May 30/GOLD DOWN $4.45 YET SILVER WAS AGAIN STRONG: UP 10 CENTS/WITH ONE DAY TO GO BEFORE FIRST DAY NOTICE: A MONSTROUS 64,772 CONTRACTS STILL STANDING (COMPARED TO LAST YR’S 39,520 CONTRACTS WITH ONE DAY TO GO)/GREECE GIVES A TRIAL BALLOON THAT IT MAY DEFAULT/TURKEY REFUSES ENTRY TO GERMAN PLANES AT INCIRLIK/

GOLD: $1262.80  DOWN $4.45

Silver: $17.43  up 10  cent(s)

Closing access prices:

Gold $1263.10

silver: $17.40

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

CHINA ON HOLIDAY

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: $xxxxx DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1269.60

PREMIUM FIRST FIX:  $xxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $xxx

NY GOLD PRICE AT THE EXACT SAME TIME: 1265.90

Premium of Shanghai 2nd fix/NY:$xx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1262.80

NY PRICING AT THE EXACT SAME TIME: $1263.25

LONDON SECOND GOLD FIX  10 AM: $1262.70

NY PRICING AT THE EXACT SAME TIME. $1264.05

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  22 NOTICE(S) FOR 2200  OZ. 

 TOTAL NOTICES SO FAR: 551 FOR 55100 OZ    (1.7138 TONNES)

For silver:

For silver: MAY

 41 NOTICES FILED TODAY FOR 210,000  OZ/

Total number of notices filed so far this month: 4657 for 23,285,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

We have now entered options expiry week:

options  expiry tomorrow on  the OTC/LBMA gold/silver contracts: May 31/2017 at around 12 noon.

The big news of the day is the huge open interest at the gold comex  for the upcoming June delivery month.  We may have a monstrous amount of gold ounces seeking delivery.  We have so far 64,772 contracts still standing vs last yr’s 39,520 with 1 day to go before first day notice.You will also recall that 48.6 tonnes of gold stood for delivery at the end of June.(initially 48.1 tonnes)  This should be interesting to watch as we enter first day notice tomorrow.

Pay no attention to the weakness in the gold price today.  The Chinese markets have been closed for two days and actually I am quite surprised that gold held its own without that huge physical time zone.

Let us have a look at the data for today

.

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In silver, the total open interest ROSE  BY 3,263  contract(s) UP to 205,128 WITH THE GOOD SIZED RISE IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (UP  21 CENT(S).  IT IS OBVIOUS THAT WE ARE GETTING SOME FAILED  BANKER SHORT COVERING IN CONJUNCTION WITH BANKER DELTA HEDGING. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.02500 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 42 NOTICE(S) FOR 210,000  OZ OF SILVER

In gold, the total comex gold FELL BY 8,545 contracts DESPITE THE RISE IN THE PRICE OF GOLD ($11.45 with FRIDAY’S TRADING). The total gold OI stands at 465,303 contracts. SO FAR WE HAVE NOT HAD OUR USUAL OBLITERATION OF OPEN INTEREST AS WE PROCEED TO FIRST DAY NOTICE.  I WILL BE MONITORING THIS AS WE HEAD INTO FIRST DAY NOTICE WHICH IS TOMORROW ! 

we had 1 notice(s) filed upon for 100 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: 847.45 tonnes

.

SLV

Today: no changes in inventory

THE SLV Inventory rests at: 340.976 million oz

 

end

.

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

1. Today, we had the open interest in silver ROSE BY 3,263 contract UP TO 205,128, (AND now CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE  RISE IN PRICE FOR SILVER WITH FRIDAY’S TRADING  (21 CENTS). NO QUESTION THAT WE HAD FAILED  SHORT COVERING BY THE BANKERS ALONG WITH SOME BANKER DELTA HEDGING WITH THE RISE IN PRICE.

(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 MONDAY night/TUESDAY morning: Shanghai closed    / /Hang Sang CLOSED UP 62.36 POINTS OR 0.24% The Nikkei closed DOWN 4.72 POINTS OR 0.02%/Australia’s all ordinaires  CLOSED UP  0.14%/Chinese yuan (ONSHORE) closed  UP at 6.8555/Oil DOWN to 49.59 dollars per barrel for WTI and 51.87 for Brent. Stocks in Europe OPENED IN THE RED     ..Offshore yuan trades  6.8270 yuan to the dollar vs 6.8550 for onshore yuan. NOW  THE OFFSHORE IS A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR) AND THE OFFSHORE YUAN IS A TOUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA NOT HAPPY WITH THE NEWS THAT ITS DEBT HAS BEEN DOWNGRADED WITH THE /CHINA ON HOLIDAY FOR THE PAST TWO DAYS

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

SATURDAY

USA deploys its 3rd aircraft carrier towards north Korea

( zero hedge)

ii)SUNDAYNorth Korea tests a new anti-aircraft weapon

( zero hedge)

iii)MONDAY

North Korea then launches another ballistic missile flying for 6 miles and landing in the Sea of Japan

(courtesy zero hedge)

iv)Tuesday

An extremely happy Kim Jong -Un now threatens the uSA with a bigger gift package

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

i)Germany/USA

Germany’s Merkel is furious with Trump after another “unprecedented” 67 failure to reach a consensus on climate change

( zero hedge)

ii)Italy

It seems that the 4 major parties like the German proportional system and that should jump start an early election in the fall.

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

EGYPT

i)Egyptian warplanes bomb terrorist camps in Libya after the attack on Christian Coptics

( zero hedge)

ii)RUSSIA/IRAN

Global trades is moving away from the USA dollar as Russia and Iran sign an oil for goods barter deal. Another dagger into the heart of the USA petrodollar/hegemony/system.

( zero hedge)

 

( zerohedge)

 

( zero hedge)

6 .GLOBAL ISSUES

Hot money is flowing out of emerging markets.  The two biggest lowers today:  the Mexican peso as the opposition party lost out in elections and the South African rand as Zuma was facing a revolt in his own party

( zerohedge)

7. OIL ISSUES

8. EMERGING MARKET

9.   PHYSICAL MARKETS

i)Famed Paul Brodsky talks about 3 forms of money: gold, dollars and bitcoin and how they relate to each other:
( Paul Brodsky/MacroAllocation.com)
ii)China and India are taking 100% of all newly mined gold.  China also refuses to export any of it’s gold that is mined there.

( Egon Von Greyerz/Kingworldnews)

iii)GATA conference in Vancouver today

( Chris Powell/GATA)

10. USA stories

i)Connecticut bonds soar in yields as tax receipts tumble as more hedge funds leave for Florida

( zero hedge)

ii)TUESDAY

Trump again blasts Germany concerning their climate control agenda and lack of spending at NATO

(courtesy zero hedge)

iii)Hard data personal spending shows that its growth year/year has tumbled to a 7 month low. Major revisions in prior months seems to have exaggerated the data

(courtesy zero hedge)

iv)We are now beginning to see ‘soft” data slumping along with the releases of hard data.  Today it is consumer confidence slumping to its weakest level since February

(courtesy zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 8548 CONTRACTS DOWN  to an OI level of 465,303 DESPITE THE RISE IN THE PRICE OF GOLD ( $11.45 with YESTERDAY’S trading). SO FAR WE HAVE NOT HAVE OUR USUAL OBLITERATION OF OPEN INTEREST AS WE ENTER FIRST DAY NOTICE ON WEDNESDAY. I WILL BE MONITORING THIS!! THE BANKERS SUPPLIED SOME EFP PAPER TO COUNTER DELAY ON SOME JUNE GOLD DELIVERIES AS LONGS STAMPEDED  INTO THE GOLD ARENA ON FRIDAY. LONGS RECEIVED A FUTURE CONTRACT AND/OR A LONG FUTURE CALL ON A FUTURE GOLD CONTRACT (I.E. EITHER JULY OR AUGUST GOLD) PLUS A FIAT BONUS FOR THEIR EFFORT. THIS IS WHY OPEN INTEREST ALWAYS FALLS WHEN WE ENTER AN ACTIVE DELIVERY MONTH WHETHER IT IS GOLD OR SILVER.

 

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 1 contract(s) FALLING TO  22. We had 1  notices filed ON FRIDAY so we GAINED 2 GOLD CONTRACTS OR AN ADDITIONAL 200 gold ounce will  stand for delivery and 0 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 A MUCH SMALLER THAN ANTICIPATED 61,627 contracts DOWN to 64,772.  The non active July contract GAINED another 191 contracts to stand at 1701 contracts. The next big active month is August and here the OI gained ONLY 51,038 contracts up to 288,307. FIRST DAY NOTICE IS WEDNESDAY MAY 31.2017 AND WE HAVE JUST ONE MORE READING DAY ON WEDNESDAY 

OH OH!! WE HAVE NOW SURPASSED last year’s huge open interest as on May 26 2016 we had at this exact time:   39,520 contracts of JUNE 2016 CONTRACTS OPEN.( compared to JUNE 2017: 64,772)WITH EXACTLY 1 DAY TO GO BEFORE FIRST DAY NOTICE (FOR BOTH YEARS).

For the June 2016 contract month initially 48.189 tonnes stood for delivery. Eventually a huge 48.552 tonnes stood.

TONIGHT OUR BANKER FRIENDS ARE QUITE NERVOUS WHEN THEY LOOK OUT THE WINDOW AND SEE THE HIGH OPEN INTEREST THAT IS STILL STANDING IN GOLD FOR JUNE 2017.

We had 22 notice(s) filed upon today for 2200 oz

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And now for the wild silver comex results.  Total silver OI ROSE BY 3,263 contracts FROM  201,865 UP TO 205,128 DESPITE YESTERDAY’S  22 CENT GAIN. THERE WERE NO EFP TRANSFERS AS JUNE IS A NON ACTIVE DELIVERY MONTH FOR SILVER. IT SURE LOOKS LIKE OUR BANKERS ARE TRYING TO COVER THEIR SHORTS IN SILVER IN EARNEST. WE ALSO NO DOUBT HAVE CONSIDERABLE EVIDENCE OF SOME DELTA HEDGING BY THE BANKERS TRYING TO OFFSET THAT HUGE SHORT POSITION THEY HAVE BEEN BURGEONING OVER THE YEARS.
Below is a little background on the EFP contracts  initiated by our bankers:
(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 their 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 GAINED 1 contract(s) RISING TO 42 contracts. We had 21 notices filed on yesterday , so we GAINED A HUGE 22 notices or an additional 110,000 oz will stand for delivery and 0 CONTRACTS were settled through the EFP route.

The non active June contract GAINED 28 contracts to stand at 651. The next big active month will be July and here the OI LOST 2 contracts DOWN to 142,222.

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 42 notice(s) filed for 210,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 288.497 contracts which is good

Yesterday’s confirmed volume was 440,217 contracts  which is GOOD ( MANY ROLLOVERS).

