMorgan is getting ready for a physical attack at the comex. I have never seen anything like this!!

The non active June contract GAINED 1 contracts to stand at 915. The next big active month will be July and here the OI strangely gained 1535 contracts up to 150,607.

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 39 notice(s) filed for 195,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 195,228 contracts which is fair

Yesterday’s confirmed volume was 284,239 contracts  which is very good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 10/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 97.995 oz
Brinks
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
43 notice(s)
4300 OZ
No of oz to be served (notices)
32 contracts
3200 oz
Total monthly oz gold served (contracts) so far this month
455 notices
45500 oz
1.4155 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month   47,886.3 oz
Today we HAD  0 kilobar transaction(s)/
total dealer deposits: nil oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
i) out of Brinks: 97.995 oz
total customer withdrawal: 97.995 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 43 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 (455) x 100 oz or 45500 oz, to which we add the difference between the open interest for the front month of MAY (75 contracts) minus the number of notices served upon today (43) x 100 oz per contract equals 48,700 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 (455) x 100 oz  or ounces + {(75)OI for the front month  minus the number of  notices served upon today (43) x 100 oz which equals 48,700 oz standing in this non active delivery month of MAY  (1.5147 tonnes).  We gained 35 contracts or an additional 3500 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/  1.5147 TONNES
total for the 17 months;  249.118 tonnes
average 14.6540 tonnes per month
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Total dealer inventory 915,933.163 or 28.489 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,928,630.798 or 277.71 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.71 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 10. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1065,161.970 oz
Brinks
HSBC
Scotia
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 1,201,541.490  oz
Scotia
No of oz served today (contracts)
 39 CONTRACT(S)
(195,000 OZ)
No of oz to be served (notices)
193 contracts
( 965,000 oz)
Total monthly oz silver served (contracts) 4231 contracts (21,155,000 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  4,847,667.0 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 3 customer withdrawal(s):
 i) Out of Brinks:  1018.410 oz
ii) out of HSBC: 462,195.640 oz’
iii) Out of Scotia:  600,956.920 oz
TOTAL CUSTOMER WITHDRAWALS: 1,065,161.970  oz
 We had 1 Customer deposits:
 i) into Scotia; 1,201,541.490 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
total customer deposits  1,201,541.490 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the MAY. contract month is represented by 39 contract(s) for 195,000 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 4231 x 5,000 oz  = 21,155,000 oz to which we add the difference between the open interest for the front month of MAY (232) and the number of notices served upon today (39) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4231(notices served so far)x 5000 oz  + OI for front month of APRIL.(232 ) -number of notices served upon today (39)x 5000 oz  equals  22,120,000 oz  of silver standing for the MAY contract month.
We actually gained another 43 contracts or an additional 215,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 22.12 million oz that are 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 8 trading 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 and the attacker is Sovereign China. 
 
 
Volumes: for silver comex
 
Today the estimated volume was 68,383 which is huge
Yesterday’s  confirmed volume was 77,021 contracts which is huge
(TODAY’S CONFIRMED. VOLUME OF 77,021 CONTRACTS EQUATES TO 385 MILLION OZ OF SILVER OR 55% 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:   198.071 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 7.3 percent to NAV usa funds and Negative 7.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.6%
cash .+0.1%( May 10/2017) 
 
2. Sprott silver fund (PSLV): Premium RISES TO   +.65%!!!! NAV (May 10/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.75% to NAV  ( May 10 /2017)
Note: Sprott silver trust back  into POSITIVE territory at +.65% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.75%/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 10/no changes in GLD inventory/inventory rests at 851.09 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.08 tonnes

May 8/no change in inventory at the GLD/Inventory rests at 853.08 tonnes

May 5/no changes in inventory at the GLD/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

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May 10 /2017/ Inventory rests tonight at 851.89 tonnes
*IN LAST 148 TRADING DAYS: 96.24 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 91 TRADING DAYS: A NET  31.19 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  56.53 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

May 8/no change in silver inventory at the SLV/inventory rests at 334.777 million oz/

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
May 10.2017: Inventory 338.610  million oz
 end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

The Dream of the Central Banker

The art world and artists have in the main not addressed one of the most important issues of our time – central banks foisting debt on the people and nations of the world and thereby controlling them.

An artist who has the knowledge and courage to look at and address the world of money, the dangers of monetary policies today and currency debasement on a scale that the world has never seen before is an Irish artist called Conor Walton.

The Dream of the Central Banker (Click painting to enlarge)

In the words of Conor himself:

“This picture (see above) refers to some of the larger monetary disorders of our time.

That economists occasionally come up with naïve images to represent their ideas has been a boon to cartoonists in the financial papers, and ‘helicopter money’ is surely among the best of them.

I think it’s about time the subject received the fine-art treatment.

This picture celebrates some of the madness of our times, with its ‘heroic’ central bankers and their delusions of control.

It is part of a series of paintings loosely titled ‘Asymmetrical Warfare’.

The Joker Wins Again (Click painting to enlarge)

This phrase sums up my entire career, but it has particular relevance to this current series of works because they deal explicitly with cultural conflict, with the crises of our times – political, ecological, financial, cultural and moral – and the warped perspectives that ensue.

These paintings represent a cultural battlefield. For me, they are a way of waging a small-scale war against modernity.

About twenty years ago, in my late twenties, I came to the conclusion that I really didn’t understand how the world worked: so much of what was going on made very little sense to me, particularly in the spheres of markets and finance.

So I went ‘back to school’ and tried to fill in the gaps in my understanding and overhaul my world-view. I emerged from that overhaul a ‘Doomer’.

Being a ‘Doomer’ is often cast in very negative terms, but I quickly discovered the positive side.

For a start, a couple of well-timed investments through GoldCoremade me money. But, more importantly, I found my sense of artistic vocation renewed: my job as a painter is now to show what I think is really going on in the world, to document our times in all their craziness.

My chief accomplices in this enterprise have been my young children. With their aid, and the aid of their toy monsters, action figures, fire-trucks, helicopters, half-deflated balloon-globes and all the other paraphernalia of childhood, I’ve been able to construct in my studio miniature tableaux; dramatic assemblies of figurines and objects that refer, explicitly and symbolically, to the ‘big picture’; the great events of our time.

I then paint these, using all the tricks of pictorial illusionism – composition, perspective, light and colour –  to render them as convincingly as possible.

Illusionism still has great artistic potential because reality is still something we find difficult and threatening.

I’ve heard it said that people can avoid facing reality, but they can’t avoid the consequences of not facing reality.

I think my work is very much bound up with these issues; with naturalism at one remove, with fantasy and disillusionment.

In our culture, to an historically unprecedented extent, affluence and industrial might have become weapons in a general war against reality, against nature.

Who’s going to win?”

