June 14/Another orchestrated gold and silver raid in the access market/At comex closing: gold up $7.00 and silver up 37 cents/Palladium lease rates skyrocket to 16% as shortages galore appear/Two shootings in the USA: first in Virginia with the Republican whip shot and in critical condition/second: in San Francisco/Highlights of the Janet’s “dovish hike”

GOLD: $1272.80  UP $7.00

Silver: $17.11  UP 37  cent(s)

Closing access prices:

Gold $1261.60

silver: $16.90

 

 

 

 

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: $1278.03 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1269.65

PREMIUM FIRST FIX:  $8.38

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SECOND SHANGHAI GOLD FIX: $1278.543

NY GOLD PRICE AT THE EXACT SAME TIME: $1268.80

Premium of Shanghai 2nd fix/NY:$9.63

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LONDON FIRST GOLD FIX:  5:30 am est  $1268.25

NY PRICING AT THE EXACT SAME TIME: $1268.80

LONDON SECOND GOLD FIX  10 AM: $1275.50

NY PRICING AT THE EXACT SAME TIME. $1275.60 

For comex gold:

JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  15 NOTICE(S) FOR 1500  OZ.

TOTAL NOTICES SO FAR: 2206 FOR 220,600 OZ    (6.8615 TONNES)

For silver:

For silver: JUNE

 18 NOTICES FILED TODAY FOR 90,000  OZ/

Total number of notices filed so far this month: 834 for 4,170,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

 

You could see a raid coming in the afternoon:  with gold and silver quite strong up until 2: 00 pm, the gold/silver equity shares languished and some of these guys were already in the red.  Then comes the dovish hike and after gold spiked to $1280, the crooks unleashed a torrent of paper shorts to bury our metals again.

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 10th 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 3,786  contract(s) DOWN to 201,214 WITH THE NASTY FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 17 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0065 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 18 NOTICE(S) FOR 90,000  OZ OF SILVER

In gold, the total comex gold FELL BY ANOTHER  2,795 contracts WITH THE FALL GOLD TOOK  ($0.80 with YESTERDAY’S TRADING). The total gold OI stands at 471,134 contracts.

we had 15 notice(s) filed upon for 1500 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 3,786 contracts DOWN TO 201,214 (AND now A LITTLE  FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE NASTY FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  ( DOWN 17 CENTS).We lost a few of our paper players but the core players remain firm and determined.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 23.07 POINTS OR 0.73%   / /Hang Sang CLOSED UP 23.80 POINTS OR 0.09% The Nikkei closed DOWN 15.23 POINTS OR 0.08%/Australia’s all ordinaires  CLOSED UP 1.04%/Chinese yuan (ONSHORE) closed DOWN at 6.7972/Oil DOWN to 45.96 dollars per barrel for WTI and 48.23 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7927 yuan to the dollar vs 6.7972 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE  STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY WITH THE RISE IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

 

Chinese yield curve inverts more as liquidity in China seems to disappear

( zero hedge)

 

4. EUROPEAN AFFAIRS

i)UK

How on earth could this happen; a fire destroyed an apartment building killing 6 and injuring many. Builders of the apartment complex used flammable material and that caused the fire to spread like wild fire…

( zero hedge)

ii) EU

my goodness! the EU sues Poland, Hungary and the Czeck Republic for not accepting refugees

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

6 .GLOBAL ISSUES

CANADA/SEARS

The bricks and mortar retail apocalypse moves north into Canada as Sears Canada admits that it’s future is dim

(courtesy zero hedge)

7. OIL ISSUES

Oil drops after another increase in crude and gasoline inventories

( zerohedge)

8. EMERGING MARKET

VENEZUELA

More Anti Government protests in Venezuela

( zero hedge)

9.   PHYSICAL MARKETS

i)We have 3 important traders who now have abandoned an extradition fight and have agreed to face charges of manipulation of foreign exchange (and that no doubt includes gold and silver)

( Alan Tovey/London’s Telegraph/GATA)

ii)James Ledbetter’s new book on how governments always tried to control the price of gold:

( GATA/Chris Powell)

iii)Palladium is the smallest of the 4 precious metals.  Russia for generations has been the dominant supplier of Palladium as this nation was the first to issue coinage of this rare metal. Russia had so much of the metal they did not know what to do with it. (Actually around the turn of the 20th Century they made ice boxes made of Palladium). In the late 1990’s they exported the metal to the west where its dominant use is in the auto sector.  They were exporting around 2.5 million oz per year.  Last year however, their inventories having been depleted and no new mining finds has caused a huge scarcity.  Derivatives incorporated by the west kept the metal price low.  Today the paper balloon burst with lease rates over 16% and mining for Palladium in South Africa on the skids due to high mining costs.

 

a must read..

(courtesy David Jensen/Safe Haven)

10. USA Stories

 

i)Today’s early trading right after CPI and retail sales were announced:

(ZEROHEDGE)

ii)Jeff Sessions did a terrific job yesterday deflecting collusion accusations and calling them appalling and a detestable lie. That did not stop the democrats trying to create the impression that Trump et al allied with Russian operatives  to steal the USA election.

( zero hedge)

iii)All eyes were on the CPI report and it was hoped that inflation would rip higher and instead it dropped .1%.  This will no doubt cause the Fed to stop raising rates as the economy is coming to a complete halt

( zerohedge)

iv)The first data point  (above) was lower than expected inflation.  Then they released another important data point: retail sales and it tumbled .3% month over month the biggest drop since Jan 2016.  The USA economy is grinding to a halt.

( zerohedge)

v)All eyes were on the CPI report and it was hoped that inflation would rip higher and instead it dropped .1%.  This will no doubt cause the Fed to stop raising rates as the economy is coming to a complete halt

( zerohedge)

( zero hedge)

vii)The scenario last night was for today’s hike being a dovish hike.  Now that the Fed received a slap in the face with a drop in inflation and also a drop in inflation expectations we will probably see only one hike and it is done!

vii a)   And she delivered a “dovish hike”

( zero hedge)

 vii b)  And now the unwinding of bond purchases.  there is no way that they will be able to do thus unless they collapse the economy

( zero hedge)

 

( zero hedge)

viii)The auto sector is in complete shambles as now the big auto companies extend plant shutdowns because of increasing inventory.  The

subprime auto loans together with lower used car prices are causing havoc to the industry

( zero hedge)

ix)This is not good: early this morning shots fired in Alexandria Virginia where Majority Whip Scalise was hit.

3 commentaries

( zero hedge)

x)OH NO!! Not again!! Active shooter in San Francisco.  the UPS building on 17th and Potrero

( zero hedge)

 

Let us head over to the comex:

The total gold comex open interest FELL BY 2795 CONTRACTS DOWN  to an OI level of 471,134 WITH THE  FALL IN THE PRICE OF GOLD ($0.80 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 70 contract(s) FALLING TO  1551.  We had 11 notices filed yesterday so we LOST ANOTHER 59  contracts or an additional 5900 oz will NOT stand for delivery in this very active delivery month of June AND WITHOUT A SHADOW OF DOUBT THESE 59 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 GAINED 54 contracts to stand at 2019 contracts. The next big active month is August and here the OI LOST 2,630 contracts DOWN to 345,745,  as the bankers trying to keep this month down to manageable size.

We had 15 notice(s) filed upon today for 1500 oz

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And now for the wild silver comex results.  Total silver OI FELL BY 3,786 contracts FROM 205,000  DOWN TO 201,214 WITH YESTERDAY’S BIG 17 CENT LOSS. WE LOST SOME OF OUR PAPER PLAYERS BUT THE CORE LONGS REMAIN STOIC. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER AND FINALLY THEY WERE ABLE TO COVER SOME OF THOSE SHORTS.
We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW GAINED 15 contract(s) RISING TO 28 contracts. We had 4 notices served upon yesterday so we AGAIN GAINED 19 CONTRACTS OR AN ADDITIONAL  95,000 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 10TH 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 7,623 contracts DOWN to 100,533 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 17 contracts to stand at 55.  The next big active delivery month for silver will be September and here the OI already jumped by another 3139 contracts up to 59,452.

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

 Monday, June 14.2016:  92,722 contracts were still outstanding vs 100,533 contracts June 14.2017

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 18 notice(s) filed for 90,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 243,283 contracts which is VERY GOOD

Yesterday’s confirmed volume was 181,591 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE
 June 14/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 10,288.910 oz
Brinks
Manfra
Scotia
Deposits to the Dealer Inventory in oz nil  oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
15 notice(s)
1500 OZ
No of oz to be served (notices)
1536 contracts
153,600 oz
Total monthly oz gold served (contracts) so far this month
2206 notices
220600 oz
6.8615 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   282,794.7 oz
Today we HAD  2 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 3 customer withdrawal(s)
i) Out of Brinks: 97.36 oz
ii) Out of Manfra; 160.75 oz (5 kilobars)
iii) Out of Scotia: 10,030.800 oz  (312 kilobars)
total customer withdrawal: 10,288.910  oz
 we had 1 adjustment(s):
i) out of Brinks:  10,344.48 oz was adjusted out of the dealer and this landed into the customer account of Brinks
For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 15  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 9 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 (2206) x 100 oz or 220,600 oz, to which we add the difference between the open interest for the front month of JUNE (1551 contracts) minus the number of notices served upon today (15) x 100 oz per contract equals 374,200  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 (2206) x 100 oz  or ounces + {(1621)OI for the front month  minus the number of  notices served upon today (15) x 100 oz which equals 374,200 oz standing in this  active delivery month of JUNE  (11.639 tonnes)
.
WE LOST 59 CONTRACTS OR AN ADDITIONAL 5900 OZ WILL NOT STAND AT THE COMEX.  HOWEVER THESE GUYS (59 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 889,847.333 or 27.67 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,636,844.749 or 268.64 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 268.64 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 14 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 63,16.421  oz
CNT
Scotia
Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory 
 3,029.07 oz
DELAWARE
JPM
No of oz served today (contracts)
 18 CONTRACT(S)
(90,000 OZ)
No of oz to be served (notices)
10 contracts
( 50,000 oz)
Total monthly oz silver served (contracts) 834 contracts (4,170,000 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 2,733,859.2 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 2 customer withdrawal(s):
 i) out of CNT: 3030.111 oz
ii) Out of Scotia; 60,086.310 oz
TOTAL CUSTOMER WITHDRAWALS:  63,116.421  oz
 We had 2 Customer deposit(s):
 i) Into Delaware:   999.05 oz
ii) Into JPM: 2030.02 oz
***deposits into JPMorgan have now slightly resumed
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 3029.07 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the JUNE. contract month is represented by 18 contract(s) for 90,000 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 834 x 5,000 oz  = 4,170,000 oz to which we add the difference between the open interest for the front month of JUNE (28) and the number of notices served upon today (18) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the initial standings for silver for the JUNE contract month:  834 (notices served so far)x 5000 oz  + OI for front month of JUNE.(28 ) -number of notices served upon today (18)x 5000 oz  equals  4,220,000 oz  of silver standing for the JUNE contract month.
 
We gained 19 contracts or an additional 95,000 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 111,746 which is GIGANTIC
Yesterday’s  confirmed volume was 128,396 contracts which is GIGANTIC
YESTERDAY’S ESTIMATED VOLUME OF 128,396 CONTRACTS EQUATES TO 642 MILLION OZ OF SILVER OR 92% 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:   204.798 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.9 percent to NAV usa funds and Negative 7.8% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.5%
cash .+0.1%( June 14/2017) 
 
2. Sprott silver fund (PSLV): STOCK NAV falls to -.20%   (june 14/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.70% to NAV  (June 14/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -.20% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.70%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

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

(courtesy Sprott/GATA)

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

 Section: Daily Dispatches

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

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

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

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

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

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

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

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

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

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

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

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

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

end

And now the Gold inventory at the GLD

June 14./no change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

 

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 14 /2017/ Inventory rests tonight at 867/00 tonnes
*IN LAST 172 TRADING DAYS: 80.13 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 114 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 14/no change in silver inventory at the SLV/inventory rests at 339.605 million oz/

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 14.2017: 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: 1.26%

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 WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Brexit and UK election impact UK housing

By janskoyles June 14, 2017

  • Growing evidence of slowdown in UK property market
  • Slow-down in activity in UK housing market in run up to UK election
  • Average UK house prices dropped in the three months to May
  • Halifax report annual house price growth fallen to a four-year low of 3.3 percent.
  • “Political instability breeds procrastination on the part of homebuyers and sellers”
  • Sterling drop will increase divide in housing market, first time buyers continue to struggle
  • House price growth has lost momentum, volumes continue to drop

UK property market forecast to take hit on political uncertainty

The United Kingdom has been dealt a couple of ‘shocks’ in the last year – Brexit and the Conservative’s lost majority in Parliament.

The only thing that these results definitively mean for the country is uncertainty. Whilst every voter and British resident works to navigate these unclear times there is an air of nervousness about how things will pan out. This is becoming clear through the commonly used temperature gauge of any Western economy – the housing market.