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 30/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 nil
Deposits to the Dealer Inventory in oz 1499.98 oz

BRINKS

Deposits to the Customer Inventory, in oz 
 NIL
No of oz served (contracts) today
 
22 notice(s)
2200 OZ
No of oz to be served (notices)
0 contracts
NIL oz
Total monthly oz gold served (contracts) so far this month
551 notices
55100 oz
1.7138 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   230,129.2 oz
Today we HAD  0 kilobar transaction(s)/ 
We had one deposit into the dealer:
i) Into Brinks;  1499.98 oz
total dealer deposits: 1499.98 oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 0  customer deposit(s):
total customer deposits; NIL  oz
We had 0 customer withdrawal(s)
total customer withdrawal: nil oz
 we had 1 adjustments:
i) Out of HSBC:
15,432.48 oz was adjusted out of the customer account of HSBC into the dealer account
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 22 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 (551) x 100 oz or 55,100 oz, to which we add the difference between the open interest for the front month of MAY (22 contracts) minus the number of notices served upon today (22) x 100 oz per contract equals 55,100 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 (551) x 100 oz  or ounces + {(22)OI for the front month  minus the number of  notices served upon today (22) x 100 oz which equals 55,100 oz standing in this non active delivery month of MAY  (1.7138 tonnes).  We GAINED 2 contracts or an additional 200 oz will stand for delivery and 3 contracts were cash settled through the EFP route 
 
 
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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/  1.7138 TONNES
total for the 17 months;  249.651 tonnes
average 14.685 tonnes per month
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Total dealer inventory 894,646.624 or 27.82 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,812,789.012 or 274.11 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 274.11 tonnes for a  loss of 28  tonnes over that period.  Since August 8/2016 we have lost 79 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  79 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE MAY DELIVERY MONTH
MAY INITIAL standings
 May 30. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
573,060.548 oz
Brinks
SCOTIA
DELAWARE
Deposits to the Dealer Inventory
575,789.02 oz
brinks
Deposits to the Customer Inventory 
 1,159,012.960  oz
 HSBC
SCOTIA
No of oz served today (contracts)
 42 CONTRACT(S)
(210,000 OZ)
No of oz to be served (notices)
0 contracts
( NIL oz)
Total monthly oz silver served (contracts) 4657 contracts (23,285,000 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  8,684,109.6 oz
today, we had  1 deposit(s) into the dealer account:
 i) Into Brinks:  575,789.02 oz
total dealer deposit: 575,789.02  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of brinks: 216,323.980 oz
ii) out of Scotia: 340,619.320 oz
iii) out of Delaware; 16,117.248 oz
TOTAL CUSTOMER WITHDRAWALS: 573,060.548  oz
 We had 2 Customer deposits:
i) Into HSBC: 580,036.660 oz
ii) into Scotia:  578,976.300
***deposits into JPMorgan have now stopped 
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits  1,159,012.960 oz
 
 we had 1 adjustment(s)
out of the Brinks vault:  457,152.010 oz was adjusted out of the customer and this landed into the dealer account of Brinks
The total number of notices filed today for the MAY. contract month is represented by 42 contract(s) for 105,000 oz. To calculate the number of silver ounces that will stand for delivery in MAY., we take the total number of notices filed for the month so far at 4657 x 5,000 oz  = 23,285,000 oz to which we add the difference between the open interest for the front month of MAY (42) and the number of notices served upon today (42) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4657(notices served so far)x 5000 oz  + OI for front month of APRIL.(42 ) -number of notices served upon today (42)x 5000 oz  equals  23,285,000 oz  of silver standing for the MAY contract month.
We GAINED 22 contracts  or an additional 110,000 oz will stand for delivery this month,  and 0 contracts were issued  EFP contract for a huge fiat bonus and a future silver contract (probably either a June or July contract.)  
 
 
Volumes: for silver comex
 
Today the estimated volume was 42,523 which is very good
Yesterday’s  confirmed volume was 75,015 contracts which is HUGE
FRIDAY’S ESTIMATED VOLUME OF 75,046 CONTRACTS EQUATES TO 375 MILLION OZ OF SILVER OR 54% 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:  33.563 million (close to record low inventory  
Total number of dealer and customer silver:   202.149 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
 
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.9 percent to NAV usa funds and Negative 6.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.7%
Percentage of fund in silver:38.2%
cash .+0.1%( May 30/2017) 
 
2. Sprott silver fund (PSLV): Premium FALLS TO   -.19%!!!! NAV (May 30/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.70% to NAV  (May 30/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.19% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.70%/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 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

May 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

May 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 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

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May 30 /2017/ Inventory rests tonight at 847.45 tonnes
*IN LAST 161 TRADING DAYS: 100.68 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 104 TRADING DAYS: A NET  26.75 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  52.09 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

may 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

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

May 30.2017: Inventory 340.976  million oz
 end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold-backed Currency Launches in Dubai

GoldCore's picture

Gold-backed Currency Launches in Dubai 

  • New gold-backed currency OneGram launched
  • Backed by one-gram of gold, uses blockchain technology
  • OneGram is first in wave of new Shariah, tech-savvy gold products
  • 2017 sees big changes for gold thanks to Shariah gold and blockchain
  • Gold investors should prepare for tightening in supply
  • Bitcoin and shariah gold demand suggest change in retail investor thinking

Technology, shariah gold and bitcoin point to changing views

Ramadan Kareem rang out across Dubai and the rest of the Muslim World this weekend as the holiest month in the Islamic calendar began. For 29-30 days over a billion Muslims around the world practice sawm (fasting), charity (zakat) and salat (prayer). This period is a time of spiritual reflection, increased devotion and worship as well as a time to come together with loved ones for both the break fast meal (Iftar) and pre-fast meal (Suhur).

Ramadan is obviously observed in different ways around the Muslim world. Here in Dubai a non-Muslim will experience a place full of both celebration and reflection, with events happening every evening that are there to welcome everybody. The month also sees a number of companies launching Ramadan promotions ranging from bank accounts (free banking for six months, anyone?) to spa treatments (2-for-1 massage?) to huge packs of dates (the first food to break the fast).

As part of the celebrations, a new gold-backed currency has been launched, here in Dubai. It is a new currency known as OneGram (OGC) backed by one gram of gold and can be used for digital payments. There is a fixed number of OGCs and digital transaction fees (minus admin costs) will be reinvested to buy more gold. According to the managers, “the amount of gold backing each OGC will increase with time.”

OneGram has been launched by a private company of the same name. The company claims to offer a proof-of-stake blockchain that is ‘’further anonymized’ than Bitcoin. Reports state that ‘developers employ zero-knowledge dual-key stealth addresses and ring signature protocols toward ‘instant, untraceable, unlinkable, trustless transactions.’

Shariah Gold Standard

In December we witnessed the launch of the Shariah Gold Standard. Announced in Bahrain by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the World Gold Council, the Standard is the first ever set of guidelines for the 2 billion Muslims looking to invest in gold-based financial products.

As we explained in December:

According to Islamic texts, gold is a ribawi item, which means that it must be sold on weight and measure, and cannot be traded for future value or for speculation. In order for a gold instrument to be Shariah-compliant, the precious metal must be the underlying asset in related transactions.

When the Shariah Gold Standard was launched, one of the world’s leading investors Mark Mobius labelled it as a “godsend” that was both “innovative and revolutionary”. Currently the Islamic Finance market accounts for 1% of the global GDP, and is growing at nearly 20% per year. The new AAOIFI issued guidelines are expected to propel demand for gold as more companies (such as GoldCore) launch Shariah-compliant gold investment products. The combined use of both innovative Shariah gold investment standards and new technology could boost demand by around 500-1000 tonnes per annum.

The launch of OneGram is part of the new wave of gold financial products that we are beginning to see as a result of the Shariah Gold Standard. Muslims have long looked for more gold products to be made available to them in the $2 trillion Islamic financial markets.

A gold-backed cryptocurrency is not just a positive sign for Muslim investors, it is also a positive sign for those who are looking to invest outside of the financial system. Of course, investing in physical gold has long been available for both Muslims and non-Muslims for many years, but this recent announcement says a lot more about the demands for safe-haven investing than previous changes in financial markets have.

A new safe-money standard?

Right now it seems the world is paying attention to a financial and geopolitical situation that is proving to have one too many cracks to fix and fill. But, in the background, there is a growing awareness of how we can protect ourselves when those cracks turn into canyons.

There is something in the air that suggests we might be seeing a turn in the way savers and investors are beginning to view their money. The launch of technologically advanced, shariah compliant gold-products is an early indication of this. But when one also considers the recent performance of bitcoin, then we see that the desire to hold money outside of the financial system with reduced counterparties is growing.

The size of the bitcoin market might be minuscule compared to gold, and gold’s market size minuscule compared to that of the dollar, but times are changing. The increased accessibility to these sound-money, safe-haven assets is a sign that the most powerful financial group in the world – the people on the street – are harnessing ways to gain control of their investment portfolios.

Ultimately we believe bitcoin is a complementary asset to gold, but time will tell. Whilst watching and waiting on bitcoin, gold investors should feel assured that launches of gold-backed products such as OneGram are not only validation of the modern approach to investing in gold, but also validation of their decision to invest in gold.

This is good news for gold investors who have chosen to invest in not only the ultimate form of financial insurance but also one that is finite and physical. As awareness and demand grow, it is not unreasonable to expect to see some tightening in the availability of physical gold, which will have a positive impact on the price.

 

News and Commentary

North Korea warns of ‘bigger gift package’ for U.S. after latest test (Reuters)

Famed Paul Brodsky talks about 3 forms of money: gold, dollars and bitcoin and how they relate to each other:
(courtesy Paul Brodsky/MacroAllocation.com)

On Gold, Dollars, & Bitcoin

Authored by Paul Brodsky via Macro-Allocation.com,

We have been bullish on gold – the barbarous relic; King Dollar – the modern hegemon; and Bitcoin – the crypto currency investors love to hate. One might say our feet have been planted firmly in the past, present and future. (We may not have three feet, but let’s go with it.) Are we hedging our bets, being too cute by half, or is there a cogent rationale that unifies bullishness for money forms most would consider incongruous and at-odds with each other?

The short answer is we like:

1) gold, because central banks around the world own it and are buying more, ostensibly to devalue their fiat currencies against it someday, after they are forced to hyper-inflate in order to reduce the burden of systemic debt service and repayment;

 

2) the dollar, because dollar-denominated financial markets are broader and deeper than any other market and because the Fed is years ahead of other major central banks when it comes to normalizing policy and maintaining bank solvency (i.e., other fiats are in worse shape), and;

 

3) Bitcoin, the borderless digital currency that is already being perceived as a better store of value than gold and all fiat currencies, and potentially a more expedient means of exchange too. All three should win in different ways.

It may be easier to accept this discussion by first reminding one’s self that monetary regimes come and go every fifty years or so. The last transition was in 1971 and the world is due for another. We have a high level of conviction that the evanescence of the current global monetary system is rooted in sound economics and already has been firmly established. A global monetary reset is necessary and likely.

To understand why we must break down money into its two main components: a means of exchange and a store of value. When it comes to using money in exchange for goods and services, fiat currencies have it all over gold and crypto currencies presently. That’s because governments demand taxes be paid with their fiat currencies (legal tender), forcing producers and labor to demand compensation in those currencies. As a result, banking, payment systems and all goods and service channels are set up to use fiat-sponsored currencies.

When it comes to a store of value, however, the factors of production may choose to save in whatever form of money they want. If the general perception is that government-sponsored, bank system-created fiat currencies will have to be greatly diluted in the future so that systemic debts can be serviced and repaid, then savers will migrate to money forms with capped floats, like gold and Bitcoin.

Prior to 1971, if a major government-sponsored currency was threatened with dilution, global sovereigns and savers and producers would exchange that currency for gold at a fixed exchange rate to the dollar. Or, they could simply exchange that currency for another currency less likely to be diluted. In the current regime, all economies are highly levered and all fiat currencies must be greatly diluted in the future. It comes down to timing and we think the US dollar is the best positioned of all major fiat currencies. That said, it will eventually have to be diluted too and will lose value in gold and Bitcoin terms.

