May 12/Gold advances by $3.80 and silver is up 21 cents/gold/ Another 2/369 million oz of silver added to the SLV/for the past 3 trading days: almost 6 million oz added/Retail sales a big miss in the uSA/

Gold: $1227.90  UP $3.80

Silver: $16.42  UP 21  cent(s)

Closing access prices:

Gold $1228.60

silver: $16.47

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

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

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

SHANGHAI FIRST GOLD FIX: $1238.76 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1226.50

PREMIUM FIRST FIX:  $12.26

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SECOND SHANGHAI GOLD FIX: $1239.72

NY GOLD PRICE AT THE EXACT SAME TIME: 1226.60

Premium of Shanghai 2nd fix/NY:$13.12

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LONDON FIRST GOLD FIX:  5:30 am est  $1227.90

NY PRICING AT THE EXACT SAME TIME: $1228.65

LONDON SECOND GOLD FIX  10 AM: $1231.25

NY PRICING AT THE EXACT SAME TIME. $1230.00

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  8 NOTICE(S) FOR 800 OZ. 

 TOTAL NOTICES SO FAR: 473 FOR 47300 OZ    (1.47122 TONNES)

For silver:

For silver: MAY

131 NOTICES FILED TODAY FOR 655,000  OZ/

Total number of notices filed so far this month: 4417 for 22,085,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

For 10 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 22.1 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  ROSE again BY a HUMONGOUS 6941  contracts UP to 206,767  WITH THE SLIGHT RISE IN PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (UP  8 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.034 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 131 NOTICE(S) FOR 655,000  OZ OF SILVER

In gold, the total comex gold ROSE BY A WHOPPING 9,220 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.50 with YESTERDAY’S TRADING). The total gold OI stands at 434,472 contracts.

we had 8 notice(s) filed upon for 800 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

Today: inventory rose by 2.369 million oz!!!!

THE SLV Inventory rests at: 340.979 million oz

it is also strange that during these past two weeks of torment, no silver left the silver vaults and now from May 10 until today almost 6 million oz has been added. However this would be a “paper” addition.

end

.

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

1. Today, we had the open interest in silver ROSE BY 6941 contracts UP TO 206,767, (AND NOW CLOSER TO  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), WITH THE SMALL  RISE IN PRICE FOR SILVER YESTERDAY (8 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 THURSDAY night/FRIDAY morning: Shanghai closed UP 22.01 POINTS OR .70%  OR / /Hang Sang CLOSED UP 30.79 POINTS OR 0.12% .  The Nikkei closed DOWN 77.65 POINTS OR 0.39%/Australia’s all ordinaires  CLOSED DOWN .72%/Chinese yuan (ONSHORE) closed UP at 6.9010/Oil DOWN to 47.73 dollars per barrel for WTI and 50.64 for Brent. Stocks in Europe OPENED IN THE GREEN    ..Offshore yuan trades  6.9036 yuan to the dollar vs 6.9010 for onshore yuan. NOW  THE OFFSHORE IS  STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE BIT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA IS A LITTLE HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

The 5 yr Chinese bond yield inverts to the 10 yr signalling trouble with Chinese finances
( zero hedge)

4. EUROPEAN AFFAIRS

UK

This is not good:  hospitals across England go dark after a massive cyber attack.  The hackers now demand ransom

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

i)CANADA

Your classic definition of a bank run:  94% of Home Capital depositors have withdrawn their money!!!

( zerohedge)

ii)CONGO

A new EBOLA outbreak in the Congo:

( zero hedge)

7. OIL ISSUES

i)Bloomberg’s oil expert Mark Cudmore paints for us the real picture of oil and it is far move negative than other reports

( Mark Cudmore/Bloomberg)

ii) Rig counts rise again for the 17th straight week as crude production again approaches record highs’

( zero hedge)

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)A very important commentary from Ronan Manly.  The SGE in 2016 records a huge 24,000 tonnes of gold trading whereby all of their trades were settled in physical gold.  The London’s LBMA is several times the volume but little  physical.  At the comex only 222 tonnes of gold was delivered upon or .01% of all trading

( Ronan Manly/Bullionstar)

ii)Gold demand in China remains quite elevated.  SGE withdrawals which equals demand for April came in at 171 tonnes or 41.7 tonnes per week which is extremely good.

( Lawrie Williams/Sharp’s Pixley)

iii) Ted Butler expects that in the next run up in silver jPMorgan will not be providing the short paper

(courtesy Ted Butler)

10. USA stories

i)Retail sales records a big miss at .4% year over year and it is growing this quarter at its slowest pace so far this year.

Now we await revisions to 2nd quarter GDP

( zero hedge)

ii)The 1.9% rise in core consumer prices came in much weaker than expected.

( zero hedge)

iii)Trump corrects tweets that Russia is laughing as the USA tears itself apart. He also cancels a trip to FBI headquarters due to the fact that he probably would not have received a warm welcome

( zero hedge)

 

Let us head over to the comex:

The total gold comex open interest ROSE BY A HUGE 9,941 CONTRACTS UP to an OI level of 434,472 WITH THE  RISE IN THE PRICE OF GOLD ( $4.50 with YESTERDAY’S trading).   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 0 contract(s) remaining at  42. We had 10 notices filed yesterday so we GAINED 10 contracts or an additional 1000 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 14,035 contracts DOWN to 218,723.  The non active July contract GAINED another 87 contracts to stand at 468 contracts. The next big active month is August and here the OI gained 19,954 contracts up to 119,322.

To give you a good idea of the devastation of open interest contracts, last year on May 11 2016 we had at this exact time:    346,941 contracts of JUNE 2016 CONTRACTS OPEN.( compared to JUNE 2017: 222,689)

We had 8 notice(s) filed upon today for 800 oz

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And now for the wild silver comex results.  Total silver OI ROSE BY A HUGE 6941 contracts FROM 196,083 UP TO 206,767  DESPITE YESTERDAY’S TINY 8 CENT PRICE GAIN. We again probably had  some attempted short covering by the banks which AGAIN FAILED MISERABLY.
We now know for certainty that private EFP contracts are given by the bankers when faced with an upcoming active delivery month.  We just do not know the makeup of that private deal.  It is my contention that the longs in silver at the end of April were given a fiat bonus plus a long “in the money” call for a  future May contract or a July contract. They were told not to exercise for a new contract until at least the first week of May is over so it would not look like a paper settlement which in reality it surely is.
So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred but replaced with a future contract with some bonus money for theie effort. No doubt by the end of May, the open interest in the silver contract month will be close to the OI we had around mid April/2017.
We are in the active delivery month is MAY  Here the open interest LOST 26 contracts FALLING TO 204 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 55 notices filed yesterday, so we gained another 29 notices or an additional 145,000 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 10 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 29 contracts to stand at 950. The next big active month will be July and here the OI  gained 5,105 contracts up to 157,693.

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 131 notice(s) filed for 655,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 108,234 contracts which is poor

Yesterday’s confirmed volume was 306,564 contracts  which is very good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 12/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
25,720.300  oz
HSBC
Scotia
(800 kilobars)
Scotia
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
8 notice(s)
800 OZ
No of oz to be served (notices)
34 contracts
3400 oz
Total monthly oz gold served (contracts) so far this month
473 notices
47300 oz
1.47122 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   76,017.9 oz
Today we HAD  2 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 2 customer withdrawal(s)
i) out of Scotia: 16,075.000 oz
500 kilobars
ii) Out of HSBC: 9645.300 oz
300 kilobars
total customer withdrawal: 25,720.300 oz
800 kilobars
 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 8 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 (473) x 100 oz or 47300 oz, to which we add the difference between the open interest for the front month of MAY (42 contracts) minus the number of notices served upon today (8) x 100 oz per contract equals 50,700 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 (473) x 100 oz  or ounces + {(42)OI for the front month  minus the number of  notices served upon today (8) x 100 oz which equals 50,700 oz standing in this non active delivery month of MAY  (1.5769 tonnes).  We gained 10 contracts or an additional 1000 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/  1.5769 TONNES
total for the 17 months;  249.4910 tonnes
average 14.675 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) = 8,900,499.248 or 276.84 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 276.84 tonnes for a  loss of 26  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 12 MONTHS  77 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
MAY INITIAL standings
 May 12. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
175,760.44 oz
Brinks
Scotia
Deposits to the Dealer Inventory
311,966.840 oz
CNT
Deposits to the Customer Inventory 
 287,305.590  oz
CNT
No of oz served today (contracts)
 131 CONTRACT(S)
(655,000 OZ)
No of oz to be served (notices)
73 contracts
( 365,000 oz)
Total monthly oz silver served (contracts) 4417 contracts (22,085,000 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  5,066,797.5 oz
today, we had  1 deposit(s) into the dealer account:
 i) Into CNT: 311,966.840 oz
total dealer deposit: 311,966.840  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
 i) Out of Brinks:100,282.400 oz
ii) Out of Scotia: 75,478.040 oz
TOTAL CUSTOMER WITHDRAWALS: 175,760.440  oz
 We had 1 Customer deposits:
i) Into CNT: 287,305.590 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  287,305.590 oz
 