Latest data suggests that both Brexit and the UK election have negatively impacted the already overheated property market. With little foresight as to how the economy and government will move forward, the housing industry is feeling nervous.

“The general election is again commonly cited as a factor hindering activity, causing some hesitancy from both buyers and vendors.” stated RICS upon release of their latest survey. Prices have also been affected by Brexit. Before Britain voted to leave the EU, the UK had seen year- on-year price rises of almost 10 percent, now house prices are either stalling or falling.

Housing market tense and uncertain

A survey carried out by Royal Institution of Chartered Surveyors (RICS) found brewing problems in the market were largely down to concerns over both the outcomes of the snap election and Brexit.

The professional body reported British house prices had risen at their slowest rate since August 2016, in May. Volumes were also down as enquiries from new buyers, new instructions from those wanting to sell and agreed sales had all declined during May, with the number of homes being put up for sale falling the most since just after the 2016 Brexit result.

The British Pound may well weaken further as we head into Brexit negotiations. This will provide international buyers with the further opportunity to purchase with a favourable exchange rate. However, they too do not like uncertainty and will likely look for more concrete assurances on how this will all play out.

Over the medium term it’s not all bad news for house prices, according to RICS contributors house prices are expected to increase at a faster pace than wages over the medium term. In short, first-time buyers will continue to suffer as the gap grows.

Currently UK house prices are nearly 8.5 times average earnings. Despite figures suggesting a fall in house prices the ratio is still at a level has not been seen at since the last property boom. On average it has never been financially easier to get a mortgage. Interest rates remain at record lows in recent years so debt servicing levels remain affordable (for the time being!).

So long as interest rates stay very low, new borrowing could keep the property market going and UK house prices buoyant at least for a while longer. However this isn’t taking into account low sentiment or government policy.

Will the government lose interest?

Western governments thoroughly enjoy riding on the wave of (and supporting) increasing house prices. But this can backfire if it is the result of a housing shortage. In the UK shortages are a major problem. UK governments have repeatedly promised to solve this problem but have rarely made headway.

One of the immediate effects of the weak Conservative victory is the shakeup in both cabinet and policy. After weak RICS data, the housing market really needed an injection of confidence this last week. However, at the moment uncertainty just continues to grow given the removal of housing minister Gavin Barwell.

The housing brief of the last government is now unlikely to be priority given Brexit negotiations and now a minority government in power. Housing market policy will be closely monitored by market participants in terms of how much government can reaffirm commitments to the pre-election policy direction rather than switch things and create further disruption or uncertainty.

The most recent housing policy white paper outlined ways and means to expand housing supply. In addition, the industry and government had both shown interest in supporting new methods of delivery such as build to rent and off-site construction. Progress in any of these areas is unlikely to be evident for some time, especially so prior to Brexit.

For new builds and development this could be a major problem, as Hayley Scott from Investec Structured Property Finance told CityAM, “Volatility and uncertainty may return to the sector….A number of proposed new projects may indeed be put on hold as the property sector takes stock of this result. Banks are likely to be cautious about financing new developments. Real estate as an asset class will lose favour with institutional and overseas investors as doubts hang over the UK real estate sector.”

Concluding thoughts

A collapse in the housing market would devastate the banking system and sterling. Confidence affects sentiment. Very few markets enjoy uncertainty and the property market is no exception. Sentiment in property markets generally changes more slowly than in more liquid, traded markets but when it does, it is as powerful a driver of prices.

In the short to medium term, Mrs May’s government has a lot of work to do when it comes to assuring markets, investors, buyers and sellers that they have this ship stable and there is nothing to worry about when it comes to property. Right now, these reassurances seem to be hot air, the longer this goes on the more damage will be inflicted on an already delicate situation.

Ultimately it is easy money that has lead us into a situation where a couple of elections can put a multi- billion pound industry close to its knees. Investors would be wise to prepare for a time (in the not too distant future) when times become tough thanks to weak sentiment and low confidence.

It is not just in the UK that property prices look over valued. In the event of price falls, gold is likely to act as a hedge and preserve wealth. Investors should select a reasonable allocation to gold bullion which is held in allocated and segregated storage. Owning these assets away from the system which fuels these overheated property markets will soon be seen as prudent.

http://www.goldcore.com/us/gold-blog/brexit-uk-election- impact-uk-housing/

-END-

end

 

We have 3 important traders who now have abandoned an extradition fight and have agreed to face charges of manipulation of foreign exchange (and that no doubt includes gold and silver)

(courtesy Alan Tovey/London’s Telegraph)

UK currency traders abandon extradition fight, agree to face charges in NY

Section:

By Alan Tovey
The Telegraph, London
Tuesday, June 13, 2017A trio of City of London traders charged by the U.S. Department of Justice with rigging the $5.3 trillion per day currency markets have agreed to go voluntarily to the United States and not battle extradition proceedings.

The three men — part of an online chat group called “the Cartel,” which is alleged to have been used to manipulate foreign exchange deals — have struck the deal, which will allow them to return to Britain ahead of the trial.

The three men are Chris Ashton, who was formerly global head of spot trading at Barclays, ex-JP Morgan dealer Richard Usher, and Rohan Ramchandani, formerly of Citigroup.

They are accused by U.S. authorities of a single count of conspiracy to manipulate markets. This charge carries a maximum penalty of 10 years’ imprisonment and a $1 million fine, though this could rise to twice the gain they received from their actions or twice the losses of those on the other side of the deal if found guilty. …

…For the remainder of the report:

http://www.telegraph.co.uk/business/2017/06/13/three-uk-currency-traders…

end

 

James Ledbetter’s new book on how governments always tried to control the price of gold:

 

(courtesy GATA/Chris Powell)

James Ledbetter: How the U.S. government tried to convict a golden rooster

Section:

10:30p ET Tuesday, June 13, 2017

Dear Friend of GATA and Gold:

James Ledbetter’s new book, “One Nation Under Gold,” has a chapter humorously detailing the U.S. government’s paranoia about the monetary metal even back in the 1950s and ’60s, before the government resorted to gold sales, swaps, and leases for price suppression. The chapter tells the strange story of a golden rooster in Nevada that was prosecuted for violating the Gold Reserve Act of 1934. The excerpt is headlined “Why the U.S. Government Once Sued a Nevada Casino over a 14-Pound Solid-Gold Rooster” and it’s posted at QZ.com here:

https://qz.com/1002767/gold-price-why-the-us-government-once-sued-a-neva…

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

end

Palladium is the smallest of the 4 precious metals.  Russia for generations has been the dominant supplier of Palladium as this nation was the first to issue coinage of this rare metal. Russia had so much of the metal they did not know what to do with it. (Actually around the turn of the 20th Century they made ice boxes made of Palladium). In the late 1990’s they exported the metal to the west where its dominant use is in the auto sector.  They were exporting around 2.5 million oz per year.  Last year however, their inventories having been depleted and no new mining finds has caused a huge scarcity.  Derivatives incorporated by the west kept the metal price low.  Today the paper balloon burst with lease rates over 16% and mining for Palladium in South Africa on the skids due to high mining costs.

 

a must read..

(courtesy David Jensen/Safe Haven)

 

and a special thanks to Doug Cundley for sending this for us

 

Palladium Blows the Whistle on the London Metals Market

By: David Jensen | Tue, Jun 13, 2017

We noted that London palladium lease rates started to surge in late 2016 giving early visibility of a physical palladium supply shortage in the London precious metals market.

The Achille’s Heel of the world’s predominant price setting center for precious metals (gold, silver, platinum, and palladium) in London is the London Bullion Market Association’s (LBMA) design by the Bank of England to substitute trading and holding metal itself – the historically reliable price discovery method – with unallocated (unbacked) precious metals spot contracts.  Unallocated spot contracts (for immediate ownership of metal) are effective in suppressing metal prices if investment funds and banks can be convinced that the contract claims, that can be created without limit, are a substitute for metal itself. The LBMA currently trades ownership of more than 200M oz of gold each day (more than 2x global annual mine production) in the form of unallocated spot metal contracts with an estimated 400M to 600M oz of unallocated claims for gold standing in the London market.

This unbalanced market of paper claims vs the reality of actual available metal can continue while investors are happy to hold certificates of metal ownership. The problem arises when certificates of metal are not adequate substitutes for metal.

This situation appears to have arisen in the 8.5 million oz per annum global palladium market, the smallest market of the four precious metals. Palladium plays an essential role in the automotive industry providing the key metal in gasoline engine catalytic converters used for exhaust emissions reduction.  Unallocated palladium spot contracts cannot be used in these converters as a metal substitute.

The reduction in South African mine output due to global palladium and platinum prices in London being set below mining costs as well as a reduction in Russian exports of palladium in 2015 (reducing its annual mine export supply to 1.0 million oz from 2.5 million oz) has resulted in visible draw-down in global stockpiles to 1.5 million oz from ~ 3.5 million oz in 2014. The counter-intuitive reduction in palladium investment stockpiles in a rising price environment since 2015 imply that these investment stockpiles may have been utilized to meet physical supply while global mine output languished.

Transparent Palladium Holdings

Palladium Lease Rate Spikes – A Metal Shortage Alert:

During this past week of June 5 to June 9, 2017, we’ve seen a notable palladium lease rate shock in London. The lease rate is the per annum cost to borrow metal for various maturity periods (1-month, 3-month, etc.) and it increased last week from 3.5% to approximately 16% in London. Also of interest is that the normally reliable Commerzbank stopped publishing its London precious metals lease data on June 5, 2017. While additional palladium may temporarily be borrowed to reduce the London lease rate, market shortage for this metal is clearly now at play.

Palladium Lease Rates from 2006 to 2017:

Palladium Lease Rates from 2006 to 2017

Source: TDBank

Russia saved the London market in the late 1990s with its stockpiles that were at that time vast during a similar London palladium shortage. Those stockpiles have now been consumed in the past 20 years and the long term price chart of palladium appears to indicate that we are heading into a new price regime for this metal. The visibility that palladium gives to the suppression of global precious metals prices in the London market from its issuing and trading unallocated paper contracts may well result in a cascade of higher precious metals prices with platinum, silver, and then gold breaking to higher prices as well as investors and industrial users alike come to realize that London unallocated paper contracts are not metal. Of concern to all should be the impact on interest rates identified by future Treasury Secretary Larry Summers in his 1985 paper with Barsky.  At that time, Summers and Barsky identified a rising price of gold as a dominant barrier to low interest rates. Two years later in 1987, the Bank of England formed the LBMA and the global debt bubble was launched in earnest. http://www.safehaven.com/article/42600/transition-of-price-discovery-in-the-global-gold-and-silver-market

Palladium Price Chart

end


Tradings flooding Morgan Stanley as they ask why Bitcoin is 3,000 dollar per coin and Ethereum $410.00

 

(courtesy zerohedge)

Traders Are Flooding Morgan Stanley With Calls To Explain Why Bitcoin Is Soaring

First it was Goldman succumbing to hedge funds and “due to popular demand” providing its first ever “technical” take on where Bitcoin will go from here. Now it’s Morgan Stanley’s turn.

In a report on the “Blockchain, Unchained” – in which it advocates for regulation of the blockchain as part of its evolution as well as providing a “master key” to a regulator, in effect killing the very premise behind such a decentralized infrastructure (more on that later) –  Morgan Stanley writes that “the rapid appreciation of cryptocurrencies has elicited many inbound phone calls to both our banks and tech teams.”

It responds that possible explanations for the dramatic moves include investors in search of uncorrelated risk assets and technologists looking for incremental security. But, the bank writes, “governmental acceptance, would be required for this to further accelerate, the price of which is regulation.” We doubt many supporters of cryptos will agree with this.

In any event, here are some further details from Morgan Stanley, but first, a quick primer: as MS explains, for many, Bitcoin and blockchain are often thought of synonymously. In reality, blockchain is primarily a messaging and bookkeeping method, whereas Bitcoin is a store of value that makes use of blockchain methodology to transfer value. Bitcoin and other cryptocurrencies have shown rapid appreciation, as shown in Exhibit 23 and Exhibit 24, with the pace of appreciation showing rapid acceleration since the beginning of 2017. While Bitcoin grabs the headlines, Ethereum, another cryptocurrency that attempts to address some of the echnical shortcomings of Bitcoin, has been gaining value at an even faster rate. The rapid appreciation of blockchain-based currencies and the proliferation of new cryptocurrencies is further raising blockchain’s technological profile.

MS then gives a detailed “explanation” on why Bitcoin and other cryptocurrencies have appreciated rapidly, saying “key possible drivers of cryptocurrency appreciation. It is not clear why cryptocurrencies are appreciating so rapidly (apart from the appreciation itself drawing in more speculation against a potentially inefficient ability to sell). But, in conjunction with our FX Strategy team we identify several key potential contributors:”

  • ICOs—initial currency offerings. Rapid appreciation of cryptocurrencies is encouraging speculative formation of new currencies (see Exhibit 25 ). Many of these new currencies don’t actually have use cases yet, but are intended to be exchange mediums for everything from virtual goods in games to banking mechanisms for products like marijuana where legal implications are not yet fully clear. ICOs are funded with existing cryptocurrencies, hence driving an appreciation circle—e.g., to support/invest in a new currency, one must buy and trade an existing cryptocurrency.