As mentioned above, gold is still owned by the world’s major treasury ministries and central banks. (In fact, it is effectively the only asset on the Fed’s balance sheet that is not someone else’s liability.) If US or global economic growth were to fall enough, or contract, and central bank monetary and credit policies were to fail to stimulate positive growth, then the value of all outstanding sovereign, household and corporate debt (and bank and bondholder assets) would become stressed.

The Fed would have no choice but to devalue dollars against its other asset – gold. Other central banks would either follow suit or go along with a coordinated plan to fix their currencies to the dollar (i.e., a new Bretton-Woods agreement). If this were to happen the price of gold in dollar terms would rise by as much as five to ten times current levels, in our view. (We arrive at this magnitude of change by taking the level of bank assets needed to be reserved and then using the Bretton Woods formula for currency valuation, base money divided by gold holdings.)

The new gold price would reflect a level at which gold holders would be willing to exchange their gold for the diluting currency. This dynamic is basically what happened in another form with US interest rates in 1980/1981. US treasury yields were forced higher by the Fed (22 percent to 15 percent along the inverted yield curve), a level at which trade partners like OPEC would accept dollars with a floating exchange rate.

Finally, Bitcoin. The BTC/USD exchange rate has gotten a lot of notice lately because it has almost doubled in the last month (se chart below)…

To listen to financial media commentary, the extraordinary move must be the result of unsophisticated financial rubes looking to get rich quick on the latest tulip fad.

We disagree. While the dollar price of BTC may drop significantly any time as it reflects people’s understanding of dynamic global economic and monetary conditions and of Bitcoin itself, we are highly confident the exchange rate will appreciate dramatically from current levels over time.

To be sure, faith in the flexible exchange rate fiat monetary system remains strong in G7 economies and those that actively trade with them. But major currencies require continued faith in perpetual growth without recessions and that highly leveraged, irreconcilable balance sheets will never have to be diluted.

Meanwhile, access to Bitcoin takes only internet connectivity, it is free to store, and there is no need to hide it traveling across borders. Bitcoin, itself or as a proxy for all crypto currencies, is quickly becoming a more reliable and accessible store of value for 5 billion people across the world residing in economies without major currencies, strong central banks or stable pegs.

The store-of-value benefit is beginning to make itself clear to wealth holders in developed economies too, those becoming aware of the need for future fiat currency inflation by monetary authorities.

Those unfamiliar with crypto currencies tend to fear bubble bursting outcomes. While this fear is understandable given its newness, complexity, past volatile market action and lack of a central or sovereign regulator, it is not reality-based. Bitcoin cannot be successfully hacked due to its underlying block chain recordkeeping system, which documents every transaction and every sequential custodian in the chain (all anonymously to the world). No one can create Bitcoins outside its system or sell Bitcoins that do not exist.

Further, Bitcoin’s float cannot be diluted without the express agreement of 51 percent of all Bitcoin holders. Bitcoins are widely dispersed across the world and there is no central authority with a political agenda. It is inconceivable why Bitcoin holders would agree to being diluted anytime soon.

At a $50 billion total market valuation, of which Bitcoin is about $30 billion, crypto currencies have almost incalculable appreciation potential vis-à-vis fiat currencies. They should gain significant market share for store of value purposes, and this could be sped up if payment systems adopt Bitcoin, Ethereum, Litecoin, or another crypto currency as a global means of exchange. After all, global fiat money amounts to nearly $100 trillion.

Many of us who have toiled over the years as professional investors are deluded with the explicit or subconscious expectation that the perception of wealth and markets will someday revert to what they were five, ten or twenty years ago. They will not, in our view. Yes, this time IS different (as it always has been). Our money will change (as it always has).

Given the highly leveraged state of the current monetary regime, the most dominant variable for future wealth maintenance and creation, in our view, may not be asset selection but rather money selection.Something to think about…

end

 

China and India are taking 100% of all newly mined gold.  China also refuses to export any of it’s gold that is mined there.

(courtesy Egon Von Greyerz/Kingworldnews)

China and India are taking all gold mine production, von Greyerz tells KWN

Section:

12:28a PT Sunday, May 28, 2017

Dear Friend of GATA and Gold:

Swiss gold fund manager Egon von Greyerz, interviewed by King World News, reports that Swiss gold refiners say all their production is being absorbed by China and India and there’s no need to market gold, since everything coming out of the mines is spoken for. Where’s the rest coming from — that is, the paper gold? If the people buying it don’t care, why should you? Von Greyerz’s remarks are posted at KWN here:

http://kingworldnews.com/greyerz-what-is-happening-in-the-physical-gold-…

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

end

 

GATA conference in Vancouver today

(courtesy Chris Powell/GATA)

We’d like to see you at GATA’s reception in Vancouver this evening

Section:

11:13a PT Monday, May 29, 2017

Dear Friend of GATA and Gold:

A reminder for those in the Vancouver, British Columbia, area today. …

You’re invited to GATA’s informal reception following the International Metal Writers Conference. It will be held from 5 to 8 p.m. this evening at the Lions Pub, 888 West Cordova St., around the corner from the Vancouver Convention Centre, where the conference is being held. There will be some free snacks and a cash bar. GATA Chairman Bill Murphy will be master of ceremonies and GATA Board of Directors member Ed Steer and your secretary/treasurer will be there too.

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

end

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

 
 

1 Chinese yuan vs USA dollar/yuan A LITTLE STRONGER  6.8550(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES HUGELY STRONGER TO ONSHORE AT   6.8270/ Shanghai bourse CLOSED HOLIDAY   / HANG SANG CLOSED UP 62,36 POINTS OR 0.24% 

2. Nikkei closed DOWN 4.72 POINTS OR 0.02%   /USA: YEN FALLS TO 110.94

3. Europe stocks OPENED IN THE RED        ( /USA dollar index RISES TO  97.50/Euro UP to 1.1152

3b Japan 10 year bond yield: RISES TO   +.043%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.94/ 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::  49.59 and Brent: 51.87

3f Gold DOWN/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  +.308%/Italian 10 yr bond yield UP  to 2.197%    

3j Greek 10 year bond yield RISES to  : 6.00 ???  

3k Gold at $1262.90/silver $17.27 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 2/100 in  roubles/dollar) 56.52-

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

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT 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 110.94 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  0.9773 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0899 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  +0.308%

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 2.2370% early this morning. Thirty year rate  at 2.906% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Greek, Italian Risks Weigh On European, Global Markets; Oil, Gold Slide

Tuesday’s session started off on the back foot, with the Euro first sliding on Draghi’s dovish comments before Europarliament on Monday where he signaled no imminent change to ECB’s forward guidance coupled with a Bild report late on Monday according to which Greece was prepared to forego its next debt payment if not relief is offered by creditors, pushing European stocks lower as much as -0.6%. However the initial weakness reversed after Greece’s Tzanakopoulos denied the Bild report, sending the Euro and European bank stocks higher from session lows. S&P futures are fractionally lower, down 3 points to 2,410.

Elsewhere, the Japanese yen rallied after strong retail sales data while US Treasuries ground higher after returning from a long weekend largely unchanged; Australian government bonds extend recent gains as 10-year yield falls as much as four basis points to 2.37%. Asian stock markets and were modestly lower; Nikkei closed unchanged despite a stronger yen. China and Hong Kong remained closed for holidays while WTI crude was little changed.

Despite the rebound, the Stoxx Europe 600 Index declined a fourth day as data showed that contrary to expectations of a record print, euro-area economic confidence fell for the first time this year, and as Draghi’s dovish comments to the European Parliament weighed on banking shares. As discussed yesterday, Italian bonds edged lower as traders digest the prospect of an earlier-than-expected election.

As Bloomberg politely explained, the overnight pullback across several assets serves as a reminder that, while equity benchmarks across the world have posted repeated records this year, potential headwinds to the global growth story remain and investor concern lingers. Or, in other words, selling is still not illegal. Elections in the U.K., Germany and Italy are looming as Brexit negotiations begin, while in the U.S. President Donald Trump’s ability to implement spending and tax-cut plans is far from certain. Speaking on Tuesday, St. Louis Fed President James Bullard said the new administration will need to fulfill the expectations that have driven the stock market higher, unless of course, the same Bullard suggests that QE4 is on the table next in which case the market will rise even higher.

“Washington does have to deliver at some point,” Bullard said in an interview on Bloomberg TV in Tokyo. “That is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of American politics would settle in.”

Looking at global markets, Japanese stocks ended higher despite a stronger yen, with the Topix reversing earlier losses. Data showed Japan’s jobless rate stayed at the lowest in more than two decades last month, but household spending remained in a slump while retail sales came in stronger than expected. Hong Kong and China markets were shut for a holiday.

The Stoxx Europe 600 Index declined 0.2 percent. Futures on the S&P 500 Index fell 2 points, or 0.1%, to 2,411. The S&P cash index closed at a new record high on Friday.

In currencies, the euro traded little changed at $1.1167 as of 6:16 a.m. in New York. The British pound added 0.2 percent. The Bloomberg Dollar Spot Index was little changed. The yen strengthened 0.2 percent to 111.06 per dollar. The rand retreated 0.9 percent, extending losses for a second session after President Jacob Zuma survived a bid by some members of his party to oust him.

Accross commodities, West Texas oil dipped back under $50, falling 0.6% to $49.52 per barrel; prices swung last week following the agreement by OPEC and its allies to extend cuts by nine months.

On the U.S. calendar, we get personal spending, personal income, consumer confidence, Dallas Fed index, S&P/Case-Shiller home price, but according to SocGen, “today’s data will all be forgotten by the end of the week, with US ISM on Thursday and the labour market report on Friday more likely to stick in memories.”

Market Wrap

  • S&P 500 futures down 0.1% at 2,411
  • Nikkei 19,677.8, down 0.02%
  • Stoxx 600 390.36, -0.24%
  • Equities: CAC 40 (-0.9%), FTSEMIB (-0.8%)
  • WTI $49.50, down 0.6%
  • Brent futures down 0.8% to $51.87/bbl
  • Gold spot down 0.2% to $1,265.10
  • U.S. Dollar Index up 0.1% to 97.54

Bulletin Headline Summary from RanSquawk

  • European equities enter the North American crossover modestly lower as UK and US return to market
  • Risk drivers minimal from what we can evaluate, with the Greek payment opt-out story prompting modest flow out of EUR/JPY, and pulling USD/JPY below 111.00 as a result.
  • Looking ahead, highlights include German regional & national CPIs, US Personal Spending, PCE data

Top Overnight News from Bloomberg

  • Federal Reserve Bank of St. Louis President James Bullard said that at some point the honeymoon period will come to an end and Washington will need to deliver on the policy expectations that have driven the stock market higher
  • Federal Reserve Bank of San Francisco President John Williams sees a “much smaller” Fed balance sheet in about five years, at the end of an unwinding process that could start with a “baby step” later this year
  • First Data Corp. said it will buy CardConnect Corp. for $750 million, in what CEO Frank Bisignano called his company’s biggest acquisition since 2004
  • Citigroup Inc. agreed to sell its fixed-income analytics and index business to London Stock Exchange Group Plc for $685 million in cash following a strategic review of the unit
  • Goldman Sachs Group Inc. was denounced by the head of Venezuela’s legislature over a report that the bank bought $2.8 billion of bonds from that country, potentially helping President Nicolas Maduro’s administration amid accusations of human-rights violations
  • Euro-area economic confidence fell for the first time this year, led by weaker readings in the services and retail sectors
  • Akzo Nobel NV successfully dodged a legal challenge by activist shareholder Elliott Management Corp. to oust Chairman Antony Burgmans, strengthening the Dutch paintmaker’s hand in rebuffing takeover talks with a U.S. suitor

Asian equity markets traded subdued after market closures in UK and US, while participants in mainland China, Hong Kong and Taiwan remained absent for the Dragon Boat Festival. This lack of demand weighed on risk sentiment in the region, although ASX 200 (+0.8%) staged a late recovery amid gains in financials and resources, while Nikkei 225 (-0.1%) was pressured by a firmer JPY. Furthermore, political concerns in Europe also added to the cautious tone after Greece hinted at a default after it threatened to opt out of the next payment, while there were also reports that UK PM May was prepared to leave the EU without a deal. Finally, 10yr JGBs were slightly higher on safe-haven demand, although upside was capped following the 2yr JGB auction in which the b/c and accepted prices declined from the prior month.

