June 13 b/GOLD DOWN $0.80/SILVER DOWN 17 CENTS/AGAIN FOR THE 9TH CONSECUTIVE TIME, THE AMOUNT OF SILVER STANDING AT THE COMEX INCREASES IN QUANTITY/SHALE OIL PRODUCTION WILL HIT RECORD LEVELS BY NEXT MONTH/OIL: 50 DAY MOVING AVERAGE CROSSES THE 200 DAY MOVING AVERAGE/ STATE OF ILLINOIS IS SERIOUS TROUBLE OF DEFAULTING/

GOLD: $1265.30  down $0.80

Silver: $16.74  down 17  cent(s)

Closing access prices:

Gold $1266.50

silver: $16.84

 

 

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

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

SHANGHAI FIRST GOLD FIX: $1274.99 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1265.80

PREMIUM FIRST FIX:  $9.19

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SECOND SHANGHAI GOLD FIX: $1273.50

NY GOLD PRICE AT THE EXACT SAME TIME: $1265.90

Premium of Shanghai 2nd fix/NY:$7.60

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LONDON FIRST GOLD FIX:  5:30 am est  $1261.30

NY PRICING AT THE EXACT SAME TIME: $1261.90

LONDON SECOND GOLD FIX  10 AM: $1262.00

NY PRICING AT THE EXACT SAME TIME. $1262.00 

For comex gold:

JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  11 NOTICE(S) FOR 1100  OZ.

TOTAL NOTICES SO FAR: 2191 FOR 219,100 OZ    (6.8149 TONNES)

For silver:

For silver: JUNE

 4 NOTICES FILED TODAY FOR 20,000  OZ/

Total number of notices filed so far this month: 816 for 4,080,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

 

 

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 9th consecutive trading 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

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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!

Jim

unnamed

In silver, the total open interest FELL BY ONLY 28  contract(s) DOWN to 205,251 DESPITE THE NASTY FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 28 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0260 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 4 NOTICE(S) FOR 20,000  OZ OF SILVER

In gold, the total comex gold FELL BY ANOTHER  3,153 contracts WITH THE FALL GOLD TOOK  ($2.40 with YESTERDAY’S TRADING). The total gold OI stands at 473,929 contracts.

we had 11 notice(s) filed upon for 1100 oz of gold.

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

GLD:

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

Inventory rests tonight: 867.00 tonnes

.

SLV

Today: no changes in inventory/

THE SLV Inventory rests at: 339.605 million oz

end

.

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

1. Today, we had the open interest in silver FELL BY A TINY 28 contracts DOWN TO 205,000 (AND now A LITTLE  FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), DESPITE THE NASTY FALL IN PRICE FOR SILVER WITH FRIDAY’S TRADING  ( DOWN 28 CENTS). NO QUESTION THAT WE AGAIN HAD CONTINUED FAILED SHORT COVERING BY THE BANKERS ALONG WITH CONSIDERABLE BANKER DELTA HEDGING AS SILVER IS GIVING THEM NIGHTMARES

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 13.86 POINTS OR 0.44%   / /Hang Sang CLOSED UP 144.06 POINTS OR 0.56% The Nikkei closed DOWN 9.83 POINTS OR 0.05%/Australia’s all ordinaires  CLOSED UP 1.51%/Chinese yuan (ONSHORE) closed UP at 6.7971/Oil UP to 46.20 dollars per barrel for WTI and 48.37 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7907 yuan to the dollar vs 6.7971 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE MUCH WEAKER DOLLAR. CHINA IS HAPPY TODAY WITH THE FALL IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

 North Korea releases a USA student following the arrival of Dennis Rodman.  There is one more American needs to be released.
Rodman will now try and convince Kim to stop his nuclear ambitions
( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

 

i)A major win for China and a slap in the face of the USA. Panama establishes ties with China and cuts off relations with taiwan

( zero hedge)

ii)The USA is not the only country with auto sale problems.  China posts it’s first consecutive monthly drop in car sales in over 2 yrs

( zero hedge)

4. EUROPEAN AFFAIRS

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 i) RUSSIA

Interesting;  Putin meets the founder of block chain Ethereum

( zero hedge)

ii)QATAR

This is going to be expensive:  In order to bypass the embargo, Qatar will pay 8 million dollars to airlift 4,000 cows.  The cows will fly business class instead of economy.

( zero hedge)

iii)Qatar receives much of its shipment of dollars from the UAE and now that it blocked. QATAR is running out of dollars!

( zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

i)So much for OPEC’s production cuts

( zero hedge)

ii)Shale production will hit its all time high in July and then rise from there!

( zero hedge)

( zero hedge)

8. EMERGING MARKET

 

9.   PHYSICAL MARKETS

N doubt that these guys were also involved int he rigging of gold and silver

( Bloomberg)

10. USA Stories

i)This is not good news for the state of Illinois as unpaid bills continue to mount.  Without a shadow of a doubt they will be downgraded in July to junk which will cause a massive increase of payments by the state to cover default provisions with respect to bond covenants with the bond purchases by individuals and corporations on prior deals.  The deals stipulated extra payments if the state is downgraded to junk.

( zero hedge)

ii)We are only positive 82 points with the treasury 10/2 bond yields.  Citibank is warning that it is approaching inversion levels:

( zero hedge)

iii)This is not good:  USA producer prices are rising at the fastest pace in 3 yrs and this signals huge inflationary pressures

( zero hedge)

iv)Mnuchin gives us until the first or second week of September before the fun begins on debt ceiling

( zero hedge)

v)David Stockman lays out the Fiscal Bloodbath scenario perfectly as the “Mother of all debt ceiling crises looms”:

( David Stockman/Daily Reckoning)

vi)Trump lays out a new plan to overhaul bank rules, by making it easier for them.  However Dodd Frank will be rolled back and that would not be good for us

( zero hedge)

 

a must read…
( zero hedge)

viii)More signs that the USA economy is in trouble: Citigroup warns of second quarter problems with respect to trading revenues:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 3,153 CONTRACTS DOWN  to an OI level of 473,929 WITH THE  FALL IN THE PRICE OF GOLD ($2.40 with YESTERDAY’S trading). AGAIN, the bankers were expecting more gold leaves to fall from the gold tree and as such they could not cover as much as they wanted.

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  LOSS OF 160 contract(s) FALLING TO  1621.  We had 62 notices filed yesterday so we LOST ANOTHER 98  contracts or an additional 9800 oz will NOT stand for delivery in this very active delivery month of June AND WITHOUT A SHADOW OF DOUBT THESE 98 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 AT THE COMEX ARE SO FAR REFUSING THAT FIAT BONUS (OVER 11 TONNES STANDING)

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 LOST 387 contracts to stand at 1,965 contracts. The next big active month is August and here the OI LOST 1,314 contracts DOWN to 348,375,  as the bankers trying to keep this month down to manageable size.

We had 11 notice(s) filed upon today for 1100 oz

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And now for the wild silver comex results.  Total silver OI FELL BY ONLY  28 contracts FROM  205,028 UP TO 205,000 DESPITE YESTERDAY’S BIG 28 CENT LOSS.  IT SURE LOOKS LIKE OUR BANKERS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT TO NO AVAIL. WE ALSO NO DOUBT HAVE CONSIDERABLE EVIDENCE OF SOME DELTA HEDGING BY THE BANKERS TRYING TO OFFSET THAT HUGE SHORT POSITION THEY HAVE BEEN BURGEONING OVER THE YEARS.
We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW LOST ONLY 23 contract(s) FALLING TO 13 contracts. We had 29 notices served upon yesterday so we AGAIN GAINED 6 CONTRACTS OR AN ADDITIONAL  30,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL. THIS IS THE 9TH CONSECUTIVE DAY THAT THE AMOUNT OF SILVER STANDING ADVANCED FROM FIRST DAY NOTICE. 

The next big active month will be July and here the OI LOST 8191 contracts DOWN to 108,156 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 1 contracts to stand at 38.  The next big active delivery month for silver will be September and here the OI already jumped by another 8205 contracts up to 56,313.

