June 7 b/Gold and silver held in check by the bankers: gold down $4.30 and silver down 9 cents but then they were whacked in the access market/For the 4th consecutive day the amount of silver standing at the comex in June increased!/Spain’s Banco Popular fails and a bail in is orchestrated: junior bond holders and Co Co bondholders wiped out/not sure about depositors/Saudi Arabia gives Qatar a 24 hr ultimatum to stop terrorism/ Turkey set to join QATAR setting the stage for a Middle East showdown!/Iran;s parliament attacked by Sunni ISIS this morning/Chicago’s cab industry decimated/Sears to close another 66 stores/Consumer credit comes to a standstill in the uSA/

GOLD: $1290.10  down $4.30

Silver: $17.58  down 9  cent(s)

Closing access prices:

Gold $1294.30

silver: $17.68










Premium of Shanghai 2nd fix/NY:$7.13


LONDON FIRST GOLD FIX:  5:30 am est  $1292.79




For comex gold:



TOTAL NOTICES SO FAR: 2048 FOR 204800 OZ    (6.3701 TONNES)

For silver:

For silver: JUNE


Total number of notices filed so far this month: 490 for 3,450,000 oz



Our banker friends never allow gold and silver to rise on two consecutive days, so with yesterdays huge gain, one would have bet the farm that we would run into some resistance today.


Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 5th consecutive day. We certainly have a determined entity trying to get its hands on whatever silver is available.

Let us have a look at the data for today



This is where we are heading:  (JB Slear/Jim Sinclair)


According to JB Slear, this is what the future holds. Why should I write words. Get into the cellar as fast as you can!






In silver, the total open interest ROSE BY 3472  contract(s) UP to 208,967 DESPITE THE RATHER MEAGRE RISE IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (UP 13 CENT(S).   In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0450 BILLION TO BE EXACT or 149% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold ROSE BY ANOTHER MONSTROUS 26,323 contracts WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($15.10 with YESTERDAY’S TRADING). The total gold OI stands at 494,041 contracts.

we had 121 notice(s) filed upon for 12,100 oz of gold.


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


We had a HUGE change in tonnes of gold at the GLD: A DEPOSIT OF 13.93 TONNES

Inventory rests tonight: 864.93 tonnes



Today: no changes in inventory/

THE SLV Inventory rests at: 339.605 million oz



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


(report Harvey)


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg


i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 38.20 POINTS OR 1.234%   / /Hang Sang CLOSED DOWN 22.98 POINTS OR 0.09% The Nikkei closed UP 4.72 POINTS OR 0.02%/Australia’s all ordinaires  CLOSED DOWN 0.01%/Chinese yuan (ONSHORE) closed DOWN at 6.7983/Oil UP to 47.90 dollars per barrel for WTI and 49.66 for Brent. Stocks in Europe OPENED ALL MIXED      ..Offshore yuan trades  6.7790 yuan to the dollar vs 6.7983 for onshore yuan. NOW  THE OFFSHORE IS MUCH STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH 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



This is a major blow to Washington and South Korea suspends the deployment of the Thaad defense missile system and a victory for China.

( zero hedge)


North Korea set to launch its 10th ballistic missile and 6th nuclear test.

(courtesy zerohedge)





Trouble in Spain.  Banco Popular has failed and will be bailed in. The company was acquired in total for the grand sum of 1 euro. Investors lost 3.3 billion euros!

the fun begins…

( zero hedge)

ii)this is what the bail in looks like;

it is not pretty.  Still no word on what will happen to the depositors.  However the CO co bond holders and junior bond holders along with equity shareholders are wiped out.

( Bill Blain/zero hedge)

iii)The Euro tumbles on the news that the ECB cannot get inflation to its target of 2%.  Behind the scenes it looks like growth around the globe is stymied

( zero hedge)

iv)A joke!! Euro jumps on “:small changes” coming.

( zero hedge)


i)Saudi Arabia gives Qatar a 24 hr ultimatum of which the key is to end all times to the Muslim brotherhood and Hamas.

( zero hedge)


This is going to be fascinating:  Turkey is now approving a bill to support Qatar.  No wonder the Turkish pipeline from Qatar through Saudi Arabia, then through Turkey and onto the Europe is critical for Turkey.  This is the route that the USA wants.  Russia naturally is totally against this as it destroys their capability of supplying natural gas to Europe.  This may cause a World War.

( zero hedge)

My goodness! they are certainly going after QATAR.  Today the UAR reveals anyone publishing statements sympathetic to Qatar will be jailed for 15 years. Freedom of speech is non existent over there.

( zero hedge)


ISIS claims responsibility for this latest attack at the Iranian Parliament and the Mausoleum of Khomeini.  Strange that a sponsor of terrorism is itself subject to an attack.  We are not sure if the attack is connected to the embargo against Qatar

(courtesy zero hedge)


iv b) Saudi Arabia/Qatari Riyal

( zero hedge)


iv c)S and P downgrades Qatar’s debt to AA-

( zero hedge)


v)Iran blames its arch enemy Saudi Arabia for the terrorist attack this morning
( zerohedge)





This is a must read as oil could be pushed down to 10 dollars by 2025

( Charles Kennedy/OilPrice.com)



A Chinese firm is trying to desperately unload bonds purchased in December. Venezuela is rapidly heading into a default

( zero hedge)


i)The conviction of this ex Deutsche bank trader will morph into more convictions from other traders. It looks like spoofing is finished.
( zero hedge)

10. USA Stories

i)Chicago/Cab industry

Cab medallions are already over 50% in Chicago as UBER is killing them

( zero hedge)

ii)More USA devastating new:  Sear closes 66 stores and Joe’s Crab shack files for bankruptcy protection

( zero hedge)

iii)Here is another indicator to show you the USA economy has just hit the skids:

( zerohedge)

iv) Trump nominates Christopher Wray as Director of the FBI

(zero hedge)

v) It looks like CNN’s anonymous sources got this one wrong:  Trump was never under investigation by the FBI for Russian interference with the USA election. And second, there is no direct evidence that Trump ordered Comey to end the investigation on Flynn

( zero hedge)

vi)Trump is keeping his promise: new job killing regulations have come to a screeching halt

( zerohedge)


Let us head over to the comex:

The total gold comex open interest ROSE BY A GIGANTIC 26,323 CONTRACTS UP  to an OI level of 494,041 WITH THE RISE IN THE PRICE OF GOLD ($15.10 with YESTERDAY’S trading). The bankers were supplying the short comex gold paper and the longs just gobbled them up with reckless abandon.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month  we had A  HUGE LOSS OF 141 contract(s) FALLING TO  2528.  We had 15 notices filed yesterday so we LOST ANOTHER 113  contracts or an additional 11,300 oz will  NOT stand for delivery in this very active delivery month of June AND WITHOUT A SHADOW OF DOUBT THESE 113 CONTRACTS RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC ARE SO FAR REFUSING THAT FIAT BONUS 

Below is a little background on the EFP contracts  initiated by our bankers:
We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract GAINED 178 contracts to stand at 2,514 contracts. The next big active month is August and here the OI gained A MONSTROUS 25,565 contracts up to 369,782.

We had 121 notice(s) filed upon today for 12,100 oz


The next big active month will be July and here the OI GAINED 35 contracts UP to 131,613 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 10 contracts to stand at 21.  The next big active delivery month for silver will be September and here the OI already jumped by another 2837 contracts up to 38,142.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

June 7.2016:  115,987 contracts were still outstanding vs 132,040 contracts June 7.2017

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (3,530,000 oz).

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 4 notice(s) filed for 20,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 95,525 contracts which is POOR

Yesterday’s confirmed volume was 269,468 contracts  which is VERY GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE
 June 7/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 49,685.581 oz
Deposits to the Dealer Inventory in oz nil  oz


Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
121 notice(s)
12,100 OZ
No of oz to be served (notices)
2407 contracts
240,700 oz
Total monthly oz gold served (contracts) so far this month
2048 notices
204,800 oz
6.3701 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   114,759.0 oz
Today we HAD  0 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
total dealer deposits: nil 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 1 customer withdrawal(s)
 i) out of Scotia:  49,685.581 oz
total customer withdrawal: 49,685.581  oz
 we had 0 adjustments:

Today, 0 notice(s) were issued from JPMorgan dealer account and 2 notices were issued from their client or customer account. The total of all issuance by all participants equates to 121  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 61 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2048) x 100 oz or 204,800 oz, to which we add the difference between the open interest for the front month of JUNE (2528 contracts) minus the number of notices served upon today (121) x 100 oz per contract equals 445,500  oz, the number of ounces standing in this active month of JUNE.
Thus the INITIAL standings for gold for the JUNE contract month:
No of notices served so far (2048) x 100 oz  or ounces + {(2528)OI for the front month  minus the number of  notices served upon today (121) x 100 oz which equals 445,500 oz standing in this  active delivery month of JUNE  (13.856 tonnes)
Total dealer inventory 900,191.813 or 27.99 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,804,780.428 or 273.86 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 273.86 tonnes for a  loss of 29  tonnes over that period.  Since August 8/2016 we have lost 80 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
June INITIAL standings
 June 7 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
314,814.860 oz
Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory 
 250,459.900 oz
No of oz served today (contracts)
(20,000 OZ)
No of oz to be served (notices)
16 contracts
( 80,000 oz)
Total monthly oz silver served (contracts) 690 contracts (3,450,000 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 2,295,343.5 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: NIL  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of CNT:  4999.700 oz
ii) Out of Delaware: 6037.400 oz
iii) Out of JPMorgan: 303,777.760
 We had 1 Customer deposit(s):
i) Into Scotia:  250,459.900 oz
***deposits into JPMorgan have now stopped 
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits  250,459.900 oz
 we had 0 adjustment(s)
The total number of notices filed today for the JUNE. contract month is represented by 4 contract(s) for 20,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 690 x 5,000 oz  = 3,450,000 oz to which we add the difference between the open interest for the front month of JUNE (20) and the number of notices served upon today (4) x 5000 oz equals the number of ounces standing


Thus the initial standings for silver for the JUNE contract month:  690(notices served so far)x 5000 oz  + OI for front month of JUNE.(20 ) -number of notices served upon today (4)x 5000 oz  equals  3,530,000 oz  of silver standing for the JUNE contract month.
We gained 10 contracts or an additional 50,000 oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS REFUSED A FIAT BONUS: THEY WANT THEIR PHYSICAL SILVER.
Volumes: for silver comex
Today the estimated volume was 25,057 which is POOR
Yesterday’s  confirmed volume was 85,434 contracts which is HUGE
Total dealer silver:  34.315 million (close to record low inventory  
Total number of dealer and customer silver:   204.477 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.3 percent to NAV usa funds and Negative 7.1% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.8%
Percentage of fund in silver:38.1%
cash .+0.1%( June 7/2017) 
 Sprott physical gold trust and Silver Trust NAV not available tonight
2. Sprott silver fund (PSLV): Premium RISES TO   -.00%!!!! NAV (june 6/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to -0.09% to NAV  (June 6/2017 )
Note: Sprott silver trust back  into POSITIVE territory at -0.00% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.09%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

 Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017


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

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

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

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

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

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

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

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

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

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

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



And now the Gold inventory at the GLD


June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes


May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

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 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

June 7 /2017/ Inventory rests tonight at 864.93 tonnes


Now the SLV Inventory

June 7/no change in inventory at the SLV/Inventory rests at 339.605 million oz

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/


May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

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??)

June 7.2017: Inventory 339.605  million oz

Major gold/silver trading/commentaries for WEDNESDAY



Gold Breaks 6-Year Downtrend On Safe Haven and 50% Surge In Chinese Demand

– Gold prices break 6 year down trend on safe haven demand (see charts)
– Chinese gold demand set to surge 50% to 1,000 metric tonnes
– Chinese demand for gold bars on track to surge more than 60 percent in 2017
– Geopolitical risk internationally leading to safe haven demand

– UK election, terrorism and rising tensions in Middle East supporting gold after attacks in London and attacks in Iran today
– Gold is 12.5% higher for year and outperforming stocks (see table)

Gold prices have broken out above the six year long downtrend (see charts) due to a 50% surge in Chinese demand and increasing safe haven demand internationally.


Gold is now 12.5% higher year to date in dollar terms and technical analysts say that the breakout is important technically. When combined with the very uncertain geo-political and positive supply demand backdrop, it is a bullish development.

Gold jumped more than 1% yesterday on concerns of conflict in the Middle East after the Saudi coalitions aggressive move against gas rich Qatar and Iran. Today there have been terrorist attacks in the Iranian parliament and at least seven people have been killed.


Gold likely also received a safe haven bid due to heightened terrorism concerns after the terrorist attacks in London and the possibility that a left leaning Labour government under Corbyn may come to power in the UK.

Chinese gold demand has increased very substantially again and Chinese gold imports are seen jumping 50% back to 1,000 metric tonnes as reported by Bloomberg.