Conor can be contacted and his art can be looked at Conorwalton.com 

News and Commentary

Gold inches up from 8-week low as dollar slips (Reuters.com)

Yen Strengthens With Gold on North Korea Concerns (Bloomberg.com)

Gold Gains In Asia As Trump’s Firing Of Comey Sparks Policy Concerns (SeekingAlpha.com)

Gold is “still a great hedge” against financial stress (Bloomberg.com)

Gold likely to appreciate to $1,400 an ounce by end of 2017 – CREDIT SUISSE (ScrapRegister.com)

Video: Gold likely to be supported by geopolitical uncertainties – SocGen (CNBC.com)

Key Moments That Led Up to FBI Director Comey’s Firing (Bloomberg.com)

A History of Central Banking – Journey to Keynesian “Excessive Power” (HiddenForcesPod.com)

Beware hedge fund celebrities “talking their book” in Asia (StansBerryChurcHouse.com)

U.S. is hosting a debt party – $2,000 gold coming (Mining.com)

end
the following will be of great interest to us:  the LBMA will report on their London gold vault holdings this summer.
(courtesy Ronan Manly./Bulllionstar)

Ronan Manly: LBMA says it will report London gold vault holdings this summer

Section:

10:08a ET Tuesday, May 9, 2017

Dear Friend of GATA and Gold:

Gold researcher Ronan Manly writes today that the London Bullion Market Association has announced plans to begin reporting this summer the volumes of gold held in its members’ vaults. Whether the total reported will be a mere aggregate or will include totals for individual LBMA members remains unclear. But the amount of gold supporting the enormous trade in gold derivatives will be of great interest to market analysts. Manly’s report is headlined “Summer of ’17: LBMA Confirms Upcoming Publication of London Gold Vault Holdings” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/ronan-manly/summer-17-lbma-confirms-im…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

END

Bill Murphy discusses the continual attacks on both gold and silver

(courtesy GATA/Bill Murphy)

GATA Chairman Murphy discusses increasingly desperate attacks on gold and silver

Section:

12:27a ET Wednesday, May 10, 2017

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy, interviewed by Dunagun Kaiser of Reluctant Preppers, discusses the increasingly desperate attacks on gold and silver in the futures markets and speculates on what they will lead to. The interview is a half-hour long and can be heard at You Tube here:

https://www.youtube.com/watch?v=omosksJRkTk&feature=youtu.be

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END



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

 
 

1 Chinese yuan vs USA dollar/yuan A LOT STRONGER  6.9028(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES A TOUCH WEAKER TO ONSHORE AT   6.9088/ Shanghai bourse CLOSED DOWN 27.72 POINTS OR .90%   / HANG SANG CLOSED UP 126.39 POINTS OR 0.51% 

2. Nikkei closed UP 57.09 POINTS OR 0.29%   /USA: YEN RISES TO 113.75

3. Europe stocks OPENED ALL IN THE RED EXCEPT LONDON       ( /USA dollar index FALLS TO  99.52/Euro DOWN to 1.0864

3b Japan 10 year bond yield: RISES TO   +.042%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.75/ 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::  46.41 and Brent: 49.23

3f Gold UP/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.401%/Italian 10 yr bond yield DOWN  to 2.234%    

3j Greek 10 year bond yield RISES to  : 5.66% ???  

3k Gold at $1223.75/silver $16.30 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 52/100 in  roubles/dollar) 57.89-

3m oil into the 46 dollar handle for WTI and 49 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 GOOD SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.75 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0071 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0941 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 FALLS to  +0.401%

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 2.372% early this morning. Thirty year rate  at 3.005% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Markets Thrown For A Loop After Comey’s Shocking Sacking

 

Just as the reflation trade appeared to be finding its latest wind, after a modest rise in oil prices over the past 24 hours (now that Andurand has finished liquidating his book) and a halt to the commodity rout in China, Trump threw the markets for a loop again with his firing of James Comey, which has implications on everything from Trump’s tax policy (most likely delayed due to more infighting between, and within, the two parties) to US geopolitics (will Trump launch another attack, this time against N. Korea to deflect from this scandal?)

There is no doubt that Trump is dominating proceedings this morning after the sacking of Comey. This is a political story rather than a market story, but yet again it creates uncertainty in the market, which leaves everything the president does with a cloud floating over it,” said James Hughes, chief markets analyst at GKFX in London, quoted by Reuters.

“The Comey news is being treated as a risk-off event, and the headlines were sparking the dollar’s move down,” said Bart Wakabayashi, branch manager for State Street Bank and Trust in Tokyo.

As a result it has been a chaotic, mostly “risk-off” overnight session, in which S&P futures, some Asian markets and European stocks (which yesterday hit the highest level since August 2015) declined on the latest spike in political uncertainty after Trump’s abrupt firing of Comey. The USD weakened vs G-10 peers; in Japan JGBs sold off across the curve after BOJ’s Kuroda acknowledged that QE purchases have become smaller. The USD/JPY fell in response to the latest belligerent North Korean rhetoric in which a North Korean ambassador told SkyNews his country will conduct a 6th nuclear test, the only question is when. In the other Korea, the Kospi opened higher, rising to new records after Moon Jae-in won the South Korean presidential vote, but then erased early gains as the won weakens.

In Europe, continued reaction to U.S. political fallout: Eurodollar and UST curves bull flatten; bunds also supported by dovish ECB paper on labor market slack. GBP/USD whipsaws after re-approaching 1.30 level, GBP crosses drive price action amid little news; crude futures hold gains after bullish API data overnight, energy stocks support. In China the PBOC resumed open market operations after three-day pause, at the same time weakening the yuan fixing to lowest since March 21, however disappointment over the latest China inflation data sent the Shanghai Composite to the lowest since October 17. Crude oil has been little changed; iron ore gains 1%. Australian government bonds rise for first time in five days after Tuesday’s federal budget is seen supporting AAA credit rating;

“All in all, this does not support the view that the U.S. Trumpflation trade faces an easy road ahead of it,” Michael Every, head of financial markets research at Rabobank Group in Hong Kong, wrote in a note. “It underlines that real surprises can pop up out of the box at any time right now.”

As a reminder, all this taxes place with the VIX in single digits, as the market has effectively assumed central banks have eliminated all risks.

While we have a more extensive list of overnight headlines below, these are the 6 main headlines that traders are focusing overnight on the BBG Terminal:

Key Headlines:

  • Trump fires FBI director James Comey, citing need to restore ’trust and confidence’
  • Pentagon urges North Korea to ’refrain from provocative actions and rhetoric’
  • ECB Analysis Paper: labor-market slack might be closer to 15%; this is likely to continue to contain wage dynamics
  • France March Industrial Prod. y/y: +2.0% vs +0.6% est.; Italy +2.8% vs +2.5% est.
  • BOJ’s Kuroda: annual JGB purchase rate is now approximately JPY60t
  • China April CPI 1.2% vs 1.1% estimate; PPI 6.4% vs 6.7% estimate
  • Kuroda: Watching effect of FX changes very carefully; weak yen boosts corporate profits

The dollar headed for the first drop in three days in the wake of Trump’s move, and after Federal Reserve Bank of Dallas President Robert Kaplan cast doubt on the pace of rate hikes in the world’s biggest economy. Treasuries advanced, while gold ended the longest run of losses since October. Roche Holding AG was the biggest drag on Europe’s Stoxx 600 Index after a cancer drug failed in a late-stage clinical trial. Oil climbed after the API reported a steep drop in US stockpiles, now extending for a fifth week. Today’s DOE report will be closely watched for confirmation.

The weakness across most markets comes in the wake of gains that sent global stocks to a record. Trump’s dismissal of Comey may threaten to undermine his administration as it attempts to move tax and spending plans through Congress, just as political risks ease in Europe and corporate earnings suggest the global economy is on the mend.

