June 20/Raids continue due to the high open interest in silver as the bankers just cannot get those silver leaves to fall/Donald Trump very upset with the death of Wambier, who was arrested and tortured in North Korea/uSA expands sanctions against Russia who are thoroughly annoyed/Oil whacked today to below 44 dollars/

GOLD: $1241.00  DOWN $3.20

Silver: $16.40  DOWN 8  cent(s)

Closing access prices:

Gold $1243.40

silver: $16.45

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: $1254.94 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1245.60

PREMIUM FIRST FIX:  $9.34

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SECOND SHANGHAI GOLD FIX: $1256.89

NY GOLD PRICE AT THE EXACT SAME TIME: $1246.70

Premium of Shanghai 2nd fix/NY:$10.11

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LONDON FIRST GOLD FIX:  5:30 am est  $1246.50

NY PRICING AT THE EXACT SAME TIME: $1246.90

LONDON SECOND GOLD FIX  10 AM: $1242.20

NY PRICING AT THE EXACT SAME TIME. $1242.80 

For comex gold:

JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  23 NOTICE(S) FOR 2300  OZ.

TOTAL NOTICES SO FAR: 2612 FOR 261,200 OZ    (8.1244 TONNES)

For silver:

For silver:

JUNE 3 NOTICES FILED TODAY FOR

15,000  OZ/

Total number of notices filed so far this month: 917 for 4,585,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 13th consecutive trading day. We certainly have a determined entity trying to get its hands on whatever silver is available.

It now seems that we are going to have a repeat as to the continual whacking of gold and silver by the crooks.

Here is something interesting on our last 3 huge waterfalls in gold
On Dec 15 2016, gold finished at its nadir at $1125.60.  The comex OI on that day:  402,111 contracts. The OI on silver:  164,500.
On Dec 16:                                                                                 The comex OI on that day: 401,798 contracts.  The OI on silver: 164,479
On March 9 2017: gold finished its nadir fall to $1200.00. The comex OI on that day: 427,627.  The comex OI for silver:  191,422
On March 10: 2017:                                                                       The comex OI on that day: 425,837.  The comex OI for silver: 189,548
On April 18/2017 gold finished at its nadir: $1226.90.  the comex OI on that day: 474,257.  silver comex OI 227,755
On April 19.2017:                                                                     the comex OI on that day: 472,263.  Silver comex OI: 227,954
today:  gold at $1242.00 so far/comex gold OI 443,021/silver comex OI 198,800 (approx)
it seems that we are having in gold higher lows and close to higher lows on the OI.
In silver, the comex OI is all over the board.

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 SURPRISINGLY ROSE BY 859  contract(s)UP to 198,713 WITH THE FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 15 CENT(S). In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  .994 BILLION TO BE EXACT or 142% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 3 NOTICE(S) FOR 15,000  OZ OF SILVER

In gold, the total comex gold FELL BY A HUGE  10,406 contracts WITH THE FALL IN PRICE OF GOLD   ($9.80 with YESTERDAY’S TRADING). The total gold OI stands at 442,615 contracts.

we had 23 notice(s) filed upon for 2300 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: 853.68 tonnes

.

SLV

Today: a big changes  in silver inventory at the SLV/surprisingly an addition of 1.513 million oz/

THE SLV Inventory rests at: 337.713 million oz

end

.

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

1. Today, we had the open interest in silver ROSE BY  859 contracts UP TO 198,920 (AND now A LITTLE CLOSER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  (DOWN 15 CENTS).We LOST NOBODY AS EVERYBODY remains 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 MONDAY night/TUESDAY morning: Shanghai closed DOWN 4.36 POINTS OR 0.14%   / /Hang Sang CLOSED DOWN 81.51 POINTS OR 0.31% The Nikkei closed UP 162.66 POINTS OR 0.81%/Australia’s all ordinaires  CLOSED DOWN 0.74%/Chinese yuan (ONSHORE) closed DOWN at 6.8266/Oil DOWN to 43.42 dollars per barrel for WTI and 46.01 for Brent. Stocks in Europe OPENED MOSTLY IN THE GREEN,,      ..Offshore yuan trades  6.8231 yuan to the dollar vs 6.8266 for onshore yuan. NOW  THE OFFSHORE IS STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN  WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

This is heartbreaking:  the young Otto Warmbier, a student from Virginia has died after he was brutally tortured by North Korea.  He was returned to his family in a coma but he died tonight..Trump condemns the brutal regime and stated that he will “handle it”

( zerohedge)

ii)Oh! Oh! is Donald going to launch a preemptive strike against North Korea?

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

CHINA

i)China deploys a massive amount of liquidity.  However the yield curve continually inverts more as China tightens.  The tightening is playing havoc to commodity traders around the globe

( zero hedge)

ii)Caterpillar/China/Asia

The huge liquidity provided by the Chinese government has finally caused CAT’s retail sales to rise. We wonder how long will this last especially if the China stops its funding.

( zerohedge)

4. EUROPEAN AFFAIRS

i)The former CEO of Barclay’s charged criminally over the handling of funds in a Qatar fundraising in 2008

( zero hedge)

ii)Belgium

Oh NO! not another one:  Belgian military neutralize the terrorist wearing an explosive belt at the Brussels train station

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Australia/Syria/Russia
Australia suspends its military flights over Syria citing potential threats from Russia
( zero hedge)

 

ii)Russia/USA

Russian jet comes within 5 feet of a USA reconnaissance plane

( zero hedge)

(courtesy zero hedge)

iv) ISIS cleric killed by USA coalition forces

( zero hedge)

6 .GLOBAL ISSUES

i)ARGENTINA

Yesterday Argentina issued a 100 yr bond.  Bill Blain and others are stunned that there are investors willing to buy this crap

( Bill Blain/Mint Partners/zero hedge)

ii)I am going to be highlighting this for you as it is quite important.  Matt King  (one smart cookie) has been studying global credit impulse and it has turned negative.  He explains what this means to the global economy

( zero hedge)

iii)CANADA

I guess we have nothing better to do:

(courtesy Rob Shimshock/Daily Caller)

7. OIL ISSUES

i)Rising output from Libya and others have finally caused oil to succumb:  WTI broke into the 43 dollar column;

( zerohedge)

ii)WTI and gasoline hold despite another buildup of inventories and increased production

( zerohedge)

8. EMERGING MARKET

Reform of the labour reform has been rejected and this caused the Brazilian real to tumble:

( zerohedge)

9.   PHYSICAL MARKETS

The author kind of throws water on Bitcoin

 

( Lee/Bloomberg)

10. USA Stories

i)Protesters interrupt the final play of the “Julius Caesar/Donald Trump play in New York

( zero hedge)

ii)This will be deadly:  it will be very difficult to get out of subprime auto loans even though the car has been repossessed

See for yourself.