 we had 1 adjustment(s)
i) out of CNT:  133,266.460 oz was adjusted out of the customer and this landed into the dealer account of CNT
The total number of notices filed today for the MAY. contract month is represented by 131 contract(s) for 655,000 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 4417 x 5,000 oz  = 22,085,000 oz to which we add the difference between the open interest for the front month of MAY (204) and the number of notices served upon today (131) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4417(notices served so far)x 5000 oz  + OI for front month of APRIL.(204 ) -number of notices served upon today (131)x 5000 oz  equals  22,450,000 oz  of silver standing for the MAY contract month.
We actually gained another 29 contracts or an additional 145,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 22.45 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 10 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 33,660 which is fair
Yesterday’s  confirmed volume was 74,057 contracts which is huge
(TODAY’S CONFIRMED. VOLUME OF 74,057 CONTRACTS EQUATES TO 370 MILLION OZ OF SILVER OR 53% 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:  33.986 million (close to record low inventory  
Total number of dealer and customer silver:   198.451 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
At 3:30 pm est we receive the COT report

Let’s head over to the gold cot

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
236,115 86,109 46,859 104,960 269,382 387,934 402,350
Change from Prior Reporting Period
-39,917 -289 4,822 5,906 -33,658 -29,189 -29,125
Traders
157 103 89 46 53 244 211
 
Small Speculators  
Long Short Open Interest  
45,099 30,683 433,033  
317 253 -28,872  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, May 09, 201
Our Large Speculators:
those  large speculators that are long in gold pitched a gigantic 39,917 contracts from their long side
those large speculators that have been short in gold covered a tiny 289 contracts.
Our commercials;
those commercials that have been long in gold added 5906 contracts to their long side
those commercials that have been short in gold covered a huge 33,658 contacts.
Our small specs:
those small specs that have been long in gold added 317 contracts to their long side
those small specs that have been short in gold added 253 contracts to their short side.
Managed Money (hedge funds)
these guys are a subset of the large specs/or some small specs
Hedge funds who have been long in gold pitched a gigantic 43,912 contracts from their long side and they added 3737 contracts to their short side and thus going net short by 47,649 contracts.
Conclusions:
I am now 99.9% sure of my theory that the EFP’s are disturbing the gold COT report.
Firstly, the large specs go net short by 39,628 (39,917 -289) and of that subset, the hedge funds went net short by 47,649 contracts.
The commercials go net long by 27,752.
these figures are terribly imbalanced by EFP’s issued by the bankers to the longs for their long contracts.  As you see, the open interest rapidly declines by 39,917 contracts but these guys receive a future contract (probably in the 2nd week) and eventually the open interest rises.
More many years, I thought the COT report was a fraudulent report and now it makes no sense describing the details as long as there are huge numbers of EFP’s issued
And now our Silver COT:
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
94,982 41,327 22,955 48,400 117,669
-6,556 11,156 6,497 4,669 -12,636
Traders
100 50 47 41 36
Small Speculators Open Interest Total
Long Short 196,083 Long Short
29,746 14,132 166,337 181,951
2,233 1,826 6,843 4,610 5,017
non reportable positions Positions as of: 158 119
Tuesday, May 09, 2017   © SilverSeek.
Our large specs:
those large specs that have been long in silver pitched a large 6556 contracts.
those large specs that have been short in silver added 11,156 contacts to their short side???
Our commercials:
those commercials that have been long in silver added 4669 contracts to their long side
those commercials that have been short in silver covered a smaller than expected 12,636 contracts
Our small specs:
those small specs that have been long in silver added 2233 contracts to their long side
those small specs that have been short in silver added 1826 contracts to their short side.
managed money (hedge funds)
those hedge funds which have been long in silver  pitched 10,240 contracts from their long side and covered 11035 contracts from their short side so the hedge funds  went net long by 795 contracts.. (compare this to gold???)
conclusions:
commercials go net long by 7967 contracts but did not take out the hedge funds who also stayed net  long.
This was up to May 9.2017.
as you can see the EFP’s in silver did not distort when compared to gold and as such we are witnessing the resultant action in silver. The commercials covered only 12,636 contracts of their shorts. Compare that to gold and you can see the problem that the bankers face in silver. Up to May 9 the bankers did not issue any EFP’s for the May contract month, and thus could not cover as much as they wanted to.

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.7 percent to NAV usa funds and Negative 6.7% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.4%
cash .+0.1%( May 12/2017) 
 
2. Sprott silver fund (PSLV): Premium FALLS TO   +.25%!!!! NAV (May 12/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to -0.58% to NAV  ( May 12 /2017)
Note: Sprott silver trust back  into POSITIVE territory at +.25% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.58%/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 12/no changes in GLD/inventory rests at 851.09 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.09 tonnes

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
May 12 /2017/ Inventory rests tonight at 851.89 tonnes
*IN LAST 150 TRADING DAYS: 96.24 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 93 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 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

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 12.2017: Inventory 340.979  million oz
 end

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

History of Gold – Interesting Facts and Changes Over 50 Years

By Mark O’Byrne May 12, 2017

Thomson Reuters GFMS have compiled an interesting high level history of the gold industry in the last fifty years.

Topics covered and interesting historical facts to note include:

– Gold market size
– Gold mine production “peaked in 2015”
– South African production collapse from 1,000 tonnes
– South African gold was flown to London and Zurich and an airliner had its own designated landing areas at Heathrow where gold moved directly from the place to
secure vaults
– It may still do – that is shrouded in secrecy!
– Political concerns in France in 1968 saw massive demand
– Strong demand in Japan in late 1980s when insurance companies were investing up to 3% of portfolios in gold
– Record demand in the wake of the financial crisis
– Investment in gold – Coin and bar demand rising globally
– Massive uptake of bullion in the Far East, especially China
– History of gold shows gold’s continuing importance as safe haven asset

Demand for physical gold investment. Source: GFMS Gold Survey

GFMS Gold Survey is recognized as an important source of information on developments in the gold market and have celebrated the Gold Survey’s 50th anniversary, by conducting a high-level look at the history of the gold market in the past half century.

Access How the gold industry has changed over 50 years here

http://www.goldcore.com/us/gold-blog/history-gold- facts/

 

END

 

A very important commentary from Ronan Manly.  The SGE in 2016 records a huge 24,000 tonnes of gold trading whereby all of their trades were settled in physical gold.  The London’s LBMA is several times the volume but little  physical.  At the comex only 222 tonnes of gold was delivered upon or .01% of all trading

(courtesy Ronan Manly/Bullionstar)

Ronan Manly: Astounding increase in trading on Shanghai Gold Exchange in just 3 years

Section:

9:55p ET Thursday, May 11, 2017

Dear Friend of GATA and Gold:

Gold researcher Ronan Manly today reports on the astounding increase in trading on the Shanghai Gold Exchange in its first three years, more astounding because the People’s Bank of China does not buy gold there but in markets where the purchases can be more easily concealed. Manly’s report is headlined “SGE Trading Volumes Surged by 43% in 2016 Led by OTC and Deferred Trading” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/ronan-manly/sge-trading-volumes-surged…

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

END

 

Gold demand in China remains quite elevated.  SGE withdrawals which equals demand for April came in at 171 tonnes or 41.7 tonnes per week which is extremely good.

(courtesy Lawrie Williams/Sharp’s Pixley)

 

LAWRIE WILLIAMS: China Gold Demand Holding Up Well. May even be better still

The latest published figures for Shanghai Gold Exchange (SGE) gold withdrawals for this year show that gold demand, as represented by the gold withdrawal figures, is holding up well, but the official cumulative figure for year to date withdrawals suggests that this demand could be even stronger! There is something of an anomaly in the officially reported cumulative figure which is somewhat in advance of the calculated figure from the month by month figures as shown in our table. There appear to have been no adjustments made to prior months’ figures, so it will be extremely interesting to see how these cumulative figures progress in future months.

Either way, 2017 figures remain higher than at the same time last year, but lower than the record gold withdrawal figures of 2015. We hope to get an answer on the anomalous cumulative figures in the SGE’s latest Data Highlights table, from which the withdrawal figures are taken, but we’re not holding our breath! However given anecdotal comment coming in there has to be a good chance that the cumulative figure, as quoted in the SGE’s own table is correct (See footnote to our table).

There is some dissension among analysts as to whether or not SGE gold witdrawal figures are a true representation of Chinese gold absorbtion or not, but we have shown in the past that the cumulative total of known Chinese gold imports, plus China’s own gold production, plus an estimate for scrap supply come out much closer to SGE withdrawal figures than other estimates of Chinese gold consumption.