The European STOXX 600 index fell 0.2 percent, led down by construction and materials stocks, having hit its highest since August 2015 on Tuesday. Asian shares, excluding China, edged fractionally higher for a third consecutive day. MSCI’s main index of Asia-Pacific shares, excluding Japan rising 0.1 percent, having earlier matched a two-year high hit last week. The forward 12 month EPS for the index is at its highest level in more than three years. Tokyo shares hit a 17-month high, up 0.3 percent on the day as a relatively weak yen outweighed concerns triggered by Trump’s sacking of Comey.

In the red column, South Korean stocks led losers as investors took profits after liberal leader Moon Jae-in was elected president, while Chinese shares closed lower after factory gate prices ion the world’s second-biggest economy cooled more than expected in April.

The dollar fell 0.1 percent against a basket of major currencies after slipping on the view that political uncertainty could derail Trump’s tax reform plans, the prospect of which has helped lift riskier assets.

The yen, often sought in times of market uncertainty, was last 0.1 percent higher at 113.83 to the dollar. The euro was flat at $1.0870.

Falling U.S. Treasury yields also weighed on the dollar. Ten-year yields were down 3.1 basis points at 2.38 percent after retreating from five-week highs touched on Tuesday as investors made room in their portfolios for new issuance of government and corporate debt.

The most eye-catching move in euro zone government bond markets was a fall in Greek 10-year government yields to their lowest since its debt was restructured in 2012. Athens and its creditors reached a deal this month on reforms that could trigger the release of more rescue funds.

“There is a relief that Greece will get its disbursements to get through the summer, and that is the main driver of the bond rally,” ING’s senior rates strategist Martin van Vliet said.

Oil prices rose after Saudi Arabia said it would cut supplies to Asia and U.S. inventories fell more than expected. Brent crude was last up 51 cents at $49.24 a barrel. Gold rose 0.1 percent to $1,222 an ounce. U.S. inventories fell 5.8mm bbl in API data ahead of more definitive EIA statistics Wednesday. OPEC secondary sources said to see group’s output falling to 31.7m b/d in April. Forties pipeline flow restrictions said lifted. Shell discusses including Russian oil in Brent benchmark. U.S. inventory data due.  Libyan output rose above 800Kbpd.

Market Snapshot

  • S&P 500 futures down 0.2% to 2,388.75
  • STOXX Europe 600 down 0.2% to 394.96
  • MXAP up 0.3% to 150.23
  • MXAPJ up 0.1% to 490.00
  • Nikkei up 0.3% to 19,900.09
  • Topix up 0.2% to 1,585.19
  • Hang Seng Index up 0.5% to 25,015.42
  • Shanghai Composite down 0.9% to 3,052.79
  • Sensex up 0.8% to 30,179.51
  • Australia S&P/ASX 200 up 0.6% to 5,875.44
  • Kospi down 1% to 2,270.12
  • German 10Y yield fell 1.3 bps to 0.417%
  • Euro up 0.1% to 1.0886 per US$
  • Brent Futures up 0.8% to $49.14/bbl
  • Italian 10Y yield rose 3.7 bps to 1.986%
  • Spanish 10Y yield fell 1.0 bps to 1.611%
  • Brent Futures up 0.8% to $49.14/bbl
  • Gold spot up 0.2% to $1,223.49
  • U.S. Dollar Index down 0.2% to 99.43

Top Overnight News from Bloomberg

  • President Donald Trump fired FBI Director James Comey amid the agency’s investigation of Russian interference in last year’s election, saying the bureau needed new leadership to restore “public trust and confidence”
  • Qatar’s royal family asked Germany’s financial regulator for approval to boost its stake in Deutsche Bank AG to more than 10 percent, a signal it may be seeking greater control of Europe’s largest investment bank
  • Exxon Mobil Corp. and Petrobras have held talks on a strategic partnership that could involve multiple assets in Brazil and overseas in different segments of the industry, similar to the $2.2 billion deal signed with Total SA in December
  • West Corp. agreed to be acquired by Apollo Global Management LP in a deal valued at $5.1 billion including debt
  • Three interest rate hikes this year seeming more likely with market at ~80% odds of June boost, 40% for September
  • Comey Ouster Threatens to Backfire on Troubled Trump White House
  • Toyota Predicts Profit Drop on Stronger Yen, Plans Buyback
  • Axa Plans IPO in the U.S., May Return Money to Investors
  • Pret A Manger Said to Plan U.S. IPO as Owner Hires Banks
  • Exxon, Petrobras Said to Have Discussed Strategic Partnership
  • SoftBank Said Near Closing Technology Fund With $95 Billion
  • Goldman Sachs Executive Compensation Plan Targeted in Lawsuit
  • Credit Suisse Adding Jobs in N. Carolina as It Gets Tax Break
  • Disney CEO Says ESPN Looking at Program Changes, Mobile Growth
  • Apple Buys Sleep Monitoring Startup Beddit; No Terms Disclosed
  • Senate Schedules Vote to Roll Back Obama Methane Regulation

Asia equity markets slightly higher as the region shrugged off the indecisive lead from US, where stocks were pressured in late trade amid geopolitical concerns after provocative rhetoric from North Korea. ASX 200 (+0.5%) was choppy in early trade after the budget release as large banks suffered from the announcement of a AUD 6.2bIn levy. However, the financial sector then recovered as smaller banks welcomed exemptions from the levy which would only impact banks with liabilities of over AUD 100bIn. Nikkei 225 (+0.26%) benefitted from a weaker currency after USD/JPY briefly reclaimed 114.00 during US hours. KOSPI (-0.7%) initially extended on record highs on post-election euphoria, before the honeymoon period was abruptly cut short on profit-taking and as participants mulled the impact of the leftist win on the conglomerates. Shanghai Comp. (-0.9%) was initially kept afloat after the PBoC injected CNY. 110bIn through reverse repos and CNY 47.6bIn via its Pledged Supplementary Lending facility. 10yr JGBs were marginally lower amid the positive risk sentiment in the region, although losses were stemmed by the BoJ’s presence in the market for a total JPY 1.03trl in JGBs. BoJ Summary of Opinions for April 26th-27th meeting stated that Japan’s economy has been turning to a moderate expansion and is likely to maintain growth above potential mainly through fiscal 2018. BoJ also stated that CPI is likely to increase towards 2% and although prices are sluggish recently, they are likely to start increasing as the economy maintains its moderate expansion.