The world’s biggest gold market looks set to increase imports through Hong Kong by about half this year as Chinese investors seek to protect their wealth from currency risks, a slowing property market and volatile stocks, according to the Chinese Gold & Silver Exchange Society.

Chinese demand for gold bullion bars is surging and is on track to surge more than 60 percent in 2017.


Gold is now just a fraction from its highs for the year so far and the 12.5% gains means that gold is outperforming most international stock indices. The S&P 500, the Euro Stoxx 50 and the Nikkei are just 8.7%, 8.4% and 4.5% higher respectively (see table above).


It is also breaking out from the long term downtrend line left from the bear market as noted by many technical analysts and Bloomberg today:

“Gold is breaking out of a six-year slump as investors search for safe havens during a period of global upheaval and bets that historically low U.S. interest rates will endure. After breaching a six-year downtrend line, gold is at the highest level since Nov. 4, and has advanced 12.7 percent this year. An uptick in bullion imports in China, as a hedge against currency risk, and a tepid pace of U.S. monetary tightening could fuel the next leg-up in the rally, say analysts.”

After breaking the 2012 downtrend at $1,290, the next level or resistance is the psychological level of the round number $1,300 per ounce and above that the next level of resistance is $1,350 per ounce.

There is a risk of gold weakening before and on the day of the Federal Reserve interest rate announcement on June 14. However, the risk posed by the Fed tightening is exaggerated and even if the Fed does tighten by a meager 25 basis points, there are increasing doubts as to whether there will be further interest rate rises due to fragile U.S. and global economic growth.

News and Commentary

Gold Makes Run Toward $1,300 as Risk Flares From U.K. to Mideast (Bloomberg.com)

Gold holds near 7-mth high, political worries buoy safe-haven demand (Reuters.com)

China’s gold imports seen jumping 50% as haven demand booms (Bloomberg.com)

CFTC Finds Trader David Liew Engaged in Manipulation of the Gold and Silver Markets (CFTC.gov)

Top overseas footballers seeking euro pay packets (FT.com)

Gold Prices Break Through a 6-Year-Long Downtrend Line (Bloomberg.com)

Gold Breaks Major Resistance Trendline (ZeroHedge.com)

Platinum shortage could throw a wrench into a class of green cars (BusinessInsider.com)

Raoul Pal Slams Bitcoin: “It’s Not The Store of Value People Thought It Was” (ZeroHedge.com)

Saudi Dispute With Qatar Has 22-Year History Rooted in Gas (Bloomberg.com)

Chats by Ex-Deutsche Bank Metals Trader Reveal Spoofing ‘Tricks from the Master’ (Bloomberg.com)

The conviction of this ex Deutsche bank trader will morph into more convictions from other traders. It looks like spoofing is finished.
(courtesy zero hedge)

Chats by Ex-Deutsche Bank Metals Trader Reveal Spoofing ‘Tricks from the Master’

June 5, 2017, 5:00 AM EDT
  • Trader linked to Deutsche Bank helps prosecutors in plea deal
  • U.S. said to be planning more charges against bank traders

David Liew was a quick study. Less than a year into his metals-trading job at Deutsche Bank in Singapore, he joked with a colleague about their latest win.

“Tricks from the … master,” Liew typed in a chat after working with a colleague to move gold futures prices while Liew executed a trade. In the course of a year, Liew and his colleagues used fake orders to try to manipulate prices, an illegal practice called spoofing, more than 50 times.

After pleading guilty to fraud charges last week and agreeing to cooperate, Liew has become a prime government witness for U.S. prosecutors investigating whether traders at the world’s biggest banks conspired to manipulate prices in silver, gold, platinum and palladium. His chats with colleagues — part of an FBI affidavit filed in Chicago and placed under seal — provide a window into the investigation by the Justice Department, which began looking into such activities at a dozen of the biggest global banks two years ago.

The U.S. is also looking beyond precious-metals trading and planning more criminal spoofing charges against Wall Street traders, according to people familiar with the matter. Working with the Commodity Futures Trading Commission, prosecutors in the Justice Department’s criminal division in Washington have been developing spoofing cases across markets since the 2010 adoption of the Dodd-Frank financial law, which made the practice illegal.

’The Legend’

In his court plea, Liew described working with others at his own bank and at two other operations. He refers to “The Legend,” without naming him, at another unidentified global bank. Many details are cloaked. Liew himself is described as a trader for Bank A, which a person familiar with the situation said is Deutsche Bank AG.

According to the documents, at least two senior colleagues taught Liew how small orders could be placed and then quickly pulled, pushing prices in a direction to benefit traders with client orders to fill. Within a couple years, he was teaching newer traders to do the same. In all, according to the filings, he attempted to move prices on Chicago’s CME more than 300 times before he left.

Deutsche Bank declined to comment on the Chicago action. The bank has wound down most of its precious metals trading business since about 2014. Liew’s lawyer, Neil MacBride, also declined to comment.

In a parallel action to the criminal complaint, the CFTC settled an enforcement action against Liew on Friday, banning him from trading in markets the agency oversees.

Deutsche Bank, which wasn’t accused of wrongdoing in the cases against Liew, is one of nearly a dozen banks whose metals trading came under Justice Department scrutiny in early 2015. Investors have brought lawsuits against a handful of big banks, including Deutsche Bank, alleging manipulation of precious metals markets. In a December court filing, they produced electronic chats showing traders from multiple banks conspiring to rig prices from 2007 to 2013. Deutsche Bank agreed to pay damages to settle cases involving gold and silver trades.

Shortly after joining the bank in 2009, Liew completed training that prohibited market manipulation. He also began learning how his bank and its traders could benefit from orders that were placed but not filled, according to the affidavit prepared by the Federal Bureau of Investigation. These trades could move prices in a direction that could benefit a trader filling a client order, or move futures prices in a direction that would be favorable to traders who needed to clear open positions.

After trading silver futures on March 29, 2011, Liew wrote to the trader he called The Legend. “Look at silver … all algo play … basically I sold out … by just having fake bids,” according to chats transcribed in the FBI affidavit.

’Im risking’

By June 2011, Liew had begun teaching others the mechanics of spoofing, according to the FBI affidavit. In a chat with a trader from an unidentified trading firm, Liew explained how he used high-speed traders to move the market to his advantage. “I just spam … then cancel a lot … its actually stupid … cause im risking … but it gets the job done.”

That August, Liew and a colleague discussed Dodd-Frank and their trading strategy in a chat, then engaged in spoofing to help Liew’s position in gold futures, according to the affidavit. “dodd frank gonna get me fired,” Liew wrote.

Eight minutes later, Liew wrote, “I bought some gold for us … get ready .. to buy a bit more.” The two then spoofed the market through a series of orders, according to the FBI account. Later, they boasted about their profits. “u greedy for 50cents pumpkin … but Im greedy for $5 …lol,” Liew wrote. His Deutsche Bank colleague replied, “I think we made … a lot … its ok … ahaha.”

Liew resigned from Deutsche Bank in 2012 and in July of that year wrote a blog post called, “Why I Quit my Investment Banking Job to Start a Tech Company,” according to the FBI affidavit. In the post, he discussed his three years of trading, saying he was “uncomfortable with some of the things I witnessed/experienced.”


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


1 Chinese yuan vs USA dollar/yuan  WEAKER  6.7983(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  STRONGER TO ONSHORE AT   6.7790/ Shanghai bourse CLOSED UP 38.20 POINTS OR 1.234%  / HANG SANG CLOSED DOWN 22.98 POINTS OR 0.09% 

2. Nikkei closed UP 4.72 POINTS OR 0.02%   /USA: YEN FALLS TO 109.44

3. Europe stocks OPENED MIXED        ( /USA dollar index RISES TO  96.94/Euro DOWN to 1.1209


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.90 and Brent: 49.66

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  +.250%/Italian 10 yr bond yield UP  to 2.266%    

3j Greek 10 year bond yield RISES to  : 6.06???  

3k Gold at $1289.90  silver at:17.62 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 19/100 in  roubles/dollar) 56.19-

3m oil into the 47 dollar handle for WTI and 49 handle for Brent/

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


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9669 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0840 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +0.250%

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 2.154% early this morning. Thirty year rate  at 2.815% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Futures Flat, Market Anxiety Eased By European Bank Rescue

European and Asian stocks, as well as S&P futures were little changed ahead of “Super Thursday’s” events which include the U.K. general election, Comey’s testimony and the ECB policy decision. That however may change following a Bloomberg news report that the ECB is set to cut inflation forecasts through 2019 due to weaker energy prices, suggesting the “hawkish” ECB announcement some had expected tomorrow has been postponed.

According to the ECB draft projections consumer prices would grow roughly around 1.5% each year in 2017, 2018, 2019. At the same time, the ECB said to revise up GDP forecasts by around 0.1 pp each year.

Earlier in the session, Spain’s collapsing Banco Popular was bailed in at the same time as Banco Santander agreed to buy the insolvent Spanish bank for a nominal 1 euro after European regulators determined that the troubled lender was likely to fail.  The bail in helped calm returned to markets on Wednesday following Tuesday’s modest selloff, as investors reassessed risks surrounding a series of key events this week. Bank stocks powered equity gains after Popular’s rescue. As a result, European blue chip shares rose and Madrid’s IBEX recovered from early losses to trade flat on the day. IBEX European banking shares rose 1.2 percent. The Stoxx Europe 600 Index rose 0.2 percent. Banks added 1.1 percent, while in the US S&P futures were little changed after the underlying gauge lost 0.3 percent on Tuesday.

As the European session wore on the success of the Spanish bail in process pushed shares in many major banks higher, supporting a recovery for Madrid’s stock market and fending off this week’s broadly weaker mood. But as Reuters notes, the rescue also underlines the risks to growth, banking and government debt burdens that are likely to delay a major switch in language and policy direction by the European Central Bank at its meeting on Thursday.

“Maybe tomorrow’s ECB meeting sees nothing but platitudes and disappoints a market that is getting ahead of itself,” said Societe Generale analyst Kit Juckes. “But (for us) that would be a huge euro buying opportunity, because ECB normalization IS coming. And when it does, the euro simply won’t be able to sustain undervalued levels for long.” Some more thoughts from the SocGen strategist:

The fall in US yields has paused. The fall in USD/JPY has paused. Commodities are trading sideways . Asian equity markets are trading sideways, or in the case of China, rallying. The big events of the week – the UK election, the ECB meeting, former FBI Director Comey’s testimony to Congress – all come in the next couple of days but today’s economic highlight may be the US consumer credit data unless the Chinese can get their FX reserve figures out soon. The big market questions are unlikely to be answered today. Are Treasury yields heading back to ‘pre-Trump’ levels or merely probing the bottom of post-election rages? Are we in danger of renewed risk aversion as the political risks mount and the US economy stumbles?


It seems to me that the US economy is fundamentally quite dull, stuck in a 2% growth rut with low productivity, huge disinflationary forces, and structural changes that fuel political; discord. Does that suggest a dramatic move down in yields? Not really. Can the politics in the US (or in the Middle East) trigger broader-based risk aversion? I still that’s unlikely, and so I think the commodity-sensitive currencies (AUD, CAD, NZD) are all in the process is finding a base. AUD was the overnight winner but CAD is my preferred long. And I still think the BOJ will hold the line and keep policy easy enough for long enough for us to see significantly higher levels in EUR/JPY and USD/JPY in due course. But not today…


If there is a single core theme for this year however, it’s that more central banks are getting closer to policy normalisation. The era of super-low US rates has meant that the currencies of countries with large current account surpluses struggled to avoid their currencies being expensive. The yen and euro were the exceptions with currencies cheap to PPP. These are the two strongest G10 currencies this year, as US yields drift lower and as European and Japanese economist recover. But of the two central banks, it’s the ECB which is by far the closest to policy normalisation. Maybe tomorrow’s ECB meeting sees nothing but platitudes and disappoints a market that is getting ahead of itself, but that would be a huge euro buying opportunity, because ECB normalisation IS coming. And when it does, the Euro simply won’t be able to sustain undervalued levels for long.

Meanwhile in Asia, the MSCI Asia Pacific Index was little changed, even as the Shanghai Composite jumped 1.2 percent to the highest in a month. The Aussie dollar climbed to the highest since May 2 after quarterly economic growth met expectations, soothing concerns of a deeper slowdown.

And while the risk-off mood has abated, traders still seem reluctant to add any big positions ahead of Super Thursday. The purchase of Popular at least offered a distraction, and signaled that Europe has made progress in ensuring the strength and stability of its financial sector.

A surprisingly closely-fought British election set for Thursday is weighing on investors’ minds along with Senate testimony from James Comey, the former FBI chief fired by President Donald Trump. Any damaging revelations in Comey’s testimony are likely to further hurt Trump and take the wind out of his plans to roll back regulations and overhaul the tax system – an agenda that had sent the dollar to 14-year highs earlier this year.