( zero hedge)

iii)Evans has now flipped from hawkish to dovish as he states that the Fec can wait until December before it hikes again

( zerohedge)

iv)Wow!! I did not realize that their pension deficit was this large: 32 billion.

( Mish Shedlock/Mishtalk)

Let us head over to the comex:

The total gold comex open interest FELL BY A HUGE 10,406 CONTRACTS DOWN to an OI level of 442,615 WITH THE FALL IN THE PRICE OF GOLD ($9.80 with YESTERDAY’S trading). An open interest of around 390,000 to 400,000 is core and nothing will move these guys from their contracts.

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 83 contract(s)FALLING TO  784.  We had 45 notices filed yesterday so we LOST 38  contract(s) or an additional 3800 oz will NOT  stand for delivery in this very active delivery month of June AND  38 CONTRACT(S) 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 10 TONNES STANDING)

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

The non active July contract LOST 456 contracts to stand at 1598 contracts. The next big active month is August and here the OI LOST 12,631 contracts DOWN to 310,937,  as the bankers trying to keep this month down to manageable size.

We had 23 notice(s) filed upon today for 2300 oz

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And now for the wild silver comex results.  Total silver OI SURPRISINGLY ROSE BY  859 contracts FROM 197,854 UP TO 198,713 DESPITE YESTERDAY’S 15 CENT LOSS. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT AS YOU CAN SEE  THEY HAVE NOT BEEN AS SUCCESSFUL AS THEY WOULD HAVE LIKED.
We are in the NON active delivery month is JUNE  Here the open interest GAINED 8 contract(s) RISING TO 16 contracts. We had 3 notices served upon yesterday so we  GAINED 11 CONTRACTS OR AN ADDITIONAL  55,000 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.

The next big active month will be July and here the OI LOST 4,946 contracts DOWN to 82,061 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 10 contracts to stand at 91.  The next big active delivery month for silver will be September and here the OI already jumped by another 4962 contracts up to 75,266.

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

 Monday, June 20.2016:  90,784 contracts were still outstanding vs 82,061 contracts June 20.2017

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  (4,595,000 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.

As for the July contracts:

Initial amount that stood for silver for the July 2016 contract:  14.785 million  oz

Final standing:  12.370 million with the difference being EFP’s taking delivery in London.

We had 3 notice(s) filed for 15,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 92,180 contracts which is  poor

Yesterday’s confirmed volume was 190,690 contracts  which is fair

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE
 June 20/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 10,344.37 oz
brinks
Deposits to the Dealer Inventory in oz nil  oz
Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
23 notice(s)
2300 OZ
No of oz to be served (notices)
761 contracts
76,100 oz
Total monthly oz gold served (contracts) so far this month
2612 notices
261200 oz
8.1244 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   309,086.5 oz
Today we HAD  0 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
total dealer deposits: nil oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i) Out of brinks
10,344.37 oz
total customer withdrawal: 10,344.37  oz
 we had 0 adjustment(s):
 strange:  again no incoming gold into the gold comex only an exit of 10,344.37 oz and this is real gold leaving. 
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 23  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 13 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 (2612) x 100 oz or 261,200 oz, to which we add the difference between the open interest for the front month of JUNE (867 contracts) minus the number of notices served upon today (23) x 100 oz per contract equals 337,300  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 (2612) x 100 oz  or ounces + {(866)OI for the front month  minus the number of  notices served upon today (23) x 100 oz which equals 337,100 oz standing in this  active delivery month of JUNE  (10.4914 tonnes)
.
WE LOST 38 CONTRACTS OR AN ADDITIONAL 3800 OZ WILL NOT STAND AT THE COMEX AND 38 CONTRACT WAS GIVEN AN 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) = 8,611,357.729 or 267.84 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 267.84 tonnes for a  loss of 35  tonnes over that period.  Since August 8/2016 we have lost 86 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 June DELIVERY MONTH
 
June INITIAL standings
 June 20 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 nil  oz
Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory 
 600,489.686 oz
CNT
No of oz served today (contracts)
 3 CONTRACT(S)
(15,000 OZ)
No of oz to be served (notices)
13 contracts
( 65,000 oz)
Total monthly oz silver served (contracts) 917 contracts (4,585,000 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 3,642,415.1 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 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: nil  oz
 We had 1 Customer deposit(s):
i) Into Brinks:  600,489.686 oz
***deposits into JPMorgan have now resumed again
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: 600.489.686 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the JUNE. contract month is represented by 3 contract(s) for 15,000 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 917 x 5,000 oz  = 4,585,000 oz to which we add the difference between the open interest for the front month of JUNE (16) and the number of notices served upon today (3) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the initial standings for silver for the JUNE contract month:  917 (notices served so far)x 5000 oz  + OI for front month of JUNE.(16 ) -number of notices served upon today (3)x 5000 oz  equals  4,650,000 oz  of silver standing for the JUNE contract month.
 
We gained 11 contracts or an additional 0 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. THIS IS THE 14TH CONSECUTIVE TRADING DAY THAT WE EITHER GAINED NOR DID WE LOSE ANY SILVER CONTRACTS THROUGH THE EFP ROUTE.
 
 
Volumes: for silver comex
Today the estimated volume was 50.749 which is very good
Yesterday’s  confirmed volume was 100,165 contracts which is GIGANTIC
YESTERDAY’S ESTIMATED VOLUME OF 100,165 CONTRACTS EQUATES TO 500 MILLION OZ OF SILVER OR 71% 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:   205.718 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.9 percent to NAV usa funds and Negative 6.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.6%
cash .+0.1%( June 20/2017) 
 
2. Sprott silver fund (PSLV): STOCK   NAV  RISES TO +.03% (june 20/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.64% to NAV  (June 20/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +0.03 /Sprott physical gold trust is back into NEGATIVE/ territory at -0.64%/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 20/no  change in gold inventory at the GLD//Inventory rests at 853.68 tonnes

June 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 853.68 TONNES

June 16/no changes in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 15/ a monstrous “paper” withdrawal of 13.32 tonnes/Inventory rests at 853.68 tonnes

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 20 /2017/ Inventory rests tonight at 853.68 tonnes
*IN LAST 176 TRADING DAYS: 93.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 118 TRADING DAYS: A NET  33.98 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  47.32 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 20/a deposit of 1.513 million oz/inventory rests at 337.713 million oz/.