  • Moving funds in China. Up until the last few days, a disproportionate share of Bitcoin mining was taking place in China (where there is cheap access to servers and cheap electricity). First on this website in 2015, and subsequently on many other outlets such as the Wall Street Journal (November 5, 2016) and Fortune (January 5, 2017) have noted that Bitcoin was being used to help avoid monetary controls in China, which explains why the Chinese government has cracked down on Bitcoin mining recently.
  • Increased demand from Korea and Japan. Bitcoin appreciation seems to have been heavily driven in recent months by increased buying from Korea and Japan. In Japan, the recent legalization of Bitcoin has led to an increase in activity, including the recent opening of new Bitcoin exchanges. In Korea, however, there is not a clear explanation for the surge.

While there is no one specific explanation for the surge in cryptos, Morgan Stanley is surprised because the rapid appreciation it taking place despite clear hurdles, to wit:

The rapid appreciation of Bitcoin and others is somewhat surprising in light of some developments that seemingly would have put downward pressure on the currency, including plateauing trading volumes (see Exhibit 23 ), the SEC’s decision not to allow the listing of a Bitcoin ETF, and China’s shutdown of several Bitcoin mining operations (without those miners, transaction time for Bitcoin could increase substantially).”

MS then notes that bitcoin, ethereum et al, are acting more like an asset than currency.

Most regulators and investors view cryptocurrencies more as assets than actual currencies. Their values are too volatile and too hard to actually use for payment for most to consider them currencies. Our conversations with some merchants indicate that, while cryptocurrencies might actually be attractive for them to operate their businesses, they find that the cryptocurrencies are far too volatile to be used.

MS slams Bitcoin which it reminds clients, scales poorly, helping alternatives (especially those based on Ethereum). The blockchain underpinnings of most cryptocurrencies scale too poorly for most currency-like uses. Scaling challenges includes increasing electricity consumption as shown in the chart below, and that time to clear single transactions can often be from 10 minutes to more than an hour, and even that with no guarantee. Ethereum and others have addressed those scaling challenges by centralizing more of the blockchain function, although such increased centralization leads to increased hacking risk, as Ethereum found out the hard way last almost exactly one year ago.

Finally, going back to the most controversial point in the report, according to Morgan Stanley further price gains in cryptos may not be possible unless there is further regulation over the crypto space, which includes giving up autonomy. Which is ironic because as Ryan Vlastelica writes, “proponents of the digital currencies frequently cite their decentralized nature as one of the primary attributes that excites them about the technology.”

Morgan Stanely didn’t specify what types of regulation might be necessary to further push bitcoin higher, noting that the specific changes needed may be different for different cryptocurrencies, all of which use blockchain technology. For blockchain overall, “regulators are involved and watching closely,” Morgan Stanley writes.

“Some have suggested privacy could be improved. Regulators are looking to have a master key so all transactions are visible to them.”

And while handing a master key may indeed streamline costs, it would likely also sacrifice Satoshi Nakamoto’s original intention of blockchain technology, which was to put banking inside the hands of the individual.

In the White Paper, Satoshi said, “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.”

This is what Satoshi’s envisioned, but it remains to be seen whether Morgan Stanley’s idea of the master key in blockchain technology will trump the idea of bypassing third parties. Some in the ecosystem still hope Satoshi’s original vision will prevail in the end. Others, those who hope for further gains in the price of bitcoin, ethereum and others, may be willing to sacrifice decentralization if it means further gains. For now, the jury is out even as both bitcoin and ethereum continue to trade just shy of their all time highs of $3,000 and $410, respectively.

end

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

 
 

1 Chinese yuan vs USA dollar/yuan  WEAKER 6.7972(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  MUCH WEAKER TO ONSHORE AT   6.7927/ Shanghai bourse CLOSED DOWN 23.07 POINTS OR 0.73%  / HANG SANG CLOSED UP 23.80 POINTS OR 0.09% 

2. Nikkei closed DOWN 15.23 POINTS OR 0.08%   /USA: YEN RISES TO 110.28

3. Europe stocks OPENED IN THE GREEN        ( /USA dollar index RISES TO  97.05/Euro DOWN to 1.1203

3b Japan 10 year bond yield: RISES TO   +.07%/     !!!!(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::  45.96 and Brent: 48.23

3f Gold UP/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.261%/Italian 10 yr bond yield DOWN  to 1.945%    

3j Greek 10 year bond yield FALLS to  : 5.83???  

3k Gold at $1265.30  silver at:16.93 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 6/100 in  roubles/dollar) 57.06-

3m oil into the 45 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 DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.28 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  0.9706 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0873 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 FALLSS to  +0.261%

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 2.197% early this morning. Thirty year rate  at 2.852% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

“FOMC Drift” In Full Effect As Global Stocks Rise; S&P Futures Hit New Record; Oil Slides

 

With last Friday’s “tech wreck” now a distant memory, this morning the “FOMC Drift” described yesterday, which “guarantees” higher stock prices and a lower dollar heading into the Fed announcement is in full effect, with European and Asian stocks rising for a second day, led by rebounding tech shares, while S&P futures are modestly in the green and stocks on Wall Streets hit a record high overnight. And as the “FOMC Drift” also expected, the dollar has weakened for a third day with Treasuries rising, while oil fell after the latest IEA world forecast cut its global demand forecast while boosting output expectations.

The MSCI All-Country World index was up 0.1% and has remained stuck in a tight range this month. European shares headed for the highest in more than a week as companies including ASML and Hexagon (on M&A speculation) led the tech share revival in the region. The Stoxx Europe 600 Index gained 0.6%, building on a 0.6% increase the day before. Apart from technology sector, European equity markets supported by continued pick-up in industrial production which helps construction stocks.

The British pound, which rose Tuesday for the first time since the U.K. election, traded sideways as pressure mounted for Theresa May to abandon a so-called hard Brexit. Weaker than expected U.K. earnings data highlights squeeze on domestic consumers, long-end gilts lead curve flattening, GBP weaker in tandem. AUD/USD pushes higher through 100-DMA to outperform G-10, residual support still evident from CAD strength after recent hawkish BOC commentary.

Sovereign yields drifted sideways inside narrow ranges with the Loonie rising for a fifth day in otherwise muted FX markets. The Nikkei was modestly higher while Shanghai Composite declines after China data dump (China May retail sales 10.7% vs 10.7% est; fixed investment 8.6% vs 8.8% est, industrial output 6.5% vs 6.4% est) was seen as mixed, with overall resilience in retail sales and industrial output offset by capex weakness, but Chinese equity markets fell on concerns about a crackdown on the insurance industry after Anbang’s chairman was “detained.”

The Shanghai Composite Index tumbled 0.7 percent and the CSI 300 Index dropped 1.3 percent, its biggest loss this year. The Hang Seng Index erased losses to add 0.1 percent and the Kospi Index in South Korea fell 0.1 percent. Japan’s Topix Index closed down 0.1 percent, while Australia’s S&P/ASX 200 Index climbed 1.1 percent to its highest since May 16. Also in China, money-market rates eased as PBOC injects a net 20 BN yuan with reverse repos and the 7-day repurchase rate fell 32 basis points from Tuesday’s one-month high, overnight CNH Hibor drops to lowest since February.

Also in China, we got the latest credit creation data which showed a modest beat in New Loan activity offset by a miss in Total Social Financing, however it was the M2 which unexpectedly rose by just 9.6%, below the 10.4% est. and the lowest on record. In a statement on its website, the PBOC said that the slower M2 growth may become “new normal” amid leverage cut, adding that the PBOC was seeking to balance delveraging and stable liquidity.

S&P 500 futures were little changed. The gauge added 0.5 percent Tuesday and the Nasdaq 100 climbed 0.8 percent, rebounding from its worst two-day drop of the year.

The pound slipped less than 0.1 percent to $1.2743 after it strengthened 0.8 percent Tuesday. The Canadian dollar rose 0.2 percent, gaining for a fifth day. The euro was little changed at 1.1210. The Bloomberg Dollar Spot Index fell 0.1 percent. The yen was also 0.1 percent weaker at 110.19 per dollar

In commodities, oil prices fell more than 1 percent, on the backfoot again on worries about US oversupply. Brent crude oil was down 45 cents a barrel at $48.27 while U.S. crude was 50 cents lower at $45.96. U.S. inventories climbed by 2.75 million barrels last week, the American Petroleum Institute was said to report. The latest IEA report stated that global oil supply rose by 585k b/d in May to 96.69mm b/d as both OPEC and non-OPEC countries produced more. Meanwhile 2017 world demand was revised to 97.8m b/d from 97.9m b/d. Gold rose 0.1 percent to $1,268.30 an ounce.  Iron ore reverses early losses to climb 1.6%.

All eyes will now turn to the Federal Reserve. The widely expected quarter-point interest rate hike will take the Fed funds target rate above 1 percent for the first time since the immediate aftermath of the collapse of Lehman Brothers in 2008. The Fed is expected stick to previous guidance for another hike before year-end, while acknowledging that inflation is muted. The $4.5 trillion question will be what clues are given on the timetable and scale of eventual balance sheet reduction. Traders’ focus will be on signals on the frequency of further hikes and how the Fed plans to unwind its huge Treasury bond stockpile over the years ahead.

“Markets will probably mostly just trade sideways today in front of the Fed’s rate decision and press conference tonight,” John Cairns, a Johannesburg-based currency strategist at Rand Merchant Bank, said in a client note. “The range of issues that the bank has to cover and the market’s sensitivities to even the slightest changes suggests some market volatility after the event.”

“With financial conditions remaining supportive … and US financials breaking higher, the Fed may see little reason to moderate its rate hike projections when meeting today,” strategists at Morgan Stanley said in a note to clients. The bank expects the dollar to gain 2 percent against major currencies over the next few weeks.

Meanwhile, rates continued to drift lower with the yield on 10-year Treasuries was down one basis point at 2.20% . The yield on U.K. gilts dropped four basis points to 1 percent after rising seven points on Tuesday. Europe’s benchmark bond yield held near seven-week lows ahead of the Fed decision.

Bulletin Headline Summary From RanSquawk

  • EU bourses have traded higher throughout the morning, buoyed by the IT sector
  • Some moderate flow to report in a session looking ahead to the FOMC meeting this evening, with traders looking past the 25bp rate hike largely priced in
  • Looking ahead, highlights include US CPI, Retail Sales, DOE crude oil and the FOMC rate decision

Market Snapshot

  • S&P 500 futures up 0.06% to 2,441.50
  • STOXX Europe 600 up 0.6% to 391.00
  • MXAP up 0.08% to 155.12
  • MXAPJ up 0.4% to 505.58
  • Nikkei down 0.08% to 19,883.52
  • Topix down 0.1% to 1,591.77
  • Hang Seng Index up 0.09% to 25,875.90
  • Shanghai Composite down 0.7% to 3,130.67
  • Sensex up 0.2% to 31,177.15
  • Australia S&P/ASX 200 up 1.1% to 5,833.90
  • Kospi down 0.09% to 2,372.64
  • German 10Y yield fell 0.3 bps to 0.263%
  • Euro down 0.01% to 1.1210 per US$
  • Brent Futures down 1.2% to $48.15/bbl
  • Italian 10Y yield fell 3.9 bps to 1.69%
  • Spanish 10Y yield fell 2.0 bps to 1.416%
  • Brent Futures down 1.2% to $48.15/bbl
  • Gold spot up 0.04% to $1,267.07
  • U.S. Dollar Index up 0.01% to 96.99

Top Overnight News

  • Jeff Sessions calls the idea he colluded with Russia a ’detestable lie’
  • Mnuchin says ’optimistic’ tax reform will get done this year
  • China May retail sales 10.7% vs 10.7% est; industrial output 6.5% vs 6.4% est
  • PBOC operations show China is sticking to ’prudent and neutral’ policy: Financial News
  • Australia June Westpac consumer confidence 96.2 vs 98.0 prev; -1.8% m/m
  • API inventories according to people familiar w/data: Crude +2.8m; Cushing -0.8m; Gasoline +1.8m; Distillates -1.5m
  • The squeeze on U.K. households intensified in the three months through April as wage growth lagged further behind inflation.
  • European Central Bank Governing Council member Jens Weidmann highlighted the risks of continuing extraordinarily expansive monetary policy for too long.
  • Nasdaq Knocks Competitor’s Proposal To Change End-of-Day Trading
  • Boeing Pares 50 Defense Executives, Eliminating Management Layer
  • TPG’s Bonderman Quits Uber Board After Cracking a Sexist Joke
  • Biogen Says CFO Leaving to Join Another Biopharma Company
  • Deutsche Post, Ford to Build Electric Delivery Vehicles
  • Calpers Considers Pay Raises for Top Executives in Delicate Move

Asia stocks rose as the region was lifted by the momentum from the upbeat close on Wall St, where the tech sector rebounded from a 2-day sell-off, while S&P 500 and DJIA printed fresh record highs. ASX 200 (+0.9%) outperformed and rose above 5,800 led by advances in healthcare and tech, while gains in the Nikkei 225 (flat) were to a lesser extent as JPY remained steadfast. Shanghai Comp. (-0.8%) and Hang Seng (flat after paring early losses) were initially negative with participants tentative as they awaited the latest Chinese data updates, which upon release failed to spur demand despite Industrial Output beating expectations as Fixed Asset Investments slowed. Finally, 10yr JGBs were flat with the BoJ’s present in the market under a somewhat lukewarm bond buying operation of JPY 750b1n, while the curve was mixed with underperformance in longer-dated bonds.