Top Asian News

  • China Sells Five-Year Government Debt at Highest Cost Since 2014
  • China Factory Price Gains Ease as Commodity Market Surge Abates
  • Moon Vows to Seek Peace With North Korea, Take On Companies
  • Kuroda Concedes Pace of JGB Buying Is Well Below BOJ Guideline
  • Regulatory Restrictions Loom Over 17 Indian Banks, Moody’s Says
  • Silk Road Lure Stokes Chinese Demand for Sri Lanka’s Bonds
  • TSMC Posts Lowest Monthly Sales Since 2014 Ahead of New iPhone
  • Hong Kong Stocks Rise to 2015 High as Shanghai Extends Losses
  • Japan Tobacco Falls Further Behind in Race for E-Cigarettes

European equities trade mostly lower (Eurostoxx -0.5%) in a continuation of some of the downbeat sentiment seen late in the US session which was initiated via inflammatory rhetoric from the North Korean Ambassador. Furthermore, markets are also placing some focus on President Trump’s decision to remove FBI director Comey and the potential political backlash given Comey’s involvement in the ongoing Russian investigation. In terms of sector specifics, losses are relatively broad-based with the only sign of green in Europe coming from the energy sector as WTI reclaimed USD 46.00 in the wake of last night’s API release with OPEC-related rhetoric relatively light thus far. From a fixed income perspective, markets have broadly benefitted from the general risk-aversion in the market place. Elsewhere, some desk have noted the recent FR/GE spread tightening and suggest that Asian investors have been capitalising on this front by selling shorter-dated French paper. Peripheral markets trade modestly tighter to the German benchmark with this largely attributed to a slight reversal of yesterday’s widening.

Top European News

  • ECB Says Slow-Declining Labor-Market Slack Poses Wage Hurdle
  • EON’s Disposal of Remaining Uniper Stake to Happen ‘Soon’: CEO
  • Italian Industrial Output Rises in Boost for Economic Recovery
  • EDF to Ask Macron for Helpful Rules for French Nuclear Fleet
  • Eni Generates Most Cash in 7 Quarters as Projects Prepared
  • ING’s Growth Push Away From Home Helps First-Quarter Profit Jump
  • Compass Group Investors Set for 1 Billion-Pound Cash Windfall
  • Pandora Extends Decline; Danske Says Transparency Has Weakened
  • TalkTalk Slides After Dividend Cut, Weaker Earnings Outlook

In currencies, the Bloomberg Dollar Spot Index lost 0.1 percent after climbing 0.4 percent Tuesday. The euro was little changed at $1.0869, while the pound gained 0.1 percent. A choppy morning in FX as traders push for some key levels in GBP; notably Cable into 1.3000, but as many have anticipated, some very strong offers up here, not least of all from option traders who have decent leverage up there. We have pulled back into the mid 1.2900’s since, but EUR/GBP is also under pressure, with M&A related flow also adding to the GBP bid this morning. Speculation that Unilever is to sell its spreads division has permeated through the market after some financing activity in the debt markets. Elsewhere, USD/JPY has had another look above 114.00, but fails to maintain a foothold as US Treasury yield tails off a little. Buyers have come back in from circa 113.75-80 as a rate path expectation have turned a little hawkish again. EUR/USD is still testing the 1.0850-80 support zone as USD bulls look to reinforce the upper hand. Some of the pressure looks to be coming through EUR/GBP as mentioned above.

In commodities, West Texas oil climbed 1 percent to $46.32 a barrel, resuming gains after dropping 1.2 percent on Tuesday. Copper erased earlier gains to trade 0.2 percent down at $5,501.50 a ton on the London Metal Exchange. Geopolitical concerns rear their ugly head again, with North Korea saying they will continue with their missile testing, whilst threatening to ‘turn’ US strategic assets to ‘ashes’. It is a modest reaction into the safe haven precious metals, which are taking a stronger lead from the USD, which is clearly on the front foot. Elsewhere, Oil prices are resisting selling interest, getting some temporary reprieve from the API report last night reporting a 5.8mln draw down in Crude. If DoE’s add some weight to these numbers, then we could see a little more than the modest upside seen since. Base metals continues to meander towards the recent lows, with Copper struggling below USD2.50.

Looking at the day ahead, we are due to get the April import price index reading (expected to print at +0.1% mom) and April monthly budget statement. Away from the data the Fed’s Rosengren is once again scheduled to speak, this time at 12pm ET while Kashkari speaks again at 1.20pm. ECB President Draghi is also due to address Dutch parliament at noon so worth keeping an eye on that. Away from this, US Secretary of State Rex Tillerson is due to meet with Russia Foreign Minister Sergei Lavrov today. The EU’s leader in the Brexit negotiations, Michal Barnier, is also due to answer questions on Brexit from Spanish lawmakers this afternoon.

  • US Event Calendar
  • 7am: MBA Mortgage Applications, prior -0.1%
  • 8:30am: Import Price Index MoM, est. 0.1%, prior -0.2%
    • Import Price Index ex Petroleum MoM, est. 0.1%, prior 0.2%
    • Import Price Index YoY, est. 3.6%, prior 4.2%
    • Export Price Index MoM, est. 0.2%, prior 0.2%
    • Export Price Index YoY, prior 3.6%
  • 2pm: Monthly Budget Statement, est. $179.0b, prior $176.2b deficit

Fed Speakers

  • 12pm: Fed’s Rosengren to Speak on Economy at Vermont Business Group
  • 1:20pm: Fed’s Kashkari Holds Q&A at Minnesota Business Ethics Awards

DB’s Jim Reid concludes the overnight wrap

I was casually flicking through the channels last night and was unlucky enough to stumble on the first semi-final of the Eurovision Song Contest. However in the brief moment I tuned in I was fortunate enough to see the act from Montenegro. It was a guy with what looked like a receding hairline but with a meter long plait on top of his head that was swung around aggressively during his performance. I really hope he made it through and if he did I am pretty sure he’ll beat the UK’s entrant on what is our first taste of the European public opinion on us Brits post the Brexit vote. I’m expecting a big backlash, if so.

If Montenegro was the excitement overnight, equity markets were the boredom. The S&P 500 (-0.10%) managed yet another sub +\- 0.20% close – the ninth in the last ten trading days. By our estimates this has only ever happened on 3 other occasions based on the history of S&P 500 returns back to 1928, all of which came in 1961. To best illustrate the lack of excitement yesterday the intraday range on the S&P 500 until the last hour of trading was an incredibly small 0.32%. Some North Korea headlines on Sky News at the close suggesting that a sixth nuclear test is imminent saw the index dip lower into the closing bell although the full story was a bit less clear as the details emerged.

Unsurprisingly given the above, measures of volatility continue to hover at or near historically low levels. After closing at 9.77 on Monday and the lowest since December 1993 (when it closed at 9.31), the index touched an intraday low of 9.56 yesterday before rising a bit into the close to finish at 9.96. Still, that is only the second sub-10 close of in 2017 and in fact as we noted yesterday you’d have to go all the way back to November 2006 to find the last time we had a sub-10 close. Yesterday was also the 11th day in a row that the VIX has closed below 11. That is a new record long streak for the index (with data going back to 1990). The previous record run was 10 days set back in 2006 while there have been 3 separate occasions where it’s managed this 9 times in a row. Over in Europe the VSTOXX closed down at 14.09 (-2.13%) and is slowly edging back towards its YTD lows in March. Equity markets in Europe were generally positive after rebounding from Monday’s post French election profit taking. The Stoxx 600 (+0.45%) closed at a 21-month high, while the CAC returned +0.28%.

There was one exciting milestone in equity markets yesterday however. Apple closed with a market cap of over $800bn ($803bn to be precise), the first US company to achieve such a feat. This time last year Apple’s market cap was ‘only’ $508bn. To put it in perspective, Alphabet (Google parent company) has the second largest market cap of any US company at $653m. Amazingly Apple’s market cap alone is about the same as the sum of the smallest 103 S&P 500 companies’ market caps.