June 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 336.200 MILLION OZ

June 16/no changes in inventory at the SLV/inventory rests at 336.200 million oz

June 15/ a massive “paper withdrawal” of 3.405 million oz of silver/Inventory rests at 336.200 million oz/

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 20.2017: Inventory 337.713  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: 1.22%  (yesterday 1.21%)

12 month:  1.42% (yesterday 1.41%)

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

 end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Inflation is no longer in stealth mode

  • IHS Markit index shows UK households pessimistic about finances for 2017-208
  • UK household finances remain under intense pressure from rising living costs
  • 58 percent of respondents expected higher interest rates in 12 months time
  • Inflation in the United Kingdom currently at near four-year high
  • Prices up prices by 2.9pc year-on-year, biggest annual increase since June 2013
  • In May consumer spending in the UK fell for the first time in almost four years

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. John Maynard Keynes, The Economic Consequences of the Peace (1919)

Inflation is taxation without legislation Milton Friedman

Inflation is no longer in stealth mode

Inflation at 2.9% and wage growth lagging behind has meant household consumers in the UK are under intense pressure from rising living costs.

The IHS Markit Index and Survey measures how people feel about their current situation. The June reading changed from 43.8 from 42.6, indicating that households are the most pessimistic about their finances than they have been in three months.

Reports have linked this to the latest Consumer Price Index readings combined with inflation and interest rate expectations. It is no surprise that with weakening economic indicators and an uncertain political outlook that sentiment is falling.

The fall in the British pound, following the 2016 Brexit vote, is seemingly being blamed for this fall in consumer confidence and climb in inflation. Prior to the referendum last June, official inflation was just 0.3%.

Whilst the pound has recovered slightly from it’s tumble post General Election, general sentiment regarding the currency and the general political and economic situation, is weak. Following the Brexit shock the fall in sterling pushed up the cost of imported goods.

Higher interest rates and inflation expectations

The IHS Market survey also showed that 58% of respondents expect the Bank of England’s Monetary Policy Committee (MPC) to raise interest rates in 12 months’ time. Following the Brexit vote, less than half of the number of people expected this to happen, suggesting consumers were unprepared for the economic hardship that was coming their way.

Consumers might not be wrong to expect a rate hike in the next year. Minutes from the MPC’s June meeting showed that three members (of eight) voted for a rate increase. Rates currently stand at 0.25%.

Usually the Bank of England would look to raise interest rates given the continuing climb above the inflation target. However, these results not only suggest the MPC will have to wait longer but that they will also be unable to inject more cash into the economy. This would perhaps not be a bad thing, in the long run.

One of the major products contributing to the increase in inflation this month was apparently package holidays, highlighting the growing cost of foreign travel at current sterling prices. The second product highlighted by the Office of National Statistics to be contributing to inflation was computer games.

We’re fairly sure that consumers have been feeling the pinch regardless of whether they like a trip to Brittany or enjoy a late-night session of World of Warcraft. Wage growth consistently fails to keep up with inflation and the UK’s household debt to income ratio shows Brits are consistently spending more than they are earning.

There are some major long-term indicators that suggest consumers have been suffering from climbing inflation for some time. But, there has been little official recognition of this, in other words we have been experiencing stealth inflation.

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit-man” Ronald Reagan

Inflation no longer so stealthy

Whilst Brexit, a hung parliament and the subsequent weak pound are being blamed for the rise in inflation and fall in consumer sentiment, make no mistake that inflation has been making its way into the market in a variety of ways for many years now. It is also at a much higher level than the Consumer Price Index would have us believe.

The first example is the CPIH which a measure of how much manufacturers are having to pay for raw materials and energy. Prices were up 15.6% in a year, in April and 11.6% in May. How this really feeds through to consumers though is not just through price rises as is measured by the CPI, but by what we call a stealth form of inflation – a fall in quality and increase in price.

“…[inflation] will lead to a decline in the quality of goods and of service to consumers, since consumers often resist price increases less when they occur in the form of downgrading of quality.” Murray Rothbard, What Has Government Done to Our Money?

Everyone you speak to can think of an example of this form of stealth inflation – decreasing quality with higher prices. The oft-quoted ‘they don’t make ‘em like they used to’ is more relevant today than it ever was.

Unfortunately there is no official measure of this form of inflation, only anecdotal evidence, conversations in the supermarket queue, at the school gates, with furniture salesman etc. Think back to when you first noticed an item of clothing falling apart or not washing properly and wondering why these things didn’t last anymore. It was a while back, certainly a long time before any official measures of inflation said anything was up.

This form of inflation is obvious however when you look at price versus size and how this has changed in recent years. Toilet and tissue paper companies are a good example. In a phenomenon known as ‘de-sheeting’ Kimberly-Clark’s 2013 Kleenex was advertised as 15% bulkier…but with 13% fewer sheets.

The US website consumerist.com joyfully calls this form of stealth inflation the Grocery Shrink Ray, a ‘phenomenon wherein an item sold at X price at a retailer shrinks in size but still costs X amount.’

The most recent example of this was the announcement by Toblerone’s manufacturers that the shape of the infamous pyramid bar would be changing. Mondelez, Tobelerone manufacturers, announced they would be reducing the bars from 170 grams to 150 grams in the UK which would affect the shape. ‘Uproar’ is not quite a strong enough word to describe the reaction from Toblerone fans. Despite the reduction in size, the RRP for the bars has not been reduced.

Mondelez’s justification for the change was due to an uptick in ‘many ingredients’ prices’, the company specifically blamed the drop of the euro against the Swiss franc in January, and an increase in cocoa prices over the last three years.

Staying with confectionary, a Missouri man has filed a federal lawsuit against Hershey’s whom he accuses ‘of under-filling the Reese’s box by around 29%, and the Whoppers box by 41% to mislead shoppers and make them believe that the box is more full than it is.’ The case was not dismissed by the judge.