“Tomorrow’s what is being dubbed as ‘Triple Threat Thursday’, … an event-filled day that could send global markets on a bumpy ride,” said ING currency strategist Viraj Patel.

Oil futures decline, gold and dollar are little changed. Brown-Forman, Navistar are among companies reporting earnings. MBA mortgage applications data due.

Bulletin Headline Summary From RanSquawk

  • Banco Popular purchased for EUR 1 by Santander while German Utilities surge on nuclear fuel tax ruling.
  • AUD up on better than exp. GDP with major FX pairs trading in choppy fashion.
  • Looking ahead, highlights include DoE Crude Inventories.

Market Snapshot

  • S&P 500 futures up 0.1% to 2,431.50
  • STOXX Europe 600 up 0.2% to 389.98
  • MXAP up 0.04% to 155.39
  • MXAPJ down 0.06% to 502.46
  • Nikkei up 0.02% to 19,984.62
  • Topix up 0.04% to 1,597.09
  • Hang Seng Index down 0.09% to 25,974.16
  • Shanghai Composite up 1.2% to 3,140.33
  • Sensex up 0.07% to 31,213.07
  • Australia S&P/ASX 200 down 0.01% to 5,667.17
  • Kospi down 0.4% to 2,360.14
  • German 10Y yield rose 0.6 bps to 0.258%
  • Euro down 0.2% to 1.1255 per US$
  • Brent Futures down 0.8% to $49.71/bbl
  • Italian 10Y yield fell 1.7 bps to 1.962%
  • Spanish 10Y yield rose 0.4 bps to 1.543%
  • Gold spot down 0.06% to $1,293.61
  • U.S. Dollar Index up 0.03% to 96.66

Top Overnight News from Bloomberg

  • Santander to Take Over Popular as ECB Says Bank Was Failing
  • Sessions Said to Suggest Resigning as Tensions Grow With Trump
  • Trump’s Closest Allies Warn President It’s Time to Stop Tweeting
  • Gunmen Launch Twin Attacks in Tehran, State Media Report
  • Dollar Tree Asks Court to Name Receiver in Dollar Express Feud
  • Exact Sciences Shares Said to Be Offered at $34.75- $35.75
  • PLAY FY Rev. View Midpoint Trails Est.; Shares Fall 2.8%
  • United Natural FY Revenue View Trails Est.; Shares Fall 2.2%
  • Glacier Bancorp to Buy Columbine Capital for About $74m
  • Comey Hearing Pits Ex-FBI Chief Against Trump Over Russia Probes

Asia markets traded choppy with initial downside observed following a subdued close in US, where participants were cautious ahead of the looming key risk events including the ECB meeting, UK election and former-FBI Director Comey’s testimony all scheduled for this Thursday. This pressured Nikkei 225 (Unch.) and ASX 200 (+0.1%) in early trade with Japanese exporters reeling from a firmer JPY, while the ASX 200 fell to a 4-month low before better than expected GDP data provided support. Shanghai Comp. (+0.7%) and Hang Seng (+0.2%) gained with the mainland bourse outperforming after the PBoC upped its liquidity efforts with a total CNY 180bIn injection via 7-day, 14 day and 28-day reverse repos. 10yr JGBs were choppy with initial upside seen amid the risk averse sentiment in Japan, although prices failed to maintain gains on return from the Tokyo break amid weakness in USTs, an improvement in risk tone and after a somewhat lacklustre Rinban operation. PBoC drained a net CNY 60bIn open market operations.

Top Asian News

  • Suicide Bomber Blows Himself Up at Imam Khomeini Shrine: Tasnim
  • India’s Top Steel Mill Still in the Hunt for European Assets
  • Watch the Bond Deadlines of These Four Singapore Companies
  • Investors Remain Cautious Ahead of ECB, U.K. Vote: Markets Wrap
  • Japan Stocks to Watch: Fujitsu General, JDI, PeptiDream, Sony
  • China’s FX Reserves Rise for Fourth Month as Yuan Stabilizes
  • Hong Kong Steals Tokyo’s Crown as Priciest Asian City for Expats
  • Dali Foods Falls With Man Wah as Shorts Target Hong Kong Stocks
  • TCI Express Sees Revenue Doubling by 2021 on Demand, India’s GST
  • GeoInvesting’s David Is Short on Hong Kong-Listed Dali Foods
  • India Tech Cos Drop After Report of Clients Seeking Price Cut
  • Pacific Insurance Rises as Investors Seen Chasing Sector Laggard

European bourses trade with lacklustre behaviour ahead of Super Thursday, as the majority of EU bourses trade mixed. Equity specific news has highlighted the European morning with Santander’s purchase of Banco Popular the noticeable pre-market stock story. Further equity news came out of Germany, as the German Constitutional Court stated that the nuclear fuel rod tax is illegal, meaning that RWE (+4%), E.ON (+3%) and EnBW (+2%) would be able to claim back around EUR 6bIn in taxes, subsequently the companies saw upside following the news. Benchmark 10yr yields trade modestly higher as the German bund rejected the new high printed on the September contract, coming back from 165.03, as German paper traders also have the 10.30 (BST) BOBL auction to lookout for. The European long end will take some focus today; with Italian BTP and ESM 30y issuance today, with pricing expected this afternoon.

Top European News

  • OECD Sets Out an Economic To-Do List for Next U.K. Government
  • Anglo American’s New Chairman Has a History of Leading Takeovers
  • OECD Warns Protectionist Rhetoric Undermining Investment Rebound
  • Workspace Rises on FY Results; Liberum Says Strength to Expand
  • Patel Leaves Schroders for BCS as Derivatives Trader
  • KGHM Eyes Growth in Chile, Poland as Record M&A Leaves Scars
  • Santander Acquiring Popular Is Good Outcome, De Guindos Says
  • Corbyn Replaces Abbott With Lyn Brown During Ill Health: BBC
  • EasyJet to Close Hamburg Base Next Year, Halve Capacity

In currencies, there is not a huge amount of activity in the FX markets other than pushing the USD lower, notably against the JPY as the spot rate eyes a move on 109.00. Dealers report stops through this level, and a breach may well trigger a move towards the 2017 lows ahead of 108.00 by the week. EUR/USD is still pressing on the resistance ahead of 1.1300 accordingly, but repeated attempts have come to little as yet. Even so, the market is loath to lose the bid ahead of the ECB press conference, where traders will be scrutinising verbiage alluding to a QE taper signal later this year. This is also supporting EUR/GBP, but price action is fighting the relentless bid in Cable, as consensus expectations of a Tory win on Thursday evening see the market looking to ride the wave of an anticipated GBP rally, no matter how long it lasts. Risks are skewed to the downside however, with the Brexit factor soon to return once the election dust has settled.

In commodities, there is also little of note to drive the commodity markets today apart from the DoE report later today. That said, the higher than expected draw down in the APIs did little other than stabilise WTI and Brent inside familiar territory, but cause for some modest optimism if the energy department back up Tuesday nights release. Elsewhere, the bid tone in Gold holds firm as one would have expected, with the UK election ahead but more so the risks surrounding the Comey testimony to the SIC, despite some reports late yesterday that suggest he will stop short of implicating president Trump of obstruction of justice. USD1300.00 still clearly in sight, but little catch up in Silver, which is camped in the mid USD17.00’s. Very little price action of note in base metals, with Lead the modest outperformer, but all largely flat on the day.

Looking at the day ahead, it’s another quiet session for data in the US this afternoon with the April consumer credit reading this evening being the sole release. Central bank wise the RBI will announce its latest policy decision

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -3.4%
  • 3pm: Consumer Credit, est. $15.0b, prior $16.4b

DB’s Jim Reid concludes the overnight wrap

One wonders whether markets are experiencing the calm before the storm as we await “Super Thursday”. The main global equity bourses have moved less than a percent in the 4 days of June so far. Having said that, bonds continue to rally with 10 year Treasuries and Bund yields 5.8bps and 5.2bps lower this month at 2.146% and 0.252% respectively. Treasuries being at the lowest since November 9th last year (around Mr Trump’s victory) and 5yr5yr breakevens also back to November levels and rallying 27bps over the last month and a bit. The bond rally is great for carry but markets don’t feel particularly great at the moment. Activity is fairly lethargic and most people’s view of higher yields (including ours) is failing to materialise. The fact that gold is at 7 month highs shows that in spite of inflation numbers being pretty tame of late, there is perhaps a nervousness of the relatively high plateau that risk is on.

Truthfully markets didn’t have a huge amount to feed off yesterday and that appeared to be enough of an excuse to take some of the chips off the table ahead of the main events tomorrow. While global  inflation expectations continue to trend lower helping push bond yields lower it was also interesting to see that the weighted average Bund maturity of QE purchases in May by the ECB dropped to a record low 3.99 years from 4.7 years over the past two months. It was around 12 years before Xmas before a rule change allowing them to buy below the depo rate. 2y Bund yields were 2.7bps lower yesterday and back to -0.732% (about 8bps lower over the last 2 week). This followed the latest PSPP and CSPP holdings data – the latter of which we detail later on. Interestingly the data also showed that Bund purchases came in below what the implied capital keys suggest, while France and Italy appeared to be the largest beneficiaries. 10y OAT yields were 5.5bps lower yesterday alone (versus 3.5bps for Bunds).

At the other end of the risk spectrum the S&P 500 (-0.28%) limped to another small loss by the close of play. It did actually pare a decline with about an hour left in the session after ABC reported that James Comey will stop short of saying that President Trump sought to obstruct a federal probe. Late last night Trump also tweeted that he had held “great” meetings with the House and Senate leaders supposedly around topics of tax reform and healthcare. It’s not the first time we’ve heard that though. Elsewhere there were slightly heavier declines for markets in Europe though with the Stoxx 600 (-0.67%) suffering its heaviest decline since mid-May. Meanwhile in commodities Oil (+1.67%) rebounded slightly however most base metals struggled once again.

In Asia this morning the mood in markets has been mixed. While the Nikkei (-0.32%), Kospi (-0.15%) and ASX (-0.14%) have followed Wall Street in trading lower, both the Hang Seng (+0.15%) and Shanghai Comp (+0.75%) appear to be trading to their own beat. There’s some suggestion that an injection of cash by the PBoC today via reverse repos is helping sentiment. US equity index futures are also a smidgen higher while the rally for safe havens like Gold, the Yen and Treasuries has briefly paused overnight. Further reports of China being prepared to increase its holdings of Treasuries hasn’t had much of an impact. Moving on. Yesterday’s dataflow was largely a non-event for markets. In the US the BLS JOLTS survey revealed a decent climb in job vacancies in April to just over 6.0m (vs. 5.75m expected). It was actually the  first time vacancies have ever passed 6.0m. The survey also revealed that the quits rate edged down one-tenth to 2.1% while the hiring rate also eased one tenth to 3.5%. In Europe the Sentix investor confidence reading rose 1pt to 28.4 in June and is now at the highest since 2007. Retail sales were however reported as rising a little less than expected for the Euro area in April (+0.1% mom vs. +0.2% expected).

Meanwhile over at the ECB, we also got the latest CSPP holdings data. It showed that the ECB held €90.7bn of corporate bonds as of June 2nd which implies net purchases settled that week of €1.52bn or an average daily run rate of €379m, which is marginally above the €367m average since the programme started. This morning Michal Jezek in my team has published a short update called “CSPP Trimmed Less than PSPP, with a Record Share of Primary Purchases”. It focuses on primary purchases in light of strong issuance in May and on the relative dynamics of CSPP and PSPP since the overall QE was trimmed in April.  It should have been in your inbox shortly before this hit, otherwise please contact michal.jezek@db.com for a copy.

Away from this there was another opinion poll to highlight in the UK which continues the theme of some of the inconsistency we have seen from the various pollsters depending on the methodology used, but still one with a theme of a recent narrowing between the Tories and Labour. The Opinium poll showed the Conservatives as holding a 7% lead over Labour at 43% to 36% which is actually a lead of 1% more for the Tories versus the last poll, but still down from as high as 16% last month. Sterling was little changed yesterday and in reality has been overall fairly stable for much of the last month.

Looking at the day ahead, this morning in Europe we’ll get April factory orders data out of Germanyand the latest Halifax house prices data in the UK. We’ll also receive the OECD economic outlook. It’s another quiet session for data in the US this afternoon with the April consumer credit reading this evening being the sole release. Central bank wise the RBI will announce its latest policy decision



i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 38.20 POINTS OR 1.234%   / /Hang Sang CLOSED DOWN 22.98 POINTS OR 0.09% The Nikkei closed UP 4.72 POINTS OR 0.02%/Australia’s all ordinaires  CLOSED DOWN 0.01%/Chinese yuan (ONSHORE) closed DOWN at 6.7983/Oil UP to 47.90 dollars per barrel for WTI and 49.66 for Brent. Stocks in Europe OPENED ALL MIXED      ..Offshore yuan trades  6.7790 yuan to the dollar vs 6.7983 for onshore yuan. NOW  THE OFFSHORE IS MUCH STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH 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  



This is a major blow to Washington and South Korea suspends the deployment of the Thaad defense missile system and a victory for China.