Table: SGE Monthly Gold Withdrawals (Tonnes)

Month 2017 2016 2015 % change 2016-2017 % change 2015-2017
January 184.41 225.08 255.42 – 18.1% -27.8%
February* 179.24 107.60 156.36 +66.6% +14.6%
March 192.25 183.24 213.35 +4.9% -9.9%
April 171.17 171.40 195.45 -0.13% -12.4%
May 147.28 162.15
June 138.51 195.67
July 117.58 285.50
August 144.44 265.27
September 170.90 259.98
October 153.25 176.29
November 214.72 202.71
December 196.37 228.21
Year to date 727.07** 687.02 820.58 +5.8% – 11.4%
Full Year 1,970.37 2,596.37

Source: Shanghai Gold Exchange, Lawrieongold.com

*February figures always distorted by Chinese New Year holiday

** Cumulative figure from month-by-month reports. The cumulative year-to-date figure as reported by the SGE is a rather higher 771.93 tonnes which is 12.4% up on the same time last year and only 5.9% below the record 2015 figure.

 

Re the SGE’s impact on global markets we should draw attention to some analysis by Ronan Manly as reported on www.bullionstar.com . Manly notes that “The growing influence of the Shanghai Gold Exchange (SGE), the world’s largest physical gold exchange, is a topic familiar to many. So it is not surprising that trading volumes at the SGE continued their dramatic rise in 2016, with a record 24,338 tonnes of gold traded across physical delivery and deferred settlement contracts. Volumes in 2016 were a staggering 43% higher vis-a-vis the 17,033 tonnes traded on the SGE during 2015, which itself was a strong year, since 2015 volumes were 84% higher than the 9,243 tonnes of gold traded at the Exchange in 2014. See ” SGE Gold Trading Volume 2015 Up 84 % Y/Y Due To International Board” for more information about the 2015 volumes. Therefore, in the space of three calendar years, the SGE has seen total trading volumes nearly triple, which is quite an achievement by any standard.”

My colleague, Julian Phillips, writing on www.lawrieongold.com noted that the Shanghai Exchange may well now be leading the way in terms of gold price setting. It comes in between New York’s close and London’s opening and has the potential given the volumes of gold traded, as noted by Ronan Manly above, to guide the price direction of the other major price-setting markets. Certainly today, with Shanghai trading at Yuan 275.60 (equivalent to around $1,236.50) it certainly seems to have set the stage for the rise in the gold price in Europe this morning (At the time of writing gold was trading at around $1,230 compared with yesterday’s New York close at $1,224). Where New York will take the price today remains to be seen, but it has opened in line with the London price.

https://www.sharpspixley.com/articles/lawrie-williams- china-gold-demand-holding-up-well-may-even-be-better- still_267418.html

-END-

Ted Butler expects that in the next run up in silver jPMorgan will not be providing the short paper

(courtesy Ted Butler)

Expecting the Unexpected

Theodore Butler |

May 12, 2017 – 11:48am

 

I am convinced that silver will soon explode in price in a manner of unprecedented proportions, both in terms of previous silver rallies and relative to all other commodities. By unprecedented, I mean that the price of silver will move suddenly and shockingly higher in a manner never witnessed previously, including the great price run ups in 1980 and 2011. The highest prior price level of $50 will quickly be exceeded.

By “soon”, I mean that the move can commence at any time, but more likely before many weeks or months have gone by. I know that the price of silver has been declining on a daily basis nonstop for three weeks now, itself an unprecedented move, but I also know the reason for the decline and how the sharply improved COMEX market structure has always guaranteed a rally in a reasonable period of time. The only question is whether on the next silver price rally will JPMorgan add aggressively to its COMEX short positions. I’m suggesting JPMorgan is not likely to add to short positions on the next rally.

At the heart of the unprecedented move higher in the price of silver is the manner in which it will occur. It will be a price move like no other. It will be the greatest short covering rally in history. That’s guaranteed because the COMEX silver short position is the largest and most concentrated short position in history. There is no buying force in the financial markets more powerful than panicky buying by those forced to cover short positions. The largest short position ever holds the potential for the greatest short covering rally ever. For more than 30 years, COMEX silver futures have had the largest short position of any commodity in terms of real world production and inventories. Yet while silver prices have had some notable rallies over the decades, none have included a genuine short covering panic. In fact, the uniquely large and concentrated nature of the COMEX silver short position (meaning it is held by just a few traders) is the mechanism by which silver has been manipulated in price all these years.

The concentrated short position in COMEX silver futures and the price manipulation are one and the same. All price manipulations must come to an end. In silver that means that at some point the concentrated COMEX short position no longer increases, but instead gets covered for the first time on rising prices. The main reason is a subtle yet distinct change in the composition of the big concentrated short position in COMEX silver.

JPMorgan has amassed a physical stockpile of silver of at least 600 million ounces by my calculations at an average cost of around $20 an ounce, all while continuing to make hundreds of millions of dollars in manipulative COMEX short selling. This epic accumulation has changed the composition of the concentrated COMEX short position more than any single factor.

No longer is the largest COMEX silver short subject to extreme financial damage should silver prices explode. Instead, JPMorgan has pulled off the accumulation of the largest silver hoard in world history on declining prices. The bank has never been better positioned for a silver price explosion. In other words, there has never been a better time, from the selfish perspective of JPMorgan, for the price of silver to rip higher or a worse time for the other big shorts. And the recent deliberate price takedown has further reduced JPMorgan’s COMEX short position, greatly enhancing the prospects that JPMorgan won’t be adding to its COMEX short position whenever the next silver rally gets rolling.

Should JPMorgan not add to its COMEX short position on the coming silver price rally, then it will be only a matter of time before the remaining big COMEX shorts wake up to the fact that they are toast. By “a matter of time” I am referring to days and weeks. When silver prices rise sufficiently, the remaining shorts will panic and begin to try to cover their short positions. This buying will send silver prices skyward and then touch off all sorts of other buying, including investment buying and then industrial user buying, perhaps the most potent buying of all. The best analogy I can come up with is an atomic bomb on top of a hydrogen bomb on top of a neutron bomb.

The big shorts, apart from JPMorgan, appear to be mostly foreign banks according to CFTC data. The speculating foreign banks are precisely the type of short sellers most likely to panic when silver prices start to rally and it begins to take hold on them that JPMorgan is no longer the shorts’ protector and short seller of last resort.

Even after the recent selloff, the short position in COMEX silver is still at astronomically high levels relative to all other commodities. The seven biggest shorts (ex JPM) are still short around 350 million ounces (70,000 contracts). It is impossible to imagine such an amount being purchased except at prices $20 to $30 higher, at a minimum.

Then other forces will kick in, such as ETF buying, which has largely been somnolent for the past six years. On a rally where silver prices jump to $20 or $30, it would not be unreasonable to imagine $2 to $3 billion of investment demand coming from investors excited by rising prices. That’s not much of an investment in dollar terms, but it happens to equate to 100 million ounces of physical silver. I have trouble visualizing where that much silver would come from, particularly when this physical demand would likely occur as the seven big banks (dead men walking) are buying back in a panic. Then add buying by industrial users who face delivery delays caused by investment buying.

The whole silver manipulation has become more obvious than ever, particularly this last deliberate selloff. The concentrated short position hit an all-time extreme a few weeks back on a rally to only $18.50 – the largest such short position at the lowest price ever. You have to ask where this thing is headed. How much longer can a manipulation last that is obvious to more observers than ever before? The name of the biggest manipulator is openly called out and the primary regulator can’t address the most basic questions about the illegal nature of the biggest bank in America holding the price of silver down on paper while it scoops up a huge hoard of physical silver. Something has to give soon and when it does, it will go down in history.

Ted Butler

May 12, 2017

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

 
 

1 Chinese yuan vs USA dollar/yuan A LITTLE STRONGER  6.9010(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES A TOUCH STRONGER TO ONSHORE AT   6.9035/ Shanghai bourse CLOSED UP 22.01 POINTS OR .72%   / HANG SANG CLOSED UP 30.79 POINTS OR 0.12% 

2. Nikkei closed DOWN 77.65  POINTS OR 0.39%   /USA: YEN FALLS TO 113.80

3. Europe stocks OPENED ALL IN THE GREEN        ( /USA dollar index FALLS TO  99.63/Euro UP to 1.0875

3b Japan 10 year bond yield: FALLS TO   +.047%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.80/ 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::  47.97 and Brent: 50.45

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.416%/Italian 10 yr bond yield DOWN  to 2.288%    

3j Greek 10 year bond yield RISES to  : 5.67% ???  