Top Asian News

  • Singapore Fines Credit Suisse, UOB After 1MDB-Linked Probe
  • Reliance Communications Extends Tumble on Concerns Over Debt
  • Japan Stocks to Watch: Mizuho, Square Enix, Rohto Pharmaceutical
  • Goldman-Backed Games Startup Aims for Vietnam’s First IPO Abroad
  • Japan Equity Movers: SoftBank, Hitachi Chem, Itoham, HIS, DeNA
  • Abe’s Coalition Ally Warns Military Shift Could Rile Neighbors
  • Asia Stocks Mixed, Euro Falls on Draghi Comments: Markets Wrap
  • Japan’s Topix Advances in Thin Trading as Volatility Declines

In Europe, risk off sentiment filtered into the market following the long weekend in the US and UK. Despite Europe being open for trade yesterday, with negative news circulating today, noticeably, the Euro’s overnight pressure extending into European trade, amid reports that Greece could opt out of their next payment, if creditors fail to agree on debt relief, however which was later denied by a Greek Government spokesman Political news continues to dictate trade, with whispers of an early Italian election being followed by comments from UK PM May, stating that the government is prepared to leave the EU without a deal. An aftermath of the first Prime Minsters debate has been evident, with both candidates coming out seemingly unconvincing. Polls have continued to tighten in the UK, with opposition leader Jeremy Corbyn stating that if he is elected, he will make sure there is a Brexit deal, however, the conservatives remain in a convincing lead in the polls. Airline names underperform in the European morning, with British Airways’ parent company, IAG weighing on the FTSE following the IT failure, which hit over 300,000 passengers over the weekend. Financials underperform, stemmed by a downgrade on European banks by Deutsche Bank, with the sector down near 1%. The recent bounce in GBP has also not helped the FTSE, with GBP/USD finding some support around 1.28, trading at session highs. The risk off sentiment has been noted in the JPY with demand notable, as USD/JPY was briefly led below 111.00 once again.

Fixed income markets have slowed down following yesterday’s bullish pressure, however still reside near session highs. Gilts have been noticeable, with the UK lOy spiking to new contract highs on the open. German paper has failed to continue the bid seen yesterday, trading marginally in the red around the intra-day 162.17 base. The lOy yield spread has narrowed slightly to 70.2bps, following the 9 month low seen last week.

Top European News

  • Italy Moves Toward Early Elections as Voting Rules Deal Nears
  • EU Demands for Citizens ’Ridiculously High,’ U.K.’s Davis Says
  • Merkel Signals New Era for Europe as Trump Smashes Consensus
  • RBS Unit Tells Euro-Long Clients Their Bullishness Is Premature
  • Greece Denies Bild Report Country Would Reject Payment
  • Deutsche Bank Downgrades European Banks, Tech; Upgrades Energy

In currencies, the euro traded little changed at $1.1167 as of 6:16 a.m. in New York. The British pound added 0.2 percent. The Bloomberg Dollar Spot Index was little changed. The yen strengthened 0.2 percent to 111.06 per dollar. The rand retreated 0.9 percent, extending losses for a second session after President Jacob Zuma survived a bid by some members of his party to oust him. Risk drivers minimal from what we can evaluate, with the Greek payment opt-out story prompting modest flow out of EUR/JPY, and pulling USD/JPY below 111.00 as a result. Indeed, the JPY has made ground across the board, with the commodity currencies also suffering a little. China’s absence hits metals price, and this has weighed on AUD and NZD but modestly so.  GBP is fighting back a little as the recent narrowing in the election polls saw the Pound taking a hit late last week. Cable has come back into the mid 1.2800’s, while the EUR cross rate dips into the mid 0.8600’s, but traders will be wary of (more) month end flow hitting the later at some stage today and tomorrow.

In commodities, drivers have been overlapping in recent sessions, with the rise in Oil prices into the OPEC/non OPEC meeting last week, largely supportive of a risk on mood. This saw metals prices rising, pushing the lead Copper ‘benchmark’ up to USD2.60. Oil has since dropped back to test the low USD48.00’s in WTI, while Brent has also been reined in, but was well contained below USD51.00. WTI is now pivoting on USD50.00, but Copper is back testing the support levels from USD2.50. On the day, only Silver, Nickel, Tin and Palladium showing (small) gains on the day. Gold is still showing better levels, but has retraced from the USD1270 highs seen earlier.

Looking at today’s calendar, we will get a first look at how consumer spending is looking in Q2 with the April personal income and spending reports (the latter expected to increase +0.4% mom). We will also receive the April PCE core and deflator readings where a modest +0.1% mom rise in the core is expected. Following that we’ll get the March S&P/Case-Shiller house price index before we then get the May consumer confidence reading (expected to decline 0.5pts to 119.8) and finally the Dallas Fed’s manufacturing survey for May. Away from the data, this evening at 1pm we are due to hear from the Fed’s Brainard who has sounded a little more positive of late.

US Event Calendar

  • 8:30am: Personal Income, est. 0.4%, prior 0.2%; Personal Spending, est. 0.4%, prior 0.0%; Real Personal Spending, est. 0.2%, prior 0.3%
    • PCE Deflator MoM, est. 0.2%, prior -0.2%; PCE Deflator YoY, est. 1.7%, prior 1.8%
    • PCE Core MoM, est. 0.1%, prior -0.1%; PCE Core YoY, est. 1.5%, prior 1.6%
  • 9am: S&P CoreLogic CS 20-City MoM SA, est. 0.9%, prior 0.69%;  NSA, est. 5.61%, prior 5.85%; CS 20-City NSA Index, prior 193.5
  • 10am: Conf. Board Consumer Confidence, est. 119.8, prior 120.3; Present Situation, prior 140.6; Expectations, prior 106.7
  • 10:30am: Dallas Fed Manf. Activity, est. 15, prior 16.8
  • 1pm: Fed’s Brainard Speaks on Economy, Monetary Policy in New York

DB’s Jim Reid concludes the overnight wrap

Back after a long and often rainy bank holiday weekend. We used some of the extra time to watch our first film of the year – LaLa Land. I really enjoyed it. In fact it’s undoubtedly the best ever Oscar winning film for 5 seconds that I’ve ever seen. Moving from the big to the small screen, if you’re exhausted at the drama surrounding the current US political administration and want something more boring and mainstream then today is your lucky day as season 5 of House of Cards lands on Netflix. Enjoy. I’m off to a conference in Germany so it’ll have to wait for my return.

Staying with politics, on a day of holidays in the US and UK, Italian election anticipation was the main story to disturb the quiet. All the talk was about a possible new electoral system in Italy which could allow an election to take place as soon as this autumn, rather than waiting until 2018. In an interview with Il Messaggero, former PM Renzi said that Italy voting at the same time as Germany this autumn “would make sense for many reasons”. Renzi said that he favoured a German-style electoral system based on proportional representation and that while this would not be a solution to all problems, the system “would be a step forward in overcoming the current stalemate” and so removing obstacles to snap elections and thus removing the need to wait until 2018. Over the weekend anti-establishment 5-Star supporters overwhelmingly backed a proportional law modelled on that of Germany in which parties must secure at least 5% of votes to get into parliament.

Up until a few noises in this direction last week, Italian politics had been looking more like an early 2018 story however clearly the risk now is that this is brought forward to the autumn. Germany’s federal election is scheduled for September 24th. Remember also that Italy is still to pass its budget law, due in October, which has the potential to complicate matters. There is also the not so small issue of Italy’s banking system woes which still need to be taken care of. With regards to polling, the overall theme is that it is very tight and the gap at the top within the margin of error. Of the last 10 opinion polls conducted since May 18th, the Democratic Party (PD) leads in 6 and the Five Star Movement (5SM) leads in 4. However the margin between the two parties is anywhere from +/- 2%. It’s worth noting that only 2 other parties (Forza Italia and Lega Nord) qualify for the >5% cut-off based on recent polls. This all raises the possibility of a hung parliament.

In an otherwise quiet day for markets it was the underperformance in  Italian assets which easily stood out. While the Stoxx 600 (-0.03%) finished more or less flat, the FTSE MIB tumbled -2.01% while Italian Banks closed down -3.51%. 10y BTP yields were also 8.6bps higher while Bunds and OATs were 2-3bps lower. The Euro (-0.17%) traded sideways for much of the session however we have seen it dip -0.32% in the early going this morning.

The slightly stronger performance for core government bond markets in Europe yesterday perhaps reflected a slightly dovish tone from ECB President Draghi. Speaking at a hearing at the European Parliament in Brussels, Draghi said that “we remain firmly convinced that an extraordinary amount of monetary policy support, including through our forward guidance, is still necessary”. This was put in the context of underutilized resources being re-absorbed and for inflation to return to and durably stabilize around levels close to 2%. Draghi did note a measureable reduction to downside risks and tail risks which Europe faced at the end of last year as receding measurably. ECB Governing Council Member Nowotny also spoke yesterday and said that he see’s “positive news” on growth but that on the other hand he still needs to see evidence that this is sustained.

The Bundesbank’s Weidman also said that “in light of subdued price pressures, an expansionary monetary policy continues to be appropriate in principal”. Over at the Fed meanwhile San Francisco Fed President John Williams spoke again although much of the speech was a repeat of comments recently. Williams said that he sees a “much smaller” balance sheet in years ahead and that the unwinding could begin with a “baby step” later this year. Early this morning the dovish St Louis Fed President James Bullard also spoke with the most notable takeaway being a fairly frank assessment of Trump’s administration. Bullard said that “Washington does have to deliver at some point and I think that is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of American politics would settle in”. He added that “we’ll see if that happens or not” and that “I think the jury is out”.

Away from Central Bank speak t he latest CSPP numbers out yesterday showed a surprisingly high amount of corporate purchases last week. The average daily purchases of €452mn was well above the average of €367mn since the program started. The CSPP/PSPP ratio was 20% (vs. 17.2%, 12.6%, 10.7% and 8.7% in the previous four weeks). Since QE was trimmed in April the CSPP/PSPP ratio has been 13.7%, up from 11.6% between July 2016 and March 2017. So after a few weeks where it looked like an equal taper it seems that corporates are being tapered less for now. The ECB has certainly not been predictable on this though.

This morning in Asia it’s been another fairly directionless session, characterised again by thin volumes with markets in China closed for a second day. The Nikkei (-0.54%) and Kospi (-0.46%) are both weaker, however the ASX (+0.24%) is slightly firmer. The Hang Seng is shut along with bourses in China. Commodities have for the most part traded sideways while Asian currencies are a little softer. Macro data this morning was reserved for Japan where April retail sales (+1.4% mom vs. -0.2% expected) rose surprisingly, while the jobless rate held steady at 2.8%.