(courtesy zero hedge)

In Major Blow To Washington, South Korea Suspends Deployment Of US Antimissile System

In a stunning blow for US diplomacy in the Pacific rim region, Yonhap reported that South Korea’s newly elected president, Moon Jae-in said he has suspended the deployment of American THAAD anti-missile defense system, a major concession to China and a significant break with the United States on policy toward North Korea.

“We are not saying the two launchers and other equipment that has already been deployed should be withdrawn. But those that have yet to be deployed will have to wait,” a senior presidential office official said, according to the news agency. The remarks come as the presidential office is examining an allegation South Korea’s defense ministry may have kept the delivery of four further Thaad launchers secret in an attempt to protect the project from an environmental impact evaluation, Yonhap said.

Protesting the American missile defense system in Seoul, last week

As noted previously, the THAAD missile defense system has been controversial in South Korea where thousands have protested the deployment, while also drawing sharp criticism from China, which views the system’s radar as a threat to the regional balance of power. In response to the initial deployment, Beijing had taken retaliatory economic measures against Seoul, including curtailing the flow of Chinese tourists and punishing South Korean companies in China. The defense system officially went into operation late last month on an abandoned golf course in Seongju, 135 miles southeast of Seoul, when two of six launchers were installed. United States military officials have said that the system is already “operational and has the ability to intercept North Korean missiles.”

During his presidential campaign, Moon who won the South Korean presidency last month and has adopted a conciliatory pose in the ongoing North Korean conflict, complained that the United States and the previous South Korean administration rushed to deploy Thaad before the election.

Moon’s decision to suspend the installation will strain relations with the White House, which has taken a hard line in confronting North Korea and its nuclear weapons program. It could also raise concerns about United States efforts to present a tough, unified position with Japan and South Korea against the North. Even more striking is that Moon also suggested that South Korea must “learn to say no” to Washington. He has already signaled a softening stance toward North Korea by encouraging aid groups to visit the country, although the North has rejected those offers since Seoul supported new United Nations sanctions.

Cited by the NYT, analysts said that as protesters demonstrated against the Thaad installation and South Korean businesses pressured the government to improve relations with China, Moon may have decided that suspending the progress of the missile defense system was politically expedient.

“I think he is trying to find a diplomatic way to slow down the process to placate the business community and placate his political supporters,” said Stephen R. Nagy, senior associate professor of politics and international studies at International Christian University in Tokyo.

Just as important as the distancing from the US is the apparent concession to Beijing: Moon may have sensed that China was not going to back down. When Lee Hae-chan, South Korea’s special presidential envoy, visited Beijing last month, President Xi Jinping did not concede anything during a meeting they jointly oversaw. As the NYT adds, China’s strategy is to stand firm in its objections to Thaad to force Mr. Moon to modify — or even eliminate — a missile defense system that the Chinese suspect he does not like, either.

Opponents of Moon said the suspension was probably a first step toward rejecting the missile defense system altogether. Oh Shin-hwan, a spokesman for the conservative-leaning Bareun Party, said in a statement that because the environmental review would take more than a year to complete, “the government does not intend to deploy the remaining four launchers.”

Discussing Moon’s decision, Scott Snyder, director of the program on United States-Korea policy at the Council on Foreign Relations, said that American officials should explain the need for the defense system to the new administration and that Moon’s supporters should not reject it simply because Ms. Park had approved it or give in to pressure from China.

“Thaad is at risk of becoming overpoliticized,” Mr. Snyder wrote. “And both sides need to take a deep breath and reaffirm common objectives and means for dealing with them rather than allowing Thaad to become a neuralgic and reflexive object of confrontation.”

In retrospect, it now appears too late to avoid “overpolitization”, especially with China scoring a major diplomatic victory in the ongoing battle of influence between the US and Beijing over South Korea’s decisionmaking process.



North Korea set to launch its 10th ballistic missile and 6th nuclear test.

(courtesy zerohedge)

North Korea Slams “Selfish” Trump’s Paris Decision, Prepares 10th Ballistic Missile Launch This Year (& 6th Nuclear Test)

Having chided President Trump for his “selfish” decision to pull of out the Paris Climate Accord, North Korea’s Kim Jong Un is reportedly preparing for the 10th ballistic missile test-fire this year, and as Asahi reports, unconfirmed information that North Korea will carry out its sixth nuclear test.

Military sources revealed North Korea had signs of launching ballistic missiles on the morning of the 8th. The detailed location has not been revealed.

Since launching a ballistic missile towards the Sea of Japan in May 29 when launched. It will be the 10th launch this year.

According to the sources, Asahi News reports, it seems that North Korea has developed a mobile launching pad and is ready to launch ballistic missiles.

There is also unidentified information that North Korea will carry out the sixth nuclear test in part.

North Korea’s Ministry of Foreign Affairs rebels against the sanctions resolution adopted by the United Nations Security Council on February 4 , “It will be seen that despicable and indiscriminate acts lead to opposite results than what they desire.”

This follows a North Korean foreign minister’s comments that Trump’s decision to leave the Paris Accord was ‘the height of egotism’ on Tuesday and said it was an example of the United States ‘seeking only their own well-being’.

‘Global warming is one of the gravest challenges that humankind is facing today’, the official told the state-run KCNA news agency on Tuesday.


‘The “America First Policy” advocated by Trump led to the withdrawal from the Paris Agreement’, the official said. The official added:


‘This is the height of egoism and moral vacuum seeking only their own well-being even at the cost of the entire planet and, at the same time, a short-sighted and silly decision ignorant of the fact that the protection of the global environment is in their own interests.”

The spokesman said that Trump’s move was a ‘selfish act’ that has ‘grave consequences for the international efforts to protect the environment’.

So to clarify – Trump is a selfish egotist for leaving an Accord that does nothing to save the environment… and North Korea is about to test its nuclear capabilities to destroy the world?





Trouble in Spain.  Banco Popular has failed and will be bailed in. The company was acquired in total for the grand sum of 1 euro. Investors lost 3.3 billion euros!

the fun begins…

(courtesy zero hedge)


Spain’s Banco Popular Bailed In, Acquired By Santander For €1.00

Just four days after Banco UnPopular chairman Emilio Saracho told his employees “don’t panic” as a result of the company’s crashing stock price, on Wednesday morning the ECB confirmed that the sixth largest Spanish bank was indeed on the verge of collapse and ordered it to be sold, which is what happened when Santander acquired the bank for €1.00 after Popular’s equity and riskiest debt instruments were bailed-in, i.e. wiped out, imposing losses of about €3.3 billion on the bank’s securities holders.

This transaction was bad news for the company’s equity and holders of contingent convertible AT1 and AT2 holders, who have the distinction of holding the first major bank capital bonds to be bailed-in/wiped out under new EU regulations. While Banco Popular senior debt is 12 points higher this morning, the AT1 perps are trading at 5%, down 50 points. As Mint’s Bill Blain notes, “we’ve not seen crashes like that since 2008.”

The ECB forced the transaction, blaming what it called a “significant deterioration of the liquidity situation of the bank in recent days” in concluding that it “would have, in the near future, been unable to pay its debts or other liabilities.” Elke König, Chair of the Single Resolution Board, an EU agency that winds down stricken banks, said that intervention had been needed overnight.

The mechanics: in the first use of Europe’s newly adopted bail-in mechanism, Popular would see shares resulting from the conversion of its riskiest debt and Tier 2 instruments wiped out, imposing losses of about 3.3 billion euros on the bank’s securities holders. Concurrently, Popular would be acquired by Spain’s biggest bank, Santander for a nominal €1.00. To fund the deal, Santander will raise €7 billion through a rights offer to bolster Popular’s balance sheet, it said in a filing. The lender will acquire Popular for 1 euro after its stock and shares resulting from the conversion of its riskiest debt and Tier 2 instruments were wiped out, imposing losses of about 3.3 billion euros on the bank’s securities holders.

The rescue, which followed a declaration by the ECB that Banco Popular was set to be wound down, marks the first use of an EU regime to deal with failing banks adopted after the financial crisis. It breaks the mould of using taxpayers’ money, instead imposing steep losses on shareholders and some creditors of the bank, a step two debt investors described as unexpected. As we had reported over the past month, Popular, Spain’s sixth biggest bank, has long struggled and repeatedly asked shareholders for fresh money. Popular’s 37 billion euros of non-performing assets, the legacy of real estate-linked lending before Spain’s property crash, drained profit and capital, forcing new Chairman Emilio Saracho to say in April that the bank would need to sell new shares or find a buyer. The situation had deteriorated in recent days, with its market value falling by about half in a week to 1.3 billion euros. The most recent acceleration in the company’s bank run compounded its funding problems, triggering its sale.

It is unclear if today’s “rescue” will stem the deposit withdrawal.

👇 Here’s some background to explain why Santander has bought Banco Popular for €1 http://bloom.bg/2r0cCgZ 

As Reuters notes, unlike Italy, which has been grappling for years with the problems of its lenders, the Spanish reaction to the problem lender was prompt. Furthermore, and in contrast to the banking crisis that unfolded in 2008, the move in Spain was also accepted with calm on stock markets and European bank shares moved upwards.

“This shouldn’t pose any real problems for other banks,” said Aberdeen Asset Management Head of Credit Research Laurent Frings. “But it does show that there is real risk in investing in these second-tier names.”

In an attempt to ease concerns, Spanish Economy Minister Luis de Guindos said that Santander’s takeover was a good outcome for Popular given its situation in recent weeks and it would have no impact on public resources or on other banks.

“It’s a unique opportunity at a very good time in the cycle,” Santander Chairman Ana Botin said in a presentation to analysts. Annual cost synergies of almost 500 million euros per year from 2020 will give Santander some of the best efficiency ratios in Spain and Portugal, the bank said. In a separate television interview, Botin said that the bank was notified at 6. a.m. today that it had won the bid for Popular. Santander won an auction carried out by the SRB and Spain’s bank rescue fund FROB to buy Popular without taxpayer support, the bank said. Adding Popular’s business will create the biggest banking business in Spain with 17 million customers.

Santander fell as much as 3.4 percent to 5.6 euros, before paring declines to 5.77 euros as of 10:42.a.m. in Madrid.  Botin presented the business case for the hastily-organized deal, arguing that the combination of the two would strengthen the group’s geographic reach as the economy in Spain and Portugal improved. “We welcome Banco Popular customers,” she said. However, Banco Popular’s customers, having come this close to losing their money, may just decide to keep it in the mattress instead.

And while the transaction has yet to be fully digested, here are some initial sellside reactions, courtesy of Bloomberg.


  • Santander’s opportunistic acquisition of Popular fits into group’s strategy to boost SME exposure
  • However, doubt over deal is likely to center on Popular’s sizable non-performing assets
  • Santander’s plans to boost coverage on real-estate NPAs should provide some comfort, though target of reducing these assets appears bold

MIZUHO (Roger Francis)

  • Deal is probably “excellent” for Santander in medium term, though it may weigh on earnings in the first or second year
  • Takeover adds significant business to Santander in terms of SME-lending and credit-card clients albeit with considerable real-estate exposure and non-performing loans that are largely behind Popular’s capital writedowns
  • Sees little impact on wider European banking sector as investors now recognize the situation poses no new dangers to the financial system


  • Santander downgraded to hold vs buy and removed from Spanish top picks on risks from acquisition
  • Limited time for due diligence on Popular’s real-estate exposure and bad loans and other potential risks and costs involved in breaking up the joint ventures raises doubts on whether the measurement of risks has been adequate
  • Combined entity will lose market share; Kepler says doubtful that Popular will be easy to integrate given its “different” risk management
  • Kepler expects litigation for “mis- selling” will require reimbursement of amount invested, given that most of the Tier 2 is held by retail clients; would not rule out litigation from AT1 holders

NATIXIS (Robert Sage and Alex Koagne)

  • Santander’s acquisition of Popular in a deal approved by European regulators shows that weaker parts of region’s banking system are being addressed; fall in systemic risk is positive for wider industry
  • Sees Popular as containing attractive retail/SME franchise with higher returns and margins
  • Santander will need to convince investors Popular’s non-performing assets are properly marked after the takeover
  • Rates Santander neutral with PT EU6




this is what the bail in looks like;

it is not pretty.  Still no word on what will happen to the depositors.  However the CO co bond holders and junior bond holders along with equity shareholders are wiped out.


(courtesy Bill Blain/zero hedge)

What Europe’s First Official Bail-In Looks Like

“If you think this has a happy ending, you haven’t been paying attention,” warns MINT Partners’ Head of Capital Markets Bill Blain, as he reflects on what just happened in Europe (that US equities seem happy to brush off as yet another fleshwound to global instability).