Top Asian News

  • Singapore Premier Lee’s Brother to Leave City Amid Family Feud
  • China’s Fosun Dangles Rival Bid for Biggest Emerald Miner
  • Former Noble CEO Alireza Sues Founder Elman for $58 Million
  • Time BOJ Talks Exit as Fiscal Risk Grows, Yoshikawa Says
  • China Big-Cap Stocks Sink Most This Year as Anbang Spurs Selling
  • IMF Lifts China Growth Estimate to 6.7% in Second Rise This Year
  • Inter Milan’s Chinese Owner in Talks to Expand Its Soccer Empire

European bourses have traded higher throughout the morning, buoyed by the IT sector, which has seen a recovery following the volume that was seen to the end of last week in the heavyweight US Tech names. Energy trades in the red amid last night’s API build while the latest IEA report stated that global oil supply rose by 585k b/d in May to 96.69mm b/d as both OPEC and non-OPEC countries produced more. Fixed income markets have been rangebound as the week of central banks begins with the FOMC’s anticipated “dovish hike” expected later. Deal related receiving has seen screens push by around 0.75bps in the 7-10yr, while the 2 — 10yr trades at 93.75bps, flatter from the open. Bund auction from the Buba was relatively well received with the line drawing a healthy 1.5 b/c (matching the previous)

Top European News

  • U.K. Squeeze Tightens as Wages Grow at Slowest Pace in Two Years
  • BNP Paribas, SocGen Selling $230 Million Stake in Euronext
  • Weidmann Stresses QE Risks as ECB Begins to Mull Stimulus ExitB
  • May Resumes Talks to Keep Power Amid Calls to Soften Brexit
  • Shell Sees Ability to Manage Risk Giving Edge in Offshore Wind
  • Germany Builds an Election Firewall to Fight Russian Hackers
  • Proposed New U.S. Sanctions On Russia to Tighten Debt Access
  • Hexagon ‘Regularly’ Looks at Opportunities to Boost Value

UK Election Latest: According to reports in the Telegraph, PM May is reportedly signalling that she is not willing to compromise over a hard Brexit and is determined to enter talks in Brussels next week with a threat that Britain is prepared to leave the EU without a future trading deal. However, the Times report that Chancellor Hammond is preparing to lead a battle within the government to soften Brexit by keeping Britain inside the EU customs union. Deal between DUP and Govt could be delayed until next week due to aftermath of Grenfell Tower and diary commitments of both leaders, according to BBC journalist. Delay to deal with DUP means likely postponement of Queens speech; and possibly Brexit talks.

In currencies, there has been some moderate flow to report in a session looking ahead to the FOMC meeting this evening, with traders looking past the 25bp rate hike largely priced in. We need to get a little colour on the rate path ahead, and just as importantly any fresh light on Fed intentions on balance sheet reduction which may alter the rate profile to some degree. EUR/USD and USD/JPY have been pretty balanced in the interim as a result, deviating less than 10-20 ticks from tight ranges seen over the week so far. More data for GBP traders to consider ahead of the BoE meeting tomorrow, and given expectations are that the MPC will maintain their easy stance for a little longer given last week’s events, this morning’s softer than expected wage growth numbers will add fresh concern over the inflation profile. The numbers were a little higher than expected Tuesday, but after today, the impact on household income is back in the frame. Cable tested towards 1.2800 ahead of the release as the market looked to extend the relief aspect from the perception that a softer Brexit is now more likely. Theresa May seems insistent on taking a ‘hard’ stance, which seems a little futile under the circumstances. The spot rate has dipped back into the lower half of the 1.2700’s since, but there seems to be limited conviction inside the broader range, with outliers at 1.3000 higher up and 1.2500-1.2400 lower down.

In commodities, last night’s API build reported went against the expectations in line with a series of recent draw downs, pulling WTI back under USD46.00 again and with Brent moving in tandem and still maintaining a USD2.00-2.50 premium to the former. We saw a 2.75m build vs the 4.6m draw previously, and but in relative terms the reaction has been modest, but with a view to looking for affirmation with the DoE report later today. Adding to support here, and to metals to a modest degree is the fresh weakness in the USD, and in turn, the prospect of a dovish hike this evening has lifted precious metals also as Gold is back around USD1270 or so despite the positive sentiment reflected on Wall Street last night. Silver remains below USD17.00 however. Copper remains just under USD2.60 this morning but is well off the recent lows to suggest a period of consolidation ahead. Aluminium also a touch lower today, but Nickel, Zinc and Lead all sporting modest gains on the day.

Looking at the day ahead, the focus will be on the FOMC decision due later in the day but before that we will get the May CPI number (+2.0% YoY expected; 2.2% previous) and retail sales data (+0.0% mom expected; +0.4% previous). According to DB, the headline retail sales series should slow due to another disappointing month for unit motor vehicle sales; however, sales excluding automobiles should fare a bit better. With respect to the CPI, DB expects energy prices will drag on the headline, likely resulting in a flat month-over-month reading. However he notes that the core CPI series  will receive significant attention given that the last couple of prints have been surprisingly soft – particularly highlighting that the FOMC specifically mentioned the March core CPI decline in its May meeting statement. Thereafter all focus should shift to the FOMC meeting and press conference.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 7.1%
  • 8:30am: US CPI MoM, est. 0.0%, prior 0.2%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.1%
    • CPI YoY, est. 2.0%, prior 2.2%; CPI Ex Food and Energy YoY, est. 1.9%, prior 1.9%
    • CPI Core Index SA, est. 251.6, prior 251.2;
  • 8:30am: Real Avg Weekly Earnings YoY, prior 0.34%;  Real Avg Hourly Earning YoY, prior 0.4%
  • 8:30am: Retail Sales Advance MoM, est. 0.0%, prior 0.4%;  Retail Sales Ex Auto MoM, est. 0.1%, prior 0.3%
  • 10am: Business Inventories, est. -0.2%, prior 0.2%
  • 2pm: FOMC Rate Decision
  • 2:30pm: Federal Reserve Board Chairwoman Janet Yellen holds news conference

DB’s Jim Reid concludes the overnight wrap

Overnight we’ve had the monthly key activity indicators for China released and they were broadly stable. Fixed asset investment (FAI) grew by 8.6% yoy ytd, slightly lower than 8.9% in April. Retail sales and industrial production both grew at the same pace as in April (10.7% and 6.5% respectively). Chinese stocks slipped, led by financial and developer shares, amid investor concern that regulators will place further curbs on insurers’ equity investments. The Shanghai Composite fell 0.6% as property and insurance sectors fell on fears of continued curbs for the former and tighter regulation for the sector. The Hang Seng is -0.3% with the Nikkei 0.1%. Asia is mostly waiting for the Fed.

Turning now to markets yesterday, global equities were broadly higher recovering some of Monday’s losses. Over in the US the S&P 500 and the NASDAQ both saw gains of +0.45% and +0.7% respectively with the S&P 500 and Dow back at record highs. The tech stocks are recovering a little after a difficult 48 hours. European equities saw a similar bounce with the STOXX 600 up by +0.6% while the DAX and FTSE MIB were up by +0.6% and +0.9% on the day. The odd one out in Europe was the FTSE 100 which dropped by -0.2% on the day, likely as sterling (+0.7%) gained for the first time since last week’s elections on slightly more stable politics and firmer data.

Staying in the UK, Gilts sold off yesterday across all maturities (2Y: +5bps; 10Y: +7bps) as UK inflation overshot in May. Data out yesterday saw consumer prices outpace expectations by growing at a four-year high of +2.9% YoY (vs. 2.7% expected; 2.7% previous). Retail prices were also up 3.7% YoY (vs. 3.5% expected; 3.5% previous) although wholesale price inflation remained more in line with expectations as PPI rose by +3.6% YoY (+3.6% previous).

Elsewhere in government bond markets, the US yield curve was broadly unchanged on the day (with only marginal flattening) ahead of the FOMC tomorrow whereas German Bunds saw yields rise across all maturities (2Y: +3bps; 10Y: +2bps). French OATs saw yields tick up from the 2Y point (+2bps) all the way to the 10Y (+1bp) but yields at the very long end fell (30Y -2bps). Italian BTPs saw yields fall across all maturities (2Y -2bps; 10Y -4bps) as the recent more positive political sentiment continues in the country.

Credit markets saw spreads broadly continue to tighten yesterday. In Europe iTraxx Main and Crossover saw spread tighten by -1bp and -3bps respectively, while in the US we saw CDX IG and HY tighten by -1bp and -3bps on the day. Turning to FX markets, we saw the US dollar and the Euro both hold fairly steady on the day. In the commodities space, we saw oil give up decent gains after a late day announcement of a surprise build up of US crude inventories. Metals on the other hand were broadly flat to lower.

Away from the inflation data out of the UK, we had a bit more data out of Europe to get through. We got the June ZEW survey in Germany which was a bit of a mixed bag – the current situation component clocked in above expectations at 88.0 (vs. 85.0 expected; 83.9 previous) while the expectations component deteriorated to 18.6 (vs. 21.7 expected; 20.6 previous). Over in the US we got the May NFIB small business optimism reading which held steady as expected at 104.5, while the May US PPI report saw wholesale prices unchanged on the month (+0.5% previous), although ex food and energy prices rose by more than expected (+0.3% mom vs. +0.1% expected).

Looking at the day ahead now, in Europe we are due to get the final May CPI numbers for Germany (with no revisions expected). We also get UK labour market data where the focus should be on the three month unemployment rate as of April (expected to hold steady at 4.6%) as well as weekly earnings numbers for April and jobless claims data for May. Following that we will also get the Eurozone industrial production readings for April which is expected to head back into positive territory (+0.5% mom vs. -0.1% previous).

Over in the US the focus will be on the FOMC decision due later in the day but before that we will get the May CPI number (+2.0% YoY expected; 2.2% previous) and retail sales data (+0.0% mom expected; +0.4% previous). Our Chief US Economist Joseph Lavorgna notes that the headline retail sales series should slow due to another disappointing month for unit motor vehicle sales; however, sales excluding automobiles should fare a bit better. With respect to the CPI, he expects energy prices will drag on the headline, likely resulting in a flat month-over-month reading. However he notes that the core CPI series  will receive significant attention given that the last couple of prints have been surprisingly soft – particularly highlighting that the FOMC specifically mentioned the March core CPI decline in its May meeting statement. Thereafter all focus should shift to the FOMC meeting and press conference.

 

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 23.07 POINTS OR 0.73%   / /Hang Sang CLOSED UP 23.80 POINTS OR 0.09% The Nikkei closed DOWN 15.23 POINTS OR 0.08%/Australia’s all ordinaires  CLOSED UP 1.04%/Chinese yuan (ONSHORE) closed DOWN at 6.7972/Oil DOWN to 45.96 dollars per barrel for WTI and 48.23 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7927 yuan to the dollar vs 6.7972 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE  STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY WITH THE RISE IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

Chinese yield curve inverts more as liquidity in China seems to disappear

(courtesy zero hedge)

China Says “Don’t Panic” As Yield Curve Inversion Deepens Amid Liquidity Collapse

The curious case of the inverted yield curve in China’s $1.7 trillion bond market is worsening as WSJ notes that an odd combination of seasonally tight funding conditions and economic pessimism pushed long-dated yields well below returns on one-year bonds, the shortest-dated government debt.

10-Year China bond yields fell to 3.55% overnight as the 1-Year yield rose to 3.61% – the most inverted in history, more so than in June 2013, when an unprecedented cash crunch jolted Chinese markets and nearly brought the nation’s financial system to its knees.

 

This inversion is being exacerbated by seasonally tight funding conditions.

June is traditionally a tight time for banks because of regulatory checks, and, as Bloomberg reports, this year, lenders are grappling with an official campaign to reduce the level of borrowing as well.

Wholesale funding costs climbed to the most expensive in history, and the 30-day Shanghai Interbank Offered Rate has jumped 51 basis points this month to the highest level in more than two years.

And this demand for liquidity comes as Chinese banks’ excess reserve ratio, a gauge of liquidity in the financial system, fell to 1.65 percent at the end of March, according to data from the China Banking Regulatory Commission. The index measures the money that lenders park at the PBOC above and beyond the mandatory reserve requirement, usually to draw risk-free interest.
“Major banks don’t have much extra funds, as is shown by the excess reserve data,” analysts at China Minsheng Banking Corp.’s research institute wrote in a June 5 note. Lenders have become increasingly reliant on wholesale funding and central bank loans this year, they said.