Before we look at the day ahead, we are yet to hear of any polls post last night’s TV Q&A between PM Theresa May and Labour leader Jeremy Corbyn. While both faced challenges with the current PM questioned on recent u-turns, the candidates seemingly came away unscathed. Prior to the Q&A a survation poll conducted over May 26-27 confirmed some of the recent trend with the Conservatives lead shrinking to just 6% at 43%-37%, from 9% on May 19-20 and 18% on May 12-13. We did a thorough recap of the UK polls in yesterday’s EMR for those interested.

Looking at today’s calendar, we’ve got a fair few data releases to get through today. This morning in Europe we’ll be kicking off in France where the latest consumer confidence and consumer spending reports are due, along with the preliminary release of Q1 GDP. Following that we’ll get May confidence indicators for the Euro area before a first look at the May inflation reports this week with Germany first up. This afternoon in the US we will get a first look at how consumer spending is looking in Q2 with the April personal income and spending reports (the latter expected to increase +0.4% mom). We will also receive the April PCE core and deflator readings where a modest +0.1% mom rise in the core is expected. Following that we’ll get the March S&P/Case-Shiller house price index before we then get the May consumer confidence reading (expected to decline 0.5pts to 119.8) and finally the Dallas Fed’s manufacturing survey for May. Away from the data, this evening at 6pm BST we are due to hear from the Fed’s Brainard who has sounded a little more positive of late. The ECB’s Liikanen is also due to speak this morning.

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 2.28 POINTS OR 0.07%   / /Hang Sang CLOSED UP 62.36 POINTS OR 0.24% The Nikkei closed DOWN 4.72 POINTS OR 0.02%/Australia’s all ordinaires  CLOSED UP  0.14%/Chinese yuan (ONSHORE) closed  UP at 6.8555/Oil DOWN to 49.59 dollars per barrel for WTI and 51.87 for Brent. Stocks in Europe OPENED IN THE RED     ..Offshore yuan trades  6.8270 yuan to the dollar vs 6.8550 for onshore yuan. NOW  THE OFFSHORE IS A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A TOUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA NOT HAPPY WITH THE NEWS THAT ITS DEBT HAS BEEN DOWNGRADED WITH THE /CHINA UNDERGOES INTERVENTION AGAIN LAST NIGHT 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA/SOUTH KOREA

SATURDAY

USA deploys its 3rd aircraft carrier towards north Korea

(courtesy zero hedge)

US Deploys Third Aircraft Carrier Toward North Korea

One month ago, when we first discussed that in addition to the CVN-70 Carl Vinson aircraft carrier group, the US was deploying two more carriers toward the Korean peninsula, some took the Yonhap-sourced report skeptically: after all, what’s the incremental symbolic impact of having three, or even two aircraft carriers next to North Korea when just one would more than suffice. Then, two weeks ago, the report was proven half right when US officials announced that in addition to the first US carrier already on location, the US Navy is moving the USS Ronald Reagan aircraft carrier to the Korean Peninsula, where it would conduct dual-carrier training exercises with the USS Carl Vinson.

Aircraft carrier CVN-76 Ronald Reagan

After completing its maintenance period in Yokosuka, Japan, the USS Ronald Reagan departed for the Korean Peninsula on Tuesday, according to the Navy. “Coming out of a long in-port maintenance period we have to ensure that Ronald Reagan and the remainder of the strike group are integrated properly as we move forward,” Rear Adm. Charles Williams said in a press release.  Once it arrives in the region, the carrier will conduct a variety of training exercises but primarily focus on certifying its ability to safely launch and recover aircraft, the service said. In other words, training for combat missions involved the North Korean capital.

We concluded our report from mid-May by saying that the US Navy may soon “further deploy the CVN-68 Nimitz, which was the third carrier reported to be eventually making its way toward Korea.”

We didn’t have long to wait, because on Friday the Kitsap Sun confirmed what we reported initially over a month ago, namely that the USS Nimitz will depart Naval Base Kitsap-Bremerton on Thursday on its first deployment since 2013. Official details of the deployment were hazy, with spokeswoman Theresa Donnelly saying that The Nimitz-class aircraft carrier is expected to be in the western Pacific for six months with visits to the Middle East and Asia-Pacific, “though plans could change in response to world events.”

However, a subsequent report from VOAnews confirms that the ultimate destination is none other than the country the US will almost certainly attack next, North Korea:

The United States is sending a third aircraft carrier strike force to the western Pacific region in an apparent warning to North Korea to deter its ballistic missile and nuclear programs, two sources have told VOA. The USS Nimitz, one of the world’s largest warships, will join two other supercarriers, the USS Carl Vinson and the USS Ronald Reagan, in the western Pacific.

The Nimitz will lead Carrier Strike Group 11, which includes guided-missile destroyers USS Shoup and USS Kidd from Naval Station Everett, guided-missile destroyers USS Howard and USS Pinckney and guided-missile cruiser USS Princeton from San Diego, and a conglomeration of aircraft squadrons that comprise Carrier Air Wing 11, including Naval Air Station Whidbey Island-based Gray Wolves of Electronic Attack Squadron 142.


Aircraft carrier CVN-68 Nimitz

After returning from its last deployment, the Nimitz underwent a 20-month maintenance and modernization period at Puget Sound Naval Shipyard that was completed in October. It has spent most of the past seven months at sea undergoing training and inspections in preparation for deployment. Now the ship and crew are ready to go, said commanding officer Capt. Kevin Lenox.

“I am so incredibly proud of the entire Nimitz team and the terrific coordination and support across the entire strike group, especially in such a condensed training cycle,” he said in a news release. “The crew stepped up to the plate, and I’m confident we’re ready to meet whatever challenges lie ahead on our upcoming deployment.”

While it is rare for the U.S. military to deploy two carriers in the same region at the same time, it is almost unheard of to have three aircraft carriers in close proximity to each other absent current or imminent military action. Which may be the case soon: as VOA notes, North Korea’s growing nuclear and missile threat is seen as a major security challenge for Trump, who has vowed to prevent the country from being able to strike the U.S. with a nuclear missile.

Sitting alongside Japanese Prime Minister Shinzo Abe, Trump said on Friday prior to the start of the G-7 meeting in Sicily that world leaders would have a “particular focus on the North Korea problem.” The White House issued a statement on Friday which said the two leaders have agreed to “enhance sanctions on North Korea” in an attempt to prevent the further development of North Korea’s ballistic missile and nuclear programs.

Meanwhile, as reported on Friday, the U.S. military will test a system to shoot down an ICBM for the first time next week. It is intended to simulate a North Korean ICBM aimed at the U.S. The Missile Defense Agency said it will test an existing missile defense system on Tuesday to try to intercept an ICBM. The Pentagon has used the Ground-Based Midcourse Defense (GMD) system to intercept other types of missiles, but never an ICBM. The GMD has been inconsistent, succeeding in nine of 17 attempts against missiles without intercontinental range capability since 1999.

So, perhaps as a contingency plan, the US will soon have not one, not two, but three aircraft carriers in the proximity of the Korean peninsula “just in case.” The trip from Naval Station Everett is expected to take several weeks. Meanwhile, here is the latest deployment of US naval forces around the globe as of May 25, courtesy of Stratfor.

SUNDAY

North Korea tests a new anti-aircraft weapon

(courtesy zero hedge)

 

Kim Jong-Un Watches As North Korea Tests New Anti-Aircraft Weapon

With Trump back from his trip, and speculation again emerging that Trump may “wag the dog” and launch an attack on the Kim regime to deflect from the domestic media onslaught a la Syria, especially after last night’s report that the US has deployed a third carrier group to the Western Pacific, on Sunday Korea’s state news agency, KCNA reported that after weeks of defiant ballistic missile tests Kim Jong Un supervised the test of a new anti-aircraft weapon system and ordered its mass production and deployment throughout the country.

While KCNA did not report the exact nature of the weapon or the time of the test it said it was organized by the Academy of National Defence Science, a blacklisted agency that is believed to be developing missiles and nuclear weapons.

Meanwhile, Kim – taking a page out of his father’s playbook – watched…

… delighted.

According to KCNA, “Kim Jong Un … watched the test of a new type of anti-aircraft guided weapon system organized by the Academy of National Defense Science.”

“This weapon system, whose operation capability has been thoroughly verified, should be mass-produced to deploy all over the country … so as to completely spoil the enemy’s wild dream to command the air, boasting of air supremacy and weapon almighty,” the press agency said.

As Reuters adds, the North has been pushing to develop a wide range of weapon systems since early last year at an unprecedented pace including a long-range missile capable of striking the mainland United States and has in recent weeks tested its intermediate-range ballistic missile, making some technical advances. The isolated state rejects U.N. and unilateral sanctions by other states against its weapons program as an infringement of its right to self defense and says the program is “necessary to counter U.S. aggression.”

We doubt it will succeed, especially with the US piling up aircraft in North Korea’s vicinity.

And while the military posturing is set to continue on both sides until some real conflict finally emerges, a potentially more relevant story is that despite assurances by Beijing that it is isolating Pyongyang, on Friday Yonhap reported that North Korea’s grain imports from China showed a more than fivefold surge last month from a year ago.

 

The North brought in 4,100 tons of grain from China in April, 5.4 times higher than 754 tons a year earlier, according to Kwon Tae-jin, head of South Korean agricultural think tank GS&J Institute’s North Korea and East Asia division. The North’s combined grain imports from China during the January-April period also marked a spike of 4.3 times to 10,619 tons from a year ago, with wheat flour at the top with 3,403 tons, the broadcaster said.

This has prompted the question whether China is promising Trump, and its Asian neighbors, one thing namely that it will pressure North Korea into halting its nuclear tests by limiting commerce with Kim, while in reality it is not only maintaining but expanding trade relations with its feisty neighbor.

end

 

MONDAY

North Korea then launches another ballistic missile flying for 6 miles and landing in the Sea of Japan

(courtesy zero hedge)

North Korea Launches Another Ballistic Missile

It’s becoming a weekend tradition.

Almost exactly one week after the latest ballistic missile test launch by Pyongyang last Sunday, and two weeks after a similar launch the weekend prior, North Korea has fired its latest unidentified ballistic missile early on Monday, South Korea’s military said according to Yonhap News. According to NBC, the North Korean missile flew for 6 miles after launch and landed in the Sea of Japan.

The launch will be the 12th missile Pyongyang has fired this year (according to the WSJ, and 9th according to Bloomberg, which count launch “errors” differently).

North Korea test-fired a new mid-to-long-range rocket, which it calls the
Hwasong-12, on May 14, 2017

The unidentified missile was fired from near the North Korean coastal city of Wonsan, Seoul’s Joint Chief of Staff (JCS) said. The missile flew in a easterly direction, sources said.

The launch was immediately reported to President Moon Jae-in, who called a meeting of the National Security Council at 7:30 a.m. (2230 GMT Sunday), the South Korean office of the Joint Chiefs of Staff said in a statement, according to Reuters.

While there was little initial information, the North Korean projectile may fall into waters of Japan’s exclusive economic zone, or EEZ, according to Japan’s public broadcaster NHK which cited the Japanese government.

NHK also adds that the Defense Ministry is analyzing details such as projectile path, and added that the foreign ministry will – again – protest to North Korea using diplomatic channels.  Prime Minister’s office collecting information in task office from related agencies and heighten alert.

There has been no official response from the White House yet, altough we expect the token “the White House is aware of the launch” will be fortcoming momentarily.

Trump, who has said all options are on the table to deal with Kim’s regime, has repeatedly sought more help from China to rein in its neighbor and ally. Acting Assistant Secretary of State Susan Thornton on Friday acknowledged China’s efforts such as banning North Korean coal imports and tightening border controls, while adding that “they clearly have to do more.” Clearly, because on Friday Yonhap reported that North Korea’s grain imports from China showed a more than fivefold surge last month from a year ago.