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

 Monday, June 13.2016:  94,437 contracts were still outstanding vs 108,156 contracts June 13.2017

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  (3,945,000 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 96,475 contracts which is POOR

Yesterday’s confirmed volume was 181,057 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE
 June 13/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 NIL oz
Deposits to the Dealer Inventory in oz nil  oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
11 notice(s)
1100 OZ
No of oz to be served (notices)
1610 contracts
161,000 oz
Total monthly oz gold served (contracts) so far this month
2191 notices
218,100 oz
6.84149 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   272,415.8 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 0 customer withdrawal(s)
total customer withdrawal: NIL  oz
 we had 0 adjustments:
For JUNE:

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 11  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 7 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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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 (2191) x 100 oz or 218,000 oz, to which we add the difference between the open interest for the front month of JUNE (1621 contracts) minus the number of notices served upon today (11) x 100 oz per contract equals 379,100  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 (2191) x 100 oz  or ounces + {(1621)OI for the front month  minus the number of  notices served upon today (11) x 100 oz which equals 379,100 oz standing in this  active delivery month of JUNE  (11.7916 tonnes)
.
WE LOST 98 CONTRACTS OR AN ADDITIONAL 9800 OZ WILL NOT STAND AT THE COMEX.  HOWEVER THESE GUYS (98 CONTRACTS) WERE GIVEN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT. YOU CAN NOW SEE WHY THE COT REPORTS ARE DISTORTED DUE TO THE ISSUANCE OF THESE EFP CONTRACTS 
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Total dealer inventory 900,191.813 or 27.99 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,647,133.659 or 268.96 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 272.96 tonnes for a  loss of 34  tonnes over that period.  Since August 8/2016 we have lost 85 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 10 MONTHS  85 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE MAY DELIVERY MONTH
 
June INITIAL standings
 June 13 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 1,009,212.978  oz
CNT
Delaware
HSBC
Scotia
Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory 
 1,183,245.277 oz
HSBC
CNT
No of oz served today (contracts)
 4 CONTRACT(S)
(20,000 OZ)
No of oz to be served (notices)
9 contracts
( 45,000 oz)
Total monthly oz silver served (contracts) 816 contracts (4,080,000 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 2,670,742.8 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 4 customer withdrawal(s):
 i) out of CNT: 46,255.508 oz
ii) Out of Delaware; 5,882.418 oz
iii) Out of HSBC:  20,255.262 oz
iv) Out of Scotia; 936,819.790 lz
TOTAL CUSTOMER WITHDRAWALS:  1,009,212,978  oz
 We had 2 Customer deposit(s):
 i) Into HSBC:   583,168.600 oz
ii) Into CNT: 600,076.677 oz
***deposits into JPMorgan have now stopped
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits 1,183,245.277 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 816 x 5,000 oz  = 4,080,000 oz to which we add the difference between the open interest for the front month of JUNE (13) 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:  816 (notices served so far)x 5000 oz  + OI for front month of JUNE.(13 ) -number of notices served upon today (4)x 5000 oz  equals  4,125,000 oz  of silver standing for the JUNE contract month.
 
We gained 6 contracts or an additional 30,000 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 63,055 which is EXCELLENT
Yesterday’s  confirmed volume was 120,134 contracts which is GIGANTIC
YESTERDAY’S ESTIMATED VOLUME OF 86349 CONTRACTS EQUATES TO 600 MILLION OZ OF SILVER OR 86% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.
 
Total dealer silver:  34.315 million (close to record low inventory  
Total number of dealer and customer silver:   204.684 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.9 percent to NAV usa funds and Negative 7.0% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.6%
cash .+0.1%( June 13/2017) 
 SPROTT PHYSICAL SILVER TRUST FUND NOT READY FOR PUBLICATION
2. Sprott silver fund (PSLV): STOCK  6.53%!!!! NAV  ??? (june 13/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.58% to NAV  (June 13/2017 )
Note: Sprott silver trust back  into POSITIVE territory at -?? /Sprott physical gold trust is back into NEGATIVE/ territory at -0.58%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

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

(courtesy Sprott/GATA)

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

 Section: Daily Dispatches

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

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

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

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

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

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

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

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

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

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

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

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

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

end

And now the Gold inventory at the GLD

June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

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

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 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 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

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

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

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

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

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

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

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

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

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

 

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June 13 /2017/ Inventory rests tonight at 867/00 tonnes
*IN LAST 171 TRADING DAYS: 80.13 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 113 TRADING DAYS: A NET  47.30 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  60.64 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

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/

June 1/NO CHANGE IN 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

June 13.2017: Inventory 339.605  million oz
end
We are going to provide GOFO rates  (gold) each day and shortly silver
courtesy of Bron Suchecki of Monetary Metals
and here is today’s figures:

The actual figures can be found on our home page https://monetary-metals.com/

with this box in the left side

GOFO

6 month: 1.27%

12 month:  1.44%

 

 

BRON SUCHECKI | VP Operations
Unlocking the Productivity of Gold
MONETARY METALS & CO
M: +61 4 1210 1912 | bron@monetary-metals.com
Skype: bron.suchecki
Twitter: @bronsuchecki
Website: monetary-metals.com
Use this link to encrypt and safely send confidential documents to Monetary Metals®
https://cloud.sookasa.com/upload_page/f840a3c3-54e5-42b0-85b4-15c9e94ea5e

 end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

In Gold we Trust: Must See Gold Charts and Research

In Gold we Trust Report: Bull Market Will Continue

The 11th edition of the annual “In Gold we Trust” is another must read synopsis of the fundamentals of the gold market, replete with excellent charts by our friend Ronald-Peter Stoeferle and his colleague Mark Valek of Incrementum AG.


Key topics and takeaways of the report:

– “Sell economic ignorance, buy gold …”
– Many signals suggest that we are about to face a big shift within the financial and monetary system
– 5 reasons why the gold bull market will continue
– Gold’s gains in 2016 dampened due to high expectations of Trump’s growth policy
– Gold still up 8.5% in 2016 and 10.2% since January 2017
– Attempt at normalization of U.S. monetary policy will be litmus test for US economy
– Bitcoin: Digital gold or fool’s gold?


– White, Gray and Black Swans and consequences for gold price
– Exclusive Interview with Dr. Judy Shelton (Economic advisor to Donald Trump) about a possible remonetisation of gold
– Prudent investors should consider accumulating gold and gold stocks now due to excessive global debt, the “gradual reduction of the U.S. dollar’s importance as a global reserve currency” and the high probability that the U.S. is close to entering a recession
– “It is a case of better having insurance and not needing it, than one day realizing that one needs it but doesn’t have it…”
– “We live in an age of advanced monetary surrealism….”


Research can be downloaded here:

In Gold we Trust – Extended version (169 pages) 
In Gold we Trust – Compact version (29 pages) 

News and Commentary

Gold tips lower, while palladium heads for highest finish since 2014 (MarketWatch.com)

Palladium near 16-year high, gold firm ahead of Fed meeting (Reuters.com)

China’s Shandong Gold Mining to seek loans to buy Barrick mine stake (Reuters.com)

Fed set to raise interest rates, give more detail on balance sheet winddown (Reuters.com)

Islamic State calls for attacks in West, Russia, Middle East, Asia during Ramadan (Reuters.com)

Palladium’s Constrained Supply. Source: Johnson Matthey & CPM Group via Macrotourist

Gold Is In A “Long Term Uptrend” Due To Political Turmoil – Cook (Bloomberg.com)

Gold could withstand rising interest rates, unwinding of Fed assets: TD Securities (Platts.com)

Palladium Pandemonium – Short Squeeze Sends Precious Metal Spreads (ZeroHedge.com)

Gold-Stock Inflection Nears – Hamilton (SeekingAlpha.com)

What, Me Worry? says Mauldin (MauldinEconomics.com)

Gold Prices (LBMA AM)

13 Jun: USD 1,261.30, GBP 992.26 & EUR 1,125.33 per ounce
12 Jun: USD 1,269.25, GBP 998.14 & EUR 1,131.28 per ounce
09 Jun: USD 1,274.25, GBP 1,001.31 & EUR 1,139.18 per ounce
08 Jun: USD 1,284.80, GBP 992.12 & EUR 1,142.70 per ounce
07 Jun: USD 1,292.70, GBP 1,001.07 & EUR 1,146.62 per ounce
06 Jun: USD 1,287.85, GBP 997.31 & EUR 1,144.77 per ounce
05 Jun: USD 1,280.70, GBP 992.41 & EUR 1,136.88 per ounce

Silver Prices (LBMA)

13 Jun: USD 16.82, GBP 13.21 & EUR 15.01 per ounce
12 Jun: USD 17.13, GBP 13.50 & EUR 15.27 per ounce
09 Jun: USD 17.35, GBP 13.60 & EUR 15.52 per ounce
08 Jun: USD 17.60, GBP 13.60 & EUR 15.67 per ounce
07 Jun: USD 17.60, GBP 13.64 & EUR 15.71 per ounce
06 Jun: USD 17.56, GBP 13.61 & EUR 15.62 per ounce
05 Jun: USD 17.52, GBP 13.58 & EUR 15.59 per ounce

Recent Market Updates

– Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”
– 4 Charts Show Gold May Be Heading Much Higher
– Gold in Pounds Surges 1.5% To £1,001/oz – UK Political Turmoil Likely
– Gold Prices Steady On UK Election Risk; ECB Meeting and Geopolitical Risk
– Gold Breaks 6-Year Downtrend On Safe Haven and 50% Surge In Chinese Demand
– Deposit Bail In Risk as Spanish Bank’s Stocks Crash
– Terrorist attacks see Gold Stay Firm
– Trust in the Bigger Picture, Trust in Gold
– Trump, UK and the Middle East drive uncertainty
– Is China manipulating the gold market?
– Why Sharia Gold and Bitcoin Point to a Change in Views
– Bitcoin volatility and why it’s good for gold
– Silver Bullion In Secret Bull Market

Access Award Winning Daily and Weekly Updates Here

Mark O’Byrne
Executive Director

-END-

N doubt that these guys were also involved int he rigging of gold and silver

(courtesy Bloomberg)

FX ‘Cartel’ Traders to Surrender to U.S. in Rigging Case

June 12, 2017, 9:48 PM EDT June 13, 2017, 6:22 AM EDT
  • Three British traders charged by U.S. in currency-rigging case
  • Former bankers have deal for arraignment in U.S. this summer

Three former currency traders in Britain who are accused by U.S. prosecutors of conspiring to manipulate markets have reached an agreement to surrender this summer to American officials and appear in federal court to face the charges.