Elsewhere, in bond markets yesterday European govies were under pressure with yields in the periphery 3-4bps higher. 10y Bund yields also edged up 1.4bps to 0.427% with the price action appearing to reflect a combination of the stronger day for risk and comments from Germany’s Finance Minister Schaeuble who suggested that normalization of ECB policy will start “shortly”. Treasury yields followed the move in Bunds (10y +1.1bps to 2.399%). Interestingly these moves came in the context of another leg lower for Oil with WTI closing below $46/bbl (-1.18%) again, although it has recovered somewhat this morning.

Over in Asia bourses are for the most part firmer this morning. The Nikkei (+0.30%), Hang Seng (+0.67%). Shanghai Comp (+0.15%) and ASX (+0.45%) are all up. The Kospi (-0.69%) is weaker although that partly reflects some strengthening in the South Korean Won after the country’s new president was sworn in earlier today. Meanwhile the latest inflation data was released in China this morning. Headline CPI in April has risen to +1.2% yoy (vs. +1.1% expected) from +0.9% in March, boosted by rising non-food prices. Meanwhile PPI has fallen back to a still elevated +6.4% yoy (vs. +6.6% expected) from +7.6%. That is  actually the slowest pace since December but still marks eight consecutive months of rising prices after 54 months of factory price deflation.

The other breaking news to report overnight is that of President Trump announcing that he has dismissed FBI Director James Comey. This comes in the midst of an investigation into contact between Russian officials and Trump’s presidential campaign. Trump confirmed that the bureau needs new leadership in order to restore “public trust and confidence”. One implication of this for markets could be that it distracts from some of the more market-focused reform progress that we’re still waiting for.

Moving on. There was another decent round of Fedspeak for investors to dig through yesterday, most of which was focused on the balance sheet debate. Rosengren said that the balance sheet normalization process won’t be disruptive and that the process itself should be “highly tapered”. The Boston Fed President did cite some concerns about the commercial real estate market however, saying that there could be a “potential and significant shock” should government-sponsored enterprises be required to reduce holdings of multifamily loans in the future. Meanwhile the Fed’s George reiterated her call for the Fed to begin shrinking reinvestments later this year, saying specifically that the process can start with reducing MBS and USTs then leaving runoff on “autopilot”. Late last night the Fed’s Kaplan said that he still views 3 rate hikes this year as appropriate.

In terms of the macro data yesterday, in the US the NFIB small business optimism reading printed at 104.5 in April (vs. 104.0 expected), albeit still at high levels relative to recent years. JOLTS job openings for March showed the number of vacancies as nudging higher and the quits rate holding steady at 2.1%. Finally wholesale inventories rose +0.2% mom in March which was an upward revision relative to the initial flash release. In Germany we learned that industrial production declined -0.4% mom in March which has lowered YoY growth to +1.9%. Over in France the Bank of France business sentiment reading was slightly higher in April at 104 from 103.

Looking at the day ahead, this morning in Europe it looks set to be fairly quiet with the only data of note being trade data and industrial production data in France. In the US this afternoon we are due to get the April import price index reading (expected to print at +0.1% mom) and April monthly budget statement. Away from the data the Fed’s Rosengren is once again scheduled to speak, this time at 5pm BST this evening, while Kashkari speaks again at 6.20pm BST. ECB President Draghi is also due to address Dutch parliament at noon so worth keeping an eye on that. Away from this, US Secretary of State Rex Tillerson is due to meet with Russia Foreign Minister Sergei Lavrov today. The EU’s leader in the Brexit negotiations, Michal Barnier, is also due to answer questions on Brexit from Spanish lawmakers this afternoon.

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 27.72 POINTS OR .90%  OR / /Hang Sang CLOSED UP 126.39 POINTS OR 0.51% .  The Nikkei closed UP 57.09 POINTS OR 0.29%/Australia’s all ordinaires  CLOSED UP .62%/Chinese yuan (ONSHORE) closed UP at 6.9028/Oil UP to 46.41 dollars per barrel for WTI and 49.23 for Brent. Stocks in Europe OPENED IN THE RED EXCEPT LONDON   ..Offshore yuan trades  6.9088 yuan to the dollar vs 6.9028 for onshore yuan. NOW  THE OFFSHORE IS A LOT STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS A LITTLE HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

SOUTH KOREA/

ii)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

Chinese stocks have fallen once again and this is accompanied by sell offs in the bond market as well. No doubt it is the deleveraging from the commodity fallout which is causing this fallout

(courtesy zero hedge)

 

Chinese Stocks Slide Again: One Trader Thinks It’s All About The Financial Deleveraging

After two days of disappointing macro data out of China, with trade numbers missing expectations on Tuesday following by another drop and miss in producer prices overnight, the “great decoupling” between China stocks and both the S&P500 as well as the rest of the world continued, and the Shanghai Composite dropped another 0.9% to 3,052 to the lowest level since mid-October. Gauges of industrial, utilities and materials shares fell the most on CSI 300 Index, while the ChiNext small-cap gauge droped 0.9%, while the divergence with offshore Chinese stocks continued: MSCI China +0.8%, set for highest close since July 2015. In short: it’s Chinese stocks against the rest of the world.

Furthermore, it’s not just stocks as China’s bond sell-off continued amid deleveraging concerns, leading China to sell five-year government debt at the highest cost since 2014.

To be sure, there have been various explanations for this ongoing decoupling, many of which were noted here previously, and most have to do with either China’s shadow bank crackdown, the ongoing monetary tightening by the PBOC, the recent plunge in commodity prices leading to accelerating margin calls and asset liquidations, and in general concerns about China’s record debt load.

Below we present yet another take, this time from Kyoungwha Kim, a reporter and markets blogger who writes for Bloomberg, who is of the view that “China’s Deleveraging Dominates Positive Fundamentals”

Macro View:

 

It’s likely the government’s drive to enforce financial deleveraging will outweigh all the positives which otherwise might have prompted a rebound in China’s equity market.

 

The Shanghai Composite has lost 1.2% in 2017 versus a 15% advance in the MSCI EM Index

 

So far there’s no sign of relaxation in its drive to quell financial leverage. China’s insurance watchdog is looking into insurers’ major investments in stocks and property, while the securities regulator is said to be conducting a nationwide scrutiny on brokerages’ malpractice.

 

China’s economy and earnings remain strong despite signs of moderation. Industrial companies’ profits jumped 24% in March from a year ago, extending a surge from the first two months of 2017.

 

Speculation about massive infrastructure projects has returned. President Xi Jinping, who proposed the “One Belt, One Road” initiative in 2013 to spur greater global economic integration, convenes a summit in Beijing next week, hosting 28 heads of state including Vladimir Putin. This plan, estimated by Credit Suisse to fuel investments worth as much as $502 billion into 62 countries over five years, is reviving speculation that SOEs will benefit.

 

Hopes for MSCI inclusion in June are still alive, after the number of mainland companies for inclusion was cut to 169 from 448. A positive decision would provide some fuel to a market suffering from a liquidity drought.

 

The positives may serve as a stabilizer to keeping the SHCOMP from breaking below 3,000, but they won’t be enough to catch up with the EM rally — unless the government alters its stance.