As The Wall Street Journal reports, an inverted yield curve defies common understanding that bonds requiring a longer commitment should compensate investors with a higher return. It usually reflects investor pessimism about a country’s long-term growth and inflation prospects.

“But the curve inversion we are seeing right now is one with Chinese characteristics and it’s different from the previous one in the U.S.,” said Deng Haiqing, chief economist at JZ Securities.

 

The current anomaly in the Chinese bond market is partly the result of mild inflation and expectations of a slowing economy, Mr. Deng said. “At the same time, short-term interest rates will likely stay elevated because the authorities will keep borrowing costs high so as to facilitate the deleveraging campaign,” he said.

Notably, it appears officials are concerned at the potential for fallout from this crisis situation.

In an article published Saturday, the central bank’s flagship newspaper, Financial News, said that the severe credit crunch four years ago won’t repeat itself this month because the central bank will keep liquidity conditions “not too loose but also not too tight.”

 

Chinese financial markets tend to be particularly jittery come June due to a seasonal surge of cash demand arising from corporate-tax payments and banks’ need to meet regulatory requirements on capital.

 

On Sunday, the official Xinhua News Agency ran a similar commentary that sought to stabilize markets expectations. “Don’t panic,” it urged investors.

Sounds like exactly the time to ‘panic’.

4. EUROPEAN AFFAIRS

How on earth could this happen; a fire destroyed an apartment building killing 6 and injuring many. Builders of the aprtment complex used flammable material and that caused the fire to spread like wild fire…

(courtesy zero hedge)

“The Fire Destroyed Everything, We Saw Them Dying”: Inferno Engulfs London Apartment Tower; At Least 6 Dead

At least six are dead and more than 64 injured, 20 of them critically, after a catastrophic fire at the 24-story Grenfell Tower in the Kensington area of London. A witness told Reuters she feared not all the residents had escaped the fire. Some were evacuated in their pyjamas.

As Reuters described the inferno, flames licked up the sides of the block in the north Kensington area as 200 firefighters, backed up by 40 fire engines, fought the blaze for hours. Plumes of black and gray smoke billowed high into the air over the British capital hours after the blaze broke out at the Grenfell Tower where several hundred people live.

“I looked through the spy hole and I could see smoke everywhere and the neighbors are all there. There’s a fireman shouting ‘get down the stairs’,” one of the block’s residents, Michael Paramasivan, told BBC radio. “It was an inferno.”

Residents rushed to escape through smoke-filled corridors in the housing block after being woken up by the smell of burning. Some said no fire alarm sounded. Witnesses said they saw trapped residents desperately shouting for help from windows on upper floors as flames enveloped the building.

“As we went past the fourth floor it was completely thick black smoke. As we’ve gone outside I’m looking up at the block and it was just going up. It was like pyrotechnics. It was just unbelievable how quick it was burning.”

London Fire Brigade said the fire engulfed all floors from the second to the top of the block which contained 130 apartments.

“In my 29 years of being a fire fighter, I have never ever seen anything of this scale,” London Fire Brigade Commissioner Dany Cotton told reporters

In a statement released moment ago, Commander Stuart Cundy of the Metropolitan Police said: “I can confirm six fatalities at this time but this figure is likely to rise during what will be a complex recovery operation over a number of days. Many others are receiving medical care.”

Latest statement re fire at . Call Casualty Bureau if concerned about a loved one or if they’ve been found safe 0800 0961 233

In an echo of a fire that engulfed a luxury tower in Dubai that occurred on New ‘ Eve in 2015, early reports suggest that the cladding material used in construction – the outer layer of covering on the building – was flammable, and allowed the flames to quickly spread to every floor of the building.

More than 200 firefighters and dozens of fire trucks and ambulances were called to the scene, according to the Associated Press. Buildings adjacent to the Grenfell Tower were evacuated by police and firefighters over fears that the flames could spread. London Fire Commissioner Dany Cotton calls the fire an “unprecedented incident” and says she has never seen anything on this scale in her 29-year career.

George Clarke, the presenter of “Amazing Spaces,” told Radio 5 Live he was covered in ash even though he was 100 meters (yards) from the scene. He said he saw people waving flashlights from the top levels of the building and saw rescuers “doing an incredible job” trying to get people out.

Authorities fully expect that the number of casualties will rise.

The fire erupted around midnight, and burned for more than nine hours.

At least one group has been warning about potential vulnerabilities at the high-rise. The Grenfell Action Group, a community organization formed to oppose a nearby redevelopment project, has been warning about the risk of fire there since 2013, the AP reported. The group says on its blog that it has raised concerns about testing and maintenance of firefighting equipment and blocked emergency access to the site.

One witness who spoke to AP says she saw a member of the public catch a baby that was dropped from the burning tower block in west London.

Samira Lamrani told Britain’s Press Association she saw a woman try to save the baby by dropping it from a window “on the ninth or 10th floor.”

She says “people were starting to appear at the windows, frantically banging and screaming. The windows were slightly ajar, a woman was gesturing that she was about to throw her baby and if somebody could catch her baby. “Somebody did, a gentleman ran forward and managed to grab the baby.”

London Mayor Sadiq Khan says questions need to be answered about tower blocks around the city following a devastating fire. Khan had been called to respond after reports that people had been advised in advance to remain in their flats in the event of fire. Khan says in a statement “there will be a great many questions over the coming days as to the cause of this tragedy and I want to reassure Londoners that we will get all the answers.”

The Guardian reported that residents repeatedly warned about the fire risk.

Michael Paramasivan, 37, a builder, lives on the seventh floor of the tower and managed to escape along with two roommates who escaped with him.

“I’ve lost absolutely everything,” he told the Guardian. “The most chilling moment was when I suddenly realised it was a fire.

“Between 1am and 1.30am, I was dozing in and out of sleep. I then smelled something. I got up and looked around to see if it was an electrical fault but there was nothing. Then I looked through the spyhole. There was smoke and people running past. We just ran straight out down the stairs.”

Paramasivan said the material on the outside of the building went up in flames rapidly. “It just went up like that,” he said, gesturing wildly. “There’s no fire alarms in the corridors, no sprinklers, nothing. There’s only smoke detectors in the flat and they didn’t go off.”

A live feed from the scene courtesy of RT

end

my goodness! the EU sues Poland, Hungary and the Czeck Republic for not accepting refugees

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

CANADA/SEARS

The bricks and mortar retail apocalypse moves north into Canada as Sears Canada admits that it’s future is dim

(courtesy zero hedge)

‘Retail Apocalypse’ Moves North As Sears Canada Admits Its Future Is In “Serious Doubt”

The retail apocalypse that has caused the closing of thousands of department stores in the US – not to mention the evaporation of tens of billions of dollars in market capitalization – is moving north: Sears Canada revealed Tuesday that it’s exploring a sale or a possible restructuring as it draws nearer to bankruptcy. In an admission that shouldn’t come as a surprise to anyone who has ever shopped online, Sears Canada said it has “significant doubt” that it can continue to operate for much longer. Meanwhile, its American counterpart announced that it would lay off 400 employees as part of an initiative to produce $1.25 billion in savings after admitting back in March that the future of its business is also in serious jeopardy, as Fortune reported.

Sears Canada’s shares slid as much as 40% on the news.

“The company continues to face a very challenging environment with recurring operating losses and negative cash flows from operating activities in the last five fiscal years, with net losses beginning in 2014,” the company said, according to the Financial Post.

Sales at Sears Canada have fallen sharply since it was spun off from its equally-troubled US-based parent in 2012; the slump coincides with a broader shift in consumer preferences away from brick and mortar retailers and toward e-commerce.

Shares of some of the biggest department and big-box stores have seen double-digit declines this year against the backdrop of a broader market rally. Macy’s, J.C. Penney, Sears and Dick’s Sporting Goods. Meanwhile, Amazon briefly climbed above $1,000.

Department stores were slow to develop strong e-commerce platforms, leaving Amazon to dominate a segment of the market that’s seeing double-digit annual growth. Amazon’s share of the US e-commerce market rose to 43% this year, and its shares briefly climbed above the $1,000 threshold. Ignoring the fact that corporate mismanagement has more or less defined the Sears brand in recent years, Sears Holdings PR team assures readers that – in the grand scheme of things – the cuts to its workforce really aren’t all that significant.

“While the total number of people who are directly affected represents a small fraction of our total headcount, we are conscious of the impact on individual employees,” Sears said.

Those workers who are being handed pink slips can hopefully find solace knowing that the retailer has promised that it will continue to take “all necessary action” to achieve profitability – short of cutting the pay of Eddie Lambert, the company’s CEO, chairman and largest shareholder.

Lambert, as USA Today reported back in March, has extracted “significant value” from the company in recent months, and stands to profit further if the company goes belly up.

Although in a sense, Lambert has already taken a pay cut: Sears’ stock has shed more than 41% over the past 12 months, and is down 25% year to date as well. However, Lambert has managed to protect his investment in Sears – or what’s left of it – from the seemingly inevitable bankruptcy that stands to wipe out the other shareholders – American retirees, to the extent that Vanguard and State Street both own large stakes.

If Sears goes bankrupt, Lambert loses his equity stake, but he remains the company’s principal creditor. Already, Lampert has effectively laid claim to enormous amounts of the company’s assets through loans he’s made. His hedge fund, ESL Investments, also owns large stakes in Lands’ End and a Real Estate Investment Trust that gained control of some of Sears’ best properties in a $2.8 billion deal back in 2015, then leased them back to the company. Lambert owns a stake in that vehicle, too.

In other words, while Sears was floundering, Lambert was busy shielding himself from the worst of the fallout. His former employees will need to make due with the public safety net.

end

7. OIL ISSUES

Oil drops after another increase in crude and gasoline inventories

(courtesy zerohedge)

WTI/RBOB Slump After Another Shocking Crude & Gasoline Inventory Build

Following last week’s surprising builds (which sent WTI/RBOB prices lower), API reported another big crude build (+2.75mm vs an expected draw of 2.45mm) and surprise gasoline build. Crude and Gasoline futures prices immediately gave up the day’s gains.

 

API

  • Crude +2.75mm (-2.45mm exp)
  • Cushing -833k
  • Gasoline +1.794mm (-1.15mm exp)
  • Distillates -1.451mm

Last week’s surprise builds in crude, gasoline, and distillates upset the OPEC narrative of movement towards rebalancing and tonight’s API data further weakens that case…

 

WTI topped $46 in the day session ahead of the API print, but as the data hit, both saw significant selling pressure…

 

As Bloomberg noted prior to the data, “people feel like the inventory report should be at least moderately bullish, but they don’t want to bet the farm on that,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, says by phone. “It is the time of year when you expect inventory draws and high gasoline demand. Gasoline demand last week was not robust to put it lightly.”

end

Then oil moves into the 44 dollar handle

(courtesy zero hedge)

8. EMERGING MARKET

More Anti Government protests in Venezuela

(courtesy zero hedge)

Dramatic Images From 3 Months Of Deadly Anti-Government Protests In Venezuela

Violence in Venezuela, South America’s crumbling socialists paradise, is intensifying as street clashes between anti-government protesters and government forces enter their third month. At least 67 people have died since the demonstrations began, including 18-year-old Armando Canizales, who the New York Times described as a “success story of Venezuela’s state-run music program for the poor.”

As the country’s economic and humanitarian crises worsen, President Nicolas Maduro is taking steps to consolidate power within the presidency. Maduro is now calling for the formation of a new “constituent assembly” that the country’s pro-government electoral council will vote on in July that will allow him to rewrite the country’s constitution before he faces an election in the fall. These decisions effectively guarantee that the violence will continue, as the opposition cries for his ouster.

The economic troubles – exacerbated by (but not initiated by) the drop in oil prices that began during the summer of 2014 – have caused inflation to soar above 10,000% as Venezuela’s currency, the bolivar, trades at a black-market rate of nearly 8,000 to the dollar, according to dolartoday.com. Meanwhile, the central bank’s foreign currency reserves have dwindled to $10.6 billion.

Venezuela, a member of OPEC, has the largest oil reserves of any nation on Earth. But OPEC’s fragile production cuts have failed to push the price of crude above $50 a barrel. On Tuesday, it announced that an unexpected surge in production by Iraq raised the bloc’s total production in May, validating the market’s doubts about an agreement between the bloc and a handful of other oil-exporting countries to extend a production cut that began in December. With global oil supplies near record highs, the hoped-for recovery in oil prices – key to alleviating Venezuela’s acute financial stress – is a long way off.

Photos from the daily clashes depict a level of violence that has long since become normal.

An opposition demonstrator wears a gas mask in a clash with police in Caracas.

Riot police officers confront opposition activists during a demonstration in Caracas.

Employees of the administration headquarters of the Supreme Court of Justice try to put out the fire of a burning vehicle.

Deputy of the opposition Carlos Paparoni is hit by jets of water during riots at a march to the state Ombudsman’s office.

Venezuelan opposition activists launch a firework with a tube during clashes with riot police.

 

A demonstrator throws a Molotov cocktail during a rally.