JPMorgan Chase & Co.’s Richard Usher, Citigroup Inc.’s Rohan Ramchandani and Barclays Plc’s Chris Ashton have agreed to be arraigned in a Manhattan court in July, according to a Justice Department letter filed Monday. The document follows months of negotiations with U.S. prosecutors over the terms of their surrender, including permission for the men to return to the U.K. while they await trial.

The trio was charged by the U.S. in January with conspiring to rig foreign-exchange markets, using an electronic chat room known as “The Cartel” to share information. The indictment was the culmination of a global investigation into currency-market manipulation that saw seven banks pay about $10 billion in fines to authorities.

“Mr. Ramchandani has agreed to travel voluntarily to the USA to stand trial and clear his name,” Alison Geary, Ramchandani’s London lawyer at WilmerHale, said Tuesday in an e-mailed statement. “He has not committed any criminal offense. The Serious Fraud Office itself concluded as much, after 18 months of investigation and the review of half a million documents.”

U.K. lawyers for Usher and Ashton didn’t immediately respond to requests for comment. Usher was previously JPMorgan’s London chief currency dealer, Ashton was global FX head of voice spot trading at Barclays, and Ramchandani was head of G-10 spot currency trading at Citigroup.

A trial would be closely watched by the British finance industry after the SFO ended its own foreign-exchange investigation in March 2016, citing insufficient evidence for a “realistic” prospect of conviction. The SFO has clashed with the Justice Department in the past over the pursuit of British bankers — most notably when the U.S. started filing charges related to Libor manipulation — but its decision not to pursue the currency case has left the door open for the Americans.

The Justice Department has agreed on bail conditions for the three that will be presented at their arraignment, ordered by U.S. District Judge Richard Berman on July 17. Bail terms are subject to court approval but U.S. judges generally follow the government’s lead on such decisions.

The case is U.S. v. Usher, 17-cr-00019, U.S. District Court, Southern District of New York (Manhattan).

end

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

 
 

1 Chinese yuan vs USA dollar/yuan  STRONGER 6.7970(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES  MUCH STRONGER TO ONSHORE AT   6.7907/ Shanghai bourse CLOSED UP 13.86 POINTS OR 0.44%  / HANG SANG CLOSED UP 144.06 POINTS OR 0.56% 

2. Nikkei closed DOWN 9.83 POINTS OR 0.05%   /USA: YEN RISES TO 110.06

3. Europe stocks OPENED IN THE GREEN        ( /USA dollar index FALLS TO  97.05/Euro UP to 1.1211

3b Japan 10 year bond yield: RISES TO   +.064%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  46.20 and Brent: 48.37

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.271%/Italian 10 yr bond yield DOWN  to 1.995%    

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

3k Gold at $1263.20  silver at:16.80 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 17/100 in  roubles/dollar) 56.89-

3m oil into the 46 dollar handle for WTI and 48 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.06 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9683 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0856 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +0.271%

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 2.216% early this morning. Thirty year rate  at 2.876% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Markets Rebound As Tech Rout Ends; Sterling Rises

 

As the Fed begins its two-day meeting, global stocks have recovered their footing and European shares rise, led by a bounce in tech stocks as last Friday’s global selloff that started in the sector shows signs of abating. Asian stocks and U.S. futures gain as investors turn their attention to today’s Jeff Sessions testimony as well as tomorrow’s barrage of macro data including Yellen, CPI and retail sales.

It has been a risk-on session globally as the tech rout ended and technology stocks rebound from recent weakness and amid a lack of negative fundamental catalysts. European equity markets open higher with technology sector leading, travel stocks also well supported. Bund futures pushed lower, with supply pressure also coming from 10y DSL auction. Gilts sell-off after higher than expected U.K. CPI, short sterling curve bear steepens aggressively. USD broadly weakens across G-10 except for USD/JPY which is supported by lift in EUR/JPY and general risk sentiment. SEK spikes higher after strong domestic CPI data, NOK rallies in tandem after bullish domestic growth survey.

As Bloomberg notes, highlighting the importance of the tech, “should the rebound in tech shares carry through into U.S. trading investors will likely breathe a sigh of relief; the sector has been a key driver of global equity gains and a prolonged selloff would have represented a major threat to the ongoing bull market.”

Tomorrow, the Fed is widely expected to raise its benchmark interest rate in a decision scheduled for Wednesday and may also provide more details on its plans to shrink $4.5 trillion dollars of assets it amassed to nurse the economic recovery. The gap between benchmark U.S and European bond yields hit its widest in a month as the Fed meeting also shone a light on the slow pace of change in European Central Bank policy. “If the Fed is tightening policy and embarking on a gradual normalization path, whether it is the short-term policy rates or the balance sheet, it wants the market to believe it and to adjust to it,” said Frederik Ducrozet, an economist at Pictet Wealth Management.

“It is not just about complacency and the creation of financial bubbles…but also about its own credibility.” The Bank of Japan and the Bank of England also meet this week, although no major policy changes are expected.

According to a Retuers poll, a small majority of traders in China’s financial markets think its central bank will likely raise short-term interest rates again this week if the U.S. Federal Reserve hikes its key policy rate. But the reaction to this in bond markets has been concerning. China’s two-year yields have in the last few sessions risen above its 10-year yields- a trend that has only happened in a few instances over the past decade and suggests investors have worries over the long-term health of the world’s second biggest economy.

This morning, almost every industry group in the Stoxx Europe 100 Index traded in the green, with the abovementioned tech bounce meanings technology shares are poised for the largest gain in more than a month. The Stoxx Europe 600 Index climbed 0.6 percent as of 11:17 a.m. in London, after dropping 1 percent on Monday. Tech shares rose 1.3 percent. Futures on the S&P 500 Index rose 0.2 percent. The Nasdaq 100 fell 0.6 percent on Monday, adding to its 2.4 percent rout on Friday. Apple fell 2.4 percent while Microsoft Corp. slid 0.8 percent.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, recouping about half of the previous session’s losses. The MSCI Asia Pacific Information Technology index steadied, after sliding 1.4 percent on Monday. Australian equities rallied 1.7 percent, the most since November, as bank stocks jumped after investors returned from a holiday. South Korea’s Kospi added 0.7 percent, with Samsung Electronics Co. little changed after leading declines in Asia during Monday’s rout. Hong Kong’s Hang Seng rose 0.6 percent as Tencent Holdings Ltd., which tumbled 2.5 percent in the previous session, rebounded 0.7 percent.

Some analysts had predicted Asian tech shares would not see as intense a sell-off as their U.S. peers as their valuations were less stretched. “Comparatively, valuations for the IT sector in the Asia Pacific region are less expensive compared to the U.S., which may be why we’re not seeing the situation further aggravate for a second session,” said Jingyi Pan, market strategist at IG in Singapore.

Sterling headed for the first increase since the election that’s left U.K. Prime Minister May battling to shore up her position. She’ll meet Northern Ireland’s Democratic Unionists today, seeking the votes she needs to be able to pass any legislation. The pound strengthened 0.4 percent to $1.2711 after sliding 0.7 percent on Monday.

The Canadian dollar hit a two-month high after a policymaker said the central bank would assess if it needs to keep rates at near-record lows as the economy grows.

“It feels like a long time since markets have been treated to unscheduled hints of tightening, and this was quite apparent when you saw the positive reaction of CAD crosses overnight,” Matt Simpson, senior market analyst at ThinkMarkets in Melbourne, wrote in a note.

Elsewhere, the euro fluctuated before gaining less than 0.1 percent to $1.1210. The Bloomberg Dollar Spot Index fell by 0.1 percent.  The yen fell 0.2 percent to 110.12 per dollar, after Monday’s 0.3 percent gain.

The yield on 10-year Treasuries was little changed; before today it climbed for four straight sessions. German benchmark yields rose two basis points, French equivalents increased three basis points and U.K. yields added five basis points.

WTI, Brent were supported by positive risk sentiment globally. Brent trades near $48.50/bbl, WTI above $46 with industry-funded API data on U.S. stockpiles due later. “The market’s just waiting for the API data,” says Nitesh Shah, commodities strategist at ETF Securities. “There’s some expectations for a bit of a correction from last week’s disappointment.” API data due 4:30pm ET, crude inventories forecast to decline 2.25m bbl in more definitive EIA data Wednesday. Weaker dollar, positive equities supported prices earlier Tuesday.