This is not a new phenomenon. It has been seen repeatedly prior to major depressions. consumerist.com draws our attention to this 1916 (front-page) story in The Seattle Star, ‘[Inspectors] went from bakery to bakery Thursday checking up on the bread situation…And here is what they found: ten-cent loaves of bread have shrunk from 32 ounces to 22 ounces, and standard 5-cent loaves, that used to weigh 16 ounces, now average 11 ounces.”

Toiler paper and sweets might seem like a fickle way to demonstrate the existence of inflation but the truth is that is because of the rising cost and falling quality of everyday goods that consumers are feeling down about the economy.

Conclusion – can doctors treat economic depression?

With wage growth refusing to keep up with rising price levels, the MPC refusing to tackle inflation and declining economic growth likely, the UK may be entering a period of stagflation. When a similar event occurred in the 1970s the period was long lasting and unmanageable.

We don’t know if we are heading into a similar period, but it would be imprudent to fail to prepare for such an event. In the meantime, it is obvious both officially and unofficially that inflation is very much here to stay for the foreseeable future and that is is affecting sentiment both at home and abroad.

Economic depression is usually defined as a sustained, long-term downturn in an economy. At the moment we are clearly look at the form of depression that precedes this – long-term, sustained downturn in economic mood and sentiment. As with an economic depression, there is no quick-fix or obvious treatment. Instead, we can only prepare ourselves for what might be coming.

Gold is a hedge against both inflation and stagflation. History shows it has preserved purchasing power over long periods of time. When compared with the prices of commodities denominated in a fiat currency, the prices of commodities such as oil when priced in gold remain relatively stable.

In contrast, the value of fiat only continues to fall thanks to inflation. It is near impossible to preserve your wealth when kept in such a form. This combined with the increased cost of day-to-day living means households will continue to struggle and the economic outlook for the UK will remain weak.

Readers would be wise to look at their portfolios and consider how it is set for a long-term period of economic depression and rising inflation, whether stealth or otherwise.

News and Commentary

Gold hovers near 5-week low; political tensions support (Reuters.com)

Gold ends lower as Fed seen adopting hawkish stance (Marketwatch.com)

Dollar rises after Fed Dudley’s comments, yen falls (Reuters.com)

U.S. Tech Stocks Rally; Dollar Gains, Bonds Slide: Markets Wrap (Bloomberg.com)

Gold ends lower as Fed seen adopting hawkish stance (Marketwatch.com)

 Are Central Banks Getting Ready to Crash the System Again?” (Goldseek.com)

Massive Central Bank Asset Purchases: Last Ditch Effort To Save Economy & Cap Silver-Gold Prices (Silverseek.com)

“The Central-Bank Moment” – Global Excess Liquidity Collapses (24HGold.com)

The Pin To Pop This Mother Of All Bubbles? (24HGold.com)

Bill Blain Flips Out: “Not Much Surprises Me Any More About Markets, But Really? Really!?” (Zerohedge.com

end

Russia adds 700,000 oz of gold or 21.7 tonnes to its official reserves.

That is a good haul for Russia.

(Pravda/Moscow)

 

Russian gold reserves up at 54.9 million ounces as of June 1

 

MOSCOW, June 20 Russia’s central bank, which is seeking to its international reserves, posted an increase in gold reserves in May, the fifth consecutive month of gains. The central bank, one of the world’s largest holders of bullion, has been regularly buying gold as it wrestles with weaker oil prices and Western sanctions imposed over Moscow’s role in the Ukraine crisis.

Russia’s gold reserves rose to 54.9 million troy ounces by early June from 54.2 million ounces as of May 1, the central bank said on Tuesday. The value of its holdings rose to $69.30 billion from $68.65 billion as of May 1.

Russia’s central bank, which usually buys locally produced gold from Russian banks, has been one of the leading national buyers of gold in recent years, along with China.

(Reporting by Polina Devitt; editing by Jeremy Gaunt)

-END-

The author kind of throws water on Bitcoin

 

(courtesy Lee/Bloomberg)

Bitcoin is digital gold, but will you buy a sandwich with it?

Section:

By Justina Lee
Bloomberg News
Monday, June 19, 2017

For digital-marketing agency Cooperatize.com, taking bitcoin for payment was easy enough, all co-founder Roger Wu had to do was obtain a digital wallet. To promote the move in 2014, he even penned a blog post for Forbes explaining the decision.

The number of transactions the New York-based firm has made since? Zero.

“The biggest thing is are people willing to pay in bitcoin?” Wu said. “The reality is that most of our customers are other businesses and other businesses don’t use bitcoin.”

Even as the euphoria over bitcoin reached a fever pitch last week as the price surged to almost $3,000, slow transaction times and inertia are helping to prevent it from achieving widespread usage. Adoption has slowed, according to Morgan Stanley, after a slew of companies from Microsoft Corp. to Expedia Inc. initially trumpeted its use, and hurdles remain when it comes to longer-term viability. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-06-19/bitcoin-is-digital-go…

END

 

 

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

 
 

1 Chinese yuan vs USA dollar/yuan  WEAKER 6.8266(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  MUCH STRONGER TO ONSHORE AT   6.8236/ Shanghai bourse CLOSED DOWN 4.36 POINTS OR 0.14%  / HANG SANG CLOSED DOWN 81.51 POINTS OR 0.31% 

2. Nikkei closed UP 162.66 POINTS OR 0.81%   /USA: YEN RISES TO 111.58

3. Europe stocks OPENED MOSTLY THE GREEN (EXCEPT SPAIN)        ( /USA dollar index RISES TO  97.60/Euro UP to 1.1149

3b Japan 10 year bond yield: FALLS TO   +.057%/     !!!!(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::  43.42 and Brent: 46.01

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  +.271%/Italian 10 yr bond yield DOWN  to 1.939%    

3j Greek 10 year bond yield FALLS to  : 5.63???  