There is a rule in Financial Institutions that any bank that calls itself “popular” generally isn’t. This was proved last night. But, congratulations if you were a holder of Spain’s Banco Popular’s Senior Debt – they did a Zebedee “boing!” on the basis last night’s last minute Santander rescue makes the bonds money good.

Bad news for the Equity and COCO AT1 holders – who have the distinction of holding the first major bank capital bonds to be bailed-in/wiped out under EU regulations. Banco Popular senior debt is 12 points higher this morning.

The AT1 perps are trading at 2.6%, down 50 points!!,and even that price looks optimistic. Ahah. We’ve not seen crashes like that since 2008.

Popular has been desperately seeking a rescue for the last few weeks, but everyone looked the other way. So last night the ECB triggered the “Single Resolution Mechanism” when it determined the Popular’s liquidity crisis was such its equity would be unable to cover debts or other liabilities.

The Single Resolution Board agreed the sale of Popular for One Euro to Santander. Santander will launch a Euro 7 bln rights issue to recapitalise the bank, but that’s not a massive ask for Popular’s business. At one time Pop was the top Spanish bank – a great SME platform, strong retail business and solid management. Now it’s just another name to be restructured and synergised (is that a word?) into the maw of Santander.

Meanwhile, what do last night’s events in Spain say for the number of unresolved Italian banks scrabbling to recapitalise and find relevance? Essentially they face the same problem as Banco Popular – no one is interested to recapitalise them. Italy hopes the regulators will approve further state aid and bond sales by Banco Populare di Vicenza (See – another Popular bank about as loved as rabies) and Veneto Banco – but they will require state guarantees – which is a probable No No!

What happens to the Italian banks is very relevant to Italian politics – for years Italian banks canabilised their own depositor bases selling retail savers “savings bonds” which were actually deeply subordinated debt. Let’s wait and and see how this one plays out..

*  *  *

Meanwhile, back in the Land of Not Kansas..

Tomorrow morning I shall leap out of bed full of anticipation! Ah! The joy of exercising my democratic right to kick the Tories out…  (or probably not in this case, cos that would make as much sense as buying an Italian bank…)

Our London flat is in Tower Hamlets, so I suppose I should vote early and often. (It is, allegedly, the most corrupt constituency in the UK.) Of course – for the benefit of the Electoral Fraud Commission – I shall not. I am saving my vote for the afternoon when I go back home to Hamble to vote in the critical Eastleigh Tory/Liberal marginal. (Am willing to supply either candidate with my bank account details.)

About the only thing I’m certain of is Jeremy Corbyn won’t win this election. But, neither will Theresa May – she might even get a triple digit majority, but she’s busted. The internal politics of the Conservatives makes Game of Thrones look like something out of CeeBeebies (preschool Tellytubbesque viewing for 3 yr olds). Apres Theresa le deluge? Boris, or Amber, or worse? (Is there worse?)

The key determinant of tomorrow’s UK general election is going to be turnout. Just about every commentator, instant election expert and prognosticator now agrees the polls are wrong and have been counting the wrong eggs and seeing invisible chickens. One major aspect is over-emphasising the young person vote: they just don’t bother to vote in the same numbers as grown-ups, and they are more likely to support Labour. Moreover, the youth voters are more likely to be denizens of the inner cities, which tend to be Labour seats anyway. The maths is simple – 6 million young people may vote Labour, but if they are all in Central London.. big deal.

The conventional wisdom is a low turnout favours the Conservatives – their older, middle class and affluent voter base take their voting responsibilities to heart. But, weather will also be important – forecast across much of England and Scotland for Thursday is cold and raining, which will likely scare off the unwashed socialist masses from trudging to the polling stations, while Tory grandees will ferry their voters to the ballot boxes in Rollers and Bentleys.  Meanwhile, it will be a decent day in the Tory heartlands of the Home Counties, but also in that seventh circle of Socialist Ferment – London.

And don’t underestimate the significance of postal votes – which have already been cast. They now make up 20% of the vote – and are more likely to have missed the growing “disappointment” with Theresa May’s version of firm leadership. And of course UKIP voters aren’t all complete idiots and some of them will have figured out they are just Tories under a different guise.

I’ll be watching what happens in Scotland – anticipating Nicola Krankie takes a neverendum spanking and losing 10 seats to the Tories, Labour and even the Liberals. That should shut her up for at least a few months till she starts havering about “Freeeeeeeedom” again..

But the truth is, I don’t have a clue about tomorrow. Pretty certain the Tories will win, but Corbyn has proved far better than we initially credited him.

I reckon whatever the bookies are saying is as good a bet as anything. And they are saying Tories to win with a 106 majority..

As Bloomberg notes, the pound could slump as much as 7 percent to $1.20 on Friday, a level last seen in January, should the U.K. snap election lead to a hung parliament, according to a Bloomberg poll of 11 banks and brokerages. While unlikely, an indecisive vote would be marginally more negative than even the Labour Party defying odds to win the election. A victory for Prime Minister Theresa May’s Conservative Party could push sterling to $1.31.

Let’s see what tomorrow brings..



The Euro tumbles on the news that the ECB cannot get inflation to its target of 2%.  Behind the scenes it looks like growth around the globe is stymied

(courtesy zero hedge)

Euro Tumbles On Reports ECB Will Cut Inflation Forecasts

EURUSD tumbled this morning, erasing the gains following US payrolls weakness on Friday, after reports that officials familiar with the matter said the ECB’s draft projections show slower consumer-price growth in the three years through 2019 versus March forecasts.

“You saw the German bund jump with stocks right after that news, clearly,” said Nacho Lopez, an institutional sales officer at brokerage Ahorro Corp. in Madrid, “It means we may hear a more conservative tone from the ECB at tomorrow’s meeting.”

And EURUSD plunged…


As Bloomberg notes, a downgrade to the inflation outlook would back the view of top policy makers, including President Mario Draghi and Chief Economist Peter Praet, that they must be extremely cautious in communicating and implementing any exit from monetary stimulus. The Governing Council is set to debate how to balance policy for the euro area as economic growth solidifies but inflation remains muted.

Euro Spikes As Headline-Reading Algos Go Wild Ahead Of ECB

Well that didn’t last long. Just a few short hours after EURUSD dropped on reports that the ECB would cut its inflation outlook, headlines have hit saying the changes are likely small” and EURUSD has spiked back towards the highes of the day…

The Algos are busy today…

Are they trying to run all the stops ahead of Draghi’s big day?



Saudi Arabia gives Qatar a 24 hr ultimatum of which the key is to end all times to the Muslim brotherhood and Hamas.

(courtesy zero hedge)

Saudi Arabia Gives Qatar 24 Hour Ultimatum As Analysts Warn Of “Military Confrontation”

Shortly after imposing a naval blockade in the immediate  aftermath of the Qatar diplomatic crisis, one which left the small Gulf nation not only politically isolated and with severed ties to its neighbors but potentially locked out of maritime trade and crippling its oil and LNG exports, on Tuesday SkyNews Arabia reported that Saudi Arabia has given Qatar a 24 hours ultimatum, starting tonight, to fulfill 10 conditions that have been conveyed to Kuwait, which is currently involved in the role of a mediator between Saudi and Qatar.

مصادرنا: أبلغت بـ10 شروط يجب أن تطبقها الدوحة خلال 24 ساعة بدءا من هذه الليلة

According to media report, among the key demands by Saudi Arabia is that Qatar end all ties Muslim Brotherhood and Hamas.

Developing: Saudi Arabia issues ultimatum to demanding it end all ties Muslim Brotherhood & Hamas

While there was little additional information on the Ultimatum and more importantly what happens should Qatar not comply, Al Jazeera reported that Kuwait’s emir, Sheikh Sabah Al Ahmad Al Jaber Al Sabah, left Saudi Arabia on Tuesday after holding mediation talks with the Saudi King Salman bin Abdul Aziz to try to defuse an escalating crisis between Arab countries and Qatar. No details were given on the talks.

In addition to Saudi Arabia’s aggressive approach, Egypt’s Foreign Ministry accused Qatar of taking an “antagonist approach” towards Cairo and said “all attempts to stop it from supporting terrorist groups failed”. Qatar denied the allegations, with a Foreign Ministry statement describing them as “baseless” on Monday.

Speaking to Al Jazeera, analyst Giorgio Cafiero of Gulf State Analytics, a geopolitical risk consultancy based in Washington, DC, said: “I think the Kuwaitis as well as Omanis … fear the prospects of these tensions escalating in ways which could undermine the interest of all six members of the GCC.

“There are many analysts who believe that a potential break-up of the GCC has to be considered right now.”

“If these countries fail to resolve their issues and such tensions reaches new heights, we have to be very open to the possibility of these six Arab countries no longer being able to unite under the banner of one council,” said Cafiero.

He added that if tension escalates, some have warned of a “military confrontation”.




This is going to be fascinating:  Turkey is now approving a bill to support Qatar.  No wonder the Turkish pipeline from Qatar through Saudi Arabia, then through Turkey and onto the Europe is critical for Turkey.  This is the route that the USA wants.  Russia naturally is totally against this as it destroys their capability of supplying natural gas to Europe.  This may cause a World War.

(courtesy zero hedge)

Turkey Fast-Tracks Bill Approving Troop Deployment To Qatar

In the ongoing diplomatic crisis between Qatar and its Gulf/Arab peers, which is either the result of Saudi nat gas envy or – for those who watch CNN – Russian hacking, Turkey has emerged as a vocal  supporter of the small but wealthy state.  On Tuesday, Turkish President Recep Erdogan defended Qatar, saying he personally would have intervened if accusations that the tiny Gulf emirate supports “terrorism” were true and said he intends to “develop” ties with the embattled Gulf state hit by sanctions from Saudi Arabia and its allies.

“Let me say at the outset that we do not think the sanctions against Qatar are good,” Erdogan said in a speech in Ankara.”Turkey will continue and will develop our ties with Qatar, as with all our friends who have supported us in the most difficult moments,” he added in reference to last year’s failed coup. The support puts Turkey in a complicated position because while the NATO member has close ties with Qatar it also has good relations with the other Gulf states, especially Saudi Arabia.

Turkey’s support for Qatar also has ideological reasons as in the past both both have provided support for the Muslim Brotherhood in Egypt and backed rebels fighting to overthrow Syrian President Bashar al-Assad.

Erdogan was careful not to criticise Riyadh, calling on the member nations of the Gulf Cooperation Council to “resolve their differences through dialogue”.

“Efforts to isolate Qatar … will not solve any problem,” said Erdogan, praising Doha’s “cool-headedness” and “constructive approach”.

“Presenting Qatar as a supporter of terrorism is a serious accusation,” the Turkish leader said. “I know [Qatar’s leaders] well and if that had been the case, I would have been the first head of state to confront them” which of course is ironic coming from near-dictator, who last year cracked down on over 100,000 Turkish citizens accusing them of cooperating with Fethulah Gulen’s “shadow state”, and who has been accused of using false flag terrorist attacks to crack down on the Kurdish minority in his country.

On Wednesday morning Turkish support for Qatar escalated after the country’s parliament was expected to fast-track a draft bill allowing its troops to be deployed to a Turkish military base in Qatar, officials from the ruling AK Party and the nationalist opposition said.

According to Reuters, lawmakers from Erdogan’s AK Party have proposed debating two pieces of legislation: allowing Turkish troops to be deployed in Qatar and approving an accord between the two countries on military training cooperation, AKP and nationalist opposition officials said. The draft bills, which were drawn up before the spat between Qatar and its Arab neighbours erupted, are expected to be approved by the Ankara parliament later on Wednesday.

Just like the US with its CENTCOM base, as part of an agreement signed in 2014 Turkey set up a military base in Qatar, its first such installation in the Middle East. In 2016 Ahmet Davutoglu, then Turkish prime minister, visited the base where 150 troops have already been stationed, the Turkish daily Hurriyet reported.

In an interview with Reuters in late 2015, Ahmet Demirok, Turkey’s ambassador to Qatar at the time, said 3,000 ground troops would eventually be deployed at the base, planned to serve primarily as a venue for joint training exercises.

The imminent Turkish decision to deploy troops comes as a Saudi 24 hour ultimatum, issued on Tuesday night, and containing 10 conditions among which demands by Saudi Arabia is that Qatar end all ties Muslim Brotherhood and Hamas, is ticking. While it was unclear what the outcome would be should Qatar fail to comply, some analysts have gone so far as to suggest a “military confrontation.”

As we reported last night, speaking to Al Jazeera, analyst Giorgio Cafiero of Gulf State Analytics, a geopolitical risk consultancy based in Washington, DC, said: “I think the Kuwaitis as well as Omanis … fear the prospects of these tensions escalating in ways which could undermine the interest of all six members of the GCC.