3k Gold at $1228.60/silver $16.37 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 17/100 in  roubles/dollar) 57.24-

3m oil into the 47 dollar handle for WTI and 50 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 SMALL SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.80 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  1.0075 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0957 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  +0.416%

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 2.377% early this morning. Thirty year rate  at 3.017% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Markets All Too Quiet Ahead Of Inflation, Retail Sales Data

 

Asian stocks and S&P futures are both feeling the weather this morning, while European stocks are little changed as traders have decided to hold back until today’s key US CPI and retail sales data is released in under two hours.

Commodities have posted another modest rebound, driven by a rise in metal prices that has helped ease a China-led rout even as oil traded modestly in the red. The Bloomberg Commodity Index rose for a third day, recovering from a 16-month low on May 9.

A dip on Wall Street overnight on signs of weak consumer spending and waning enthusiasm over the recovery in European corporate earnings has put MSCI’s gauge of world stock markets on track for its first weekly loss in four. “We’ve had a nervous twitch about China, over this week,” said Sean Darby, chief global equity strategist at Jefferies told Reuters. “We’ve had a bit more of a regulatory overhang coming through in the financial system.”

China’s banking regulator this week launched yet another emergency risk assessments of lenders’ new business practices, as Beijing extends its crackdown on shadow banking.  Meanwhile, with corporate earnings seasons in the U.S. and Europe drawing to a close investors, focus is likely to shift back to central banks, particularly in the United States, where inflation pressures are growing.

Massively overbought European stocks continue to struggle for direction after the biggest, if relatively modest, drop in three weeks on Thursday as investors assessed global earnings and mixed U.S. economic data.  As a result, European stock markets steadied this week after a torrid rally in recent weeks. Company profits are expected to grow 20 percent in the first quarter, the best corporate results in a decade, according to Morgan Stanley. The Stoxx Europe 600 was little changed in early trading, with AstraZeneca Plc climbing 4.8 percent while Cie. Financiere Richemont SA slumped 4.9 percent. European outperformance this year against global peers remains intact, with the benchmark’s 10 percent gains outpacing the 7 percent rise on the S&P 500. Greek stocks snapped a their longest winning streak in two decades.

“European stocks are still in the sweet spot of basking in the removal of political risk in Europe for the time being, though it is somewhat ironic that we could see a modest decline on the week as investors take stock,” said Michael Hewson, chief markets analyst at CMC Markets.

S&P 500 futures were down 0.3 percent after the underlying gauge fell by the same amount Thursday.

The Bloomberg Dollar Spot Index headed for its best week of the month as bets stack up on a Federal Reserve interest-rate increase next month. Accelerating German economic growth, where Q1 GDP came in line at 1.7% Y/Y, failed to ignite buying of stock or upset bonds as investors signaled overbought fatigue. Treasury yields fell, tracking a move in core European government bonds as gold extended a rebound from a two-month low and industrial metals including copper, nickel and zinc advanced.

The yield on 10-year Treasury notes fell two basis points to 2.37 percent, after retreating three basis points Thursday. Yields for the euro zone’s weaker borrowers, such as Italy, Portugal and Spain, were all also 1 to 3 basis points lower as investors awaited announcements of the volumes for expected bond sales next week by France and Spain.

Oil prices held recent gains as traders expected OPEC-led production cuts to extend beyond the middle of this year and as U.S. crude inventories fell to their lowest levels since February. International Brent crude futures were at $50.78 per barrel. U.S. West Texas Intermediate crude futures were at $47.85 per barrel, both little changed on the day.

Key reports on Friday are forecast to show U.S. inflation and retail sales both increasing in the last month, and may validate the case for the Fed to keep raising interest rates; alternatively one or both missing big and all those shadow bets about no rate hike in June will suddenly get much more attention. For now, however, the sellside remains optimistic: “We expect inflation pressures to remain solid in the economy, as labor markets continue to tighten and the dollar and commodity prices are broadly stable,” Barclays Plc economist Blerina Uruçi wrote in a client note.”

* * *

Bulletin Headline Summary From RanSquawk

  • European trading in tepid fashion with eyes on the US data CPI and Retail Sales scheduled later in the session.
  • Modest softening seen in US Treasury yields has pulled USD/JPY a little further away from the 114.00 level
  • Looking ahead, highlights include US CPI, Retail Sales and Baker Hughes Rig Count

Market Snapshot

  • S&P 500 futures down 0.2% to 2,385.50
  • STOXX Europe 600 up 0.1% to 394.87
  • MXAP down 0.3% to 150.55
  • MXAPJ down 0.2% to 492.23
  • Nikkei down 0.4% to 19,883.90
  • Topix down 0.4% to 1,580.71
  • Hang Seng Index up 0.1% to 25,156.34
  • Shanghai Composite up 0.7% to 3,083.51
  • Sensex down 0.3% to 30,161.49
  • Australia S&P/ASX 200 down 0.7% to 5,836.90
  • Kospi down 0.5% to 2,286.02
  • German 10Y yield fell 1.7 bps to 0.415%
  • Euro up 0.04% to 1.0865 per US$
  • Brent Futures down 0.2% to $50.67/bbl
  • Italian 10Y yield rose 4.4 bps to 1.999%
  • Spanish 10Y yield fell 1.1 bps to 1.636%
  • Brent Futures down 0.2% to $50.67/bbl
  • Gold spot up 0.3% to $1,228.56
  • U.S. Dollar Index little changed at 99.65

Top Overnight News from Bloomberg

  • Sprint Corp. is said to have started preliminary talks to merge with T-Mobile US Inc., the latest attempt to consolidate in a market watched closely by U.S. regulators
  • RWE AG plans to expand liquefied natural gas business by making the most of supply contract with Qatar to meet Europe’s growing dependency on fuel imports
  • Allianz SE affirmed commitment to bond manager Pacific Investment Management Co., signaling no plans to follow French rival Axa SA in putting some of U.S. money management business up for sale
  • Trump Escalates FBI Fight With Comey Attack. The FBI Fights Back
  • Brookfield Said Near Closing Deal for Renova’s TerraForm Stake
  • Anthem’s Latest Court Loss Means Cigna Deal Is All But Dead
  • Waymo’s Case Against Uber Sent by Judge to U.S. Prosecutors
  • United Internet to Buy Drillisch in German Mkt Consolidation
  • SoftBank Said Near Quitting Intelsat Deal Over Bond Standoff
  • Mnuchin Said to Start Review That Could Ease Volcker Rule’s Bite
  • Home Capital Says Reputational Hit Casts Doubt on Bank Survival
  • Calpers Increased Wells Fargo Stake Before Opposing Directors
  • Activision’s Hires Greeted With $40 Million Welcome Package
  • GE to Close Baker Hughes Deal by Middle of the Year, Rice Says
  • JPMorgan’s Frenkel Says Fed Hike Delay Has Negative Implications
  • Monsanto, Bayer File Merger to Brazil Antitrust Regulator

In Asia equity markets have traded mixed following the lacklustre lead from Wall St. where retailers were pressured amid soft earnings from Macy’s, while a lack of tier-1 data or drivers added to the subdued one heading into the weekend. ASX 200 (-0.7%) traded in the red as REIT and energy sectors underperformed, while Nikkei 225 (-0.4%) was also negative alongside a firmer currency after USD/JPY relinquished the 114.00 handle. Shanghai Comp. (+0.7%) and Hang Seng (+0.1%) were choppy, but still outperformed the region following a CNY 459Bn Medium-term Lending Facility operation by the PBoC. 10yr JGBs tracked the gains in T-notes amid a risk averse tone in Japan, while the curve slightly steepened on mild underperformance in the super long end.

Top Asian News

  • China Credit Growth Exceeds Estimates Despite Regulatory Curbs
  • Kuroda Attending G-7 Says Free Trade Helps Reduce Inequality
  • Temasek’s Fullerton Says Traders Are Mispricing Fed Rate Hikes
  • Chinese Shares Diverge as Hong Kong Climbs and Mainland Drops
  • Hitachi Sticks to $8.8 Billion Acquisition Plan to Lift Returns
  • Noble Group Can’t Promise Return to Profits as Shares Plummet
  • Lion Air Has Yet to Receive Notice on 737 Max Delivery Delay

European equities have started the last trading session of the week on a downbeat footing with macro newsflow throughout the Asian and European sessions particularly light thus far. From a sector standpoint, healthcare names are seen near the top of the board thanks to AstraZeneca (+5.3%) and a positive cancer drug update while Vivendi (+6.0%) have also helped to keep stocks afloat given their acquisition of a stake in Havas. To the downside, energy names lag in a pullback from recent gains with OPEC newsflow muted thus far. In fixed income markets, prices have shown some modest upside thus far amid light volumes and the week’s supply fully absorbed by the market. Focus for French paper will now begin turning towards the upcoming domestic Parliamentary elections with Harris polling showing a lead for Macron’s En Marche! Party. In the periphery, yields have come off modestly in early trade but with little in the way of notable traction.