3k Gold at $1244.00  silver at:16.52 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 70/100 in  roubles/dollar) 59.18-

3m oil into the 43 dollar handle for WTI and 46 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.58 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  0.9738 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0859 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 FALLING to  +0.271%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.180% early this morning. Thirty year rate  at 2.774% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Futures, European Stocks Flat As Oil Suddenly Tumbles; Pound Slides

 

European stocks were flat after starting off strongly earlier, dragged lower by energy stocks. Asian stocks, U.S. futures little changed as oil tumbled with Brent tumbling as low as $45.85/bbl to the lowest intraday since November 30 and taking out a 38.2% Fib support, after a one-minute spike in volume to a day-high 5,208 lots just after 6am, with WTI mirroring Brent’s momentum, and falling as much as 98c to $43.22, lowest since November 14.

As Reuters’ Jamie McGeever points out, “maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks.”

Maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks.

The pound sank for a second day, with the GBPUSD tumbling to 1.2661, alongside gilt yields as Britain central bank governor Mark Carney reversed the earlier BOE “vote split” hawkishness and said he is still worried about the impact Brexit will have on the U.K. economy and said he “now is not the time” to raise rates. Sterling weakened against all of its Group-of-10 peers, and gilt yields declined as Carney said that domestic inflation pressures remain subdued. Speaking at London’s Mansion House on Tuesday, he also highlighted the weakness in the economy and the increased uncertainty as the nation formally starts talks to exit the European Union.

Carney’s first major speech since May comes a day after negotiations over Britain’s exit from the European Union formally began, and his comments addressing weakness in the U.K. economy and subdued inflation join a raft of talking points for investors this week.  As Bloomberg adds, Carney’s comments were seen as pushing back against a hawkish shift at last week’s Monetary Policy Committee meeting, where three members unexpectedly voted to raise the benchmark rate from a record-low 0.25 percent. That split in the MPC is exacerbating the uncertainty faced by pound traders as the U.K. begins its Brexit negotiations in the wake of inconclusive elections earlier this month. Sterling’s weakness boosted U.K. stocks with the FTSE 100 and 250 both benefitting from the falling sterling and regained some early losses seen in the UK indices.

Similarly, in a speech late in U.S. time on Monday, Chicago Federal Reserve President Charles Evans said it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise rates again. Also overnight, we got the latest in a string of appearances from U.S. central bank officials when Federal Reserve Vice Chairman Stanley Fischer speaking in Amsterdam, discussing the impact of low rates on high home prices.

Hong Kong shares retreated ahead of MSCI Inc.’s decision on whether to include China’s domestic equities in its main indexes. As a reminder the MSCI will announce whether it approved Chinese-listed stocks in its global benchmarks. China’s $6.8 trillion onshore market is the world’s second largest and accounts for 9% of global stock value, but has been rejected for index inclusion three times by MSCI over issues including capital controls and long trading halts. MSCI’s decision is expected Tuesday after the close of U.S. markets.

Elsewhere, Japan’s Nikkei jumped to a near two-year high on Tuesday while Japan’s Topix rose 0.7% to the highest since August 2015 amid weakness in the yen.

In Europe, the Stoxx 600 was up less than 0.1% as of 11:33am in London, trimming gains of as much as 0.3% with miners and energy shares lead declines among sectors as crude extends drop to lowest intraday since Nov. 15. Stoxx 600 miners down 1.7%, tracking copper prices lower, while banks were the third-worst decliners as 10- year German bond yield falls. Drops offset by gains in food and beverage and media stocks, among others.

As noted above, Brent crude oil hit new year-to-date low at $45.85, which could spur a move toward the $44.66 measured support line according to Bloomberg technician Sejul Gokal; possible trend-exhaustion signals may temporarily delay the move. Brent crude oil -1.7% to 46.02. Support at $44.66 represents the 100% extension line of April-May selloff (~$10 selloff), projected from May peak ($54.67). Drop to support may not happen immediately as market on possible trend-exhaustion signal. West Texas oil erased a gain to slump 1.7 percent to $43.44 a barrel. Gold climbed 0.2 percent to $1,246.36 an ounce, after closing Monday at the lowest in more than a month.

In rates, the yield on 10-year Treasuries dropped one basis point to 2.18 percent, after rising four basis points Monday. Benchmark yields in the U.K. fell after Carney’s dovish comments with the yield on 10-year gilts dropping 2bps to 1.0%, having earlier dropped 4bps. Odds of a 25bps hike by end of 2018 tumbled to ~47% according to MPC=dated SONIAs, compared with around 77% ahead of Carney’s comments.

Currencies saw the British pound falling 0.3 percent to $1.2695, erasing an earlier gain. The euro edged 0.1 percent higher to $1.1155. The Bloomberg Dollar Spot Index was little changed, after advancing 0.4 percent on Monday. The measure touched the lowest level since October last week. The yen fell 0.1 percent to 111.61 per dollar. The currency retreated 0.6 percent on Monday.

Bulletin Headline Summary from RanSquawk

  • BoE’s Carney says now is not the time to hike given ‘anemic’ wage growth and mixed signals in consumer spending
  • European equities trade higher across the board. Energy names underperform as prices fail to recoup yesterday’s losses
  • Looking ahead, Fed’s Fischer, Rosengren, Kaplan and ECB’s Coeure

Top Overnight News from BBG

  • DAX ended at record close, up 12% YTD; S&P 500 jumped to record high; dollar dips after rally, oil steady
  • Fed’s Evans suggests delaying next rate hike
  • Fed’s Fischer Says House Prices ‘High and Rising’ Amid Low Rates
  • EU wins first Brexit battle, as U.K. retreats on timing
  • MSCI review watch: China, Saudi Arabia, Argentina, Nigeria
  • Macron’s ministers meeting with companies in which French state holds stakes; Macron considers possible divestments
  • Wait for bigger drop to buy tech shares: Morgan Stanley
  • Tesla Said Close to Agreeing on Plan for China Production Plant
  • Blackstone-Backed GEMS Said Valued at $4 Billion in London IPO
  • Boeing’s Vision for the Future Has No Place for the Iconic 747
  • Aviation Capital Group Orders 20 Boeing 737 Max 10 Airplanes
  • Lockheed Martin Gets Air Force Contract for Sniper ATP, LANTIRN
  • Bombardier Said to Near Turboprop Plane Order From SpiceJet
  • Pamplona Capital Said Near Deal to Buy Parexel for $4.6b: WSJ
  • Georgia House Race May Guide How Candidates Deal With Trump
  • Bayer CEO Sees Potential for Small Pharma Deals After Monsanto
  • Spain Regulator Starts Probe Vs Philip Morris Unit, Altadis
  • BlackRock to Take Minority Equity Stake in Scalable Capital
  • KKR Gives Up on Joining Bid With Bain for Toshiba Unit: Sankei