At least North Korea has so far this year refrained from conducting a nuclear test, something which even Beijing has said would be a ‘red line.”

Meanwhile, as reported yesterday, a third US aircraft carrier, the USS Nimitz is now making its way to the Korean Peninsula where it will join the Carl Vinson and Ronald Reagan, ahead of what many anticipate could be a “decapitation” attack on the North Korean regime.

end

An extremely happy Kim Jong -Un now threatens the uSA with a bigger gift package

(courtesy zero hedge)

A Giddy Kim Jong-Un Vows To Send “Bigger Gift Package” To America

After a delighted Kim Jong Un supervised the latest successful test of North Korea’s latest ballistic missile controlled by a precision guidance system, the leader ordered the development of more powerful strategic weapons, the official KCNA news agency reported on Tuesday.

According to Bloomberg, the missile launched on Monday – the ninth such test this year and coming two days after the G-7 pledged to “strengthen measures” aimed at prompting North Korea to cease nuclear and ballistic missile trials – was equipped with an advanced automated pre-launch sequence compared with previous versions of the “Hwasong” rockets.

In fact, according to KCNA, the latest ballistic missile test involved a precision guidance system that landed within seven meters of its target. As Reuters further adds, The North’s test launch of a short-range ballistic missile landed in the sea off its east coast and was the latest in a fast-paced series of missile tests defying international pressure and threats of more sanctions.

The latest missile was first unveiled at an April 15 military parade celebrating the birth anniversary of North Korea’s founder Kim Il Sung, the news agency said. It flew 450 kilometers (280 miles) toward Japan, according to South Korean military officials, with the government in Tokyo saying it may have reached waters in Japan’s exclusive economic zone.

The accuracy claims, if true, would represent a potentially significant advancement in North Korea’s missile program. KCNA said Kim called for the continued development of more powerful strategic weapons, though the report didn’t mention whether the missile could carry nuclear warheads.

 

We can’t prove if it’s bluffing, but North Korea is basically saying it can hit the target right in the center, which is scary news for the U.S.,” said Suh Kune Y., a professor at Seoul National University’s department of nuclear engineering. “If true, that means they’re in the final stage of missile development.”

The successful test was music to Kim’s ears, who said the reclusive state would develop more powerful weapons in multiple phases in accordance with its timetable to defend North Korea against the United States. “He expressed the conviction that it would make a greater leap forward in this spirit to send a bigger ‘gift package’ to the Yankees” in retaliation for American military provocation, KCNA quoted Kim as saying.

KCNA said North Korea won’t be swayed by pressure from the G-7.

“The G-7 summit is a place where those nuclear- and missile-haves put their heads together to discuss how to pressure weak countries and those incurring their displeasure,” the news agency said. “The U.S. and its followers are seriously mistaken if they think they can deprive the DPRK of its nuclear deterrence, the nation’s life and dignity, through sanctions and pressure,” it said, using an abbreviation for North Korea.

Trump, who has sought more help from China to rein in its neighbor and ally, said on Twitter that “North Korea has shown great disrespect for their neighbor, China, by shooting off yet another ballistic missile…but China is trying hard!” Beijing also expressed its opposition to the test. All sides should “ease tensions on the Korean Peninsula as soon as possible and bring the Peninsula issue back onto the right track of peaceful dialog,” China’s foreign ministry said.

Meanwhile, South Korea said it had conducted a joint drill with a U.S. supersonic B-1B Lancer bomber earlier on Monday. North Korea’s state media earlier accused the United States of staging a drill to practise dropping nuclear bombs on the Korean peninsula.

The U.S. Navy said its aircraft carrier strike group, led by the USS Carl Vinson, also planned a drill with another U.S. nuclear carrier, the USS Ronald Reagan, in waters near the Korean peninsula. A U.S. Navy spokesman in South Korea did not give specific timing for the strike group’s planned drill.

North Korea calls such drills a preparation for war, and prompted yet another outburst from Kim on Tuesday:

“Whenever news of our valuable victory is broadcast recently, the Yankees would be very much worried about it and the gangsters of the south Korean puppet army would be dispirited more and more,” KCNA cited leader Kim as saying.

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

Germany/USA

Germany’s Merkel is furious with Trump after another “unprecedented” 67 failure to reach a consensus on climate change

(courtesy zero hedge)

 

Merkel Furious With Trump After “Unprecedented” G-7 Failure To Reach Consensus On Climate Change

In the end it was not mean to be. As discussed on Friday, during Trump’s first G-7 summit, world leaders including German Chancellor Angela Merkel and new French President Emmanuel Macron, had hoped to persuade the the US president to endorse the Paris Agreement climate pledge to fight global warming. By the end of the summit – held at a luxury hotel in Taormina, Sicily that was once a Dominican monastery and base for the Nazi air force during World War Two – they realized they had failed, as Trump “underscored his determination to break the global mold” by refusing to follow the Group of Seven line not only on global warming but also by resisting measures on trade.

Furthermore, in what was described as an “unprecedented step“, the final G-7 communique gave the U.S. its own section to say that it is “undergoing a review process” and is unable to join in the discussion, an official cited by Bloomberg said. As a result while the US will remain excluded from the final affirmation, the other six, call it the G-6, will recommit to the Paris Agreement on climate change, which Trump tweeted Saturday he’d come to a decision on next week.

I will make my final decision on the Paris Accord next week!

Needless to say, Merkel who had hoped to leave the Saturday summit with the G-7 agenda endorsed by everyone, including Trump, was furious at the US president.

“The whole discussion about climate has been difficult, or rather very unsatisfactory”  German Chancellor Angela Merkel told reporters Saturday. “Here we have the situation that six members, or even seven if you want to add the EU, stand against one. That means there are no signals until now whether the U.S. will remain in the Paris Agreement or not. We have therefore not talked around it but made clear that we the six member states and the EU remain committed to the goals of the agreement.”

The unhappy German continued: “The fact that we have not been able to make progress here is of course a situation in which you have to say that there is no common support for an important international agreement. This Paris Agreement is not simply any old agreement, but it’s rather a core agreement.”

She concluded by noting the unprecedented breach of agreement within the ranks, perhaps a first in G-7 history “There is right now no agreement. But we have made very clear that we are not moving away from our positions.”

Moments later, the final declaration released a just as stunning statement, which said that the U.S. was “not in a position to join consensus” on climate change.

BREAKING: Group of Seven final declaration says U.S. “not in a position to join consensus” on climate change.

 

To be sure, its wasn’t just Merkel who was displeased with Trump. According to Politico, while he avoided any major gaffes or serious diplomatic breaches, Trump’s lack of rapport with European leaders raises serious questions about his ability to effectively team up with critical U.S. allies.

“Like when there’s a new strange kid in the class nobody likes,” said a senior EU official who was briefed on the closed NATO meetings in Brussels. “You behave civilly when teachers (media) watch but don’t spend time with him in private because he’s so different.”

* * *

Trump’s inability to integrate with European leaders aside, there was at least some G-7 concensus on trade, after government officials were said to have found an agreement after haggling over wording on protectionism and reciprocal benefits, Bloomberg reported. Technical negotiations had stretched until 3 a.m. in Taormina to try to reconcile Trump’s ‘America First’ approach with the other leaders’ commitment to open markets. The result is a reference to combating protectionism to be included in the final text, according to two of the officials. Still, said the third, the document in its current draft clearly falls back by comparison to earlier G-7 communiques.

The leaders “found a reasonable solution” on trade that commits to a rules-based system, Merkel said. “We want to make the WTO successful,” she said.

Speaking to reporters on the G-7’s trade decision, Merkel said “we had very tough discussions about trade. Here I think we have found a reasonable solution. We commit ourselves to a rules- based trade system. We want to make the WTO successful. We will together keep our markets open and will move against protectionism, but will at the same time fight against unfair trade practices. This is also in the German interest when I think about the question of steel.”

According to Bloomberg, the discussions, described by Merkel as “very intense” late on Friday, “underscore the Trump administration’s decision to break with the established order honed over decades. Trump told his fellow leaders on Friday that he had campaigned on a platform of protecting U.S. jobs and would act accordingly, according to the officials, all of whom asked not to be named discussing the private meetings.”

But the best indication of the hit globalization took over the past 48 hours, was the actual content of the final G-7 communique, which was just six pages long compared to 32 pages last year. While much was dropped from the final draft, the text will contain a passage on migration, which it refers to as “human mobility.” It includes a sentence which says that nations also have the right to protect their security, while observing human rights.

end

 

Italy

 

It seems that the 4 major parties like the German proportional system and that should jump start an early election in the fall.

 

(courtesy zerohedge)

 

Fearless leader Deutsche bank knows that something is up: they downgrade all European banks to underweight

(courtesy zero hedge)

Deutsche Bank Downgrades European Banks To Underweight

In what some may find an amusing change in outlook by the bank that less than a year ago was on insolvency’s door, its stock at record lows, this morning Deutsche Bank downgraded its peers, other (ostensibly more sound) European banks, to underweight from benchmark on expectations that fading euro-area growth momentum will weigh on the sector over coming months.

At the same time, DB strategist Andreas Bruckner also Upgraded energy to overweight from underweight as recent USD weakness points to near-term upside for oil. He also upgraded construction materials to overweight from underweight as the recent correction has gone too far given sector is already priced for severe slowdown in global growth and a sharp rise in U.S. credit spreads even as they have tightened.

The German bank also downgrades tech to benchmark from overweight given fair price after outperformance and USD weakness, DB notes however that within tech, Deutsche Bank prefers semiconductors.

It also downgraded airlines to benchmark from overweight, and downgrades consumer durables to underweight from benchmark on expected slowdown in global PMI momentum, fading U.S. consumer confidence and high valuation.  Finally, it reduced its underweight in mining as sector is below fair value estimate.

The details:

Banks – downgrade from benchmark to underweight, as fading Euro area growth momentum is set to weigh on the sector over the coming months. The Euro area composite PMI new orders index, at 55.5, is consistent with 3% Euro area GDP growth, significantly above our economists’ GDP forecast of 1.8%. If PMIs fade back to the levels consistent with our economists’ projections (at around 53), this would imply PMI momentum (i.e. the six-month change in PMIs) turning negative over the coming months.

 

Banks are among the sectors most sensitive to swings in Euro area PMI momentum and tend to underperform when it turns negative. There is no particular valuation support, with the sector’s P/E discount at 20%, roughly in line with the long-term average. We expect PMI momentum to trough later in the year, at which point we will be looking to turn more positive on banks, especially given that our sector analysts see upside for the sector over the next 12 months (as a function of the expected interest rate normalization).

 

 

 

Energy – upgrade from underweight to overweight: the sector has underperformed the market by 12% year-to-date, making it the worst performing sector so far this year. Following the recent correction, energy is around 5% cheap on our short-term fair-value model based on oil and sterling (the largest upside in four years). It also ranks as the cheapest sector on our European sector valuation scorecard. The relationship between the oil price and the USD points to near-term upside for oil, given the recent USD weakness. Lastly, oil speculative positions have fallen sharply from asix-year peak in February, pointing to a more balanced market sentiment. The key risks for the sector are the continued rebound in US shale oil production and the scope for renewed USD strength weighing on commodity prices (though we note that our FX strategists have recently reduced their projected USD upside for the rest of the year).