Top European News

  • Faster German Growth Buoys Draghi’s Firming Euro-Area Recovery
  • Thyssenkrupp Slumps After Forecasting Negative Free Cash Flow
  • ArcelorMittal Slides Even After Reporting Profit Doubled
  • Richemont Chairman’s Son to Join Board as Profit Beats Estimates
  • Pimco’s Strongest Inflows in Four Years Boost Allianz Earnings
  • London Landlord Home Sales Plummet as Tax Changes Slash Returns
  • Le Pen Hesitating to Run in Parliamentary Elections: Parisien
  • De’ Longhi Seeks Major M&A as Coffee Boosts Growth, CEO Says
  • Barclays CEO Tricked Into Replying to Email Hoax, FT Says

In currencies, the Bloomberg Dollar Spot Index was little changed after adding 0.7 percent this week, its best showing over a five-day period since mid-December.The yen rose 0.2 percent to 113.65 per dollar, paring its decline for the week to 0.8 percent. The euro gained 0.1 percent to $1.0873. The currency is down 1.1 percent for the week, the worst performance since March. Traders are awaiting the inflation and retail sales figures out of the US and to that end, we have seen little else other some intra range jostling as the market positions itself ahead of the dual release. Modest softening seen in US Treasury yields has pulled USD/JPY a little further away from the 114.00 level, but so far 113.50 holds. Pressure also coming from some GBP/JPY selling as the Pound loses ground in the wake of the Bo E/Q I R yesterday. Sellers of Cable continue to run into stubborn support ahead of 1.2830-35, but EUFt/GBP continues to offers a better route with the backdrop of support seen in EUFt/USD from the mid 1.0800’s. Cross rate resistance from 0.8460-70 worth noting at this point, but price action is relatively slow.

In commodities, oil lost 0.2 percent to trade at $47.75 a barrel even after clocking up a weekly gain of 3.3 percent. Gold advanced 0.4 percent to $1,229.75 an ounce after a 0.5 percent advance Thursday. Commodity prices are all moving up to a very modest degree at the present time. Traders here have been largely unresponsive towards the OPEC comments which strongly suggest there will be an extension to the production cuts in place, but after healthy drawdowns revealed in both the API and DoE reports, WTI has pushed up through first resistance at USD47.00, and backed up by the concurrent Brent reclaim of USD50.00. The follow through has petered out at USD48.00 and USD51.00 respectively, but consolidation mode has since set in. Gold managed to hold the support seen ahead of USD1200 as the USD recovery stalls, but along with Silver, remain way off the recent highs. In metals, Copper is the lead metric, and we have pushed above USD2.50 again after holding the band of support stretching down to USD2.45.

Looking at today’s calendar, there’s some important data out in the US where we’ll get the April retail sales figures, while the other big release is the April CPI report. The final release today is the preliminary University of Michigan consumer sentiment survey for May. Away from the data the Fed’s Evans is due to speak at two separate events this afternoon at 9am and 10.30am while the Fed’s Harker speaks at 12.30pm.

US Event Calendar

  • 8:30am: US CPI MoM, est. 0.2%, prior -0.3%; Ex Food and Energy MoM, est. 0.2%, prior -0.1%
    • US CPI YoY, est. 2.3%, prior 2.4%; Ex Food and Energy YoY, est. 2.0%, prior 2.0%
    • US CPI Core Index SA, prior 251
  • 8:30am: Real Avg Weekly Earnings YoY, prior -0.01%; Real Avg Hourly Earning YoY, prior 0.3%; Retail Sales Advance MoM, est. 0.6%, prior -0.2%
    • Retail Sales Ex Auto MoM, est. 0.5%, prior 0.0%; Retail Sales Ex Auto and Gas, est. 0.4%, prior 0.1%; Retail Sales Control Group, est. 0.4%, prior 0.5%
  • 10am: U. of Mich. Sentiment, est. 97, prior 97; Current Conditions, prior 112.7
  • 10am: Business Inventories, est. 0.1%, prior 0.3%

Central Banks

  • 9am: Fed’s Evans Speaks in Dublin
  • 10:30am: Fed’s Evans Live Interview on Bloomberg TV
  • 12:30pm: Philadelphia Fed’s Harker Speeks at Drexel University

DB’s Jim Reid concludes the overnight wrap

Things have been so quiet this week that an ape walking down our trading floor would have been a welcome distraction. Having said that the S&P 500 broke its record run of 10 out of 11 days with a sub +\- 0.20% move last night by falling an earth shattering -0.22%! Believe it or not, that was the biggest fall in the S&P since April 21st. In fairness it did recover somewhat into the close after being down as much as -0.74% at one stage. The VIX also rose to its ‘highest’ level in over a week at 10.60. Much of the blame for the early weakness in equities was directed at the US retail sector following disappointing earnings reports out of both Macy’s and Kohl’s, which sent shares down -17% and -8% respectively. Nordstrom shares were also down -8% during the day, only to then plummet a further -6% in extended trading last night after the company delivered a similarly disappointing earnings release after the close. It was a similar story in the CDS market for US retailers yesterday too with 5y CDS for Macy’s and Nordstrom ending up about 25bps and 16bps wider respectively. It’s worth noting that these earnings updates come before today’s US retail sales report for April. Market consensus is for a +0.6% mom headline print and +0.4% mom rise in the core.

Across the border Canadian equity markets also weakened in the wake of Moody’s downgrading the Canadian banks. Meanwhile that early weakness in the US appeared to be the main catalyst also for European markets finishing in the red yesterday. The Stoxx 600 closed -0.52% at the closing bell. The FTSE 100 was flat, outperforming mainland Europe, but that was mostly to do with the leg lower for Sterling (-0.40% but down -0.68% at its lows) following the BoE meeting. We’ll touch on that in more detail below. Meanwhile bond markets took slightly divergent paths. Yields were generally higher across the board in Europe with 10y Bunds edging up just over 1bp to 0.428% and yields in Italy and Spain just over 4bps higher. That may have partly reflected ECB board member Peter Praet’s comments who said fiscal authorities should plan sufficiently ahead to prepare for the time when it will be appropriate to start a gradual process of normalization. In the US 10y Treasuries were 2.7bps lower at 2.388% which appeared to be more in-keeping with the slightly more risk-off tone. Bucking the trend though was Oil which extended its rebound with WTI (+1.06%) back near $48/bbl again.

The macro data didn’t really move the dial too much although it was interesting to see US continuing claims print at 1918k which is the lowest since November 1988. After that you’d have to go back to 1973 to find the next lowest reading. Initial jobless claims also came in at 236k making it 114 straight weeks below 300k. In other news headline PPI rose by more than expected in April (+0.5% mom vs. +0.2% expected) while the core also edged up +0.7% mom and more than expected (+0.2% expected).

Refreshing our screens this morning bourses for the most part are tracking the moves in Europe and on Wall Street yesterday. The Nikkei (-0.69%), Kospi (-0.43%) and ASX (-0.89%) are all in the red while the Hang Seng is currently flat. Bucking the trend with the rest of Asia once again is China where the Shanghai Comp is +0.59%. News has emerged overnight of a trade deal between China and the US. The agreement is said to cover 10 areas where negotiators from both countries have reached consensus according to Bloomberg. Agricultural trade and market access for financial services appear to be two sectors in the agreement.

Staying in Asia, just after we went to print yesterday, our Chinese economist Zhiwei Zhang gave a quick update on the Chinese economy. He highlighted that although broad credit growth dropped sharply in Q1, most of it was due to slower growth of credit to non-bank financial institutions, as the government tied up regulatory loopholes. Credit growth to the real economy only moderated slightly.He therefore does not expect growth to collapse even if the quarterly growth profile is slowing (6.9% yoy in Q1 to 6.8%, 6.6% and 6.5% in Q2, Q3 and Q4 respectively). Zhiwei is more concerned about risks in 2018 than this year. High CPI inflation is unlikely to be a problem for the PBoC this year, due to low food prices. The market interest rates are high now, but the government has the option to bring them down if necessary. But the PBoC may have less room to manoeuvre in 2018. CPI inflation may move to above 3% sometime in 2018, partly due to the low base effect this year. Moreover, the cumulative effects from the Fed rate hikes will constrain the PBoC’s policy space as well. See the following link for more and within it a link to his more detailed piece on Q1 marking the growth peak https://goo.gl/bVlJPn.