Market Snapshot

  • S&P 500 futures up 0.01% to 2,447.00
  • STOXX Europe 600 up 0.2% to 392.81
  • MXAP up 0.08% to 155.37
  • MXAPJ down 0.09% to 506.00
  • Nikkei up 0.8% to 20,230.41
  • Topix up 0.7% to 1,617.25
  • Hang Seng Index down 0.3% to 25,843.04
  • Shanghai Composite down 0.1% to 3,140.01
  • Sensex down 0.01% to 31,308.11
  • Australia S&P/ASX 200 down 0.8% to 5,757.25
  • Kospi down 0.07% to 2,369.23
  • German 10Y yield fell 1.4 bps to 0.267%
  • Euro up 0.02% to 1.1151 per US$
  • Italian 10Y yield fell 3.1 bps to 1.664%
  • Spanish 10Y yield fell 3.3 bps to 1.415%
  • Brent Futures up 0.2% to $47.01/bbl
  • Gold spot up 0.3% to $1,247.16
  • U.S. Dollar Index up 0.02% to 97.57

In Asian markets, stocks were mixed after failing to sustain the momentum from Wall Street where stocks closed at fresh all time highs after the tech sector rebounded from last week’s underperformance and the DJIA extended into record territory. Nikkei 225 (+1.1%) outperformed and printed fresh 22-month highs due to a weaker currency, while ASX 200 (-0.5%) was dampened by softness across commodities and with financials pressured after Moody’s downgraded ratings on Australia’s big 4 banks. Shanghai Comp. (+0.1%) and Hang Seng (-0.1%) traded choppy after the PBoC’s reduced its liquidity operations to a paltry CNY1Obln, which was counterbalanced by a decline in money market rates with the CNH Overnight HIBOR at an 8-month low. 10yr JGBs were subdued amid a positive risk tone in Japan and with the demand at the enhanced liquidity auction for super-long JGBs virtually unchanged from prior.

  • Top Asian News
  • ‘Dangerous Situation’ for Hong Kong Property Market, Says Chan
  • Sinochem Group Said to Consider Oil Asset Listing in Hong Kong
  • Gaming the Yuan: Making Money on a State-Controlled Currency
  • Zhou Says China’s Banks Risk Laziness Without Outside Rivals
  • China’s Surging Bonds Show Angst About a Cash Crunch Is Easing
  • Noble Group’s Shares Extend Rally as Trader to Sell More Assets
  • Hong Kong Stocks Fall as Investors Wait for MSCI’s Call on China
  • Indian WhatsApp-Rival Hike Gets Into Busy Digital-Payments Arena

In European bourses, the FTSE 100 and 250 both benefited from the falling sterling and regained some early losses seen in the UK indices, stemmed by equity specific morning news, where poor earnings from Wolseley (WOS LN) and Orange reducing its stake in BT (BT/A LN) set the FTSE off to a slow start. The Eurostoxx 600 sectors were positive, with 9/10 trading the morning in the green — the noticeable laggard was the energy sector, with WTI and Brent Crude failing to bounce from yesterday’s losses. Fixed income markets were led by Gilts, as the aforementioned dovish tone from Carney led Gilts to outperform, trading near session highs, as the other triple A’s followed. Note, supply from Europe is particularly light this week.

Top European News

  • Barclays, Four Former Executives Charged Over Qatar Fundraising
  • Carney’s Brexit Concerns Mean BOE Governor in No Rush to Tighten
  • Centrica Plans to Close Only U.K. Long-Term Gas Storage Site
  • Amazon-Whole Foods Deal Puts Spotlight on France’s Carrefour
  • Trump’s Steel-Import Threat Prompts EU to Warn of Retaliation
  • Italy Seeks to Entice Foreign Buyers With New Rules on Bad Loans
  • Atlante May Buy Paschi NPLs After Fortress, Elliott Drop: Sole
  • French Defense Minister Goulard Resigns, AFP Says on Twitter

In currencies, the price action this morning has been focused on the Pound, as BoE gov Carney allayed any ‘fears’ that UK rates were on the rise any time soon. This was a known factor given the vote split revealed last week, but the algos jumped on his accommodative tone on policy over the near term, focusing on anaemic wage growth — we also knew this — as reported in the jobs report last week.
Even so, Cable dived below 1.2700 from circa 1.2750, while from the mid 0.8700’s, we were testing 0.8800 again. Both pairs have since pulled back off their respective extremes, with Brexit themes and the cordial start to the talks yesterday proving supportive to a very modest degree. Elsewhere, USD/JPY remains the key path for USD bulls concurring with Fed chair Yellen last week and NY’s Dudley yesterday. We still run into seller ahead of 112.00, as their optimistic tunes are clearly being met with scepticism from some quarters. Modest gains in mid curve UST yield is testament to this.
EUR/USD is still finding buyers well ahead of 1.1100, with this morning’s upturn in EUR/GBP having provided some support.

In commodities, since the FOMC announcement last week, the USD has recovered some ground, notably against the USD as Treasuries have edged lower. This has fed into some weakness in Gold which is now trading below USD1250, with Silver finding a little more support having lagged the yellow metal on the way up. The steady risk tone has also added to weakness here, and as a result, base metals have pushed up to a modest degree. Copper is a little more balanced, but Aluminium, Zinc and Lead all showing moderate gains on the day but with few individual drivers which stand out. Oil prices have also stabilised, but as we have noted in recent weeks, the backdrop of rising US shale production precludes any significant upturn in WTI or Brent — both still trading relatively close to the recent lows, but WTI finding support well ahead of the key USD40 mark.

Looking at the day ahead, we’ve got another fairly thin calendar of data ahead of us today. We’ll get current account balance readings for both the US and Euro area. China’s conference board leading index is also out this afternoon. It’s a busy day for Fedspeak though with Fischer (3.15pm EDT), Rosengren (8.15am EDT) and Kaplan (3pm EDT) all scheduled to speak. House Speaker Ryan’s speech will also be a key focus.