 

Construction materials – upgrade from underweight to overweight: the sector has underperformed the market by around 9% since early December, making it the third worst performing sector over that period (after energy and food retail). The correction now seems to have gone too far, given that: (a) the sector is already priced for a slowdown in global growth momentum that is significantly harsher than the mild fade that we envisage; (b) it is discounting a sharp rise in US credit spreads, even as the actual spreads have continued to tighten; (c) the sector would benefit from a further fall in the European policy uncertainty index from still-elevated levels; and (d) the sector’s P/E relative is close to the lowest level since 2009.

 

Tech – downgrade from overweight to benchmark, given that: (a) the sector has outperformed the market by around 12% since early December and appears fairly-priced on our two-factor model; (b) the case for dollar strength, which has historically been a key performance driver due to the sector’s above-average sales exposure to the US, has softened and tech has yet not caught up with the recent USD weakness; and (c) the sector ranks as the most expensive sector on our European sector valuation scorecard. Within tech, we prefer semiconductors (~30% of tech market cap) which has not yet caught up with the recent rebound in US consumer confidence.

 

Airlines – downgrade from overweight to benchmark: the sector has outperformed the market by almost 25% since the beginning of the year, supported by lower commodity prices and favorable FX moves. As such, it has now overshot its underlying drivers and is more than 10% above fair value according to our 3-factor model (based on oil prices, Sterling and peripheral bond spreads). On the upside, the sector could benefit from a further reduction in European policy uncertainty – and relative P/Es remain close to a 10-year low (at a 35% discount to the market).

 

Consumer durables (i.e. luxury goods) – downgrade from benchmark to underweight, given that (a) the sector is highly sensitive to swings in global growth, but has not yet reacted to the recent fade in global PMI momentum, which we think has further to go; (b) the sector has outperformed in line with the post-election rebound in US consumer confidence to a 17-year high, but this has recently started to fade, and (c) the sector’s relative P/E, at a 30% premium to the market, is almost one standard deviation above its long-run average.

 

Mining – reduce underweight: the sector has been the weakest sector in Europe over the past three months, underperforming the market by around 15% on the back of falling metal prices. As a consequence, our fair-value model (based on copper, sterling and US real rates) now points to around 5% upside. Yet, we remain underweight, given that: (a) after its recent sharp fall, the iron ore price points to around 40% downside for miners’ relative EPS, suggesting renewed earnings downgrades to come; (b) adjusting for the iron-ore implied EPS downside, the relative P/E is around one standard deviation above the long-term average; (c) we expect the China credit impulse to turn negative again over the coming months, which would be consistent with further downside for iron ore; (d) global PMI momentum has started to roll over – and mining tends to underperform when this is the case.

Finally, this is why DB is increasingly souring on the European recovery: the bank believes the Euro area PMI momentum is set to turn negative over the coming months, and explains why in the charts below.

And now we wait for other European banks to downgrade Deutsche Bank in sympathy.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Egyptian warplanes bomb terrorist camps in Libya after the attack on Christian Coptics

(courtesy zero hedge)

Egyptian Warplanes Bomb Terrorist Camps In Libya After Attack On Coptic Christians

Hours after gunmen opened fire on a convoy of vehicles carrying Coptic Christian worshippers to a desert monastery in Egypt, killing 28, the Egyptian warplanes carried out six bombing strikes targeting camps near Derna in Libya where Cairo believes militants responsible for the deadly attack were trained, Egyptian military sources said quoted by Reuters.

Egyptian President Abdel Fattah al-Sisi said directed strikes against what he called terrorist camps, declaring in a televised address that states that sponsored terrorism would be punished. He also vowed to continue striking bases used to train militants and who carry out terrorist attacks in his country, whether those camps were inside or outside the country.

“The terrorist incident that took place today will not pass unnoticed,” Sisi said. “We are currently targeting the camps where the terrorists are trained.”

“Egypt will not hesitate in striking any camps that harbor or train terrorist elements whether inside Egypt or outside Egypt,” the al-Ahram news agency quoted Sisi as saying.

The strikes took place around sundown, hours after the deadly attack. Christians, who account for about 10% of Egypt’s population of 80 million, have become the victims of an intensifying campaign of bombings and shootings masterminded by ISIS, which is trying to expand its footprint in Egypt. In April, at least 37 people were killed and more than 100 injured in two separate bombings at Christian Coptic churches packed with worshippers in northern Egypt one week before Coptic Easter.

Following the Libyan incursion, Egyptian armed forces released a short video which was aired on state television following the president’s speech. The voiceover in the army video said its air force carried out strikes on targets in Libya “after confirming their involvement in planning and committing the terrorist attack in Minya governorate on Friday.” Egypt’s military said that the air strikes are ongoing, local media reports.

Egyptian security forces have destroyed some 300 vehicles over the past two months which attempted to cross the border from Libya in order to bring in “evil,” according to Sisi, who emphasized the huge efforts his country has undertaken to battle terrorism.

The Egyptian president also directly addressed Donald Trump to take the lead in fighting terrorism. “I direct my appeal to President Trump: I trust you, your word and your ability to make fighting global terror your primary task,” he said.

On Friday President Trump condemned the attacks on Egypt’s Coptic Christians, denouncing the “thuggish ideology” and “evil organizations of terror.” The White House issued the following statement earlier in the day:

Terrorists are engaged in a war against civilization, and it is up to all who value life to confront and defeat this evil. This merciless slaughter of Christians in Egypt tears at our hearts and grieves our souls. Wherever innocent blood is spilled, a wound is inflicted upon humanity. But this attack also steels our resolve to bring nations together for the righteous purpose of crushing the evil organizations of terror, and exposing their depraved, twisted, and thuggish ideology.

 

America also makes clear to its friends, allies, and partners that the treasured and historic Christian Communities of the Middle East must be defended and protected. The bloodletting of Christians must end, and all who aid their killers must be punished.

 

America stands with President Al Sisi and all the Egyptian people today, and always, as we fight to defeat this common enemy.

 

Civilization is at a precipice—and whether we climb or fall will be decided by our ability to join together to protect all faiths, all religions, and all innocent life. No matter what, America will do what it must to protect its people.

No militant group has yet claimed responsibility for the deadly attack on the bus.

 

 

END

Global trades is moving away from the USA dollar as Russia and Iran sign an oil for goods barter deal. Another dagger into the heart of the USA petrodollar/hegemony/system.

(courtesy zero hedge)

(courtesy zerohedge)

(courtesy zero hedge)

6 .GLOBAL ISSUES

Hot money is flowing out of emerging markets.  The two biggest lowers today:  the Mexican peso as the opposition party lost out in elections and the South African rand as Zuma was facing a revolt in his own party

(courtesy zerohedge)

Peso Pounded As Political Risk Re-Emerges In Mexico

The Mexican peso tumbled more than 1% this morning, more than every other major emerging-market currency except the South African rand.

Bloomberg reports that traders were anticipating a victory for the opposition Morena party in this weekend’s gubernatorial elections in the state of Mexico, according to Win Thin, Brown Brothers Harriman & Co.’s head of emerging markets in New York.

And the peso is back at one-week lows

 

Peso also hurt by negative sentiment towards emerging markets, as South
African President Jacob Zuma quashed a revolt in his own party, denting
optimism a more market-friendly leader will take over…

While hot money floods into EM bonds and stocks, Thin notes

“Markets got a wake-up call with regards to
EM political risk with South Africa, and may be re-pricing chances of a
negative outcome from this coming weekend’s state of Mexico elections”

7. OIL ISSUES

8. EMERGING MARKET

end

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

Euro/USA   1.1152 UP .0023/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES IN THE RED 

USA/JAPAN YEN 110.94 DOWN 0.246(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 1.2869 UP .0057 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3459 DOWN .0019 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 23 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1152; 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      / Hang Sang  CLOSED  UP 62.36 POINTS OR 0.24% /AUSTRALIA  CLOSED UP 0.14% / EUROPEAN BOURSES OPENED  RED 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED DOWN 4.72 POINTS OR 0.02%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 62.36 POINTS OR 0.24%  / SHANGHAI CLOSED   /Australia BOURSE CLOSED UP 0.14% /Nikkei (Japan)CLOSED  DOWN 4,72 POINTS OR 0.02%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1266.11

silver:$17.29

Early TUESDAY morning USA 10 year bond yield: 2.237% !!! DOWN 1 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.906, DOWN 1  IN BASIS POINTS  from FRIDAY night.

USA dollar index early TUESDAY morning: 97.50 UP 6  CENT(S) from FRIDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.109%  DOWN 4 in basis point(s) yield from FRIDAY 

JAPANESE BOND YIELD: +.043%  UP 1/5  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.528%  DOWN 2 IN basis point yield from FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.18 UP 8   POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 65 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.292% DOWN 5 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1173 UP .0044 (Euro UP 44 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.75 DOWN  0.444 (Yen UP 44 basis points/ 

Great Britain/USA 1.2841 UP 0.0029( POUND UP 29 basis points)

USA/Canada 1.3465 DOWN .0007 (Canadian dollar UP 7 basis points AS OIL FELL TO $49.36

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This afternoon, the Euro was UP by 44 basis points to trade at 1.1173

The Yen ROSE to 110.75 for a GAIN  of 44  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 29  basis points, trading at 1.2841/

The Canadian dollar ROSE by 7 basis points to 1.3465,  WITH WTI OIL FALLING TO :  $49.36

The USA/Yuan closed at 6.8555/
the 10 yr Japanese bond yield closed at +.043% UP 1/10  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 3  IN basis points from FRIDAY at 2.224% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.889  DOWN 3 in basis points on the day /

Your closing USA dollar index, 97,38 DOWN 6 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 21.12 POINTS OR 0.28%
German Dax :CLOSED DOWN 30.67 POINTS OR 0.24% 
Paris Cac  CLOSED DOWN  26.53 POINTS OR 0.50% 
Spain IBEX CLOSED  DOWN 7.16 POINTS OR 0.07%

Italian MIB: CLOSED  UP 30.66 POINTS/OR 0.15%

The Dow closed DOWN 50.81 OR 0.24%

NASDAQ WAS closed DOWN 7.00 POINTS OR 0.11%  4.00 PM EST
WTI Oil price;  49.36 at 1:00 pm; 

Brent Oil: 51.56 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.62 DOWN 11/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS T0  +0.292%  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:$49.49

BRENT: $51.68

USA 10 YR BOND YIELD: 2.206%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.8777%

EURO/USA DOLLAR CROSS:  1.1196 UP .0067

USA/JAPANESE YEN:110.76  down 0.430

USA DOLLAR INDEX: 97.27  DOWN 18  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2861 : UP .0047  OR 47 BASIS POINTS.

Canadian dollar: 1.3460  up 12 BASIS pts 

German 10 yr bond yield at 5 pm: +.292%

END

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

TRADING IN GRAPH FORM FOR THE DAY

VIX Jumps As Yield Curve Dumps To 7-Month Lows

 

Macro data, the dollar, and the yield curve are ‘breaking bad’ so when does the Walter White market die?