 

 

END

The plunge in commodity prices especially iron ore causes the Chinese producer prices to slide for the 2nd  month in a row.  PPI came in at 6.4% down from 6.8% last month and 8% from the start of 2107 as the bursting commodity bubble spills into their economy

 

(courtesy zero hedge).

 

Chinese Producer Prices Miss, Slide For Second Month As Burst Commodity Bubble Spills Over

With the entire world’s focused on the last remaining reflationary dynamo in the world, China, today’s inflation data out of Beijing, fabricated as it may be, was closely watched.  After all, just one month ago, UBS declared China‘s reflationary phase over, and a dark, deflationary era of negative credit impulse-driven deflation would soon be unleashed on the world. Again.

It wasn’t quite so dramatic.

After surging to almost 8% at the start of 2017, the fastest pace in 9 years, PPI declined for a second consecutive month, slowing to just 6.4% YoY in April, down 0.4% from March, and missing expectation, confirming (as if it was needed) that China’s commodity boom is now in the rearview mirror.  The accelerating producer price plunge has been all too obvious to those who have watched the recent crash (most recently previewed here) in Chinese iron ore and coal prices, which tumbled after rising sharply on a construction boom, or rather bubble, that drove China’s strongest economic growth since 2015.

At the same time consumer prices rose fractionally more than expected, although CPI remained at just 1.2% YoY, up from 0.9% in March. This was driven entirely by non-food inflation which jumped 2.4%, while food inflation plunged 3.5% from a year ago.

And in the backward logic of the “good is good and bad is great” world, the burst commodity bubble (declining PPI)  and lower purchasing power (rising CPI) allowed the  PBOC to be a little more generous with its liquidity, ending the three drought of no reverse repos, even if the central bank still drained a net of CNY80 billion today, and so Chinese stocks are higher… for now.

end

4. EUROPEAN AFFAIRS

A great look at what will be facing France and Germany with the election of Macron.  Macron wants a shared Eurobond i.e. a fiscal bonding whereby Germany accepts Italian risk.  He wants a European deposit insurance and most importantly wants Germany’s current account surplus to be lowered.  Good luck to him

 

(courtesy Mish Shedlock/Mishtalk)

 

“Zumutungen!” Buyer’s Remorse In France, Impossible Situation For Germany

Authored by Mike Shedlock via MishTalk.com,

Now that the cheering over the French election has died down, reality will strike France and Germany like a cold bucket of water thrown in one’s face on a Winter’s day.

Germany was guaranteed to not like the result no matter who won. The final choice was between an anti-EU Marine Le Pen and a budget-comingling Emanuel Macron who needs EU treaty changes to get what he wants.

And in France, buyer’s remorse has set in. Unions are already protesting against Emmanuel Macron’s policies.

Zumutungen!

The word of the day is Zumutungen. Google translates that from German as “impositions” but the actual meaning is quite a bit stronger according to Eurointelligence.

The German political establishment clearly favored Emmanuel Macron over Marine Le Pen during the election campaign, but they are nervous about Macron’s eurozone agenda. As FAZ notes this morning, the relief over his victory still weighs heavier than the reality – which is that Macron and Angela Merkel have diametrically opposed views on the future of the eurozone. Merkel yesterday confirmed her readiness to engage in a dialogue with Macron, but said that eurozone bonds are a no-go. And without Eurobonds – or other forms of a eurozone-level fiscal backstop – none of the Macron agenda would work.

 

The FAZ article uses a word for which there is no straight translation – “Zumutungen” – which means an excessive and immoral demand that one can conceivably not fulfil. The paper makes the point that François Hollande also favoured the same kinds of reforms, but let go when he realized that there was no support from Berlin. The article notes that Macron’s ideas go way beyond those of Hollande. His eurozone agenda is not about crisis resolution, but economic shock absorption in general, as evidenced by his ideas for a pan-European unemployment insurance. FAZ is appalled by all of this, as well as by Macron’s idea of a Buy-European act. The paper noted that the eurozone finance ministers, at their meeting in Malta, criticised similar ideas by the European Commission.

 

On day one after Macron’s election, there is a first taste of resistance in the form of street protests against his labor law reforms. Labor reforms have been a particularly traumatic experience for the outgoing government. The radical trade unionists are taking to the streets, while the more cautious headquarters warn against implementing the whole agenda.

Volcanic Forces on Germany

Telegraph writer Ambrose-Evans-Pritchard accurately states Volcanic Macron Forces Germany to Come Clean on its Real EU Agenda.

Emmanuel Macron’s lightning conquest of France has put Germany in an awkward spot. French voters have picked an apostle of Europe and an arch-defender of the Franco-German axis. While this is welcomed with jubilation by some in Berlin, it raises thorny questions that others would prefer left unanswered.

 

He plans Nordic labor reforms, easier collective bargaining rules, and the sort of tax shake-up that German leaders have long demanded. The quid pro quo is that Berlin must agree to eurozone fiscal union, and cut its corrosive current account surplus – now 8.6 percent of GDP and in breach of EU rules.

 

“If France is not reformed, we will not be able to regain the confidence of the Germans,” Mr. Macron told Ouest-France. “After that, Germany must ask whether its own situation is tenable. It is accumulating surpluses which are neither good for its own economy nor for the eurozone.”

 

He wants a eurozone finance minister and budget, with joint debt, and a banking union with shared deposit insurance, all legitimized by a new parliament for the currency bloc. It implies a unitary eurozone superstate.

 

This calls Berlin’s bluff. The German elites often argue that they cannot accept such radical proposals as long as other eurozone states scoff at budget rules and fail to put their house in order.

 

The Handelsblatt accused Mr. Macron of “Teuton-bashing” over the trade surplus. The German Council of Economic Experts holds defiantly to the national view that trade surpluses are proof of virtue. It sees EMU debt-pooling as a slippery slope towards a “Transferunion”.

 

Mr. Macron’s plans would require a new EU Treaty, opening a can of worms that several states are determined to avoid. Berlin has no intention of sharing Italy’s debts, whatever France does.

 

Germany’s top court says EMU fiscal union and debt-pooling would require a change to country’s constitution. “Politically, that is absolutely impossible,” said Heiner Flassbeck, former economy minister and now at Hamburg University.

 

France is split on deep lines cleavage, Balkanized five ways. The scale of Mr. Macron’s 66:34 victory on Sunday is misleading. Blank protest votes – “Neither Plague nor Cholera” – jumped threefold to 11.5pc. The abstention rate jumped six points to 25.4pc.

 

The Front National’s Marine Le Pen botched the final weeks of her campaign with confused messages over pensions and the French franc, but she still won 34 percent of the vote. Five years ago this would have been deemed impossible. We now shrug off earthquakes a little too lightly.

German Elections

Angela Merkel has recently surged in the polls vs. SPD candidate Martin Schulz.

Is there a fundamental reason for the shift?

Yes, Schulz is far more open to Macron’s views than is Angela Merkel. Despite the fact a majority of German citizens do not want Merkel, voters may be stuck with her as a counterbalance to more radical ideas that SPD may be willing to try.

Germany a Loser

I discussed much of this setup long ago, before the French primaries, on January 15, in Germany a Loser No Matter Who Wins?

Germany a Loser No Matter Who Wins?