“There are many analysts who believe that a potential break-up of the GCC has to be considered right now. If these countries fail to resolve their issues and such tensions reaches new heights, we have to be very open to the possibility of these six Arab countries no longer being able to unite under the banner of one council,” said Cafiero.

He added that if tension escalates, some have warned of a “military confrontation”.

My goodness! they are certainly going after QATAR.  Today the UAR reveals anyone publishing statements sympathetic to Qatar will be jailed for 15 years. Freedom of speech is non existent over there.

(courtesy zero hedge)

Qatari Riyal Crashes After Saudi Orders Banks To Cut Exposure

The Qatari Riyal plunged to record lows (and forward FX markets indicate the peg is doomed) as Bloomberg reports Saudi Arabia’s central bank has ordered lenders in the country not to increase their exposure to any Qatari clients amid the worst crisis in relations among the Gulf Arab monarchies in decades, according to people familiar with the matter.

The Saudi Arabian Monetary Agency also told banks licensed in the country that they should not process any payments denominated in Qatari riyals, the people said, asking not to be identified because the information is private.

The order to refrain from increasing exposure to Qatar is being applied to include treasury investments, loans, letters of credit and trade-finance facilities, the people said.

Saudi Arabia is among countries including the United Arab Emirates, Egypt and Bahrain, that have blocked transport routes with Qatar, accusing the country ofdestabilizing the region through supporting proxies of Shiite Muslim Iran and the Sunni militants of al-Qaeda and Islamic State.

Some banks in Saudi Arabia, the U.A.E. and Bahrain have already begun cutting their exposure to Qatar, other people


S and P downgrades Qatar’s debt to AA-

(courtesy zero hedge)

S&P Downgrades Qatar To AA-, Credit Risk Spikes To 2017 Highs

Citing expectations of notable slowing in economic growth andconcerns about fiscal and current account deficits widening, S&P has downgraded Qatar from AA to AA- as credit risk premia hit 2017 highs.

Qatar credit risk is at 2017 highs (but remains well below Jan 2016 recent highs…

Full Statement from S&P…

  • On June 5, 2017, a group of governments including Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Libya, and Yemen moved to cut diplomatic ties, as well as trade and transport links with Qatar.
  • We believe this will exacerbate Qatar’s external vulnerabilities and could put pressure on economic growth and fiscal metrics.
  • We are therefore lowering our long-term rating on Qatar to ‘AA-‘ from ‘AA’ and placing it on CreditWatch with negative implications.
  • The negative CreditWatch encompasses numerous downside risks to the rating as a consequence of recent events, reflecting that we could lower the ratings if domestic political risks were to substantially increase or if government indebtedness increases materially quicker than we currently expect. We could also lower the ratings if our assessment of contingent liabilities from the banking system or the government’s related entities were to increase, or if Qatar’s external financing lines were withdrawn.


On June 7, 2017, S&P Global Ratings lowered its long-term rating on the State of Qatar to ‘AA-‘ from ‘AA’ and placed the rating on CreditWatch with negative implications. The ‘A-1+’ short-term rating was affirmed. The Transfer & Convertibility assessment is ‘AA’.

As a “sovereign rating” (as defined in EU CRA Regulation 1060/2009 “EU CRA Regulation”), the ratings on the State of Qatar are subject to certain publication restrictions set out in Art 8a of the EU CRA Regulation, including publication in accordance with a pre-established calendar (see “Calendar Of 2017 EMEA Sovereign, Regional, And Local Government Rating Publication Dates published Dec. 16, 2016, on RatingsDirect). Under the EU CRA Regulation, deviations from the announced calendar are allowed only in limited circumstances and must be accompanied by a detailed explanation of the reasons for the deviation. In this case, the reason for the deviation is a significant geopolitical development impacting creditworthiness. The next scheduled rating publication on the sovereign rating on the State of Qatar will be on Aug. 25, 2017.



ISIS claims responsibility for this latest attack at the Iranian Parliament and the Mausoleum of Khomeini.  Strange that a sponsor of terrorism is itself subject to an attack.  We are not sure if the attack is connected to the embargo against Qatar

(courtesy zero hedge)

Terrorists Raid Iran Parliament, Mausoleum; Gunmen, Suicide Bombers Leave At Least 12 Dead

Terrorist attackers raided Iran’s parliament and opened fire at the Mausoleum of Ayatollah Khomeini a few kilometers south of the capital on Wednesday morning, in near simultaneous assaults that killed at least 12 people, Reuters reported citing local media.

خبر گروگانگیری همسر دو نماینده مجلس توسط افراد مسلح در ساختمان مجلس تکذیب شد
خبرگزاری مهر این خبر را منشتر کرده بود

فارس: دقایقی قبل عملیات تروریستی در ساختمان اداری مجلس با ورود نیروهای ویژه سپاه و هلاکت عوامل تروریستها لحظاتی پیش به پایان رسید pic.twitter.com/XccS9BR357

View image on TwitterView image on TwitterView image on Twitter

The first assault took place at 10.30am local time when the parliament was in session. Four gunmen walked into the parliament buildings and began shooting at visitors. Parliament is in lockdown and the police are reported by state media to be still hunting the gunmen. A bomb blast was subsequently reported at Iranian parliament killing one and injuring several, officials said as cited by local media.

View image on TwitterView image on TwitterView image on Twitter

گزارش تصویری روزنامه ایران از نجات مراجعه‌کنندگان در داخل مجلسhttp://iipa.ir/News/60944.html 


In a second incident half an hour later, at least two people opened fire at the shrine of Ayatollah Khomeini. Several people are reported to have been injured there. One of the shrine attackers is reported to have killed himself by detonating an explosive vest. Another was shot dead.

Dramatic video via @IranNewspaper of attack on ‘s parliament.

The video shows shooting inside ‘s Parliament, following terrorist attack in Tehran.

ISIS has claimed responsibility for the attacks, AMAQ, a news agency close to the group, said. “Fighters from Islamic state attacked Khomeini’s shrine and the Iranian parliament in Tehran,” the news agency said.

“The atmosphere is tense. It is a blow to Rouhani. How can four armed men enter the parliament, where a very tight security has always been in place,” said a senior official, who asked not to be named.

The attackers killed seven people and wounded several others, Tasmin said. The news agency also said there were unconfirmed reports that the attackers had taken four hostages inside the parliament building, although according to a subsequent report by Iran’s PressTV all terrorists at the parliament had been killed.

Four terrorists – including a suicide bomber – attacked the shrine of the late leader Ayatollah Ruhollah Khomeini in Tehran, Iran’s state TV website reported.

As Reuters adds, three assailants, one with a pistol and two with AK-47 assault rifles, carried out the attack in central Tehran, lawmaker Elias Hazrati told state television. Another lawmaker said one of the assailants was surrounded by security forces and all the doors to the building had been closed, ISNA news agency reported.

https://www.instagram.com/p/BVB7oTRglph/embed/?cr=1#%7B%22ci%22%3A0%2C%22os%22%3A1725.9950000000001%7DIran’s state TV said a security guard was killed and four people were wounded in the shrine attack. It said one of the attackers at the shrine was killed by security guards and that a woman was arrested. It described the shrine attackers as “terrorists” and said one carried out a suicide bombing, without providing further details.

https://www.instagram.com/p/BVB5tXBAVSh/embed/?cr=1#%7B%22ci%22%3A1%2C%22os%22%3A1741.9950000000001%7DTehran Governor Hossein Hashemi confirmed the incident at Ayatollah Khomeini mausoleum, saying that one attacker was killed by security forces and other assailants were arrested, IRIB broadcaster reported, as cited by Reuters. Hashemi added that a worker was killed and several people injured in the mausoleum attack.

“I was inside the parliament when shooting happened. Everyone was shocked and scared. I saw two men shooting randomly,” said one journalist at the scene, who asked not to be named. Around half an hour later, an attacker opened fire at the Mausoleum of Ayatollah Khomeini, injuring several members of the public, Iran’s English-language Press TV said.

State TV quoted lawmaker Elias Hazrati as saying the attackers at parliament were armed with Kalashnikov assault rifles. Iran’s intelligence ministry said on state TV that the attacks were carried out by terrorist groups. Iran’s parliamentary speaker, Ali Larijani, added that “some cowardly terrorists” had penetrated the parliament building and that the security forces would fight them decisively.

A male assailant was arrested while on the run at the parliament’s hallway, Akbar Ranjbarzadeh, a senior member of the parliament’s Presiding Board told Farsnews.

The semi-official ISNA news agency said all entrance and exit gates at parliament were closed and that lawmakers and reporters were ordered to remain in place inside the chamber. Iranian state media said police helicopters were circling over the parliament building and that all mobile phone lines from inside were disconnected.  Similar to the Mausoleum attack, Iranian state TV said one of the attackers taking part in an assault on parliament has blown himself up.

Fars cited some members of parliament who claimed that shooting continues in the building.  “Clashes still continue at the parliament building,” one MP said. That has not been confirmed by other media outlets.” A Tasmin reporter at the parliament says the lawmakers have been locked in the building’s hall.

Such attacks are incredibly rare in Iran, which keeps a very tight grip on domestic security. Iran has always said that its fight against militias in Iraq and Syria helps keep it safe. Iranians have not seen such strikes since the 1980s when, in the wake of the 1979 Islamic revolution, the Mujahedin Khalq Organisation (MEK), an exiled opposition group, resorted to armed struggle against the Islamic republic.

It was not immediately clear if the attacks were related, although the Islamic State has claimed responsibility for the Iran attacks, Al Jazeera Says, citing the group’s Amaq news agency.

It was also not clear if the Iran attacks are linked to the recent diplomatic crisis gripping nearby Qatar.

Iran blames its arch enemy Saudi Arabia for the terrorist attack this morning
(courtesy zerohedge)

Iran Blames Saudi Arabia For Terrorist Attack, Supporting ISIS; Vows “Revenge”

Iran’s infamous Revolutionary Guards accused Saudi Arabia of being behind the twin terrorist attacks in Tehran, which killed 12 and left at least 39 injured, and have vowed “revenge.”

Earlier in the day, a group of four people in women’s clothes opened fire in the building of the Iranian Parliament, with a subsequent explosion. Another attack involving an explosion took place near the Imam Khomeini shrine. One of the perpetrators of the attack was detained and the rest were executed.

“This terrorist attack happened only a week after the meeting between the U.S. president (Donald Trump) and the (Saudi) backward leaders who support terrorists. The fact that Islamic State has claimed responsibility proves that they were involved in the brutal attack,” said the statement, published by Iranian media.

What is notable is that ISIS already claimed responsibility for the attack, so Iran is explicitly accusing Saudi Arabia of supporting the Islamic State.






This is a must read as oil could be pushed down to 10 dollars by 2025

(courtesy Charles Kennedy/OilPrice.com)

’EVs, Solar Could Push Oil Down To $10 By 2025’’

Oil prices could fall to as low as $10 per barrel within a decade as a “tsunami” of threats could undo demand.

That prediction comes from Engie SA’s innovation chief, Thierry Lepercq, who says that oil demand will be hit on multiple fronts. He lays out five tsunamis: solar power, battery storage, electric vehicles, “smart” buildings, and cheap hydrogen. “Even if oil demand continues to climb until 2025, its price could drop to $10 if markets anticipate a significant fall in demand,” Lepercq told Bloomberg in an interview. Solar, battery storage, electrical and hydrogen vehicles, and connected devices are in a ‘J’ curve,” he added. “Hydrogen is the missing link in a 100 percent renewable-energy system, but technological bricks already exist.”

Engie SA, formerly GDF Suez, is a French utility company that held coal and natural gas generation assets but has increasingly been moving into renewables and energy services. The cost of renewables will continue to decline while capacity ramps up. Lepercq asserts that renewables, EVs, and battery storage are on a ‘J’ curve because all of them feed into each other. The cost of solar could drop under $10 per megawatt-hour in less than a decade, making it the cheapest source of electricity. At the same time, falling costs for battery storage makes solar even more competitive. Cheaper batteries will also make EVs cost competitive with traditional passenger vehicles. “As carmakers offer more electrical vehicles with a range exceeding 500 kilometers, charging stations being progressively deployed and more cities banning gasoline and diesel cars, a shift will progressively take place,” he said.Related: A New World Order Is Emerging In Natural Gas

His prediction is in line with a growing number of estimates that predict a faster adoption of renewables and EVs than previously anticipated. For example, just a few weeks ago Wood Mackenzie estimated that electric vehicles could erase 10 percent of global gasoline demand by 2035. That would kill off between 1 and 2 million barrels of oil demand per day. WoodMac also estimates that EVs are already displacing about 50,000 bpd today. The IEA put out a less optimistic projection last month, predicting absolute growth in oil demand through 2040.