Tomorrow the Fed is expected to raise its benchmark rate for the second time this year on Wednesday. Since that’s widely expected, the more market-sensitive elements of the meeting will relate to signals on future policy — either the path for rates or plans to cut the $4.5 trillion balance sheet. Central banks in Japan, Switzerland and Britain are also scheduled to weigh in with policy decisions this week.

Bulletin headline summary from RanSquawk

  • Tech names recoup losses to lead European bourses higher
  • UK inflation rises yet again to its highest level since June 2013, while GBP moves back above 1.27
  • Looking ahead, highlights include US PPI and API Crude Oil Inventories

Market Snapshot

  • S&P 500 futures up 0.2% to 2,430.50
  • STOXX Europe 600 up 0.6% to 388.92
  • MXAP up 0.3% to 154.94
  • MXAPJ up 0.6% to 504.10
  • Nikkei down 0.05% to 19,898.75
  • Topix up 0.1% to 1,593.51
  • Hang Seng Index up 0.6% to 25,852.10
  • Shanghai Composite up 0.4% to 3,153.74
  • Sensex up 0.3% to 31,195.41
  • Australia S&P/ASX 200 up 1.7% to 5,772.77
  • Kospi up 0.7% to 2,374.70
  • German 10Y yield rose 1.9 bps to 0.268%
  • Euro up 0.1% to 1.1217 per US$
  • Brent Futures up 0.7% to $48.64/bbl
  • Italian 10Y yield fell 6.5 bps to 1.729%
  • Spanish 10Y yield fell 0.9 bps to 1.436%
  • Brent Futures up 0.7% to $48.64/bbl
  • Gold spot down 0.3% to $1,262.70
  • U.S. Dollar Index down 0.1% to 97.04

Top Overnight News

  • The stakes of an intensifying Russia investigation are growing for President Donald Trump, as his attorney general Jeff Sessions prepares to confront lawmakers on Capitol Hill for the first time about what role he played in the inquiry and the firing of FBI director James Comey
  • The Trump administration laid out its highly anticipated plan for overhauling bank rules, calling on the government to ease, though not eliminate, many of the strictures that were imposed on Wall Street after the financial crisis
  • U.K. Prime Minister Theresa May bought herself a stay of execution by apologizing to her own lawmakers for the election debacle as she prepared to meet Northern Ireland’s Democratic Unionists to secure the votes needed to prop up her minority government
  • Goldman Sachs, Morgan Stanley and Societe Generale top the ranking of global lenders at JPMorgan as analysts led by Kian Abouhossein reiterate their preference for U.S. investment banks over Europeans
  • President Donald Trump plans to follow through on a campaign promise by rolling back the Obama administration’s effort to open Cuba to U.S. tourism and trade, with new limits being considered on travel and investment by U.S. companies
  • Several U.S. senators struck a bipartisan deal to expand existing sanctions against Russia and let Congress review any move by President Donald Trump to lift existing penalties, a sign of congressional frustration amid probes of interference in the 2016 election
  • Janet Yellen’s Federal Reserve is getting ready to set off on a path
    toward a smaller balance sheet without knowing quite where it will end
    up.
  • U.K. inflation resumed its upward march last month, accelerating more than forecast to the fastest pace in four years
  • U.K. Prime Minister Theresa May bought herself a stay of execution by
    apologizing to her own lawmakers for the election debacle as she
    prepared to meet Northern Ireland’s Democratic Unionists to secure the
    votes needed to prop up her minority government
  • German Investors Confidence in Economy Unexpectedly Declines: German Jun. ZEW Expectations: 18.6 vs 21.7 est; Current Situation 88.0 vs 85.0 est.
  • The European Union is pushing ahead with plans to assert control over the clearing of euro-denominated derivatives, a politically charged step that could force firms to move from London to the EU after Brexit
  • A rally in bonds of China’s most-indebted developer has some analysts
    warning that steps to cut borrowings have yet to bring leverage down to
    healthy levels.
  • U.K. May CPI y/y: 2.9% vs 2.7% est; Core CPI 2.6% vs 2.4% est; highest CPI since Apr. 2012, core highest since Dec. 2011; weaker GBP increased costs of computer games, laptops and package holidays
  • Senior U.K. cabinet ministers are holding secret talks with Labour MPs to secure cross-party backing for a soft Brexit: Telegraph
  • Italian Finance Minister: solution for Italian Veneto banks is close, there will be no bail-in
  • Sweden May CPI y/y: 1.7% vs 1.6% est; CPIF 1.9% vs 1.7% est; largest upside contribution from restaurants and hotels

Asian stocks shrugged off the negative lead from US where the tech sector once again underperformed and posted its worst 2-day period YTD. Nonetheless, the tone in Asia improved throughout the session with ASX 200 (+1.2%) underpinned by financials after gains in the big 4 banks, while Nikkei 225 (Unch.) recovered from early losses alongside a rebound in USD/JPY. Elsewhere, Shanghai Comp. (+0.4%) was indecisive with early weakness observed alongside speculation the PBoC may raise rates in response to a US Fed hike and after another lacklustre liquidity operation, although Chinese stocks then recovered to conform to the overall improvement of risk sentiment in the region. 10yr JGBs were lower amid an improvement in risk sentiment throughout the session, while today’s 20yr auction later also failed to spur demand with the results mixed in which the accepted prices declined from prior. PBoC injected CNY 10bIn in 7-day reverse repos and CNY 40bIn in 28-day reverse repos.

Top Asian News

  • U.S. Bears Target China With Shorts Circling $6 Billion ETFs
  • Japan Leveraged Fund Outflows in May ‘Warrants Caution’: Nomura
  • JGB Sale Price Beats Estimate as $117b of Maturities Spur Demand
  • Chinese Coal Producers Jump After Regulator Says to Cut Capacity
  • India Signals Flagship Tax Reform on Track as Timing Questioned
  • Shanghai Backs Homebuyers’ Rights After Protest on Streets
  • Steel Coil Drops in Shanghai as China Plans Auto Capacity Curbs

European bourses have seen mixed gains with the Eurostoxx 50 roughly halfway to recouping yesterday’s losses led by the recovering the tech sector. Notable movers of the morning is Capita with shares surging as much as 15% as the company pins hopes on improving profitability and secure more contract wins in the second half of the year. In fixed income markets, core European bond yields have seen a recovery this morning with the German 10yr up 1.2bps, while outperformance has been observed in peripheral markets led by Spain and Italy.

Top European News

  • Credit Agricole Said to Plan Part Sale of Saudi Fransi Stake
  • Deutsche Bank Said to Offer Ex-Managers Portion of Their Bonuses
  • ECB Said to Be Unlikely to Include Greece in QE in Coming Months
  • U.K. Inflation Rate Rises More Than Forecast to Four-Year High
  • Heineken to Offer Deal Concessions to Appease U.K. Regulator
  • Trump Administration Reviewing Eni’s Arctic Drilling Plan
  • LSE Rises to Highest on Record as Analysts Bullish on Growth
  • Capita Soars Most Since 2002 on Update, Following Mitie Jump
  • Sweden Inflation Slows Less Than Expected in Relief for Riksbank
  • ECB’s Liikanen: Economic Recovery Not Enough to Raise Inflation
  • Italy Finance Minister Says Solution Is Close for Veneto Banks

In commodities, it has been another mixed session where on the upside we see some modest gains in Oil price this morning, which as yet looks to be corrective, though value levels in WTI seem to have drawn in buyers ahead of USD45.00. Brent is keeping its USD2.00-2.50 differential and trades in the mid USD48.00’s, but where `value’ currently stands is arbitrary to a larger degree, given the weakness has been down to the rise in US shale production which translates into greater self-sufficiency. Elsewhere, metals prices are lower, but all inside familiar territory to point to sideways price action more than anything else. Copper has dipped back towards USD2.60 and just under, but the moves above this level were somewhat of a surprise in any case. On the day, Zinc is the underperformer at down over 1.0%. Gold is still better supported than Silver as the latter has now relinquished the USD17 handle.

In currencies, the key USD rates have been in consolidation mode this morning, with USD/JPY edging back above 110.00 but with little conviction. The FOMC meeting ahead is now in focus, and while traders are not phased over the 25bp hike largely priced in, there is a sense that the market may have gotten a little overly dovish on the accompanying statement and rhetoric, but on the balance on the data, this has been justified to some degree. This morning’s data focus was on UK inflation, but despite the welcome break from politics, inflation was only slightly higher than expected (worth noting during a time of GBP appreciation), but not by enough to trouble the BoE who are set to keep policy measures as they are, and more so given fresh political uncertainty. At the start of Europe, Wesaw Cable retesting the 1.2610-40 base, and having survived tests in NY, Asia and early London, higher levels now look set to be tested at 1.2740-50 initially. EUR/GBP is also giving way a little, with sellers benefitting from the more relaxed tone in EUR/USD. The CAD continues to grind higher in the aftermath of the comments from the BoC’s Wilkins, who says it is time to assess the current stimulus levels. We cannot help but point out that the Q1 GDP data was healthy, as was Friday’s jobs report, but clearly the market required some reassurances from official quarters, so USD/CAD is now probing the next support zone into 1.3250-1.3150.