Coming back to the BoE, as expected there were no surprises with the MPC leaving policy unchanged with the May Inflation Report and the statement that policy can go in either direction was repeated. DB’s Mark Wall noted that the modest hawkish tilt from the last meeting in March continued into the May Inflation Report and if anything became more explicit. Mark also notes that at the last meeting, the BOE admitted upside and downside risks, but the rhetoric around growth was more constructive, Forbes voted for a hike and “some members” were ready to join her quickly if data surprised to the upside. The only difference in May is the BOE no longer mentions downside risks. Yet despite this net hawkish move and an inflation profile that is now upward sloping in the final year of the trajectory, BOE Governor Carney’s presentation of the Inflation Report at the press conference did not give the market a strong reason to price more risk of tighter UK monetary policy. The analysis and the presentation felt at odds with one another in Mark’s view. DB’s baseline view remains that BOE monetary policy will stay unchanged for the foreseeable future. The BOE’s presentation of the forecasts may differ after the elections, but then the outlook will become increasingly a function of the tone of the Brexit negotiations. Judging by recent comments from both sides, there will need to be some early goodwill created in the negotiations to ensure the BOE assumption of “smooth” exit remains valid.

Looking at today’s calendar now, this morning in Europe we’ll be kicking off in Germany where we will get a first look at the Q1 GDP growth print (market expecting +0.6% qoq while our team expect +0.4% qoq) and the final revision to April CPI. The other data out this morning is the Euro area’s industrial production report for March. There’s some important data out in the US this afternoon. As noted earlier we’ll get the April retail sales figures, while the other big release is the April CPI report. Our US team expect both headline and core CPI to have increased +0.2% mom (which is in-line with the market). The final release today is the preliminary University of Michigan consumer sentiment survey for May. Away from the data the Fed’s Evans is due to speak at two separate events this afternoon at 2pm BST and 3.30pm BST while the Fed’s Harker speaks at 5.30pm BST. The ECB’s Lane is due to speak this morning at 9.30am BST.

Before we sign off, it’s worth also highlighting some of the scheduled events this weekend. Tomorrow President Trump is due to deliver a keynote address. On Sunday China President Xi Jingping is due to host world leaders including Russia’s Putin and the IMF’s Lagarde at a summit. Emmanuel Macron will also be sworn in as French President on Sunday while perhaps the most important event is the German state election in North Rhine-Westphalia – Germany’s most populous state.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 22.01 POINTS OR .70%  OR / /Hang Sang CLOSED UP 30.79 POINTS OR 0.12% .  The Nikkei closed DOWN 77.65 POINTS OR 0.39%/Australia’s all ordinaires  CLOSED DOWN .72%/Chinese yuan (ONSHORE) closed UP at 6.9010/Oil DOWN to 47.73 dollars per barrel for WTI and 50.64 for Brent. Stocks in Europe OPENED IN THE GREEN    ..Offshore yuan trades  6.9036 yuan to the dollar vs 6.9010 for onshore yuan. NOW  THE OFFSHORE IS  STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE BIT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA IS A LITTLE HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

The 5 yr Chinese bond yield inverts to the 10 yr signalling trouble with Chinese finances
(courtesy zero hedge)

 

 

Is A Chinese Recession Imminent? Yield Curve Inverts For First Time Ever

While China growth has been slowing, and monetary conditions tightening, few (if any) have predicted any prolonged deflation (let alone a recession), yet overnight – for the first time ever – the $1.7 trillion Chinese bond market inverted, flashing a warning signal to the world that something is wrong.

Early on Thursday, the five-year yield rose to 3.71%, breaking above the 10-year yield for the first time since records began – even though the latter, at 3.68%, was near a 25-month high.

Some of the overnight weakness in the 10Y yield was eased by reports that PBOC would offer some Medium-Term Loans.

Of course it’s not just bonds that are getting dumped…

 

But, as The Wall Street Journal writes, such a “yield-curve inversion” defies normal market logic that bonds requiring a longer commitment should compensate investors with a higher return. It usually reflects investor pessimism about a country’s long-term growth and inflation prospects.

Perplexed traders and analysts offered up many excuses…

“Many of us are scratching our heads for an explanation because this kind of curve inversion is absolutely not normal,” said Wang Ming, a partner at Shanghai Yaozhi Asset Management Co., a bond fund that manages 2 billion yuan ($289.66 million) in assets.

 

“The inversion is a form of mispricing in the bond market,” said Liu Dongliang, senior analyst at China Merchants Bank . “The fact that no one is taking the bargain despite the higher yield on the five-year bond just shows how depressed investors’ mood is.”

 

“It’s really difficult to predict when the selloff or such anomalies will end because China’s bond market is reacting to the regulatory crackdown only and is no longer reflecting economic fundamentals,” said China Merchants Bank’s Mr. Liu.

But of course, the reality is – without massive and continued credit creation, there are very large questions about just how ‘dynamic’ Chinese growth could be and while technical flows are certainly part of the reasoning for 5Y yields rising, the question is, why wouldn’t the rest of the world pile in to ‘reach for yield’… unless the fundamentals really did have them worried?

4. EUROPEAN AFFAIRS

UK

This is not good:  hospitals across England go dark after a massive cyber attack.  The hackers now demand ransom

(courtesy zero hedge)

Hospitals Across England Go Dark After Massive “Cyber-Attack”; Hackers Demand Ransom

Hospitals across the UK have been hit by what appears to be a major, nationwide cyber-attack, resulting in the loss of phone lines and computers, with many hospitals going “dark” and some diverting all but emergency patients elsewhere. At some hospitals patients are being told not to come to A&E with all non-urgent operations cancelled, the BBC reports.

The UK National Health Service said: “We’re aware that a number of trusts that have reported potential issues to the CareCERT team. We believe it to be ransomware.” It added that trusts and hospitals in London, Blackburn, Nottingham, Cumbria and Hertfordshire have been affected and are reporting IT failures, in some cases meaning there is no way of operating phones or computers.

At Lister Hospital in Stevenage, the telephone and computer system has been fully disabled in an attempt to fend off the attack.

NHS England says it is aware of the issue and is looking into it.

According to the Telegraph, doctors across the country have seen this message – what appears to be ransomware – flash up on their screens. The notification demands that $300 worth of bitcoin be sent to a specific address to unlock the infected computer.

One source told Health Service Journal that  multiple trusts had been affected by a suspected malware attack around 1.30pm. They said trusts had their computer systems almost entirely shut down.

East and North Hertfordshire NHS trust said in a statement: “Today the trust has experienced a major IT problem, believed to be caused by a cyber attack.

“The trust is postponing all non-urgent activity for today and is asking people not to come to A&E – please ring NHS111 for urgent medical advice or 999 if it is a life-threatening emergency.

 

“To ensure that all back-up processes and procedures were put in place quickly, the trust declared a major internal incident to make sure that patients already in the trust’s hospitals continued to receive the care they need.”Health officials are understood to have declared a major incident and ordered a meeting of national resilience teams.

 

NHS Digital said: “We’re aware that a number of trusts that have reported potential issues to the CareCERT team. We believe it to be ransomware.”

There are reports that trusts affected include East and North Hertfordshire, North Cumbria, Morecambe Bay hospitals, Blackpool, and Barts Health in London. A number of GP surgeries also say they are also unable to use their systems.

IT specialists are working to resolve the problem as quickly as possible, a statement from the trust says. A GP from a surgery in York said: “We received a call from York CCG [Clinical Commissioning Group] around an hour ago telling us to switch off all of our computers immediately. “We have since remained open, and are dealing with things that can be dealt with in the meanwhile.”

Services affected are thought to include picture archiving
communication systems for x-ray images, pathology test results, phone
and bleep systems and patient administration systems. The source added: “This will mean delays and a focus on the sickest
patients. I’ve seen it once before and we relied on local trusts
supporting each other. If truly widespread then that’ll not be an
option.”

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

CANADA

Your classic definition of a bank run:  94% of Home Capital depositors have withdrawn their money!!!

(courtesy zerohedge)

Home Capital Depositors Have Withdrawn 94% Of Funds In Past 6 Weeks

According to its latest daily update, Canada’s biggest non-bank lender Home Capital Group showed the rate of withdrawals by depositors was slowing, one day after the company raised doubts about its ability to continue as a going concern, albeit for a simple reason: there are almost none left. In other words, over the past six weeks, depositors have withdrawn 94% of funds from Home Capital’s high-interest savings accounts since March 28, when the company terminated the employment of former Chief Executive Martin Reid.

Also on Friday, Home Capital said its liquid assets stood at C$962 million at the end of Thursday, which, combined with the total undrawn on the HOOPP credit facility (which as a reminder yields 22.5%) gives the distressed company access to C$1.56 billion in available liquidity and credit capacity.

Also overnight, Home Capital released the terms of the usurious credit facility with the Healthcare of Ontario Pension Plan, that was first announced April 26 in a May 11 filing.

Here are the details via BBG:

  • C$2 billion credit facility is secured against two pools of mortgages, Pool A and Pool B, “reflecting two tiers of collateral credit quality”
  • If collateral from Pool A is pledged, co is able to draw upon 50% of posted value from facility; Pool B allows 26%

This would suggest that the “fair” LTV of HCG’s loans, most of which are “less than prime” is somewhere between 26% and 50%, and begs questions where other alt-lenders are marking their own books, not to mention what loss reserves thay will be forced to disclose soon as a result of the HCG fiasco.