 

  • Le Pen: Eurosceptic – Seeks better relations with Russia
  • Macron: Pro Europe but seeks a common eurozone budget for investment and financial assistance in case of shocks.
  • Mélenchon: A socialist who will not be in favor of reforms France desperately needs
  • Valls: After the 2016 Nice attack, he was booed for saying that “France will have to live with terrorism.”
  • Fillon: Fillon aims to reduce the public sector and cut 500,000 civil-service jobs.  He wants the state healthcare program (securité sociale) to work better with fewer payments. Fillon is in favor of increasing the retirement age to 65. He seeks better relations with Russia.

Of the five, Germany could work best with Fillon. But his pro-Russia stance poses at least a minor problem.

O Come, O Come Emmanuel

I ask again, Is Macron the Anti-Trump, European Obama Savior?

 

 

 

end

GREECE

Greek stocks are soaring for the past 12 days and the bond yields have dropped into the column percent column. What is strange is the fact that the demands of their creditors to cut pensions is unconstitutional according to their supreme court

 

(courtesy zero hedge)

Greek Stocks Soar To Longest Winning Streak Since ’99 (Despite Unconstitutional Bailout Demands)

The Greek stock market is up 12 days in a row – the longest streak since 1999 – with its 25% gains amongst the world’s best in 2017 following the bailout decision.

 

The last time Greek stocks were this overbought was September 1999 – which was followed by a 77% decline…

 

Furthermore, Greek bond yields have collapsed to post-crisis lows in the last weeks as everyone and their pet rabbit is sure the bailout is a done deal..

 

There’s just one thing… Greece’s highest court just decided that the pension cuts demanded by the creditors to secure the bailout are unconstitutional! As KeepTalkingGreece reports,

The Plenary of the State Audit Council has ruled that the cuts to main and supplementary pensions to be implemented in 2019 are against the Constitution and contravene the European Convention of Human Rights. Pension cuts are creditors’ top favorite austerity measure.

 

The pension cuts the government and its creditors have agreed on in the Supplementary Memorandum of Understanding on May 2 2017 will affect more than one million Greek pensioners who will see further cuts up to 18% in their main and the supplementary pensions respectively. The pensioners will suffer losses from 45 to 350 euros per month.The total annual loss could reach 3,000 euros, that is a loss of up to 2.5 to 3 monthly pensions per year.

 

Exempted from the cuts are neither low-pensions nor widow or invalidity pensions.

 

It will be the fourth or fifth cut in pensions since 2010 when the International Monetary Fund arrived in the country together with the first bailout.

 

The State Audit Council council also decided that the fiscal bill containing the pension cuts contravenes the Greek legislation as it has been tabled to the audit council without a relevant actuarial study.

 

Government sources told media that the decision of the State Audit Council is not binding and they refereed to a decision that the Council of State should take on the issue.

The Supplementary Memorandum of Understanding, a mixture of outstanding prior actions the government signed in the third bailout of 2015 and additional austerity measures for 2019-2020 is due to be voted in the Parliament on May 18.

 END

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Well that did not take long:  Turkey warns the USA as to their decision to arm the Syrian Kurds:  They consider it a crisis but they also gave Trump time to reconsider his decision or else..

 

(courtesy zero hedge)

Turkey Warns US Decision To Arm Kurd “Terrorists” Is A “Crisis”, Gives Trump Chance To “Reconsider”

Following yesterday’s news that the White House had radically changed its strategy involving Syrian military intervention, and that it had decided to provide weapons to Kurdish militants in the region, we were curious to see just how livid Turkey would be when it inevitably responded to Trump’s announcement. One day later we got the answer when the Turkish Defense Minister Fikri Isik was quoted by Reuters that the U.S. decision to provide weapons for Kurdish militants in the fight against ISIS “is a crisis” and warned it would not benefit the United States or the region.

 

Isik also said that Turkey should not be expected to support any potential operations in Syria involving “terrorist groups” which leaves open the question whether Turkey would prevent the US from using the critical for the region Incirlik air base, which is also ground zero for many US combat missions involving ISIS.  As expected, Turkey urged the United States on Wednesday to reverse the decision, saying every weapon supplied to the YPG militia constituted “a threat to Turkey”.

The decision to supply arms to Kurds would have “consequences” and a potentially “negative result” for Washington, warned Turkish Prime Minister Binali Yildirim warned on Wednesday.

“We cannot imagine [the US] making a choice between our strategic-level partnership and a terrorist organization,” Yildirim said, quoted by the Sabah daily. “The US administration still has a chance to consider Turkey’s sensitivities of highest level on the PKK. If the decision is taken otherwise, this will surely have consequences and will yield a negative result for the US as well.

Turkish Foreign Minister Cavushoglu also chimed in telling reporters that “if we support the territorial integrity of Syria, we should take lessons from the mistakes we made in Iraq and abstain from making any wrong moves. YPG and PKK are the same entity, there’s no difference between them,” Cavushoglu said, according to NTV broadcaster. “Every weapon which gets into their hands represents a threat to Turkey.”

A third warning came from Turkish Deputy PM Nurettin Canikli who told local TV station A Haber  that “we cannot accept the presence of terrorist organizations that would threaten the future of the Turkish state. “We hope the US will put a stop to this wrong and back down from it. This policy will not be beneficial to anyone; you can’t be in the same sack as terrorist organizations.”

Meanwhile, as Turkey was slamming Trump’s decision, the Kurds were praising it, saying it was a “historic” move that greatly expands the group’s capabilities to “fight terrorism.” By now everyone is aware that YPG is a US ally in Syria which Ankara perceives as an extension of the Kurdistan Workers Party (PKK), considered a terrorist group in both Turkey and the US.

Responding to the Turkish laments, U.S. Defense Secretary Jim Mattis said he was confident the United States would be able to resolve tensions with Turkey the decision. “We will work very closely with Turkey in support of their security on their southern border. It’s Europe’s southern border, and we’ll stay closely connected,” Reuters quoted Mattis on Wednesday.

It remains to be seen just how willing Turkey is to “resolve” tensions: an answer will emerge in the next few days when Erdogan is expected to fly to the US. Should he cancel this trip, the answer will be clear. Also, don’t stand below the Turkish Lira when any such news hits.

6 .GLOBAL ISSUES

7. OIL ISSUES

Both WTI and Gasoline jump after a huge crude inventory draw

(courtesy zerohedge)

WTI/RBOB Jump After Biggest Crude Inventory Draw Since 2016

WTI and RBOB have rallied since last night’s surprisingly large Crude draw (and gasoline build) reported by API, and DOE ata confirmed with inventory draws across the entire complex (including gasoline). WTIO and RBOB prices popped as Crude inventories dropped most since 2016 despite crude production rising above 9.3mm – highest since Aug 2015.

API

  • Crude -5.789mm (-2mm exp) – biggest since 2016
  • Cushing -133k (+60k exp)
  • Gasoline +3.169mm (+350k exp)
  • Distillates -1.174mm (-800k exp)

DOE

  • Crude -5.247mm (-2mm exp)
  • Cushing -438k (+60k exp)
  • Gasoline -150k (+350k exp)
  • Distillates -1.587mm (-800k exp)

Draws across the board with Crude inventories down most since Dec 2016

 

Gasoline demand is going against the seasonal norm… declining in the last few weeks when it should be surging iont summer driving season

 

 

U.S. crude production continued its steady rise, up 21,000 barrels a day to 9.314 million. That’s 12 consecutive increases, 13 in 14 weeks, and 14 in 16 weeks. Production now at the largest since August 2015.