Looking at today’s calendar, we get the May NFIB small business optimism number which printed at 105.2, unchanged from last month, and missing expectations 105.2, while the May PPI report is due later in the afternoon (2.3% YoY vs. 2.5% previous).

US Event Calendar

  • 6am: NFIB Small Business Optimism, est. 104.5, prior 104.5
  • 8:30am: PPI Final Demand MoM, est. 0.0%, prior 0.5%
    • PPI Ex Food and Energy MoM, est. 0.1%, prior 0.4%
    • PPI Ex Food, Energy, Trade MoM, est. 0.1%, prior 0.7%
    • PPI Final Demand YoY, est. 2.3%, prior 2.5%
    • PPI Ex Food and Energy YoY, est. 1.9%, prior 1.9%
    • PPI Ex Food, Energy, Trade YoY, prior 2.1%

 

* * *

DB’s Jim Reid concludes the overnight wrap

Global equities were on the soft side yesterday. Over in the US the S&P 500 saw losses of -0.1% while the NASDAQ extended Friday’s declines by falling another -0.5%. However both markets were off the lows of the session. The very recent tech sell-off was the talk of the town yesterday as opinion was divided as to whether this was money leaving equities or simply a rotation back into more defensive stocks. Markets in Asia have stabilised overnight with the Nikkei -0.05% but with the Hang Seng +0.5% and the Shanghai Comp +0.3%.

In Europe the STOXX fell by -1.0%, with the DAX and FTSE also dropping by -1.0% and -0.2% respectively. Credit markets however seemed immune to these risk-off moves. In Europe iTraxx Main and Crossover tightened by -1bp and -2bps respectively. In the US CDX IG was flat on the day while HY tightened by -2bp. Turning to the government bond market, German and US 10Y yields both fell by -1bp, while their respective 2Y points were unchanged on the day – hence a small flattening. Elsewhere in Europe Gilts (2Y: -1bp; 10Y: -4bps) and French OATs (2Y: -3bp; 10Y: -5bp) saw yields drop across maturities, while Italian BTPs saw all yields beyond the 2Y point drop (10Y: -7bp). The strong performance of President Macron’s party in the first round of the French legislative elections helping as did the relatively weak performance of the 5SM in regional elections in Italy over the weekend.

Turning to FX markets now and Sterling extended Friday’s losses by dropping another -0.7% yesterday (flat overnight though). On the whole the election shock last week has compounded political uncertainty in the UK and has thrown up a number of new questions clouding the outlook for the currency. Our FX strategists published a note yesterday arguing that developments over the weekend following the election have provided sufficient evidence for a muddlethrough Brexit strategy (as previously outlined as their baseline). They highlight that it is premature for the market to start pricing the soft Brexit narrative given that no political party or grouping has an incentive to change the status quo, which would likely lead to a period of acute political paralysis in coming months. Hence the risk of a disruptive Brexit is rising – as timelines are fixed, the more decisions are delayed, the greater the risk that there is no time left to negotiate something non-disruptive. All of the above increase downside risks to an already gloomy outlook for the UK economy, leaving the BoE on hold as the Fed and ECB tighten and push interest rate differentials further against the pound. Taking these factors into consideration, the outlook for Sterling is particularly negative and the team reiterates their bearish view.

Away from Sterling, the US dollar and the Euro were both broadly flat on the day. Over in the commodity space, oil saw gains of +0.4% on the day while metals were broadly higher. Gold however failed to recoup any of its past week’s losses and remained essentially unchanged.

Going back to all things Brexit/UK related, the FT reported over the weekend that today marks the day that Brussels opines on how it will police the $850bn a day OTC Euro-denominated derivatives market that currently clears in London. This may be an early marker for how financial markets, banks and Brexit will coincide so worth watching. Also worth noting is that PM Theresa May met her influential 1922 backbench committee last night and it’s been reported that she took the blame for the party’s disappointing performance last week.

On a related theme, one of the more amusing stories yesterday was news (Reuters/ BBC) that the UK’s Queen’s speech (where the government set out the next year’s legislative agenda) scheduled for next Monday may be delayed a few days as the Conservative Party’s ‘understanding’ with the DUP Party has not been finalised yet. Although it’s expected to be agreed very soon, the Queen’s speech apparently has to be written on goat’s skin parchment paper, which takes a few days to dry.

The latest ECB CSPP numbers were out yesterday. They bought €1.421bn last week which is €355mn/day (assuming 4 days given the European holiday last Monday). The average daily run rate since CSPP started is €367mn. In relative terms, the CSPP/PSPP ratio dropped to 11.9% last week (PSPP purchases were €11.94bn) which is still mildly above the 11.6% average ratio before QE was trimmed. Since the taper it’s been 13.4% on average indicating less tapering of corporates. There’s still quite a lot of noise week to week to be a 100% confidence that corporates have been tapered less but the evidence still points in that direction.

Yesterday was a very quiet day in terms of data. The only data point of note out of Europe was the Bank of France business sentiment for May which was in line with consensus (105 vs. 104 previous). There was no real data to note out of the US. Today is a bit busier in terms of data. We kick off in the UK where we are due to receive the May inflation numbers (CPI +0.2% mom expected; RPI +0.3% mom expected; PPI +0.1% mom expected). Elsewhere in Europe we will also get the ZEW survey in Germany where survey numbers are expected to tick up marginally (Current situation: 85.0 expected vs. 83.9 previous; Expectations: 21.7 expected vs. 20.6 previous). Over in the US we get the May NFIB small business optimism number which is expected to hold steady (104.5 expected) while the May PPI report is due later in the afternoon (2.3% YoY vs. 2.5% previous).

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 13.86 POINTS OR 0.44%   / /Hang Sang CLOSED UP 144.06 POINTS OR 0.56% The Nikkei closed DOWN 9.83 POINTS OR 0.05%/Australia’s all ordinaires  CLOSED UP 1.51%/Chinese yuan (ONSHORE) closed UP at 6.7971/Oil UP to 46.20 dollars per barrel for WTI and 48.37 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7907 yuan to the dollar vs 6.7971 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE MUCH WEAKER DOLLAR. CHINA IS HAPPY TODAY WITH THE FALL IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

 North Korea releases a USA student following the arrival of Dennis Rodman.  There is one more American needs to be released.
Rodman will now try and convince Kim to stop his nuclear ambitions
(courtesy zero hedge)

North Korea Releases US Student Following Rodman Visit

Rex Tillerson announced on Tuesday that North Korea has released Otto Warmbier, an American who was serving a 15 year jail sentence somewhere in the bowels of the hermit kingdom. The announcement came just hours after Dennis Rodman arrived in North Korea for an unexpected trip, as reported last night. Warmbier, a University of Virginia student from Cincinnati, was sentenced in March after a televised tearful public confession to trying to steal a propaganda banner.

First photo: Dennis Rodman arrives in North Korea for the 5th time. He wouldn’t tell me if he’s spoken to Trump or anyone from the US gov’t.

“At the direction of the President, the Department of State has secured the release of Otto Warmbier from North Korea,” Tillerson said in a statement. “Mr. Warmbier is en route to the U.S. where he will be reunited with his family.”

What he really meant is that Dennis Rodman’s unique style of “diplomacy” appears to have achieved what neither Tillerson himself, nor the previous administration had been capable of.

Tillerson’s statement gave no other details and made no mention of Rodman’s visit. But it noted that the State Department is continuing “to have discussions” with North Korea about the release of other American citizens who are jailed there. The statement said the department would have no further comment on Warmbier, citing privacy concerns.

While Rodman had said he did not plan to raise the fate of the Americans while he was in North Korea, the timing is oddly coincidental and is likely a gesture of good will by Kim toward one of his favorite basketball players.

Previously, the U.S. government had condemned Warmbier’s sentence and accused North Korea of using such American detainees as political pawns. The court held that Warmbier had committed a crime “pursuant to the U.S. government’s hostile policy toward (the North), in a bid to impair the unity of its people after entering it as a tourist.”

North Korea regularly accuses Washington and Seoul of sending spies to overthrow its government to enable the U.S.-backed South Korean government to take control of the Korean Peninsula.

 

In a tearful statement made before his trial, Warmbier told a gathering of reporters in Pyongyang he was offered a used car worth $10,000 if he could get a propaganda banner and was also told that if he was detained and didn’t return, $200,000 would be paid to his mother in the form of a charitable donation.

To be sure, this is not the first release obtained from the Kim regime: in November 2014, U.S. spy chief James Clapper went to Pyongyang to bring home Matthew Miller, who had ripped up his visa when entering the country and was serving a six-year sentence on an espionage charge, and Korean-American missionary Kenneth Bae, who had been sentenced to 15 years for alleged anti-government activities. Jeffrey Fowle, another U.S. tourist from Ohio detained for six months at about the same time as Miller, was released just before that and sent home on a U.S. government plane. Fowle left a Bible in a local club hoping a North Korean would find it, which is considered a criminal offense in North Korea.