Additionally, the company revealed that as of May 9 value of posted collateral totals C$5.4b; C$1.4bn of C$2b credit facility has been drawn to date.

Amounts outstanding may be repaid at any time without penalty; amounts may also be re-borrowed

As Bloomberg also notes, given the maximum share of pledged mortgages that can come from Pool B, up to C$5.778b in collateral can be posted to secure all of this credit facility

  • Criteria that determine whether a given mortgage security is eligible for inclusion in either Pool A or Pool B were redacted from the filings posted on May 11

Perhaps most improtantly, as part of the terms, Home Capital is not able to create, assume, or incur any additional debt unless permitted by the lenders until such time as all its obligations under this facility have been paid in full. This means that the secured lenders now have an option on putting the company into bankruptcy and taking over the keys when the existing liquidity runs out.

Confirming this, Home Capital is also unable to “enter into any reorganization, consolidation, amalgamation, arrangement, winding-up, merger or other similar transaction” without the prior written consent of the Agent, which is currently the Healthcare of Ontario Pension Plan.

Keep a close eye on HCG whose next major liquidity shock is likely to take place over the next 30-60 days as its C$12.6 billion in GICS mature!!!

END

CONGO

A new EBOLA outbreak in the Congo:

(courtesy zero hedge)

New Ebola Epidemic Declared After Three People Die In DR Congo

Back when markets still responded to exogenous “risks” by occasionally “selling off”, the S&P nearly suffered a correction in late 2014 when a major Ebola epidemic broke out in west Africa, with isolated incidents in Europe and the US suggesting it may have jumped continents, sending airline stocks crashing and Ebola vaccine makers soaring. Luckily, fears blew over quickly, the dip was bought – especially after  James Bullard infamously hinted that QE4 could be invoked to halt the market drop – and the S&P proceeded to reach new all time highs on short notice.

Perhaps the time to Buy The Ebola Dip is back, because according to Reuters, at least one person has tested positive for the Ebola virus in the Democratic Republic of Congo, the health ministry said in a statement on Friday.

The case was confirmed from tests on nine people who came down with a hemorrhagic fever in Bas-Uele province in the northeast of the country on or after April 22, the statement said, adding that two of the sufferers had died.

Separately, SkyNews reports that the World Health Organization declared an Ebola epidemic in the northeast region of the Democratic Republic of Congo as a result of three deaths linked to the virus, and it is taking the situation “very seriously”. Referring to the outbreak noted above, the WHO explained that one of those killed had tested positive for Ebola after coming down with a haemorrhagic fever last month in Bas-Uele, a province which borders the Central African Republic.

Spokesman Eric Kabambi said: “The case is in a very remote zone, very forested, so we are a little lucky.” The DRC suffered a three-month outbreak of Ebola in 2014. Although it was quickly contained, 49 people were killed. Ebola occasionally jumps from animals including bats and monkeys to humans – and without preventative measures, the virus can spread quickly between people.

 

The virus is fatal in up to 90% of cases, and the WHO recently developed an experimental vaccine for use in emergencies. In a statement, the DRC’s health ministry said: “Our country must confront an outbreak of the Ebola virus that constitutes a public health crisis of international significance.”

 

Ebola caused alarm around the world in 2013 when the world’s worst outbreak began in West Africa – killing more than 11,300 people and infecting an estimated 28,600 as it swept through Liberia, Guinea and Sierra Leone.

For now stocks are not even bother to consider dipping on the news.

7. OIL ISSUES

Bloomberg’s oil expert Mark Cudmore paints for us the real picture of oil and it is far move negative than other reports

(courtesy Mark Cudmore/Bloomberg)

Trader: “The Bigger Picture On Oil Is Far More Negative”

With oil prices spiking nearly 10% from last Friday’s sudden, capitulation “flash crash” which was perhaps driven by Pierre Andurand liquidating his entire long book, there has been a scramble by analysts to “fit” the narrative to the price action and the sudden change in momentum, most notably by Goldman, which continues to pump one after another bullish crude note, we suppose because Goldman’s prop trading desk still has some oil left to sell to clients. However, is the recent bounce an indication of a sustainable direction shift, facilitated by a another even more acute round of OPEC jawboning even as shale production continues to grow, or just a dead cat bounce?

According to Bloomberg FX commentator Mark Cudmore, the answer is the latter as he explains in his latest overnight “macro view” note.

Traders’ New Love for Oil Isn’t Basis for Marriage: Macro View

 

What a difference a week makes. Oil prices are more than 9% above last Friday’s capitulation low. The bounce has legs in the short-term but it doesn’t alter the long-term bearish story.

 

Recent newsflow justifies this rally. U.S. oil inventories just showed their largest drop of 2017, and a fifth consecutive weekly decline. OPEC is expected to extend production cuts when it meets May 25. Goldman reiterated its bullish call for an imminent supply deficit.

 

February’s record speculative long position has been roughly halved. The market technicals appear healthy and fresh for a sustained bounce.

 

That’s the short-term outlook. But at some point the much bigger picture will dominate again and that entails a far more negative skew on the situation.

 

As Bloomberg oil strategist Julian Lee wrote, the OPEC production cuts would need to be significantly deepened to remove the OECD stockpile by year-end — especially in the face of increased output from Libya and Nigeria.

 

OPEC itself just raised its forecast for 2017 production from non-members by 64%. U.S. Baker Hughes rig count has climbed for the past 16 weeks.

 

U.S. stockpiles may now be showing a steady decline – but only from an extreme record. They are still above any level seen before this year.

 

The important backdrop is that extraction from shale continues to become cheaper and more efficient all the time, lowering the price point above which production will rapidly increase to flood the market with supply.

 

And simultaneously, there’s the slow and steady growth of renewable/alternative sources of energy as well as technological improvements in energy storage and transfer. That’s without mentioning the C-words: carbon and climate change. Even without Trump’s support, efforts to reduce emissions and the use of oil-derived products are garnering more and more support.

 

All this boils down to a long-term, structurally bearish story. Rallies can last for weeks, or even months. But don’t get too attached. They won’t carry you through to old age.

Separately, here is Commerzbank doubling down on the bearish narrative with its own overnight note, it which it warns that should OPEC extend output curbs on May 25, it “is unlikely to be more successful than the cuts implemented so far in the longer term,” according to the bank’s head of commodity research, Eugen Weinberg.  He also points out, logically, that the extension may “considerably tighten the market in the second half, yet will only boost non-OPEC production.

The decisive factor, if only for the time being, technical positioning, as algos continue to enjoy stopping out whichever side is positioned more heavily in the oil price debate.

end

 

Rig counts rise again for the 17th straight week as crude production again approaches record highs’

(courtesy zero hedge)

8. EMERGING MARKETS

end

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

Euro/USA   1.0875 UP .0011/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 GREEN

USA/JAPAN YEN 113.80 DOWN 0.000(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 1.2856 DOWN .0032 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3724 UP .0021 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 11 basis points, trading now ABOVE the important 1.08 level  RISING to 1.0875; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 22.01 POINTS OR .72%     / Hang Sang  CLOSED  UP 30.79 POINTS OR 0.12% /AUSTRALIA  CLOSED DOWN .72% / EUROPEAN BOURSES OPENED IN THE GREEN 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED DOWN 77.65 POINTS OR 0.39%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 30.79 POINTS OR 0.12%  / SHANGHAI CLOSED UP 22.01 POINTS OR .72% /Australia BOURSE CLOSED DOWN .72% /Nikkei (Japan)CLOSED  DOWN 77.65 POINTS OR 0.31%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1228.60

silver:$16.36

Early FRIDAY morning USA 10 year bond yield: 2.377% !!! DOWN 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  3.017, DOWN 2  IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 99.63 UP 1  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.373%  down 2  in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.047%  UP 1/2   in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.627%  DOWN 2  IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.252 DOWN 2   POINTS  in basis point yield from THURSDAY 

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

GERMAN 10 YR BOND YIELD: +.3910% DOWN 4 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.0920 UP .0055 (Euro UP 55 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.34 DOWN  .461 (Yen UP 46 basis points/ 

Great Britain/USA 1.2866 DOWN 0.0023( POUND DOWN 23 basis points)

USA/Canada 1.3718 UP 0.0014(Canadian dollar UP  14 basis points AS OIL ROSE TO $47.73

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 55 basis points to trade at 1.0920

The Yen ROSE to 113.34 for a GAIN of 46 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 23  basis points, trading at 1.2866/

The Canadian dollar FELL by 14 basis points to 1.3718,  WITH WTI OIL RISING TO :  $47.73

The USA/Yuan closed at 6.8995/
the 10 yr Japanese bond yield closed at +.047% UP 1/2  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 7  IN basis points from THURSDAY at 2.329% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.988  DOWN 6 in basis points on the day /

Your closing USA dollar index, 99,25 DOWN 37  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 48.76 POINTS OR .66%
German Dax :CLOSED UP 59.35 POINTS OR .47% 
Paris Cac  CLOSED UP 22.00 POINTS OR 0.41% 
Spain IBEX CLOSED  UP 35.60 POINTS OR 0.33%

Italian MIB: CLOSED  UP 92.92 POINTS/OR 0.43%

The Dow closed DOWN 22.81 OR 0.11%

NASDAQ WAS closed up 5.27 POINTS OR 0.09%  4.00 PM EST
WTI Oil price;  47.73 at 1:00 pm; 

Brent Oil: 50.67 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.07 DOWN 1/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD LOWERS T0  +0.391%  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:$47.88

BRENT: $50.85

USA 10 YR BOND YIELD: 2.326%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.987%

EURO/USA DOLLAR CROSS:  1.09.31 up .0067

USA/JAPANESE YEN:113.35  up 0.460

USA DOLLAR INDEX: 99.19  DOWN  44  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2887 : DOWN .0001  OR 1 BASIS POINTS.