Meanwhile, Bloomberg New Energy Finance might be the most bullish of all on EVs, offering a scenario earlier this year in which EVs cut into global oil demand by about 13 mb/d by 2040, enough to probably keep oil prices from ever reaching $100 per barrel again.

For now, demand is still rising, and fluctuations in the pace of consumption depends much more on short-term factors, such as oil prices and the health of the global economy. The IEA says that 2017 will see demand growth drop to just 1.3 mb/d, the lowest expansion in several years.

By Charles Kennedy of Oilprice.com



A Chinese firm is trying to desperately unload bonds purchased in December. Venezuela is rapidly heading into a default

(courtesy zero hedge)


Venezuela’s “Mysterious” Bond Deal Reappears, And This Time China Wants Out

As its foreign reserves dwindle to less than $10 billion, the government of Venezuela – desperate for any kind of financial lifeline – has partnered with a Chinese brokerage to try and resell $5 billion in bonds that it initially issued at a deep discount, according to the Wall Street Journal. The brokerage, Haitong Securities USA, a unit of China’s Haitong Securities, is quietly marketing the bonds to yield-starved hedge fund managers.

What makes today’s news particularly notable is that the original bond transaction in question was highlighted here back in January when in a post titled “In “Mysterious” Bond Sale, Venezuela Issues $5 Billion In Debt To Itself With China As Underwriter we reported that the Maduro government appeared to be effectively selling debt, and raising dollar funds, from (and to) itself with China as an intermediary; as Reuters added at the time, the deal was peculiar in that the transaction did not bring in actual new funds for the cash-strapped OPEC nation.

Quoted by Bloomberg in January, Francisco Rodriguez, the chief economist at Torino Capital in New York, said that “my guess – but it’s just a guess – is that given uncertainty as to whether Venezuela would be able to deliver the oil necessary for repayment, the Chinese may have asked for the loan to be also guaranteed with a bond,” he told Bloomberg by email, adding that he had been expecting a disbursement of $5 billion related to the renewal of a loan from China.

Bond traders were just as confused as reporters and analysts: Russ Dallen, a managing partner at Caracas Capital, told Bloomberg that “bond markets will likely react with “befuddlement. Taking place on Dec. 29 with no approval by the National Assembly and no promulgation notice in the Official Gazette, this smells of some kind of end of the year financial shenanigan from a government that is out of cash and is desperately trying to hide it,” he said.

As we concluded at the time, “With that assumption in place, we look forward to learning the details of just how China is now funding insolvent supplier sovereigns by the back door, and where else besides Venezuela is this arrangement in place.”

Five months later, we may have gotten the answer, and it now appears that Haitong had simply kept the bond without syndicating to end buyers, and – for whatever reason – is now desperate to dump them to any willing purchaser, a move which bodes poorly for China’s on going relationship with Venezuela.

Reports that Venezuela is shopping around the bonds arrived just a week after Goldman Sachs Asset Management inadvertently ignited a PR crisis when it bought $2.8 billion worth of Venezuelan bonds issued by state oil company PDVSA from an obscure UK brokerage. Opponents of the brutal regime of Nicolas Maduro accused the bank of buying “hunger bonds” and Venezuela opposition leader Julio Borges accused it of “aiding and abetting the country’s dictatorial regime.”

As we noted last week, it appears that Goldman turned around and sold those same bonds, which it bought at a discount, for a tidy profit.

Haitong is reportedly offering the bonds at an even deeper discount than the 31 cents on the dollar that Goldman paid. But the latest batch of bonds currently on sale is different from those purchase by Goldman (and Nomura) as they remain unregistered with clearing organizations like Euroclear and the Depository Trust & Clearing Corp., which is required for the bonds to trade electronically, WSJ reported.

Aside from the illiquidity issue, potential buyers have other reasons to be wary of lending to the Maduro regime: The political opposition has argued that the bond sales are illegal because they were never approved by the legislature.

Some would-be buyers told WSJ they’re afraid that if Venezuela defaults, the owners of the 2036 bonds wouldn’t have the same claim on the country’s debt as other bondholders because the bonds were issued through an intermediary. Of course, any potential buyer should probably be concerned about the huge sheer size of the discounts, as the WSJ points out tongue-in-cheek.

“It’s like they’re having a going out of business sale,” said Russ Dallen, a partner at Brokerage Caracas Capital.


“And that’s what buyers should be worried about. Either they’re really desperate, or they’re just filling up their credit card with no plans of paying back.”

There is a reason for Venezuela’s desperation: after two decades of economic mismanagement, the largest global banks refuse to do business with the insolvent socialist country – which has on numerous occasions tried to lease or sell outright some of its gold reserves – making it impossible to plug holes in its budget by issuing debt. Instead, the country must rely on small and often little-known institutions to peddle its bonds.

That, and of course, hyperinflating away its debt. Venezuela’s economy has shrunk by an estimated 27% since 2013. The International Monetary Fund says inflation this year will hit 720%, and the country’s central bank hasn’t publishing basic economic indicators like balance of payments and gross domestic product since September 2015, rendering the country’s basic economic indicators, let alone calculations of its capacity to repay, a giant question mark for investors and credit rating firms alike.

With that in mind, we’re curious to see who – if anyone – is willing to step up and buy the latest batch of “hunger bonds” in the aftermath of the shock treatment that Goldman received after it was revealed that Blankfein’s firm may have been covertly funding Maduro’s central bank.

But the far bigger question is whether China – as the Haitong firesale appears to suggest – has finally given up on the melting Venezuelan ice cube, also known as one of its main foreign crude oil vendors. If so, Maduro’s days are indeed numbered.



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



GBP/USA 1.2904 DOWN .0002 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS WEDNESDAY morning in Europe, the Euro FELL by 61 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1209; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 38.20 POINTS OR 1.234%     / Hang Sang  CLOSED DOWN 22.98 POINTS OR 0.09% /AUSTRALIA  CLOSED DOWN 0.010% EUROPEAN BOURSES OPENED MIXED 

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED UP 4.72 POINTS OR 0.02%

Trading from Europe and Asia:
1. Europe stocks  OPENED ALL MIXED 


Gold very early morning trading: 1289.50


Early WEDNESDAY morning USA 10 year bond yield: 2.154% !!! DOWN 3 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.815, DOWN 3  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 96.94 UP 30  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING



And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.097%  UP 1 in basis point(s) yield from TUESDAY 

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

SPANISH 10 YR BOND YIELD: 1.568%  DOWN 3 IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.300 UP 5   POINTS  in basis point yield from TUESDAY 

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





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

Euro/USA 1.1210 DOWN .0029 (Euro DOWN 29 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.52 UP  0.02 (Yen DOWN 2 basis points/ 

Great Britain/USA 1.2909 UP 5 ( POUND UP 5 basis points)

USA/Canada 1.3518 UP .0070 (Canadian dollar DOWN 70 basis points AS OIL FELL TO $46.09


This afternoon, the Euro was DOWN by 29 basis points to trade at 1.1210


The POUND ROSE BY 5  basis points, trading at 1.2909/

The Canadian dollar FELL by 70 basis points to 1.3518,  WITH WTI OIL FALLING TO :  $46.09

The USA/Yuan closed at 6.7957/
the 10 yr Japanese bond yield closed at +.047% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 4 IN basis points from TUESDAY at 2.1711% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.83  UP 2  in basis points on the day /

Your closing USA dollar index, 96.84 UP 21 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 46.23 POINTS OR 0.62%
German Dax :CLOSED DOWN 17.63 POINTS OR 0.14%
Paris Cac  CLOSED DOWN  3.69 POINTS OR 0.07% 

Italian MIB: CLOSED  DOWN 20.10 POINTS/OR 0.10%

The Dow closed UP 37.46 OR 0.18%

NASDAQ WAS closed UP 22.32 POINTS OR 0.36%  4.00 PM EST
WTI Oil price;  46.09 at 1:00 pm; 

Brent Oil: 48.32 1:00 EST




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

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


BRENT: $48.17


USA 30 YR BOND YIELD: 2.836%


USA/JAPANESE YEN:109.81  UP 0.315

USA DOLLAR INDEX: 96.66  UP 2  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2960 : UP .0055  OR 55 BASIS POINTS.

Canadian dollar: 1.3506 UP 59 BASIS pts 

German 10 yr bond yield at 5 pm: +.269%


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


Bonds, Bullion, & Black Gold Drop But Investors Buy-The-“No Smoking Gun”-Dip In Stocks

Overheard at today’s Intel Official hearing…


An extremely volatile day in FX markets highlights the sensitivities ahead of tomorrow…


But there was on driver for today’s gains…


And as Intel Officials confirmed Trump did not pressure them and Comey’s prepared remarks had no smoking gun, so investors bought the dip and bid stocks back into the green…All major indices closed green


Trannies managed to ramp back to unchanged on the week…


The big story of the day was a shocking build in crude and products (biggest since April 2015) which sent WTI and RBOB tumbling…back near cycle lows (dragged Energy stocks notably lower) – Biggest drop in Crude in 3 months


Financials got a lift today (very small move in TSYs so perhaps on Dodd-Frank chatter) but energy was worst…


FANG Stocks bounced back modestly from yesterday’s late-day tumble but not convincingly…


Bond yields rose modestly, now higher on the week…it seems the excitement over China buying bonds was short-lived


As we noted above, today was a volatile day for the dollar with AUD strength overnight (GDP) and volatility in EUR, GBP, and CAD amid ECB, Poll, and energy headlines respectively


Gold and Silver rolled over as Comey’s prepared remarks hit...




Chicago/Cab industry

Cab medallions are already over 50% in Chicago as UBER is killing them


(courtesy zero hedge)


Chicago Cab Industry Collapsing As Medallion Foreclosures Soar

Chicago mayor Rahm Emmanuel has a lot on his plate these days between soaring murder rates, failing pension systems and the worst domestic migration trends in the country as residents see the tax-hike writing on the wall and are moving out of the ‘Windy City’ by the 1,000s.  Now, it seems he can add a failing taxi industry and millions in additional annual tax revenue losses to his list of woes.

As the USA Today points out, the cab industry in Chicago is quickly hurdling toward extinction as nearly 50% of the city’s fleet sat idle in March 2017 and medallion foreclosures in 2017 have already exceeded 2016.

About 42% of Chicago’s taxi fleet was not operating in the month of March, and cabbies have seen their revenue slide for their long-beleaguered industry by nearly 40% over the last three years as riders are increasingly ditching cabs for ride-hailing apps Uber, Lyft and Via, according to a study released Monday by the Chicago cab drivers union.


More than 2,900 of Chicago’s nearly 7,000 licensed taxis were inactive in March 2017 — meaning they had not picked up a fare in a month, according to the Cab Drivers United/AFSCME Local 2500 report. The average monthly income per active medallion — the permit that gives cabbies the exclusive right to pick up passengers who hail them on the street — has dipped from $5,276 in January 2014 to $3,206 this year.


The number of riders in Chicago hailing cabs has also plummeted during that same period from 2.3 million monthly riders to about 1.1 million.


More than 350 foreclosure notices or foreclosure lawsuits have been initiated against medallion owners already this year, compared to 266 last year and 59 in 2015. Since October, lenders have filed lawsuits against at least 107 medallion owners who have fallen behind on loan payments, according to the union’s count.


Meanwhile, the value of Chicago medallions have crashed by 90% in less than four years after peaking at over $350,000 each back in 2013.

The value of Chicago medallions hit a median sales peak of $357,000 in late 2013, just before Uber arrived on the scene in Chicago. In April, one medallion sold for just $35,000, according to city data.


About 39% of Chicago’s medallions are owned by individuals or groups with four or few fewer medallions, while the majority of medallions are owned by companies that maintain large fleets of taxis and lease the permits and vehicles to licensed operators.


“It feels like the city is just watching us collapse,” Aikins said. “Right now, there are a few people, the elderly and some others who refuse to take Uber because they are uncomfortable with it, that keep us going. But how many of those people are out there to sustain us?”

Not surprisingly, the cabbie union has done what unions do best by calling on local government officials to prop up the dying industry through tax incentives, measures which should buy them at least another month or two of operation.

The union is calling on the city take several actions to provide relief for the city’s struggling taxi industry, including changing rules so taxi drivers aren’t required to replace their vehicles as often, waive an annual $1,176 per taxi ground transportation tax fee, and eliminating a city medallion license renewal fee that costs owners $1,000 every two years.


“When they opened up ground transportation and taxi market to thousands of for-hire vehicles like Uber, Lyft and now Via . . . taxi driver income has been decimated and owner-operators are unable to keep up with loan payments for their medallions plus their high-operating costs,” said Tracey Abman , associate director at AFSCME. “As a result of that, hundreds of taxi owner-operators are facing foreclosures on their medallions and thousands more foreclosures are likely unless the city takes substantial action to reduce the financial burden on small taxi owners.”