US Event Calendar

  • 8:30am: Revisions: Current Account
  • 8:30am: Current Account Balance, est. $123.6b deficit, prior $112.4b deficit
  • 3:15am: Fed’s Fischer Speaks in Amsterdam
  • 8:15am: Fed’s Rosengren to Speak at Macroprudential Conference
  • 3pm: Fed’s Kaplan Speaks in San Francisco

* * *

DB’s Jim Reid concludes the overnight wrap

Not many divorce settlements start with a cheery exchange of gifts between the spurned partners. Well Brexit is like no divorce in history as UK Brexit Secretary David Davies yesterday kickstarted talks by giving EU lead negotiator Michel Barnier a rare mountaineering book with a hiking stick going in the opposite direction. There was no suggestion that the latter gift was Europe’s way of asking the UK to take a hike. In fact everything was very cordial. If it carries on like this (unlikely) it could be the friendliest divorce since Coldplay’s Chris Martin and Gwyneth Paltrow’s conscious uncoupling. We’d note that the latter sung backing vocals on Coldplay’s last album so proof that it is possible to remain friends.

The first round perhaps went to the EU as the UK agreed to their sequencing of sorting out agreement on the divorce payments first before any trade negotiations could progress. It seems EU and UK citizen rights living in the other’s region will be discussed early on in the talks as will the contentious Irish border issue. UK Brexit Minister David Davis confirmed that the UK would present its offer on rights for citizens at some stage next week. Timing wise we’re expecting one week of negotiations every month. In between those weeks consultations and technical work will go on behind the scenes. For now the overall tone and relationship between the two camps in the press conference yesterday appeared friendly and talks as being constructive in the very early going. However expect the real details to emerge in the weeks and months ahead. It’s worth pointing out that there is an EU leaders’ summit this Thursday and Friday which might provide a decent summary as to how the first week of talks has proceeded.

With those talks going on behind the scenes then, in an otherwise fairly quiet start to the week most of the focus was on comments from the NY Fed’s Dudley. Most significant appeared to be his remark that recent rate hikes by the Fed have not tightened financial conditions to any significant degree and also that halting the tightening cycle now would imperil the expansion. Dudley appeared upbeat about the US economy overall and also that the expansion has “a long way to go”. On inflation he said that prices are a little lower than what the Fed would want – which was no great surprise – but also that he expects  wage growth to quicken a bit more as the job market continues to tighten. So overall fairly upbeat and the comments helped both the Greenback to firm up (Dollar index +0.40%) and Treasury yields to edge higher (10y +3.7bps to 2.190%), while Gold (-0.79%) nudged lower.

Overnight we’ve also heard from the Chicago Fed’s Evans who was similarly upbeat. The Fed official said that the “real economy is really doing quite well” and that “I think where we are with the funds rate right now is kind of in line with my outlook”. He didn’t offer any further clues as to his expectation for how many more hikes we might get this year but did say that “the important feature is that the current environment supports very gradual rate hikes and slow preset reductions in our balance sheet”. Staying with the US for a moment, it’s worth noting that House Speaker Paul Ryan is due to deliver his first major speech on tax reform in an address today. It’s due to kick off at 12.45pm ET/5.45pm BST. That should be well worth keeping an eye on.

Elsewhere in markets yesterday it was a decent start to the week for global equity markets with the S&P 500 (+0.83%) and Dow (+0.68%) both rallying to new record highs. A decent rebound for the Nasdaq (+1.42%) appeared to be the main driver as tech stocks surged after being beaten up in recent days. In fact the Nasdaq actually had its best day since November 7th and is now ‘only’ 1.66% off its intraday all-time high from June 8th and up 2.10% from its intraday low on June 9th when it had a mini sell-off. For all that talk of a correction it’s worth also highlighting that the Nasdaq has now gone 154 consecutive sessions without a 5% drawdown from the peak. The record is 156 days set in he mid-1980’s. Elsewhere yesterday European equities also turned in a solid session with the Stoxx 600 (+0.86%) having its best day since April 24th.

This morning in Asia, despite a positive start, most major bourses have pared early gains and faded. The Hang Seng (-0.02%), Shanghai Comp (-0.12%) and Kospi (-0.05%) are little changed as investors await the decision on whether or not the MSCI will include mainland China stocks in its benchmark indices later today. Elsewhere the ASX (-0.41%) is underperforming with Banks under pressure after Moody’s yesterday downgraded Australia’s major banks. The one market which has rallied this morning is the Nikkei (+1.10%) which appears to be getting some support from a weaker Yen.

Moving on. While there was no significant macro data released yesterday we did get the latest ECB CSPP holdings data. Although the average daily run rate was €318mn and below the average daily run rate since CSPP started of €366mn, the CSPP/PSPP ratio was still 12.7%, which is above the average of 11.6% before QE was trimmed in April. So after a buoyant May where CSPP seemed to increase again (likely in line with high issuance), we’ve dropped back down to lower than average levels. However the ratio still suggests a higher taper for PSPP than CSPP.

Staying with the ECB, there was a bit of focus on comments from Governing Council member Jan Smets yesterday. He said that the ECB is closely watching wages and inflation expectations with the ECB still not seeing convincing signs that price stability can be supported without monetary support. The EUR 5y5y inflation swap rate is currently holding at 1.533% and at around 7-month lows. Meanwhile over at the BoE Silvana Tenreyro was appointed to the Bank’s MPC as Kristen Forbes’ (a notable hawk) replacement. She will start next month. Tenreyo is currently a professor at the LSE and a former Bank of Mauritius official. It’s difficult to really get a gauge on where she sits on the hawk-dove scale although we do know that she has published an academic paper arguing the impact of monetary policy as being asymmetric which could put her closer to the core of the committee than Forbes. At least the current balmy English summer is somewhat comparable to the warmer Mauritius climate.

Looking at the day ahead, we’ve got another fairly thin calendar of data ahead of us today. We’ll get current account balance readings for both the US and Euro area, along with PPI data in Germany this morning. China’s conference board leading index is also out this afternoon. It’s a busy day for Fedspeak though with Fischer (8.15pm BST), Rosengren (1.15pm BST) and Kaplan (8pm BST) all scheduled to speak. The aforementioned House Speaker Ryan speech will also be a key focus. The other key event for markets today is the Mansion House speeches by BoE Governor Carney and Chancellor of the Exchequer Hammond. The event was rescheduled as a breakfast so we are expecting the speeches to take place early this morning.