 

Another day, another set of dismal data (with soft data’s dump continuing)…

 

But The Nasdaq was bid (up for the 8th day in a row), because the real economy doesn’t matter and buying safe-haven 200x P/E stocks is the new normal… (Small Caps had a tough day)

 

Ugly day for the big banks as bond yields tumbled… (all of which are down 2 to 4% in May)

 

Amazon topped $1000 for the first time ever at the open…

Better just hope the G3 keeps printing…

 

After 7 straight down days, VIX actually ended higher on the day (despite fading lower from the US cash open)

 

For the month of May, Nasdaq remains the winner and Small Caps the biggest loser…

 

Treasury yields dropped on the day (and all but 2Y remain lower on the month)…

 

The Long-end outperformed… (with 30Y yields closing at 6 week lows)

 

And the yield curve has crushed to pre-Trump level…

 

And even the short-end has given up on the Trumpflation trade…

 

The Dollar Index ended the day unchanged from yesterday and unchanged from Friday’s close (despite some volatility)… The dollar slid as bond yields dropped…

 

Yen was strongest and CAD weakest against the Dollar today…

 

The Peso was the worst on the day after disappointing local elections

 

Crude trod water around $50 while NatGas crashed to 10 week lows…

 

While the dollar index slid all day, gold had a tough day (even as silver gained)

end

OVER THE WEEKEND

Connecticut bonds soar in yields as tax receipts tumble as more hedge funds leave for Florida

(courtesy zero hedge)

 

Connecticut Credit Risk Soars To Record High As Tax Receipts Tumble

Connecticut’s general-obligation bonds are riskier than ever as plummeting income-tax collections and a $2.3 billion budget deficit moved all three credit rating companies to downgrade its debt.

 

As Bloomberg details, tax receipts for the current fiscal year ending in June will be about $451 million short of estimates from January, prompting Governor Dannel Malloy to empty the state’s already small budget stabilization fund. To help close the gap, public employees agreed to accept a 3-year wage freeze and to contribute more for their pension and health-care benefits under a tentative deal that would save more than $1.5 billion over the next two years.

As we previously detailed, The state of Connecticut has been hit hard by the double whammy of a deteriorating local economy, coupled with a plunge in hedge fund profits – as well as hedge fund managers permanently relocating to Florida – leading to a collapse in tax revenues. According to the the latest Connecticut budget released last week, the state is reeling from the consequences of sliding tax revenue from the super-rich, i.e. the state’s hedge fund managers. The latest figures showed that tax revenue from the state’s top 100 highest-paying taxpayers declined 45% from 2015 to 2016. The drop adds up to a $200 million revenue loss for Connecticut.

In a dramatic, if of questionable credibility, soundbite Department of Revenue Services Commissioner Kevin Sullivan says these wealthy people are “dramatically less wealthy than they were before.” He was referring to annual income, not actual asset holdings, because judging by the all time high in the S&P, the local financial elite have never had a higher net worth.

“When you look at the top 75, top 50 … this is a group of wealthy people who are dramatically less wealthy than they were before,” said Kevin Sullivan, commissioner of the Connecticut Department of Revenue Services. “These folks, for a number of reasons, are either not realizing as much income or don’t have as much income.”

Just don’t expect tears from the general public. Sullivan also noted how several international hedge funds have recently failed, resulting in “significant retrenchment” from investors. That drop in tolerance for risk brings smaller margins and ultimately less personal income for the state to tax, he added. It’s fascinating how the Fed’s central planning, superficially meant to restore “confidence” in a rigged, manipulated market is having such profound and adverse 2nd and 3rd order effects on state budgets.

Sullivan also acknowledged part of revenue decline can also be attributed to “a handful” of wealthy individuals who moved to more tax-friendly states — an issue frequently raised by legislative Republicans, who argue Connecticut’s tax policies encourage the state’s super-rich to move out.

None of this should be a surprise… it’s no wonder more people than ever are looking to leave the increasing tax burden of this troubled state?

end

TUESDAY

Trump again blasts Germany concerning their climate control agenda and lack of spending at NATO

(courtesy zero hedge)

Trump Blasts Germany In First Tweet Of The Day

So much for Trump’s lawyers gaining control over the president’s tweeting habits.

Just three after the Italian G-7 meeting ended in an unprecedented lack of consensus over the Paris climate deal, prompting Angela Merkel to announce one day later that Germany can no longer “completely rely” on the US, Trump escalated the dispute with Germany over trade and defense while the German Chancellor met with Indian Prime Minister Narendra Modi in a demonstration of her ability to pivot from the U.S. to strengthen alternative global alliances.

“We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military,” Trump said in his first tweet on Tuesday. “Very bad for U.S. This will change”

We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change

Trump’s tweet came minutes after Merkel and Modi held a joint press conference in Berlin, at which the German leader sent a very clear message to the US, calling India a “reliable partner with respect to big projects.” That contrasted with her Sunday comments at a Munich rally that reliable trans-Atlantic ties that formed the basis of German foreign policy since World War II “are to some extent over.”

Merkel and Modi stressed their mutual values on the economy and climate change, with the Indian leader suggesting he will adhere to the Paris Agreement to combat global warming even if the U.S. quits. He praised Merkel’s experience and Germany’s economic example to India.

“We are meant for each other,” Modi said.

In the same vein, on Monday Germany’s foreign minister Sigma Gabriel, called Trump’s policies “short-sighted,” saying they stand against the European Union’s interests.

“Anyone who accelerates climate change by weakening environmental protection, who sells more weapons in conflict zones and who does not want to politically resolve religious conflicts is putting peace in Europe at risk,” Sigmar Gabriel said on Monday. “The West has become smaller, at least it has become weaker.

In a follow up tweet, Trump said Russian officials are likely “laughing” at the U.S. amid continuing reports related to Russian meddling in the 2016 presidential race.

“Russian officials must be laughing at the U.S. & how a lame excuse for why the Dems lost the election has taken over the Fake News,” Trump tweeted shortly after his German-bashing tweet.

Russian officials must be laughing at the U.S. & how a lame excuse for why the Dems lost the election has taken over the Fake News.

Trump’s latest comments come after reports last week that son in law and senior aide Jared Kushner in December sought to establish a backchannel line of communication between the Trump transition team and Moscow. The move came during a meeting with Russian Ambassador Sergey Kislyak. The FBI is looking at meetings that Kushner held with Kislyak and Russian banking executive Sergey Gorkov in December as part of the law enforcement investigation into possible collusion between the Trump  campaign and Moscow.

The tweet also came out at the same time as news broke that Trump’s communications director, Mike Dubke, has resigned from the White House.

end

 

Hard data personal spending shows that its growth year/year has tumbled to a 7 month low. Major revisions in prior months seems to have exaggerated the data

 

(courtesy zero hedge)

Personal Spending Growth Tumbles To 7-Month Lows After Dramatic Revisions

Having weakened to unchanged for the last two months, April saw personal spending rise 0.4% MoM (as expected) and personal income rise 0.4% MoM (as expected). However, year-over-year growth in spending (+4.3%, weakest since Sept 2016) and income (+3.6%, weakest since Jan 2017) both signaled a rolling over of the post-Trump exuberance (just in time for another rate-hike by the The Fed).

Major (upward) revisions to spending data seems to have exaggerated April’s demise…

But, this is not what The Fed (nor Trump) was hoping for.

Spending and Incomes are still rising though

 

And the revisions sent the savings rate soaring off crash lows…

 

Before and After

 

Here’s why – huge downward revisions to income and spending was re-engineered higher…

 

And this is the economic data that The Fed et al. uses to judge whether rate-hikes are appropriate – more noise, less signal.

end

We are now beginning to see ‘soft” data slumping along with the releases of hard data.  Today it is consumer confidence slumping to its weakest level since February

 

(courtesy zerohedge)

Consumer Confidence Drops To Weakest Since Feb As ‘Soft’ Data Slump Continues

Having reached 17 year highs in March following the Trump Bump, The Conference Board’s consumer confidence has slipped to its weakest since Feb as ‘hope’ fades…

Plans to buy homes, cars, and major appliances all fell in May to the lowest levels of the year.

As The Conference Board details…

“Consumer confidence decreased slightly in May, following a moderate decline in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “However, consumers’ assessment of present-day conditions held steady, suggesting little change in overall economic conditions. Looking ahead, consumers were somewhat less upbeat than in April, but overall remain optimistic that the economy will continue expanding into the summer months.”

 

Consumers’ appraisal of current conditions held steady in May. Those saying business conditions are “good” edged down from 30.8 percent to 29.4 percent, but those saying business conditions are “bad” was unchanged at 13.7 percent. Consumers’ assessment of the labor market also remained positive. Those stating jobs are “plentiful” declined marginally from 30.3 percent to 29.9 percent, however, those claiming jobs are “hard to get” decreased from 19.4 percent to 18.2 percent.

 

Consumers were less optimistic about the short-term outlook in May. The percentage of consumers expecting business conditions to improve over the next six months decreased from 25.1 percent to 21.3 percent, however, those expecting business conditions to worsen declined marginally from 10.4 percent to 10.1 percent.

 

Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs in the months ahead declined from 21.9 percent to 18.6 percent, but those anticipating fewer jobs decreased from 13.8 percent to 12.0 percent. The percentage of consumers expecting their incomes to increase edged up from 18.7 percent to 19.2 percent, but the proportion expecting a decrease also rose, from 7.6 percent to 8.7 percent.

And the collapse of hope continues…

Who could have seen that coming?

end

Let us close tonight’s commentary with this interview of Dr Chris Martenson.  It is a terrific interview and I urge you to watch it.

(courtesy Greg Hunter/USAWatchdog)

You Can Look Stupid Now or Look Stupid Later-Chris Martenson

By Greg Hunter On May 28, 2017 In Market Analysis

(Early Sunday Release)

Resource analyst and futurist Chris Martenson says, “I’d rather look stupid now than look stupid later.” Martenson thinks the stock market rise since the last crash is mostly manufactured by central banks. Martenson explains, “What in the heck is going on is real simple. We have central banks who have now taken over everything in the markets. Let’s be clear, markets go up when they are really well supplied with liquidity. We have $200 billion or more a month coming into these markets . . . these central banks are dumping $200 billion, sometimes as much as $250 billion a month into the markets.”

Martenson thinks what the central bankers are doing will not go on forever. Martenson contends, “The mantra of the entire system in D.C. and Wall Street has been let’s just borrow more. Let’s just kick the can down the road. I don’t know when that ends or when that breaks, but it’s mathematically impossible that this all gets paid off at this point. So, the question remains, who’s going to eat the losses? In times past, the banks have been very good at heads they win and tails you lose or we lose. . . . I think this ends badly because it’s very, very unfair. That unfairness will bring social consequences. People are primates, and we don’t like unfair. . . . That level of injustice is building. If you don’t understand that base level of injustice, you don’t really understand why Trump got elected. You don’t understand why populism is rising all over the globe. It’s because “We the People” are starting to figure this out. It’s a scam, and if it looks and smells like a fraud, it’s a fraud. The markets are highly fraudulent at this point. They’re very, very rigged.”

Martenson thinks many people will be devastated when their paper wealth disappears in a coming market crash. Martenson explains, “We have these things call wealth destructions. Markets crash and people lose money they thought they had. If you watch carefully, what really happened was the claims that got out of balance came crashing back to reality. So, you might as well own some reality. I am a big fan of people owning tangible wealth. This is land, productive enterprises, investing in yourself, investments you make in your home if you own it. Things that will help you spend money on food and fuel down the road. These are the kinds of investments that make sense to me right now. If you look at stocks and equities right now . . . and these valuations are so stretched, at this point in time, the only way you can make a case to further buying into financial assets at this point is because you believe . . . the central banks are just going to keep buying these assets. If that’s the case, feel free to do that. Please let’s remove the word investing from that statement and say I am going to speculate on the idea that the central banks are so deep down this rabbit hole that they have no other course of action, and they will have to keep doing this. That’s a guess. It’s speculating and not investing.”

Join Greg Hunter as he goes One-on-One with Chris Martenson of PeakProsperity.com.

(There is more in the video interview.)

Video Link

http://usawatchdog.com/you-can-look-stupid-now-or-look- stupid-later-chris-martenson/

-END-

Well that about does it for tonight

I will see you tomorrow night

h

 

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