 

A demonstrator shows an injury caused by a rubber bullet.

 

Demonstrators look on as motorcycles belonging to riot security forces are set on fire.

See more images here (courtesy of The Atlantic).

end

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

Euro/USA   1.1203 DOWN .0006/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 110.28 UP 0.217(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 1.2731 DOWN .0027 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3217 DOWN .0024 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 6 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1203; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  DOWN 23.07 POINTS OR 0.75%     / Hang Sang  CLOSED UP 23.80 POINTS OR 0.09% /AUSTRALIA  CLOSED UP 1.04% / 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 WEDNESDAY morning CLOSED DOWN 15.23 POINTS OR 0.08%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 23.80 POINTS OR 0.09%  / SHANGHAI CLOSED DOWN 23.07 POINTS OR 0.73%   /Australia BOURSE CLOSED UP 1.04% /Nikkei (Japan)CLOSED DOWN 15.23 POINTS OR 0.08%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1266.95

silver:$16.95

Early WEDNESDAY morning USA 10 year bond yield: 2.197% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.852, DOWN 1  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 97.05 UP 8  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 2.849%  DOWN 10 in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.07%  UP 1/2  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.382%  DOWN 5 IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.939 DOWN 5   POINTS  in basis point yield from TUESDAY 

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

GERMAN 10 YR BOND YIELD: +.226% DOWN 4 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1277 UP .0068 (Euro UP 68 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.14 DOWN  0.920 (Yen UP 92 basis points/ 

Great Britain/USA 1.2804 UP 56 ( POUND UP 56 basis points) 

USA/Canada 1.3211 DOWN .0030 (Canadian dollar UP 30 basis points AS OIL FELL TO $44.65

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This afternoon, the Euro was UP by 68 basis points to trade at 1.1277

The Yen ROSE to 109.14 for a GAIN of 92  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 56  basis points, trading at 1.2804/ 

The Canadian dollar ROSE by 30 basis points to 1.3211,  WITH WTI OIL FALLING TO :  $44.65

The USA/Yuan closed at 6.7917/
the 10 yr Japanese bond yield closed at +.07% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 9 IN basis points from TUESDAY at 2.117% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.771  DOWN 9  in basis points on the day /

Your closing USA dollar index, 96.45 DOWN 53 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 26.04 POINTS OR 0.35%
German Dax :CLOSED UP 106.30 POINTS OR 0.96%
Paris Cac  CLOSED DOWN 18.45 POINTS OR 0.35% 
Spain IBEX CLOSED  DOWN  106.30 POINTS OR 0.96%

Italian MIB: CLOSED  DOWN 128.23 POINTS/OR 0.61%

The Dow closed UP 46.09 OR 0.22%

NASDAQ WAS closed DOWN 25.48 POINTS OR 0.41%  4.00 PM EST
WTI Oil price;  44.65 at 1:00 pm; 

Brent Oil: 46.90 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.19 DOWN 19/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.224%  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:$44.73

BRENT: $46.99

USA 10 YR BOND YIELD: 2.123%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.767%

EURO/USA DOLLAR CROSS:  1.1216 UP .0007

USA/JAPANESE YEN:109.56  DOWN 0.509

USA DOLLAR INDEX: 96.92  DOWN 6  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2751 : UP 3 POINTS FROM last NIGHT  

Canadian dollar: 1.3228 UP 12  BASIS pts 

German 10 yr bond yield at 5 pm: +0.224%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Banks Best, Tech Trounced As ‘Hawkish’ Fed Flattens Yield Curve Most Since Brexit

Economic data at 2-year lows, rate hikes, and hawkish outlook…  yield curve crash, FANG (growth) plunge, and Gold down…

 

First things first – today’s macro data was an utter disaster and smashed Citi Surprise Index to its lowest in 2 years...

 

The post-FOMC fallout shows financials outperforming and tech tanking… Gold was the worst performer…

 

The Dow managed to close green today (thanks to GS, HD, and TRV)…

 

VIX broke above 11 early on but was crushed back below to ensure a ramp as ETFs rebalanced…

 

Bad data sent traders back into the ‘buy growth, sell value’ mode but then when The Fed statement hit ‘growth’ was dumped… but once Yellen started wrapping up and promised (once again) that disinflation was transitory, then growth and value ripped…

 

FANG Stocks were slammed (after touching the 61.8% retracement of the Friday/Monday plunge)

 

Treasury yields tumbled across the curve…

 

The yield curve (2s10s) collapsed to 79bps…

Almost at its flattest since 2007…

 

And 2s30s crashed by the most since Brexit…

Yeah this happened…

 

The Dollar Index had quite a day – big plunge on terrible data early on then raging bull as Yellen began to speak…

 

Gold slipped after The Fed (as per script) retracing the gains after the early dismal data dump…

 

Silver’s morning ramp tagged its 50DMA and then dumped on FOMC…

 

WTI and RBOB plunged after another DOE report showed surprise inventory builds (and weak demand)…

 

Finally, there’s this… Get back to work Mrs.Yellen…

 

 

END

Today’s early trading right after CPI and retail sales were announced:

(ZEROHEDGE)

“Brutal Price Action” – Bonds & Bullion Surge, Dollar Dumps After Dismal Data Deluge

Disappointing inflation and retail sales data has sparked a surge in safe-haven demand for bonds and bullion, and left stocks confused this morning ahead of The Fed statement and press conference this afternoon…

A disastrous morning for US macro data – and yet we are assured by The Fed that a hike is overdue and everything is awesome…

 

It’s not!

 

Gold and Bonds are well bid…

 

Pushing 10Y yield to its lowest since Nov 10th…

 

And Nasdaq jumped on the dovish-inspiring data dump…

 

USD has been hit with a double whammy, with both retail sales and inflation firmly weak. Price action has been rather brutal, most notably in fixed income. The whole treasuries curve has been hit, with US 2y yields slipping from 1.35 to the 1.31 handle. US 5y yields have similarly slipped to just 1.723%. The spillover has been felt in Europe too.

The move has been echoed in FX. USDJPY is down 70 pips to 109.60 while EURUSD is up almost 50 pips to 1.1250. USDCHF has entirely retraced earlier gains and G10 commodity currencies have found a further bid – AUDUSD is now at 0.7600 while NZDUSD trades at 0.7273. NOK and SEK are also finding bids here. Even GBP is managing to pick itself up, all things considered.

USDJPY at 2mo lows…

 

The Dollar Index has crashed to the lowest since October 3rd… Today’s drop is the biggest since The Fed hiked rates in March.

This price action might continue into the FOMC – the weakness of the data is hard to argue with.

 

end

 

 

Jeff Sessions did a terrific job yesterday deflecting collusion accusations and calling them appalling and a detestable lie. That did not stop the democrats trying to create the impression that Trump et al allied with Russian operatives  to steal the USA election.

(courtesy zero hedge)

All eyes were on the CPI report and it was hoped that inflation would rip higher and instead it dropped .1%.  This will no doubt cause the Fed to stop raising rates as the economy is coming to a complete halt

(courtesy zerohedge)

Consumer Price Growth Plunges To 27-Month Lows As Shelter Inflation Rolls Over

Following a hotter than expected Core PPI, all eyes were on today’s Consumer Price data (as RBC noted is more important for The Fed than PPI) which gravely disappointed the inflation-hoping crowd. Core PPI printed +1.7% (worse than expected 1.9%) and the weakest growth since Feb 2015.

May 2014 was the last time that Core PPI (Ex Food and Energy) was this high…With goods prices dropping but services rising.

 

But Consumer Price growth is plunging…Headline CPI dropped 0.1% MoM in May

Headline CPI slowed from 2.2% YoY to 1.9% YoY (also missing expectations).

There is a silver lining for Americans though (which The Fed will hate)… Shelter inflation is rolling over…

 

As RBC warned overnight, if CPI comes in ‘soft,’ will crystalize “slow-flation” and may see consensus begin shifting to a Fed ‘one and done over balance of 2017’ view.

The inflation disappointment would see rates again grind lower, while equities trade will revert – back to the prior YTD status quo ‘risk barbell’ trade: long ‘Secular Growth’ and ‘Defensives,’ short ‘Cyclicals’ – as if Thursday, Friday and Monday didn’t happen

 

 

end

 

 

The first data point  (above) was lower than expected inflation.  Then they released another important data point: retail sales and it tumbled .3% month over month the biggest drop since Jan 2016.  The USA economy is grinding to a halt.

(courtesy zerohedge)

Retail Sales Tumble Most Since January 2016 As Gasoline, Electronics Sales Slump

This is not supposed to happen…

Headline retail sales tumbled 0.3% MoM in May, the biggest drop since January 2016 (and all the weather-related malarkey that was blamed on).

Core retail sales also dropped the same…

Retail sales less autos fell 0.3% in May, notably worse than the expectation of a 0.1% rise.

  • Retail sales forecast range -0.3% to 0.3% from 79 economists surveyed
  • Retail sales rose 0.4% in April
  • Retail sales fell to $473.808b in May vs $475.009b in April
  • Retail sales ex-auto dealers, building materials and gasoline stations unchanged in May
  • Retail sales ‘control group’ unchanged m/m in May

The breakdown show a big tumble in Electronics and appliance stores, along with gasoline prices.

 

This is the weakest YoY retail sales growth since the election and continues to signal that despite record high stock market indices, all is not at all well in ‘Murica.

(courtesy zero hedge)

Q2 GDP In Trouble As Business Inventories Tumble In April

Adding further pain to Q2 GDP hope, April Business Inventories tumbled 0.2% MoM in April (following Wholesale Inventories decline). This is the biggest drop since November 2015.

  • Manufacturers inventories rose 0.1% m/m in April after rising 0.2% prior month
  • Wholesalers inventories fell 0.5% m/m in April after rising 0.1% prior month
  • Retailers inventories fell 0.2% m/m in April after rising 0.2% prior month

The November spike in inventories is now long gone…

 

Inventories-to-Sales stagnated in April but remain in a recession-signalling mode…

end

 

The auto sector is in complete shambles as now the big auto companies extend plant shutdowns because of increasing inventory.  The

subprime auto loans together with lower used car prices are causing havoc to the industry

(courtesy zero hedge)

 

GM Extends Plant Shutdowns As Toxic Trifecta For Auto Loans Fuels Carmageddon

In yet another unsurprising headline, The Wall Street Journal reports that GM will extend the typical summer shutdown at certain U.S. factories to deal with slumping sales and bloated inventory, a sign the industry’s hot streak is grinding to a halt.

The No. 1 U.S. auto maker in terms of sales will idle its Chevrolet Malibu factory near Kansas City for five weeks starting in late June, Vicky Hale, president of the United Auto Workers Local 31, said. Job cuts will be needed if GM is forced to slow assembly-line speeds when those workers return.

 

Additional downtime is also slated in Lordstown, Ohio, a small-car factory already stung by deep layoffs related to a pullback in demand for passenger cars. A GM spokesman declined to comment on specific plans.

 

GM enters the summer with a glut of unsold inventory after running production lines at relatively high rates to prepare for factory downtime related to plant upgrades. WardsAuto.com estimates GM’s production increased 2.9% over the first four months of 2017, even as the broader industry pulled back.

 

As a result, GM’s inventory spiked 43.5% at end of May compared with the prior year. It has nearly 1 million vehicles sitting on dealer lots, WardsAuto.com estimates, representing 101 days’ worth of supply, or 23.4% of total industry stock.

Here is what GM’s auto inventory since emergency from bankruptcy looks like.

Will this time the GM inventory cycle indicator be different? With widespread operating shutdowns planned in the coming weeks, it better be, or else something is far more broken with the US consumer than even the paltry 0.7% GDP would suggest.

And as WolfStreet.com’s Wold Richter explains below, it is not about to get any better.

Subprime Auto-Loan Backed Securities from 2015 on track to be Worst Ever.

Institutional investors that manage other people’s money grabbed subprime auto-loan backed securities because of their slightly higher yields. These bonds are backed by subprime auto loans that have been sliced and diced and repackaged and stamped with high credit ratings. But those issued in 2015 may end up the worst performing ever in the history of auto-loan securitizations, Fitch warned.

And then there are those issued in 2016. They haven’t had time to curdle.

The 2015 vintage that Fitch rates is now experiencing cumulative net losses projected to reach 15%, exceeding the peak loss rates during the Financial Crisis.

Fitch Ratings’ Auto Loan Annualized Net Loss Index shows the strong seasonality, with either May or June forming the low point each year and the winter months forming the peaks. A terrible trend took off in 2014. The winter peak last year occurred in November with a net annualized loss of 10.9%. The latest data point is for April, at 7.8%, up from 7.4% last year. The index peaked in February 2009 at 13.1%. The trend is pointing that way (via Fitch Ratings ABS):

Fitch analysts Hylton Heard and John Bella Jr. wrote in the report, cited by Bloomberg:

The 2015 vintage has been prone to high loss severity from a weaker wholesale market and little-to-no equity in loan contracts at default due to extended-term lending, a trend which was not as apparent in the recessionary vintages.

So let’s see.