But in this case, all prop go to Rodman, who as we concluded last night, “if he manages to persuade Kim to end his nuclear program – something no other US politicians has achieved – it will mark quite a dramatic departure in style and substance to US foreign policy.” He still has a few days left on his trip….

Foreign policy through celebrity and sponsored by a digital currency service for marijuana. 2017, baby pic.twitter.com/8pYLt1cIQ3

Some photos of Rodman, provided by his North Korean trip sponsor, PotCoin pic.twitter.com/fS1E7U85Lq

View image on TwitterView image on TwitterView image on Twitter

b) REPORT ON JAPAN

c) REPORT ON CHINA

A major win for China and a slap in the face of the USA. Panama establishes ties with China and cuts off relations with taiwan

(courtesy zero hedge)

In Major Win For Beijing Panama Establishes Ties With China, Cuts Relations With Taiwan

Demonstrating China’s creeping geopolitical dominance, on Monday night Panama’s President Juan Carlos Varela announced that Panama has established diplomatic ties with China while breaking relations with Taiwan in a major victory for Beijing, which continues to lure away the dwindling number of countries that have formal relations with the self-ruled island. President Varela said that the strategically important nation was upgrading its commercial ties with China and establishing full diplomatic with the country which is the second-biggest user of the Panama Canal and has played a key role in sectors from banking to telecommunications. Varela called Taiwan a great friend and said he hoped for a constructive reaction.

Panama’s government said in a statement that it recognized there was only one China, with Taiwan belonging to the Asian giant, and that it was severing ties with Taipei. “The Panamanian government is today breaking its ‘diplomatic ties’ with Taiwan, and pledges to end all relations or official contact with Taiwan,” the statement said.

“We have taken a historic step,” Varela said. “Both countries opt for the connection of a world that is more and more integrated, which creates a new era of opportunities for a relationship that we are starting today.”

“I’m convinced that this is the correct path for our country,” Varela said.

In response, Taiwan’s government said it was sorry and angry over Panama’s decision, and said it would not compete with China in what it described as a “diplomatic money game“.

“Our government expresses serious objections and strong condemnation in response to China enticing Panama to cut ties with us, confining our international space and offending the people of Taiwan,” David Lee, Taiwan’s minister of foreign affairs, told a briefing in Taipei quoted by Reuters.


Taiwan’s President Tsai Ing-wen and Panama’s Juan Carlos Varela during a welcome ceremony
before a meeting at the Presidential Palace in Panama City, Panama June 27, 2016.

As Bloomberg adds, the diplomatic U-turn reduces to 20 the number of nations that recognize the government in Taipei, rather than Beijing, as representing China. The Communist Party considers Taiwan a province and has criticized President Tsai Ing-wen’s refusal to accept that both sides belong to “One China,” its precondition for ties. Taiwan Presidential office spokesman Alex Huang said earlier that he couldn’t comment before any announcement by Panama.

In December, the West African island nation of Sao Tome and Principe cut diplomatic relations with Taiwan. Beijing formally reestablished relations with Gambia last March – another former Taiwanese partner in West Africa – and has stepped up communications with others, such as the Vatican.

The establishment of links with Panama is a coup for China, which has been showering largesse on countries throughout Central America in recent years in an attempt to get them to break ties with Taiwan. As recently as December, Panama’s deputy foreign minister had said he did not expect any change in Panama’s relations with Taiwan or China. Panama is one of Taiwan’s oldest friends, but some diplomats in Beijing had speculated that the Central American country could become the next nation to break ties.

China is deeply suspicious of Taiwan President Tsai Ing-wen, who it thinks wants to push for the island’s formal independence, although she says she wants to maintain peace with Beijing.

 

China and Taiwan have tried to poach each other’s allies over the years, often dangling generous aid packages in front of developing nations, although Taipei struggles to compete with an increasingly powerful China.

Tsai visited Central American allies earlier this year but did not stop in Panama.

In Beijing, Panama’s foreign minister de Saint Malo said President Varela had expressed 10 years ago his interest in establishing ties with China, and that she hoped the move would lead to trade, investment and tourism opportunities, especially for “exporting more goods from Panama to China”.

Monday’s diplomatic move could also raise questions about the future of a Chinese-backed project to build another Central American waterway to rival the Panama Canal in Nicaragua. Earmarked at a cost of $50 billion, the Nicaraguan scheme was met with widespread incredulity when it was announced in 2013, and critics have raised questions about its feasibility.

* * *

In response to the announcement, Taiwan said it would immediately end cooperation with and assistance for Panama, and evacuate embassy and technical personnel “in order to safeguard our national sovereignty and dignity”, Lee said.

Panama is the second country to switch its recognition to Beijing since Tsai took office last year, following a similar move by Sao Tome and Principe in December, trimming to 20 the number of countries that formally recognize Taiwan. Taiwan had as many as 30 diplomatic allies in the mid-1990s, and its remaining formal ties are with mostly smaller and poorer nations in Latin America and the Pacific.

China’s Foreign Minister Wang Yi met his counterpart from Panama, Isabel de Saint Malo, in Beijing on Tuesday and signed a joint communiqué establishing ties.

 

end

The USA is not the only country with auto sale problems.  China posts it’s first consecutive monthly drop in car sales in over 2 yrs

(courtesy zero hedge)

China Auto Sales Post First Consecutive Monthly Drop Since 2015

The Chinese auto market is having it’s own version of a “cash for clunkers” moment.  After artificially pulling sales forward for all of 2016 with a purchase tax that was cut in half from 10% to 5%, the Chinese auto market is now suffering the consequences of removing that stimulus.  As Reuters notes, Chinese auto sales have declined sharply so far in 2017 with April and May registering the first consecutive monthly declines since 2015.

Chinese auto sales slipped in May from a year ago, registering two straight months of declines for the first time since 2015, with the automakers’ association saying the weakness may drag on as the rollback of a tax incentive continues to hurt.

 

The world’s biggest auto market got a shot in the arm in 2016, growing at its fastest pace in three years, after Beijing halved the purchase tax on smaller-engined vehicles. But buyers have shied away since taxes climbed to 7.5 percent, from 5 percent, at the start of this year.

 

Auto sales in China fell 0.1 percent in May from a year ago to 2.1 million vehicles, China Association of Automobile Manufacturers (CAAM) said on Monday. In April, sales recorded their steepest fall in 20 months.

 

Of course, for those of old enough to remember 2009, the U.S. auto market had it’s own, albeit short-lived, experience with massive government subsidies for auto purchases.  Unfortunately, sales crashed as soon as the stimulus was removed.

 

Meanwhile, as China Association of Automobile Manufacturers spokesman Xu Haidong notes, the downturn in China is probably far from over given that auto purchases taxes will increase again in 2018 back to their original 10%.

The current downturn in China’s auto market could extend through July or August, said Xu Haidong, a CAAM spokesman.

 

“Last year was just too strong and now the policy impact is fading away,” said Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight. “The growth (last year) overdrew some of the demand.”

 

China’s auto market recorded a 13.7 percent rise in sales last year, helped by the tax incentive. The purchase tax on vehicles with engines of 1.6 litres or below will rise to the normal 10 percent next year.

Seems as though China is experiencing an auto plateau of their own…

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Interesting;  Putin meets the founder of block chain Ethereum

(courtesy zero hedge)

Putin Meets With Ethereum Founder To Create National Virtual Currency

Two weeks ago, in our latest comparison of Bitcoin and its up and coming competitor, Ethereum, we said “step aside bitcoin, there is a new blockchain kid in town.” Actually, we said that for the first time back in February when Ethereum was still trading in the low teens (the return on ETH since then is roughly 3000%), but the most recent glance provided some perspective on where the competition between the two largest cryptocurrencies may culminate, because according to at least two venture capitalists, the market cap of Ethereum – currently roughly $35 bilion – and whose share of the market has been soaring, will surpass that of Bitcoin, at ~$43 billion although it changes by the second, sometime before the end of 2018.

Two things: first, at the current rate of gains in Ethereum market share (and loss in Bitcoin’s), the inflection point between the two will come not in months, or weeks, but perhaps days.

Second, said inflection point may come in even faster if Vladimir Putin has anything to say about it, because as Bloomberg reports, “Ethereum has caught the attention of none other than the Russian president as a potential tool to help Russia diversify its economy beyond oil and gas.” Putin met Ethereum’s young founder Vitalik Buterin on the sidelines of the St. Petersburg Economic Forum last week and supported his plans to build contacts with local partners to implement blockchain technology in Russia, according to a statement on Kremlin’s website.

Speaking at the Economic Forum, Putin said that “the digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business model” and discussed means to boost growth long-term after Russia ended its worst recession in two decades. As explained repeatedly over the past 6 months, besides being a method of exchange, Ethereum is also a ledger for everything from currency contracts to property rights, speeding up business by cutting out intermediaries such as public notaries. It also does not suffer from some of the size limitations that have paralyzed bitcoin in recent months.