As a reminder, Bloomberg notes that EIA bumped up its estimates and forecasts for U.S. crude production yet again in yesterday’s STEO report. It increased its April estimate by 20,000 b/d and May by 40,000 b/d compared with the previous month’s forecast. For Lower 48 onshore output, the increase was even bigger — 50,000 b/d for April and 60,000 b/d for May. It now sees output exceeding the April 2015 peak of 9.63 million barrels a day by November, a month earlier than before.

 

WTI and RBOB both rallied overnight (as the dollar sank) following the big API-reported crude draw, and extended their gaisn after DOE confirmed the draw…

end

8. EMERGING MARKETS

end

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

Euro/USA   1.0864 DOWN .0022/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 (EXCEPT LONDON)

USA/JAPAN YEN 113.75 UP 0.049(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 1.2940 DOWN .0007 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3707 DOWN .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 22 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0864; 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 27.72 POINTS OR .90%     / Hang Sang  CLOSED  UP 126.39 POINTS OR 0.51% /AUSTRALIA  CLOSED UP .62% EUROPEAN BOURSES OPENED IN THE RED EXCEPT LONDON

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED UP 57.09 POINTS OR 0.29%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 57.09 POINTS OR 0.29%  / SHANGHAI CLOSED DOWN 27.72 POINTS OR .90% /Australia BOURSE CLOSED UP .62% /Nikkei (Japan)CLOSED  UP 57.09 POINTS OR 0.29%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1224.45

silver:$16.29

Early TUESDAY morning USA 10 year bond yield: 2.372% !!! DOWN 2 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  3.005, DOWN  2  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 99.52 DOWN 14  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.396%  down 4  in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.042%  UP 1/5   in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.606%  down 2  IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.251 down 3  POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 676points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.4220% up 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.0872 DOWN .0014 (Euro DOWN 14 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 114.03 UP  .331 (Yen DOWN 33 basis points/ 

Great Britain/USA 1.2936 DOWN 0.0012( POUND DOWN 12 basis points)

USA/Canada 1.3655 DOWN 0.0053(Canadian dollar DOWN 53 basis points AS OIL ROSE TO $47.46

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This afternoon, the Euro was DOWN by 14 basis points to trade at 1.0872

The Yen FELL to 114.03 for a LOSS of 33 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 12  basis points, trading at 1.2936/

The Canadian dollar ROSE by 53 basis points to 1.3655,  WITH WTI OIL RISING TO :  $47.46

The USA/Yuan closed at 6.9032/
the 10 yr Japanese bond yield closed at +.042% UP 1/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2  IN basis points from MONDAY at 2.387% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.014 DOWN 2  in basis points on the day /

Your closing USA dollar index, 99,57 DOWN 4  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 41.35 POINTS OR .57%
German Dax :CLOSED UP 54.57 POINTS OR .43% 
Paris Cac  CLOSED UP 15.06 POINTS OR 0.26% 
Spain IBEX CLOSED  DOWN 47.10 POINTS OR 0.42%

Italian MIB: CLOSED  UP 58.85 POINTS/OR 0.27%

The Dow closed DOWN 32.67 OR 0.16%

NASDAQ WAS closed UP 8.56 POINTS OR 0.14%  4.00 PM EST
WTI Oil price;  47.46 at 1:00 pm; 

Brent Oil: 50.26 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.44 UP 97/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD REMAINS AT  +0.422%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 5:00 PM:$46.26

BRENT: $48.94

USA 10 YR BOND YIELD: 2.40%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.028%

EURO/USA DOLLAR CROSS:  1.0874 DOWN .0052

USA/JAPANESE YEN:113.97  UP 0.754

USA DOLLAR INDEX: 99.58  UP  52  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2931 : DOWN .0008  OR 8 BASIS POINTS.

Canadian dollar: 1.3723  up .0028(CAN DOLLAR DOWN 28 BASIS PTS)

German 10 yr bond yield at 5 pm: +.422%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Equity Traders ‘Buy The F**king Comey Dip’ As Treasury ‘VIX’ Tumbles

Even a so-called “constitutional crisis” can’t derail this market…

 

An extremely mixed day in stocks today – Small Caps soared, Dow dropped, Trannies tumbled, and Nasdaq and S&P clung green…

 

Dow suffered from Boeing and Apple…

 

The Dow remained below 21k… and S&P below 2400 – S&P 500 closes for the last 10 days (rounded to the big figure)… 2388, 2387, 2389, 2384, 2388, 2391, 2388, 2390, 2399, 2399, 2397, and 2399 today – and VIX below 10…

*VIX IS ‘INSANELY LOW’; SHOULD BUY IT IF COULD: GUNDLACH TO RTRS

 

This is another record for VIX – the 13th day in a row closing below 11…

 

A dismal 10Y Treasury auction (almost a 2bp tail) sparked notable weakness after 1300ET…

 

 

Despite the crappy auction, The MOVE Index – or Treasury “VIX”  – plunged to near its lowest since the Taper-Tantrum lows…

 

But there’s an odd ‘vol’ out…

 

Notably, European macro data surprises are soaring relative to the collapse in US macro data… which implies DAX will continue to outperform S&P…

 

*  *  *

Another day, another Treasury selling panic during the US day session…

 

Weak 10Y auction sent yields higher with 30Y once again closing above 3.00%…

 

The Dollar Index fell early on after comments from Wilbur Ross and on Comey…

 

JPY and EUR are the weakest on the week…

 

Gold and Silver clung top gains from an overnight spike on Comey headlines…

 

Bitcoin tumbled late yesterday but that was bid back up to record highs once again (at $1798)…

 

WTI and RBOB popped after big inventory draws…

 

Humpday Humor…

 

Finally, we did notice one thing – probably nothing for now – but volume sare shifting to out months in ED futures (as prices rise) suggesting – perhaps – some loss of faith in the June rate hike (but odds remain above 90%)

The Trump administration now admits that 3.% GDP growth is not attainable:

(courtesy zero hedge)

Trump Administration Admits 3.0% GDP Growth “Is Certainly Not Achievable This Year”

The U.S. economy will fall short of the Trump administration’s goal of 3 percent growth this year and will only achieve that when its regulatory, tax, trade and energy policies are fully in place, Commerce Secretary Wilbur Ross said on Tuesday.

The GDP target “is certainly not achievable this year,” Ross told Reuters in an interview. “The Congress has been slow-walking everything. We don’t even have half the people in place.”

In fact, the consensus does not see anything more than 2.3% GDP growth for the US economy out to 2020…

But optimism remains (as seen above in stocks), as Ross said it ultimately could be achieved in the year after all of Republican President Donald Trump’s business-friendly policies are implemented. He noted that delays were possible if the push for tax cuts was slowed down in Congress.

Finally, Reuters reports that when asked if he thought that the dollar’s strength was a problem for achieving U.S. trade goals Ross said:

“I don’t think it is so much that the dollar is too strong as that the other currencies are too weak.”

And whether it was Comey alone or some hangover from Ross, the dollar index has fallen since…

(courtesy zero hedge)

 

 

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