Negative equity hits all-time record. The average negative equity in vehicles that were traded in for new vehicles during Q1 2017 has reached $5,195 per trade, the highest ever, according to Edmunds data, cited by AutoWeek. The percentage of trade-ins with negative equity has surged to 32.8%, also the highest ever! Average negative equity exceeded $4,000 in Q3 2013 and hasn’t looked back.

This negative equity in the trade is then rolled into the new loan, thus increasing the negative equity in that vehicle from the first second, which sends net losses soaring in the event of default.

Why is negative equity such a growing phenomenon? Because of the toxic trifecta in the auto industry, now happening.

Lengthening loan terms. The average new-vehicle loan term in Q1 2017 reached a record of 69 months, up from 64 months in 2011, according to Edmunds data. Terms between 73 and 84 months (7 years!) accounted for a record of 32.1% of all new-vehicle loans in Q4 2016, up from 29% a year earlier. Among used-vehicle loans, they accounted for 18%, up from 16% a year earlier. The value of a new vehicle declines sharply over the first few years. But the loan doesn’t amortize at this pace and doesn’t catch up with the dropping value of the vehicle until the later stages of the loan. As many consumers like to get a new vehicle every few years, these longer terms add to the negative equity at trade-in time.

 

Rising transaction prices. Vehicle prices have surged in general. And consumers buy more expensive models because low interest rates and longer loan terms make this possible by keeping the payments down.

 

Falling used-vehicle values. The seasonally adjusted Used Vehicle Price Index by J.D. Power Valuation Services (formerly NADA Used Car Guide) in May has declined for the 10th month in a row, now down over 13% from its peak in mid-2014 and at the lowest level since September 2010 [Used Vehicle Trade-in Values Sink, Hit New Vehicle Sales].

These factors, along with aggressive lending, propelled new vehicle sales to new records in 2015 and (barely) in 2016. But now the blowback has started. The net effect going forward translates into greater losses for lenders and investors in case of default after the car is repossessed and sold, and ultimately – now happening – lower sales for automakers.

Fitch isn’t alone in warning about soaring defaults and net losses of subprime auto-loan backed securities. Moody’s also warned. And S&P Global Ratings pointed out recently that net losses even on prime auto-loan backed securities have risen at the fastest pace since 2008.

For now, downgrades of subprime auto-loan backed securities are still modest. Ratings agencies cite structural enhancements, such as the slices that take the first loss and that have been retained by the lender. Investors that bought the highly rated slices might be spared initial losses. If losses continue to surge, even highly rated slices are starting to take losses.

But auto lenders that sold the subprime securities are starting to get hit. Fitch warns particularly about those that have sprung up since the Financial Crisis and have specialized in subprime auto loans, using looser underwriting standards. Lending by these weakly capitalized lenders has grown at magnificent rates in recent years. Some of those lenders have specialized in “deep-subprime” auto loans. And those lenders might be at risk.

And at least one of them, Santander Consumer USA, the top subprime auto lender in the US, verified income on only 8% of the loans, according to Moody’s. So here we go again. Read… Liar Loans Dog Subprime Auto-Loan-Backed Securities

 

Not a good sign for Q2 GDP.

end

 

Last night in anticipation of a dovish rate hike!

 

The scenario last night was for today’s hike being a dovish hike.  Now that the Fed received a slap in the face with a drop in inflation and also a drop in inflation expectations we will probably see only one hike and it is done!

 

(courtesy zero hedge)

 

“The Day Of The Dovish Hike?”

The paradox continues: on one hand stocks continue to anticipate a reflating economy, with S&P futures hitting a new all time high overnight; on the other hand, the weaker dollar and especially Treasury yields are increasingly worried that today’s rate hike, the 4th in the past decade, will be another policy error, leading to more curve flattening and eventually a deflationary outcome.

And while there is little doubt Yellen will hike today as Goldman, and consensus, expect, the question is what the future pace of rate hikes will look like and whether the recent disappointing CPI prints will mean and “one and done” for the rest of the year from the Fed. While there is some possibility of an unexpectedly hawkish statement from the FOMC, especially if the Fed is worried about an asset price bubble, it is far more likely that today’s announcement will be yet another “dovish hike”, which is what SocGen’s Kit Juckes previews in his latest overnight note.

Here is SocGen withThe day of the dovish hike?”

At 2.21%, US 10year yields are firmly in the low end of the 2017 range, while at 1.35%, 2s are very close to the highs. The Treasury market is convinced the Fed will hike today, but not convinced about the longer term. Yesterday’s NFIB small business survey was just one of the data points to underline why the market is so perplexed. The response on ‘jobs hard to fill’ is at 34%, the highest level since December 2000. But we can all see the lack of wage growth, which used, once upon a time, to correlate pretty well with this survey. Hence the call from the likes of ex-Minneapolis Fed head Naranya Kocherlakota for the Fed’s inflation target to be raised; at the same time as 10year breakeven inflation rates on TIIPs fall to 1.78%, their lowest level since 8 November.

 

 

The FOMC’s response is likely to be a ‘dovish hike’ and that’s priced in, to a large degree. Uncertain about how much slack there is in the economy or the labour market, FOCM members are inclined to want to ‘normalise’ rates while they have the chance, but they seem very pragmatic about the longer-term outlook.

 

So more likely to raise rates now, without overlay hawkish commentary, and then lay the groundwork for another hike in the autumn if markets don’t take fright in the weeks ahead. That could leave yields in their range, the hunt for carry intact. Obviously, since this is to some degree what the market expects, the converse is also true – a ‘hawkish hike’ would come as a big surprise and unsettle higher-yielding currencies.

 

 

end

And she delivered a “dovish hike”

(courtesy zero hedge)

 

 

FOMC Delivers “Dovish Hike”, Lays Out Plans For Balance-Sheet Unwind

In the most well-telegraphed, ‘never in doubt, no matter how bad the economic data is’ FOMC Statement ever, The Fed hiked rates by 25bps and maintained its rate-hike trajectory forecast, shrugging off the collapse in economic data (including weak inflation). The market was anticipating a so-called ‘dovish hike’ and The Fed delivered to some extent by saying it is “monitoring” inflation (and dropped the word ‘transitory’) and also offered more detailed plans of the balance sheet unwind (beginning this year).

Interesting hedgeing against the chance of a “no rate hike” was “aggressive” today in Fed Funds Futures.

Here are the headlines.

  • *FED RAISES RATES, MAINTAINS FORECAST FOR ONE MORE HIKE IN 2017
  • *FED SAYS IT’S `MONITORING INFLATION DEVELOPMENTS CLOSELY’
  • *FED SAYS KASHKARI DISSENTS IN FAVOR OF KEEPING RATES ON HOLD
  • *FED SAYS IT EXPECTS TO START SHRINKING BALANCE SHEET THIS YEAR
  • *FED MAINTAINS BALANCE SHEET REINVESTMENT, LAYS OUT UNWIND PLAN

Key highlights from the Fed’s forecast, first the change in dots, which dipped on the long-end:

  • 2017 1.375% (range 1.125% to 1.625%); prior 1.375%
  • 2018 2.125% (range 1.125% to 3.125%); prior 2.125%
  • 2019 2.938% (range 1.125% to 4.125%); prior 3.000%

On inflation: the key lines:

  • “Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term.”
  • “Near term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

The FOMC’s inflation forecast dropped by 0.2%:

  • Median 2017 core pce inflation 1.7% vs 1.9% march est.
  • Median 2017 core pce inflation 1.7% vs 1.9% march est.

On the Fed Funds rate:

  • Median federal funds est. 1.4% end-2017, unch vs march
  • Median federal funds est. 2.1% end-2018, unch vs march
  • Median federal funds est. 2.9% end-2019 vs 3% in march

The other forecasts:

  • Longer-run median unemployment rate 4.6% compares to previous forecast of 4.7% at March 15, 2017 meeting
    • 2017 median jobless rate at 4.3% vs 4.5%
    • 2018 median jobless rate at 4.2% vs 4.5%
    • 2019 median jobless rate at 4.2% vs 4.5%
  • Longer-run real GDP median projection of 1.8% compares to previous forecast of 1.8%
    • 2017 median GDP growth 2.2% vs 2.1%
    • 2018 median GDP growth 2.1% vs 2.1%
    • 2019 median GDP growth 1.9% vs 1.9%
  • Longer run PCE inflation median at 2.0% compares to previous forecast of 2.0%
    • 2017 median PCE inflation 1.6% vs 1.9%
    • 2018 median PCE inflation 2.0% vs 2.0%
    • 2019 median PCE inflation 2.0% vs 2.0%
    • 2017 median core PCE inflation 1.7% vs 1.9%
    • 2018 median core PCE inflation 2.0% vs 2.0%
    • 2019 median core PCE inflation 2.0% vs 2.0%

Some other observations:

  • Fed says it’s ‘monitoring inflation developments closely’
  • Fed raises target range for federal funds rate to 1%-1.25%
  • Fed: labor mkt continued to strengthen, job gains moderated
  • Fed: economic activity rising moderately, spending picked up
  • Fed says balance-sheet rolloff caps would start at $10b/month

*  *  *

Here is Neil Dutta of Renaissance Macro explaining what he think is the highlight:

The main development in the statement is that they aremonitoring inflation developments closely” in the second paragraph. In our view, this means they are not going to follow through on hikes if core inflation continues to disappoint.

* * *

Meanwhile, the fallacy of Fed data-dependence is exposed…

And the yield curve has collapsed in policy-error-style…

As of last night, the market was pricing 1.48 rate hikes in 2017 (including today), heading into the print, it was anticipating just 1.28 rate hikes (including today) following the dismal data this morning…

*  *  *

Full FOMC Statement redline below…

 

end

And now the unwinding of bond purchases.  there is no way that they will be able to do thus unless they collapse the economy

(courtesy zero hedge)

The Fed’s Balance Sheet Reduction Schedule, In Yellen’s Words

Tyler Durden's picture

Earlier, we laid out how, in theory, the Fed’s balance sheet unwind plan will work according to the FOMC: the Fed will trim reinvestments in TSYs at a rate of $6Bn/month initially, and MBS at $4Bn/month, or a total of $10bn/month, and will increase the reinvestment caps in steps of $10bn ($6TSY+$4MBS) at 3 month intervals over 12 months until it reaches a total 50bn per month.

Shortly thereafter Yellen confirmed that the Fed expects to implement a balance sheet reduction plan this year; not just announce it, suggesting either a September or December taper start, unless something “changes” of course.

Here is the explanation, straight from Yellen’s mouth, as laid out in the press conference following the Fed announcement:

“Initially, these caps will be set at relatively low levels, $6 billion per month for treasuries and $4 billion per month for agencies. So any proceeds exceeding those amounts would be reinvested. These caps will gradually rise over the course of a year to maximums of $30 billion per month for treasuries and $20 billion per month for agency securities, and will remain in place through the normalization process.”

The Fed believes that with this approach to limit the volume of securities, “private investors will have to absorb as we reduced our holdings, the caps should guard against outsize moves in interest rates and other potential market strains.”

“I can’t tell you what the longer run normal level of reserve balances will be because that will depend on the committee’s eventual decisions about how to implement monetary policy most efficiently and effectively in the longer run, as well as a number of as-yet unknown elements, including the banking system’s future demand for reserves, and various factors that may affect the daily supply of reserves.”

It is worth noting that, in the Q&A, Yellen also said that the Fed’s “normalization” plan is contingent on the economy and other factors, so it will most likely change.

In the first question, a reporter asked “The principles you released today say the balance sheet wind down should commence once interest rate normalization is well under way. Would this latest rate increase, with this increase, do you believe normalization is now well under way?”

Yellen answers: “So that is something that we have said for some time, and I’ve previously, when I’ve been asked what well under way means, said that I don’t want to define that in purely quantitative terms, but rather in qualitative terms. So there is no specific level of the federal funds rate that means we are well under way.”

The message: the Fed is not yet ready to signal a specific time this year when implementation might begin

end

 

The mouthpiece for the Fed further adds to the puzzle:

  1. begin to runoff bond expiries in September
  2.  rate hike in December

 

(courtesy Goldman Sachs/zerohedge)

 

 

Goldman’s Take On The FOMC: Taper In September, Next Rate Hike In December

When in doubt about the Fed’s policies, or their implementation, always go right to the source of Fed ideas, Goldman Sachs, which moments ago published its post-mortem on today’s FOMC statement, noting that the “post-meeting statement included modest upgrades to its description of growth but acknowledged the moderation in job growth and the decline in inflation, and it continued to describe risks to the outlook as “roughly balanced.”

The statement noted that the Committee expects to begin the process of balance sheet normalization this year, and an updated set of normalization principles clarified the series of caps. Taken together, Goldman continues to expect the announcement of balance sheet normalization in September and a return to rate hikes in December.