Furthermore, just like the western Enterprise Ethereum Alliance which consists of JPMorgan, Intel, Microsoft and other leading blue chips, Russia’s central bank has already deployed an Ethereum-based blockchain as a pilot project to process online payments and verify customer data with lenders including Sberbank PJSC, Deputy Governor Olga Skorobogatova said at the St. Petersburg event. She didn’t rule out using Ethereum technologies for the development of a national virtual currency for Russia down the road.

Adoption of Ethereum in Russia has been brisk also in the private sector: last week, Bloomberg reports that Russia’s state development bank VEB agreed to start using Ethereum for some administrative functions. Steelmaker Severstal PJSC tested Ethereum’s blockchain for secure transfer of international credit letters.

Blockchain may have the same effect on businesses that the emergence on the internet once had — it would change business models, and eliminate intermediaries such as escrow agents and clerks,” said Vlad Martynov, an adviser for The Ethereum Foundation, a non-profit organization that backs the cryptocurrency. “If Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age.”

What about price targets? Pavel Matveev, co-founder of Wirex told CNBC today that Ethereum could reach $600 by the end of the year, leaving bitcoin in the dust. Until just a few short weeks ago, such a forecast would seem ludicrous. However, considering the recent surge in ethereum prices – recall it hit an all time high of $412 earlier today before sharply dropping then again erasing virtually all losses – it may reach that particular target in just a few weeks.

END

 

QATAR

This is going to be expensive:  In order to bypass the embargo, Qatar will pay 8 million dollars to airlift 4,000 cows.  The cows will fly business class instead of economy.

(courtesy zero hedge)

 

To Bypass Food Embargo, Qatar Will Pay $8 Million To Airlift 4,000 Cows

Yesterday we reported that as the Qatar crisis continues with no resolution in sight, in an act of generosity toward its distressed Gulf neighbor, Iran dispatched four cargo planes of food to Qatar and plans to provide 100 tonnes of fruit and vegetable every day. Qatar has also been holding talks with Iran and Turkey to secure food and water supplies after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut links, accusing Doha of supporting terrorism.

However, any stopgap measures implemented so far are not nearly enough to compensate for all the food imports lost as a result of the gulf blockade. So, for the nation with the highest GDP/capita in the world, where money is largely not an object, an ingenious solution has emerged.

Call it the biggest bovine airlift in history, as Bloomberg puts it. Because while the “showdown between Qatar and its neighbors has disrupted trade, split families and threatened to alter long-standing geopolitical alliances”, it has prompted one enterprising Qatari businessman to fly 4,000 cows to the Gulf desert in an act of resistance and opportunity to fill the void left by a collapse in the supply of fresh milk.

The reason for the dramatic “solution” to the millk embargo is that most of Qatar’s fresh milk and dairy products, meant for Doha’s more than 1 million residents, came from Saudi Arabia up until a week ago. That supply was cut off after the kingdom and its allies cut transport links with “a country that spends $500 million a week to prepare stadiums and a metro before the soccer World Cup in 2022.”

According to Bloomberg’s calculations, it will take as many as 60 flights for Qatar Airways to deliver the 590-kilogram beasts that Moutaz Al Khayyat, chairman of Power International Holding, bought in Australia and the U.S. “This is the time to work for Qatar,” he said. In addition to the abovementioned airlifted Turkish dairy goods and Iranian fruit and vegetables, there’s also a campaign to buy home-grown produce. Signs with colors of the Qatari flag have been placed next to dairy products in stores. One sign dangling from the ceiling said: “Together for the support of local products.”

“Our government has made sure we have no shortages and we are grateful for that. We have no fear. No one will die of hunger.”

“It’s a message of defiance, that we don’t need others,” said Umm Issa, 40, a government employee perusing the shelves of a supermarket before taking a carton of Turkish milk to try.

Only you do, and those who provide the much needed milk will get even richer than they already are.

For Al Khayaat, whose main business is a construction firm that built Qatar’s biggest mall, the cow-a-drop may be a slam dunk business decision. He has been expanding the company’s agricultural business at a farm 50 kilometers north of Doha. Food security is part of Qatar’s government strategy to steer the economy away from petrodollars, known, like in Saudi Arabia, as “Vision 2030.” And what better way to aggressively grow that business than at a time when it is your countrymen’s patriotic duty to buy your goods.

On a site covering the equivalent of almost 70 soccer fields, new grey sheds line two strips of verdant grass in the desert with a road running through the middle up to a small mosque. It produces sheep milk and meat and there were already plans to import the cows by sea. Then Qatar was ostracized, so the project was expedited.

Fresh milk production will start by the end of the month rather than September and will eventually cover a third of Qatar’s demand by mid-July, Al Khayyat told Bloomberg at his office in Doha. Facilities for the Holstein cows are ready, though the company will take a hit on the shipping cost for the animals, which increased more than five times to $8 million.

Which amounts to $2,000 per cow. At that price, it was not immediately clear if the cows would fly business or first class.

END

Qatar receives much of its shipment of dollars from the UAE and now that it blocked. QATAR is running out of dollars!

(courtesy zerohedge)

6 .GLOBAL ISSUES

end

7. OIL ISSUES

So much for OPEC’s production cuts

(courtesy zero hedge)

.

OPEC Oil Production Rises Most In 6 Months, Hits Highest Since December

Well, so much for OPEC’s production cut.

In OPEC’s latest Monthly Oil Market Report, the oil producing cartel reported that in May – the same month OPEC met to extend its production cuts – crude output climbed the most in six month, since November 2016, rising by 336.1kb/d to 31.139 mmb/d, the highest monthly production of 2017, as members exempt from the original Vienna deal restored lost supply.

From the report:

Preliminary data indicates that global oil supply increased by 0.13 mb/d in May to average 95.74 mb/d, m-o-m. It also showed an increase of 1.48 mb/d, y-o-y. A decrease in non-OPEC supply, including OPEC NGLs represents a contraction of 0.21 mb/d m-o-m but an increase of 0.34 mb/d in OPEC crude oil production, not only offset the decline of non-OPEC supply but also increased overall global oil output in May. The share of OPEC crude oil in total global production stood at 33.6% in May, an increase of 0.3% from the month before. Estimates are based on preliminary data for non-OPEC supply, direct  communication for OPEC NGLs and non-conventional liquids, and secondary sources for OPEC crude oil production

Specifically, Libya pumped 730k b/d in May, up 178kb/d from 552kb/d in April; Nigeria output jumped to 1.68m b/d vs 1.506m b/d, a 174kb/d increase, while even the biggest producer Saudi Arabia, saw its output grow by 2.3kb/d to 9.94mb/d vs 9.938m b/d in April.

Not surprisngly, in an attempt to preserve the “reduction” narrative, in its self-reported figures, Saudi Arabia told OPEC via direct communication that it produced 9.88mb/d in May, down 66.2kb/d from April’s 9.946mb/d, although these figures are looking increasingly suspect.

Perpetuating its existence of forced self-delusion, OPEC predicted that surplus oil inventories would continue to decline in 2H 2017 as their cuts (what cuts) take effect and demand picks up. “The re-balancing of the market is underway” OPEC wrote, conceding that it is taking place “at a slower pace” and adding that “the decline seen in the overhang” in developed-nation stockpiles “is expected to continue in the second half, supported by production adjustments by OPEC and participating non-OPEC producers.” There was little discussion of the soaring US shale output, which as we wrote last night is expected to hit an all time high next month.

From the monthly report:

The decline seen in the overhang in OECD commercial oil inventories in the first four months of the year – from 339 mb to 251 mb compared to the five-year average (Graph 2) – is expected to continue in the second half, supported by production adjustments by OPEC and participating non-OPEC producers.

 

 

These trends along with the steady decline in oil in floating storage, indicate that the rebalancing of the market is underway, but at a slower pace, given the changes in fundamentals since December, especially the shift in US supply from an expected contraction to positive growth. In light of these developments, OPEC and the participating non-OPEC countries decided to extend production adjustments for a further period of nine months in recognition of the need for continuing cooperation among oil exporting countries in order to achieve a lasting stability in the oil market.

Additionally, OPEC lowered forecasts for Russia production in 2H by 200k b/d, while the overall outlook for non-OPEC supply in 2H was reduced by 200k b/d, vs pledge of total reduction of ~558k b/d. The surplus in oil inventories in developed nations relative to their five-year average — OPEC’s main measure of the overhang — is down to 251m bbl from 339m at end-2016.

The report kept 2017 global oil demand growth forecast unchanged from previous month’s estimate at 1.27m b/d y/y, while it cut full year non-OPEC supply growth estimate to 840k b/d y/y, a downward revision of 110k b/d.  Which is, of course, wrong if Goldman’s forecast for shale production is even remotely accurate.

Shale production will hit its all time high in July and then rise from there!

(courtesy zero hedge)

Shale Production Will Hit An All Time High Next Month… And That’s Just The Beginning

While the June oil production data is still pending, it is safe to say that the June oil output from US shale producers – estimated today by the EIA at 5.348mb/d – will post the first double-digit production growth since July of 2015, when oil prices tumbled and a substantial portion of US production was briefly taken offline.