Canadian dollar: 1.3711  up .0007(CAN DOLLAR down 7 BASIS PTS)

German 10 yr bond yield at 5 pm: +.391%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Sink Despite VIX Records As Economic Data Collapse Continues

 

Overheard in China this week…

“I was inverted…”

 

US Macro Data has collapsed for 8 straight weeks to its weakest and most negative in 12 months…

 

The last time US Macro and stocks decoupled like this was in mid 2015 and did not end well for stocks…

 

Finally to put a nail in this utter idiocy – here is ‘soft’ and ‘hard’ data… equities have even decoupled from the hype in ‘soft’ data…

 

So after all that stocks actually ended the week red (aside from Nasdaq of course which is awesome)…

 

 

VIX has now closed below 11 for 15 consecutive days…

 

Smashing the previous record…

 

Financials were the worst hit on the week, Tech outperformed…

 

It was a retailer massacre this week, but FAANGs soared…

 

Despite 2 very weak auctions (10Y and 30Y), Treasury yields ended the week lower…

 

30Y Yields dropped back below 3.00%…

 

After this morning’s CPI data missed expectations sending breakevens tumbling (after rising on yesterday’s inflation data)…

 

The USD Index tumbled on the day (3rd day down in a row) after weak CPI data but remains higher on the week…

 

All the majors compressed today to end the week marginally changed but note that Yuan was the only one stronger on the week against the dollar…

 

Despite USD strength, crude had a good week (driven mostly by an inventoiry driven squeeze. Gold, silver, and copper were close to unch (rallying as the dolar index slipped the last 3 days)…

 

Gold managed to get back above its 100-day moving average and Silver’s streak of losses stalled…

 

Finally Bitcoin was battered today after the global ransomware attacks struck… (still up 10% on week, and up 6 of the last 7 weeks for a 75% gain)

 

Bonus Chart: WTF!!

Source: WolfStreet

END

Retail sales records a big miss at .4% year over year and it is growing this quarter at its slowest pace so far this year.

Now we await revisions to 2nd quarter GDP

(courtesy zero hedge)

Retail Sales Miss Across The Board; Grow At Slowest Pace Of 2017

Earlier today, when looking at BofA’s internal credit and debit card data, we warned to expect a miss in retail sales:

And, sure enough, the actual spending data once again did not disappoint when moments ago the Census reported April retail sales which, well, did disappoint across the board:

  • Retail Sales up 0.4%, missing expectations of +0.6%,  up from an upward revised 0.1%
  • Retail sales up 4.5% Y/Y, down from 5.2% in April
  • Retail sales less autos rose 0.3% in April, est. 0.5%, unchanged from last month’s revised 0.3%
  • Retail sales ex-auto dealers, building materials and gasoline stations rose 0.2% in April
  • Retail sales ‘control group’ rose 0.2% m/m in April

Visually:

While increases were posted across most sectors, they were uninspiring with the exception of online sales. aka “nonstore retailers” which rose 1.4% in April, and are up a whopping 11.9% Y/Y

And now, bring on the downward revisions to Q2 GDP.

end

The 1.9% rise in core consumer prices came in much weaker than expected.

(courtesy zero hedge)

Core CPI Slumps To 19-Month Lows – Below Fed Mandate

For the first time since October 2015, core consumer prices rose at a pace slower than The Fed’s mandate. The 1.9% YoY rise is the weakest print since Sept 2015.

The last time this pattern played out – in 2012 – The Fed unleashed Operation Twist and subsequently QE3 to stall the disinlationary dive…

This time they are hiking rates??

Perhaps even more concerning is that Core inflation ex-shelter is at its lowest since Feb 2015… and near record lows…

(courtesy zero hedge)

Trump Tweets “Russia Is Laughing As U.S. Tears Itself Apart”, Scraps FBI Visit

It appears that US politics is back to its quasi-surreal state first observed in the early weeks of the Trump administration, when the president spent much of his day in front of Twitter. And while it is unclear if Trump is bored, busy, engaging in damage control or quite the opposite, he blasted a couple of tweets shortly after the close which have led to the now traditional media firestorm.

First, Trump responded to his perpetual nemesis, Rosie O’Donnell, and specifically her tweet from December 20 of last year, in which she said “FIRE COMEY” to which Trump responded, “We finally agree on something Rosie.”

A New York Times reporter promptly provided the necessary and sufficient reaction to that particular tweet.

So Trump is retweeting Rosie and Hannity is tweeting at Bette Midler. Pretty much sums up 2017. https://twitter.com/seanhannity/status/862759610138206209 

Shortly after, Trump followed up with another tweet, this time taking aim at Democrats, saying “Russia must be laughing up their sleeves watching as the U.S. tears itself apart over a Democrat EXCUSE for losing the election.

Russia must be laughing up their sleeves watching as the U.S. tears itself apart over a Democrat EXCUSE for losing the election.

Trump is right: whether for this, or some other reason, it is safe to say that the residents of the Kremlin have been enjoying a good time recently.

And while the two may or may not be linked, moments ago NBC reported that contrary to a Reuters report earlier this morning confirmed later by Deputy White House press secretary Sanders, Trump abandoned plans to visit the FBI headquarters to ease tensions with the agency’s employees after he fired James Comey.  The reason: “Trump was told FBI agents might not provide a warm reception following Comey’s ouster.”

FBI agents told NBC that many of them voted for Trump during the 2016 presidential election. However NBC’s sources added that few were ready to celebrate Trump’s visit after his sacking of Comey.

 

“My sense is most FBI employees feel a loyalty to Comey,” one person who works at the bureau’s headquarters said.

 

“And whether they agree or disagree with the way he handled the email case, like and respect him … Trump would not be well-received at headquarters.”

Perhaps it’s just more fake news, but in either case with Trump having recently burned bridges with Russia just to boost his domestic image, a move which was then mostly obviated when he fired Comey and delayed the passage of his domestic economic agenda by weeks if not months, getting on the bad side of FBI’s rank and file is arguably one of the more precarious things the president can do, especially with the Russian interference probe still going on, bonus points for twitter trolling – which sadly does not result in better governance – notwithstanding.

END

 

Let’s wrap up the week, with this offering from Greg Hunter

(courtesy Greg hunter/USAWatchdog)

Trump Fires Comey, DNC Stopped FBI Russia Investigation, US Drought Over

By Greg Hunter On May 12, 2017 In Media , Weekly News Wrap-Ups

Just like on Trump’s hit TV show, the words “you’re fired” hit FBI Director James Comey like a ton of bricks. President Donald Trump fired Comey because the White House says the Trump Administration has “lost confidence” in the FBI Director. Democrats, who asked Comey be fired because of the Clinton Email probe, are now outraged over the firing and want a special prosecutor for the so-called Russia collusion investigation.

Meanwhile, you may remember that it was the Democratic National Committee (DNC) that stopped the FBI from looking at its servers during the reported Russia hacking attack on the Clinton campaign and the DNC. Why didn’t Comey take the servers anyway if this “Russian hacking” was of such profound importance to U.S. election integrity? The Democrats, including Hillary Clinton, have been blaming the Russians for their 2016 presidential loss. Others say Clinton was a bad candidate that lost all on her own.

The drought plaguing America, especially the Western U.S., is over. Now, there is plenty of rain, and in some places, way too much. Some areas in the Midwest received more than 11 inches of rain in less than two days. Now, fields are too wet to plant for farmers, and there is concern that it won’t dry up enough to get the planting done in time.

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

Video Link

http://usawatchdog.com/trump-fires-comey-dnc- stopped-fbi-russia-investigation-us-drought-over/

-END-

Well that about does it for tonight

I will see you Monday night but it will be a short version

I will be out of the loop for the entire day

H

 

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