Main points from the report:

  1. The FOMC raised the funds rate target range to 1-1.25%, as widely expected. The median dot in the Summary of Economic Projections continued to show three hikes in both 2017 and 2018. The post-meeting statement included modest upgrades to its description of growth, continued to note the decline in the unemployment rate, but acknowledged the moderation in job growth and the decline in inflation. However, the statement continued to note that core inflation is running only “somewhat” below 2%, a more hawkish reference than we had expected. The statement continued to describe risks to the outlook as “roughly balanced.” Minneapolis Fed President Neel Kashkari dissented against the hike, in line with our expectations.
  2. The statement noted that the committee expects to begin the process of balance sheet normalization “this year.” The addenda to the statement provided additional guidance on the potential size of the “caps” for treasuries and mortgage backed securities, which could rise from initial levels of $6bn and $4bn, respectively, to peak caps of $30bn and $20bn. We think the language adopted – which dropped the condition “until the normalization of the level of the federal funds rate is well under way” included in the May minutes and the inclusion of specific dollar figures – make the start of balance sheet runoff in September more likely.
  3. The changes to the Summary of Economic Projections were a touch more hawkish than our expectations following the soft May CPI report. GDP growth in 2017 was upgraded a tenth to 2.2%, and the path for the unemployment rate was lowered significantly to 4.3% this year and 4.2% in 2018-2019, and NAIRU came down a tenth to 4.6%. Core PCE inflation for this year was lowered to 1.7% but was unchanged at 2.0% for next year. The funds rate projections were relatively stable, but the median and mode for 2019 declined by 0.1pp and 0.2pp respectively. Taken together, we continue to expect the announcement of balance sheet normalization in September and a return to rate hikes in December.

 

 

 

This is not good: early this morning shots fired in Alexandria Virginia where Majority Whip Scalise was hit.

3 commentaries

(courtesy zero hedge)

Multiple People Shot, Including House Majority Whip Scalise, At Congressional Baseball Practice

Update 8:

President
Trump has just confirmed that Hodgkinson has died from wounds incurred
during his shootout with the Capitol Police this morning.

 

Update 7:

The shooter has been identified at 66 year old James Hodgkinson of Belleville, Ill.

Live video now: Police give update on shooting at GOP baseball practice http://wapo.st/2t1ACxJ 

BREAKING: Shooter named as James T. Hodgkinson, 66, of Belleville, Ill. http://wapo.st/2t1V2qh 

Photo published for Shooter identified by law enforcement officials James T. Hodgkinson

Shooter identified by law enforcement officials James T. Hodgkinson

The shooter at the GOP congressional baseball practice this morning is James T. Hodgkinson of Belleville, Ill., according to multiple law enforcement sources. Hodgkinson, 66, owns a home inspection…

washingtonpost.com

 

Update 6:

Virginia Governor Terry McAuliffe and law enforcement officials held a press briefing which began around 10:30AM EST.  Among other things, officers confirmed that the 2 U.S. Capitol Police Officers who were shot this morning were in “good condition.”

Virginia police said the FBI will be taking over the investigation.

UPDATE: FBI will be taking over the Virginia shooting investigation – Alexandria police http://reut.rs/2soann8 

 

Not surprisingly, VA governor McAuliffe used this tragedy to push gun control.

 

Update 5:

The House has gone into recess and confirmed that no votes are scheduled for today in light of this morning’s shooting.  The House Sgt. as Arms will brief members of Congress later this morning.

JUST IN: No House votes are expected today following shooting at Alexandria baseball park

BRIEFING ALERT — House Sgt at Arms will brief members of congress in the 11 a hour today

 

Update 4:

Majority Whip Steve Scalise’s office has just confirmed the congressman was shot in the hip and was transported to MedStar Washington Hospital Center where he is currently undergoing surgery.

JUST IN: Rep. Scalise’s office says he’s in stable condition & currently undergoing surgery after being shot in hip http://cbsn.ws/2saqZwy 

 

Update 3:

Shortly after the shooting this morning at a congressional baseball practice, Representative Mark Walker (R-N.C.) said that it appeared the gunman was there to kill as many Republican members as possible.” Walker, who was at the practice for the upcoming annual congressional baseball game in Alexandria, Virginia, confirmed he was “shaken but okay.”

https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2FRepMarkWalker%2Fposts%2F786008941558860&width=500

 

Update 2:

Michigan Rep. Mike Bishop tells WWJ Newsradio 950 he was attending the practice around 5:30 a.m., just outside of Alexandria, when shots rang out. He said he and his colleagues were “sitting ducks.”

“As we were standing here this morning, a gunman walked up to the fence line and just began to shoot. I was standing at home plate and he was in the third base line,” Bishop said. “He had a rifle that was clearly meant for the job of taking people out, multiple casualties, and he had several rounds and magazines that he kept unloading and reloading.”

More than 50 shots were fired, according to CBS News, with some accounts putting the number closer to 100. Four people were injured, including two Capitol Hill police officers and House Majority Whip Steve Scalise. The suspect was also shot.

The only reason why any of us walked out of this thing, by the grace of God, one of the folks here had a weapon to fire back and give us a moment to find cover. We were inside the backstop and if we didn’t have that cover by a brave person who stood up and took a shot themselves, we would not have gotten out of there and every one of us would have been hit — every single one of us,” said Bishop. “He was coming around the fence line and he was looking for all of us who had found cover in different spots. But if we didn’t have return fire right there, he would have come up to each one of us and shot us point-blank.”

Bishop was uninjured. General Jack Bergman, who represents northern Michigan and the Upper Peninsula, and John Moolenaar, from Midland, were also at the practice; both uninjured. Democratic members of Congress were practicing at a different field, miles away.

“Two of our staff was hit, Steve Scalise was hit on second base, I watched him get hit and I couldn’t do anything to help him. We tried to get him off as fast as we could but this guy was relentless with his fire,” he said. “One of our staffers got hit in the chest and I pray for him, I just don’t know what the outcome is going to be. This is a tragic situation and frankly, it’s changed everything as I know it forever.”

THE LATEST of the 5 shot in Alexandria:
– Rep. Scalise
– 2 security details
– 1 staffer
– 1 lobbyist
– Suspect in custody

A suspect, who received at least one gunshot, is believed to be in custody. Bishop said the man didn’t speak a word.

He stood there silently. None of us saw him walk up,” he said. “One of our coaches had his son, his 11-year-old son — I have an 11-year-old son, too, who’s supposed to be here — and I am just, I can’t even tell you, I don’t know. Fortunately everybody’s OK. It’s just traumatic

At least five people have been shot, including House Majority Whip Steve Scalise and aides, during a baseball practice in Virginia Wednesday, Fox News confirmed. The shots were reported on East Monroe Street in Del Ray, Alexandria police said on Twitter at 7:30 a.m. The location was near a YMCA.

  • BROOKS: APPEARS SOME SECURITY DETAIL MEMBERS WERE INJURED
  • BROOKS SAYS SECURITY DETAIL SHOT BACK AT ASSAILANT
  • BROOKS: HELICOPTER LANDED ON FIELD TO TRANSPORT INJURED
  • BROOKS: AT LEAST 5 INJURED, INCL. SCALISE, STAFFER, 2 GUARDS
  • INJURED GUNMAN IN CONGRESS MEMBER SHOOTING APPREHENDED: FOX

A reporter from the Huffington Post tweeted that a congressman said he “heard there was a shooting at the Congressional baseball game practice field.” ABC 7 News reported “multiple shooting” in the 400 block of E. Monroe Street.

Shooting at Congressional baseball practice. Scalise hit. Other staffers hit. Gunmen with rifle

A reporter from Fox News tweeted that staffers were hit.

According a report from Rep. Mo Brooke, who said he was not shot, more than 50 rifle shots were fired.

from @RepMoBrooks “Shooter attack at GOPpractice. Rifle. 50+ shots fired. 5 or more hit including GOP Whip steve scalise. I am not shot.”

Gunman just opened fire on Congressional members playing baseball this morning in Del Ray

Brooks adds that a helicopter landed in center field and took one of the wounded to a hospital, Rep. Brooks said

Helicopter landed in center field and took one of the wounded to a hospital, Rep. Brooks said

The suspected is “believed in custody,” ABC reported, according to Alexandria police.

: @AlexandriaVAPD report “multiple shooting” in 400 block of E Monroe and say “suspect believed in custody”. Story to come.

Suspect Reportedly Asked “Are Those Republicans Or Democrats” Before Starting To Shoot

Today’s dramatic shooting attack on Congressmen during an early morning baseball practice appears to have been politically motivated.

According to RealClearNews reporter Rebecca Berg, “Rep. Jeff Duncan plans to give a statement to police regarding a conversation he had with the shooter before leaving practice early” and she notes that “The man was wearing running clothes, asked Duncan: “Are those Republicans or Democrats out there practicing?””

I’m told Rep. Jeff Duncan plans to give a statement to police regarding a conversation he had with the shooter before leaving practice early

I’m told Rep. Jeff Duncan plans to give a statement to police regarding a conversation he had with the shooter before leaving practice early

The man was wearing running clothes, asked Duncan: “Are those Republicans or Democrats out there practicing?” Per source familiar.

Fox confirms, quoting Rep. DeSantis according to whom, the “Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting”

Rep. DeSantis: Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting @foxandfriendshttp://insider.foxnews.com/2017/06/14/scalise-shooting-details-ron-desantis-says-man-asked-whether-republicans-or-dems-field 

Photo published for Rep. DeSantis: Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting

Rep. DeSantis: Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting

Rep. Ron DeSantis (R-FL) described an encounter with a man shortly before House Majority Whip Steve Scalise was shot during a congressional baseball practice in Alexandria, Va.

insider.foxnews.com

She adds: “Amazing heroism: Rep. Brooks tells CNN one member of security detail was shot in leg, still helped tend to Scalise afterward”

Amazing heroism: Rep. Brooks tells CNN one member of security detail was shot in leg, still helped tend to Scalise afterward

Meanwhile, Rand Paul told MSNBC that “Scalise being at practice “saved everybody else’s life. W/o leadership person there would’ve been no security there.”

Scalise being at practice “saved everybody else’s life. W/o leadership person there would’ve been no security there.” –Rand Paul on MSNBC

end
Rand Paul gives his firsthand account of the shooting. Scalise is in stable condition
(courtesy zerohedge)

Rand Paul’s Dramatic First Hand Account Of The Shooting

Below is a first-hand account of this morning’s shooting in Washington D.C. from Senator Rand Paul who was on the scene enjoying some batting practice when the first shots rang out.  Paul recounts a chaotic scene in which Majority Whip Steve Scalise was shot while playing 2nd base and then crawled toward the outfield to get further away from the shooter who apparently took cover behind the 3rd base dugout.

Paul, who couldn’t see the gunman from his position, said he believed the shooter fired 50-60 shots and he described the gun as sounding like an AR-15.

Paul credited the Capitol Police, who would not have been on site but for the presence of Scalise, for reacting swiftly to counteract an attack that could have been far worse.

“One of the things that’s really fortunate and probably why — everybody probably would have died expect for the fact that the Capitol Hill police were there,” he said.

 

Capitol Police were at the scene because of the presence of Scalise, the third-ranking Republican in GOP leadership.

 

“If Scalise wouldn’t have been on the team — unfortunately he was hit and I hope he does well — but also by him being there it probably saved everybody else’s life because if you don’t have a leadership person there, there would have been so security there,” Paul said.

 

“They do a great job. These are brave men and women and we were really lucky they were there,” he said.

 

 

end

 

OH NO!! Not again!! Active shooter in San Francisco.  the UPS building on 17th and Potrero

(courtesy zero hedge)

Police Issue “Shelter In Place” After Shooter Kills 2, Injures 3 More In San Francisco UPS Facility; Shooter Detained

Update: According to IPS the shooter has been detained.

* * *

San Francisco police advised residents to avoid the area and shelter in place, after at least five people were shot in San Francisco’s Potrero Hill neighborhood near a UPS facility around 9amPT this morning, according to numerous reports.

Avoid the area of 17th Street and Vermont due to Police activity.

Avoid the area of 17th Street and Vermont due to Police activity. pic.twitter.com/G1jpmm6hE5

PIO is responding out to the scene. Media staging area will be at 17th and Potrero Ave. pic.twitter.com/HabDSp32xi

View image on Twitter

Details to follow…

 

At least 2 people are being treated by fire fighters and first responders for injuries sustained in connection with the active shooter situation.

What looks like bodies being covered up on the street outside the UPS center…NBC News reports an official said that two were “medical examiner cases.” It was not immediately clear if they were deceased.

The guman reportedly attempted suicide (but is in hospital now).

Statement from UPS:

UPS confirms there was an incident involving employees within the company’s facility in San Francisco earlier this morning.

 

Local law enforcement have control of the facility and are conducting an investigation.

 

The company is cooperating with law enforcement. We cannot provide information as to the identity of persons involved at this time, pending the police investigation.

*  *  *

Social media has some color…

worker tells @KCBSNews the shooting in the well-known SF UPS building was on 3rd floor, fire alarm sounded and people fled building.

Just witnessed an active shooting at UPS in SF. UPS workers ran on bus screaming for driver to go. Police en route

Shots fired at the UPS in Potrero Hill in SF. Lots of police activity and people running for cover. Apparently it is one of the drivers.

 

We will see you tomorrow night

Harvey.

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