Of course,Chicago cabbies aren’t alone in feeling the pinch.  In New York, ridership in the city’s iconic yellow cabs has fallen about 30% over the last three years. Last year, San Francisco’s Yellow Cab — the city’s largest taxi company — filed for Chapter 11 bankruptcy protection.  Los Angeles taxi ridership fell 43%, and revenue was down 24%, between 2013 and 2016.

Shocking that it is so hard to compete in an industry in which Uber is willing to burn billions of dollars per year to provide your service for a fraction of your operating costs.




More USA devastating new:  Sear closes 66 stores and Joe’s Crab shack files for bankruptcy protection


(courtesy zero hedge)


Sears Closing Another 66 Stores; Joe’s Crab Shack Files For Bankruptcy

Here’s another example of when cornered hacks blame “fake news” or in this case, the “irresponsible media” for their gross incompetence, only to prove the media very much responsible and unfake.

One month ago, Sears CEO Eddie Lampert blasted the media for “unfairly singling out” the company over the past decade and blamed “irresponsible” coverage for the retailer’s woes. Sears, once the largest U.S. retailer, recently hit rock bottom and continued to dug when it warned investors in March there was a chance it may not survive after years of losses and declining sales. Still, that very warning did not prevent Lampert from lashing out at those who have – correctly – been warning that his company bankruptcy is just a matter of time, and back in May he kicked off the company’s annual shareholders’ meeting at the company’s HQ with a 12 page slideshow of headlines about the company’s financial distress, dating back to 2008 (Lampert is known for his peculiarities, collecting morbid headlines about his biggest asset was not known to be among them).

“You’d think it was from a month ago, but it’s literally been going on for a decade,” Lampert told the handful of furious Sears shareholders in attendance who have seen the value of their stock wiped out over the years.

There were other fireworks during the meeting, like for example when Lampert compared Sears – which hasn’t posted a profit in six years – to Amazon’s early unprofitable growth. He predicted people will look back and wonder how they missed the Sears’ turnaround. The audience was not amused, and six shareholders questioned Lampert, including one asked if Lampert was paranoid and in denial about the company’s losses.

Confirming the former, Lampert denied saying there were “behind-the-scenes” counterparties trying to take advantage of the company’s situation and that he was trying to adapt and preserve as many jobs as possible. “That’s not about denial; that’s about caring.”

There was little else of substance discussed, with the bulk of Lampert’s 90-minute appearance focused on the negative news coverage, which – just like Hillary Clinton – he said had been “deliberately unfair.”

“It’s irresponsible and it’s been irresponsible for too damn long. We’re just looking for a fair chance,” Lampert said of the media. “Excuse my rant but a lot of what we’re doing deserves a chance to see the light of day.”

Less than a month later, Sears quietly proceeded to close another 66 stores in Lampert’s drive to prove that he is neither paranoid not in denial, but merely a “caring” individual with a penchant for blaming the media for all his problems. Also, the company is burning through millions in cash, so it really had no other choice. The closures will include 49 Kmart stores and 17 Sears stores, with most shut by September according to USA today. The new closures are in addition to the 180 shutdowns Sears announced earlier this year.

Last month, roughly around the time Lampert was bashing “fake news” for the disintegration of Sears, the near-defunct retailer, in its latest scramble to preserve cash announced that it would delay repaying much of a $500 million loan; instead subs of Sears Holdings were granted a forebearance allowing them to repay only $100 million of the loan in July, the initial maturity date of the total debt. The remaining $400 million is not scheduled to come due until January of 2018, with Sears having an option – which it will exercise – of pushing the maturity to July of next year. The creditors will likely see at most pennies on the dollar.

* * *

Elsewhere, as had been largely anticipated, the operator of the Joe’s Crab Shack and Brick House Tavern & Tap chains, Ignite Restaurant Group, was finally extinguished when the company filed for Chapter 11 bankruptcy, hoping to sell itself to an affiliate of Kelly Investment Group. The company, which had seen a steep drop in sales in recent years, listed total debts as of April 30 of  $197.3 million on $153.4 million in assets. Of course, the rats left the sinking ship long ago, with CEO Robert S. Merritt resigning in April, when he was replaced with turnaround firm Alvarez & Marsal.

Ignite operates, or rather operated, 137 Joe’s and Brick House restaurants in 32 states, with “large numbers” in Texas, Florida and California, plus – of all places – three franchises in the United Arab Emirates. It employs 8,400 people, including 5,500 part-time workers. The first Joe’s opened in Houston in 1991.

Fear not though bland seafood fans: the brand will continue to exist upon emergency from bankruptcy: Ignite has lined up Kelly affiliate KRG Acquisitions as a “stalking horse” to open bidding in a court-supervised auction. KRG is willing to pay $50 million and assume liabilities. One thing that will not be coming back, however, is a substantial number of employees, many of whom who will be “synergized” and “restructured” away.



Trump nominates Christopher Wray as new FBI director


(courtesy zero hedge)

(courtesy zero hedge)


Looks Like CNN’s Anonymous Sources Got This One Wrong

Back on May 9th, the White House released the letter that President Trump sent to former FBI Director James Comey informing him that he’d been relieved of his duties at the FBI.  Within that letter, Trump awkwardly inserted a sentence thanking Comey for informing him “on three separate occasions, that I am not under investigation.”  Here’s the full sentence (full post here):

“While I greatly appreciate you informing me, on three separate occasions, that I am not under investigation, I nevertheless concur with the judgement of the Department of Justice that you are not able to effectively lead the Bureau.”

Not surprisingly, this statement set off alarm bells at CNN and other MSM outlets because, if true, it would put a real damper on their “Trump colluded with Russian hackers to stage a coup” narrative. Therefore, those outlets set out on a mission to ‘prove’ that Comey never made those statements and that, by definition, Trump clearly lied about his past interactions with the former FBI Director.

And not long after setting out on that mission, courtesy of those infamous ‘anonymous sources’, CNN and ABC struck gold when they confirmed that “FBI Director James Comey is reportedly set to testify he never told President Donald Trump that he was not under investigation.”  Here is a summary of CNN’s reporting from their primary echo chamber, HuffPo:

“Former FBI Director James Comey is reportedly set to testify he never told President Donald Trump that he was not under investigation in connection with Russian interference in the 2016 election, according to CNN and ABC News.”

And here is the original CNN reporting:



“Trump has made a blanket claim that Comey told him multiple times that he was not under investigation.”


“But one source said Comey is expected to explain to senators that those were much more nuanced conversations from which Trump concluded that he was not under investigation.  Another source hinted that the President may have misunderstood the exact meaning of Comey’s words, especially regarding the FBI’s ongoing counterintelligence investigation.”

Unfortunately, CNN’s ‘anonymous sources’ seem to have been ‘mistaken’ on this one.  And while we have no doubts, generally, about the integrity of CNN and/or their anonymous sources, Comey’s direct testimony released just a while ago seems to confirm exactly what Trump said in his original May 9th letter and exactly the opposite what CNN subsequently reported.

In fact, here are precisely three instances (ironic, right?), directly from Comey’s testimony, in which he personally told President Trump he was not under investigation:

1.  January 6th Meeting at Trump Tower:

“In that context, prior to the January 6 meeting, I discussed with the FBI’s leadership team whether I should be prepared to assure President-Elect Trump that we were not investigating him personally. That was true; we did not have an open counter-intelligence case on him. We agreed I should do so if circumstances warranted. During our one-on-one meeting at Trump Tower, based on President Elect Trump’s reaction to the briefing and without him directly asking the question, I offered that assurance.”


2.  January 27th Dinner at White House:

“During the dinner, the President returned to the salacious material I had briefed him about on January 6, and, as he had done previously, expressed his disgust for the allegations and strongly denied them. He said he was considering ordering me to investigate the alleged incident to prove it didn’t happen. I replied that he should give that careful thought because it might create a narrative that we were investigating him personally, which we weren’t, and because it was very difficult to prove a negative. He said he would think about it and asked me to think about it.”


3.  March 30 Phone Call:

“I explained that we had briefed the leadership of Congress on exactly which individuals we were investigating and that we had told those Congressional leaders that we were not personally investigating President Trump. I reminded him I had previously told him that.”

Of course, we’re ‘absolutely positive’ that everything else CNN has learned and reported from their anonymous sources, regarding Trump and his Russian collusion, is completely accurate and reflect nothing but the highest levels of journalistic integrity.  As such, we are quite confident that CNN will promptly retract their erroneous reporting and offer an apology to their readers for the unfortunate mistake.

And with respect to Flynn:

Comey Releases Prepared Testimony: “I Hope You Can See Your Way To Letting This Go… I Need Loyalty”



Here is another indicator to show you the USA economy has just hit the skids:

(courtesy zerohedge)

Consumers Hit The Brakes: Smallest Increase In Consumer Credit In 6 Years

In the latest red flag for the US economy, moments ago the Fed reported that consumer credit for the month of April rose a paltry $8.2 billion, barely half the consensus estimate of $15.5 billion, and 40% of march’s $19.5 billion. This was the lowest monthly increase in consumer credit going back nearly 6 years to August 2011. The increasingly obvious downward trendline in crediting is hardly indicative of a confident consumer.

While revolving, i.e. credit card, debt rose a modest $1.5 billion, far below the increase in the prior two months…

… it was the sharp slowdown in non-revolving consumer credit, which rose just $6.7 billion, suggesting that either student or auto loans had virtually ground to a halt.

While the reason for the unexpected sharp slowdown is not immediately clear, a chart of sources of consumer credit reveeals that the US government, long a dominant source of consumer debt, has virtually disappeared.

Trump is keeping his promise: new job killing regulations have come to a screeching halt

(courtesy zerohedge)

Under Trump Administration, “Job-Killing” Regulations Screech To A Halt

Tyler Durden's picture

Back in February President Trump signed an executive order for regulatory reform directing government agencies to set up task forces to look into ways to eliminate or scale back “job-killing” regulations. This is how Trump described the effort at the time:

“This directs each agency to establish a regulatory reform task force which will ensure that every agency has a real team of dedicated people to research all regulations that are unnecessary, burdensome and harmful to the economy and therefore harmful to the creation of jobs and business. Each task force will make recommendations to repeal or simplify existing regulations.”


“Every regulation should have to pass a simple test: Does it make life better or safer for American workers or consumers? If the answer is no, we will be getting rid of it and getting rid of it quickly. We’ll stop punishing companies for doing business in the United States; it will be absolutely just the opposite, they’ll be incentivized to doing business in the United States. We’re working hard to roll back the regulatory burden so that coal miners, factory workers, small business owners and so many others can grow their businesses and thrive.”

I’ll keep working with Congress, agencies, and the American people until we eliminate every unnecessary, job-killing regulation we can find!


Now, per data compiled by Politico, it appears that this is one campaign promise where Trump has thoroughly delivered.

From Inauguration Day until the end of May, just 15 regulations were approved by the Office of Information and Regulatory Affairs (OIRA), the White House department that reviews important new federal rules. That’s by far the fewest among comparable periods since recordkeeping began in the 1990s: Ninety-three rules were approved during the same period in Barack Obama’s administration, and 114 under George W. Bush.


Meanwhile, the pace of minor rules has also slowed down, though not as dramatically.

 The Trump administration published 1,005 regulations in the Federal Register from Inauguration Day until the end of May, still fewer than the Obama and Bush administrations but not as extreme a drop. Most of those are small tweaks to requirements and procedures. Under the Trump administration, the government has adjusted the drawbridge schedule of the Atlantic Beach Bridge and designated an airspace near a ranch in Montana. But it hasn’t done much else.


Of course, for the folks a Politico, a slow down in the creation of new regulations is terrible news for industries that welcome the government’s superior insights on how to run their businesses.

The slowdown is causing problems for certain industries, which had been expecting rules and are struggling to plan in their absence. For instance, the Federal Aviation Administration was expected to release a rule early this year on the operation of commercial drones over people, but it has not yet done so. Lisa Ellman, co-executive director of the Commercial Drone Alliance, said she suspects that the “two-for-one” policy could be creating complications for the FAA. She argued that new drone rules should be considered deregulatory actions because they effectively reduce the red tape on drone operators; forcing the FAA to find two regulations to eliminate, she added, will only hurt the growth of the industry.


“The commercial drone industry wants to be regulated,” she said. “That’s why the industry is very hopeful that there’s an exception.”


Pharmaceutical distributors, too, are awaiting a rule from the Food and Drug Administration that could simplify a patchwork of state rules. Patrick Kelly, executive vice president for government affairs at the Healthcare Distribution Alliance, wrote in comments to OMB that his organization was concerned the rule, which was already overdue, could be obstructed by the order. “We urge completion of the FDA rule as expeditiously as possible, and without any requirement to identify two offsetting regulations for repeal,” he wrote.

Perhaps this is what Steve Bannon meant by saying that Trump’s goal was the “deconstruction of the administrative state.”


Well that about does it for tonight




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