Chart courtesy of Forge River Research

Indicatively, while over the past year total U.S. production is up roughly 525kb/d, virtually all of it, or 98.5%, is the result of horizontal rig production in the Permian Basin, where output is up by 507kb/d.

The Permian basin has been leading the increase in horizontal oil rig count (+178%)

More important, however, is that according to the latest EIA Daily Prodctivity Report forecast released today, in July total shale basin output is expected to rise by 127kb/d in one month, hitting 5.475 mmb/d, and surpassing the previous record of 5.46 mmb/d reached in March 2015.

Needless to say, this is bad news for OPEC, which continues to price itself out of the market by not only keeping prices high enough to make production profitable for US companies, but by allowing shale to capture an increasingly greater market share.

Worse news is that shale is just getting started: both the Energy Information Administration, OPEC and the International Energy Agency have chronically underestimated the contribution of U.S. crude oil supplies in their forecasts. As Shale River notes, each has significantly increased their estimates for 2017 U.S. crude oil production during the year, with recent upward revisions larger than prior increases. In fact, the EIA recently conducted its 11th consecutive upward revision of its 2017 estimate.

But the worst news – for OPEC yet again – is in the long-term, where if 5.5mmb/d is considered a record, just wait until shale hits more than double that amount, or over 12mmb/d, which Goldman expects will be achieved some time in the 2020s.

The reason: shale breakeven costs are dropping on a monthly, if not weekly basis, and which over the next 4 years Goldman expects will plunge to prices where US production will become competitive with the lowest-cost OPEC producers: Saudi, Iran and Iraq.

Impossible? The chart below showing the collapse in breakevens in the past 9 years suggests otherwise:

Here is Goldman:

We believe the Big 3 shale plays (Permian Basin, Eagle Ford Shale and Bakken) combined with Cana Woodford plays (SCOOP/STACK) and the DJ Basin can together drive on average 0.8 mn bpd of annual production growth through 2020 and 0.7 mn bpd of annual production growth in 2021-25. We see production plateauing towards the end of the next decade at present. Importantly, as described below, we  still see room for additional productivity gains; our estimates incorporate expectations for 3%-10% productivity gains per year through 2020.

 

While rest of the world is finding ways to move breakevens down towards $50/bbl WTI, we still see shale as the dominant source of growth and as a critical source of short cycle production. Our global cost curve from our recent Top Projects report shows continued decline in shale breakevens, though at a smaller pace vs. in past years. Outside of shale, we increasingly see industry – majors, national oil companies (NOCs) and governments – working to accommodate new projects that break even at $50/bbl WTI or less with a goal of becoming more competitive with shale. This largely is occurring through a combination of improved tax/royalty terms by host governments, more limited scale by producers (smaller projects that come online more quickly) and cost reduction/efficiency gains. We still see production from new projects falling off towards the end of the decade as a result of the reduction in investment after oil prices collapsed post-2014. As such, we expect shale will continue to be a critical source of marginal supply because shale along with OPEC spare capacity are the principal sources of short-cycle supply.

The bad news for OPEC is that it is trapped when it comes to oil prices: on the bottom by plunging state revenues and booming budget deficits, which spell out austerity, social instability and eventually revolution if prices are not boosted, and on the top by shale technological advances, which consistently reduce breakeven prices, and allow shale to stale market share from OPEC the longer prices are kept artificially high.

The solution, short-term as it may be at least according to Goldman, is that oil prices “need to stay lower for longer.” That however is a non-starter with Saudi Arabia, which for obvious reasons, is rushing to IPO Aramco before math and physics finally declare victory over cartel-controlled supply, and oil prices crash. It remains to be seen if it is successful.

(courtesy zero hedge)

8. EMERGING MARKET

end

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

Euro/USA   1.1211 UP .0014/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES ALL IN THE GREEN 

USA/JAPAN YEN 110.06 UP 0.141(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2726 UP .0057 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3261 DOWN .0050 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 14 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1211; 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 13.96 POINTS OR 0.44%     / Hang Sang  CLOSED UP 144.06 POINTS OR 0.56% /AUSTRALIA  CLOSED UP 1.51% / EUROPEAN BOURSES OPENED ALL IN THE GREEN 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED DOWN 9.83 POINTS OR 0.05%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 144.06 POINTS OR 0.56%  / SHANGHAI CLOSED UP 144,06 POINTS OR 0.56%   /Australia BOURSE CLOSED UP 1.51% /Nikkei (Japan)CLOSED DOWN 9.83 POINTS OR 0.05%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1262.10

silver:$16.80

Early TUESDAY morning USA 10 year bond yield: 2.216% !!! UP 1 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.876, UP 0  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 97.05 DOWN 9  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 2.949%  DOWN 4 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.064%  UP 1/2  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.436%  DOWN 1 IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.981 DOWN 4   POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.266%UP 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1203 UP .0005 (Euro UP 5 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.96 UP  0.047 (Yen UP 5 basis points/ 

Great Britain/USA 1.2745 UP 76 ( POUND UP 76 basis points) 

USA/Canada 1.3241 DOWN .0070 (Canadian dollar UP 70 basis points AS OIL ROSE TO $46.34

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This afternoon, the Euro was UP by 5 basis points to trade at 1.1203

The Yen FELL to 109.96 for a LOSS of 5  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 76  basis points, trading at 1.2745/ 

The Canadian dollar ROSE by 70 basis points to 1.3241,  WITH WTI OIL RISING TO :  $46.34

The USA/Yuan closed at 6.7991/
the 10 yr Japanese bond yield closed at +.064% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1 IN basis points from MONDAY at 2.204% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.862  UP 1  in basis points on the day /

Your closing USA dollar index, 97.03 DOWN 14 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 11.43 POINTS OR 0.15%
German Dax :CLOSED UP 74.54 POINTS OR 0.59%
Paris Cac  CLOSED UP 21.15 POINTS OR 0.40% 
Spain IBEX CLOSED  UP 39.70 POINTS OR 0.37%

Italian MIB: CLOSED  UP 178.55 POINTS/OR 0.85%

The Dow closed UP 92.80 OR 0.44%

NASDAQ WAS closed DOWN 44.91 POINTS OR 0.73%  4.00 PM EST
WTI Oil price;  46.34 at 1:00 pm; 

Brent Oil: 48.52 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.90 UP 14/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.247%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 5:00 PM:$46.46

BRENT: $48.22

USA 10 YR BOND YIELD: 2.209%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.865%

EURO/USA DOLLAR CROSS:  1.1208 UP .0011

USA/JAPANESE YEN:110.04  DOWN 0.121

USA DOLLAR INDEX: 97.00  DOWN 13  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2752 : UP 83 POINTS FROM FRI NIGHT  

Canadian dollar: 1.3241 UP 69  BASIS pts 

German 10 yr bond yield at 5 pm: +0.247%

END

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

TRADING IN GRAPH FORM FOR THE DAY

‘Teflon’ Tech Stocks Bounce Despite The Biggest Outflows Since 2007

 

Every effort was made to stomp VIX to lift stocks ahead of The FOMC…

 

Stocks levitated at the open, dipped into the EU close, drifted sideways, then ramped on a tumbling VIX in the last hour…S&P, Dow, And Russell 2000 Record Highs…

 

Since Thursday’s close only Nasdaq remains red…

 

Of course, with The Fed due to hike rates tomorrow (June odds 100%), we are not surprised stocks were bid in that magical ‘drift into FOMC’ manner… it’s just that economic data has utterly collapsed since The Fed last hiked rates…

 

As ‘Soft’ Data collapses back to ‘Hard’ data’s reality…

 

The rout in U.S. technology shares over the past few days spurred the biggest outflows from the industry’s benchmark exchange-traded fund since the depths of the financial crisis in Nov 2007.

 

Additionally, option traders also rushed to hedge against losses with 1.42 million put contracts changing hands — the busiest session since September 2008.

 

Nasdaq VIX continued its decline…

 

S&P VIX slid back to a 10 handle…NOTE that Nasdaq only managed to get back to its pre-flash-crash ledge and was unable to break above

 

Notably, FANG stocks closed higher, but made lower highs on the day…

 

But remain down from Thursday’s close…

 

Of course, there is still plenty to keep FANG stocks higher…

 

Treasuries were mixed today with very modest gains (yield lower) at the long-end and yields higher at the short-end…

 

2s10s and 2s30s have flattened dramatically once again…

 

The Dollar Index slid lower once again

 

Gold and Silver closed down for a 5th day in a row…

 

WTI/RBOB rallied modestly today (back above $46 and 1.50 respectively) ahead of API data tonight…

 

Oh and Record high Russell 2000… as 2017 EPS expectations hit 2017 lows…

 

END

This is not good news for the state of Illinois as unpaid bills continue to mount.  Without a shadow of a doubt they will be downgraded in July to junk which will cause a massive increase of payments by the state to cover default provisions with respect to bond covenants with the bond purchases by individuals and corporations on prior deals.  The deals stipulated extra payments if the state is downgraded to junk.

 

(courtesy zero hedge)

We will see you WEDNESDAY night

Harvey.

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