 END

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 4.36 POINTS OR 0.14%   / /Hang Sang CLOSED DOWN 81.51 POINTS OR 0.31% The Nikkei closed UP 162.66 POINTS OR 0.81%/Australia’s all ordinaires  CLOSED DOWN 0.74%/Chinese yuan (ONSHORE) closed DOWN at 6.8266/Oil DOWN to 43.42 dollars per barrel for WTI and 46.01 for Brent. Stocks in Europe OPENED MOSTLY IN THE GREEN,,      ..Offshore yuan trades  6.8231 yuan to the dollar vs 6.8266 for onshore yuan. NOW  THE OFFSHORE IS STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN  WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

This is heartbreaking:  the young Otto Warmbier, a student from Virginia has died after he was brutally tortured by North Korea.  He was returned to his family in a coma but he died tonight..Trump condemns the brutal regime and stated that he will “handle it”

(courtesy zerohedge)

Otto Warmbier Has Died, Family Blames “North Korea’s Torturous Mistreatment”, Trump Condemns “Brutal Regime… Will Handle It”

Just days after North Korea released Otto Warmbier after holding him hostage for 17 months, his family has just reported the sad news of his passing.

Warmbier was sentenced to 15 years in prison with hard labor in North Korea, convicted of subversion after he tearfully confessed he had tried to steal a propaganda banner.

The University of Virginia student was held for more than 17 months and medically evacuated from North Korea last week. Doctors said he returned with severe brain damage, but it wasn’t clear what caused it.

Family Statement:

It is our sad duty to report that our son, Otto Warmbier, has completed his journey home. Surrounded by his loving family, Otto died today at 2:20pm.

 

It would be easy at a moment like this to focus on all that we lost – future time that won’t be spent with a warm, engaging, brilliant young man whose curiosity and enthusiasm for life knew no bounds. But we choose to focus on the time we were given to be with this remarkable person. You can tell from the outpouring of emotion from the communities that he touched – Wyoming, Ohio and the University of Virginia to name just two – that the love for Otto went well beyond his immediate family. Otto went well beyond his immediate family.

 

We would like to thank the wonderful professionals at the University of Cincinnati Medical Center who did everything they could for Otto.

 

Unfortunately, the awful torturous mistreatment our son received at the hands of the North Koreans ensured that no other outcome was possible beyond the sad one we experienced today.

 

When Otto returned to Cincinnati late on June 13th he was unable to speak, unable to see and unable to react to verbal commands. He looked very uncomfortable – almost anguished. Although we would never hear his voice again, within a day the countenance of his face changed – he was at peace. He was home and we believe he could sense that.

 

We thank everyone around the world who has kept him and our family in their thoughts and prayers. We are at peace and at home too.

Fred & Cindy Warmbier and Family

Quoted by Bloomberg’s Jennifer Jacobs, on the death of Warmbier Trump said “at least he got home to his parents” and added: “It’s a brutal regime and we’ll be able to handle it.” It’s unclear just how.

The White House’s full, just released statement is below;

THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
June 19, 2017

 

Statement by President Donald J. Trump on the Passing of Otto Warmbier

 

Melania and I offer our deepest condolences to the family of Otto Warmbier on his untimely passing. There is nothing more tragic for a parent than to lose a child in the prime of life. Our thoughts and prayers are with Otto’s family and friends, and all who loved him.

 

Otto’s fate deepens my Administration’s determination to prevent such tragedies from befalling innocent people at the hands of regimes that do not respect the rule of law or basic human decency. The United States once again condemns the brutality of the North Korean regime as we mourn its latest victim.

And here John McCain who wants to “state the facts plainly: Otto Warmbier, an American citizen, was murdered by the Kim Jong-un regime.”

 

Trump’s Ominous Tweet: “China’s Help With North Korea Has Not Worked Out. At Least It Tried”

In what appears to be a rather ominous tweet posted moments ago by Donald Trump, the President said that “while I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!

While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!

Trump’s troubling statement follows an earlier tweet about North Korea, in which he said that “The U.S. once again condemns the brutality of the North Korean regime as we mourn its latest victim.”

The U.S. once again condemns the brutality of the North Korean regime as we mourn its latest victim. Video: https://instagram.com/p/BVkTvCqAHLI/ 

So is this Trump’s implicit warning that he is about to launch an attack on North Korea, following a failed intervention by China, in retaliation for the death of Otto Warmbier?  If so, it may be problematic since as we showed several days ago, both US carriers Ronald Reagan and Carl Vinson appeared to have left the Korean peninsula as of last week, suggesting that any military action will require their return first.

Alternatively, without reading too much between the lines, Trump’s tweet could simply be a statement of disapproval regarding China’s failed attempt to “normalize” the North Korean situation.

In any case, if Trump is about to launch an attack on North Korea, that much discussed, record low VIX regime may finally be about to break

end

b) REPORT ON JAPAN

c) REPORT ON CHINA

China deploys a massive amount of liquidity.  However the yield curve continually inverts more as China tightens.  The tightening is playing havoc to commodity traders around the globe

(courtesy zero hedge)

China Yield Curve Slumps To Record Inversion Despite Massive Liquidity Injection

The good news – thanks to the largest liquidity injection in almost six months, yields on China’s sovereign bonds have fallen – the biggest drop since Dec. 29, to 3.50 percent, while the one-year dropped four basis points to 3.57 percent. .

“The People’s Bank of China’s liquidity injections are showing its intention to protect the market at this sensitive period of time,” said Sun Binbin, a Shanghai-based analyst at Tianfeng Securities Co.

Notably this is the largest liquidity injection for this time of year in Chinese history (noteworthy since spikes in liquidity occur at regular intervals around quarter-end and lunar new year).

The bad news – as yields have fallen, the curve has collapsed to its most inverted ever… flashing warning signals for growth as loud as they have ever been.

Of course, if Fed’s Dudley is to be believed today, a flattening yield curve is not a negative signal for the economy… apart from the seven out of seven times it has occurred since the late 60s, perfectly predicting recession of course.

Furthermore, as RBC’s Charlie McElligott notes China’s tightening financial conditions (higher short-term rates in the chart below) have crushed not just the yield curve, but global commodities

Lenders have become increasingly reliant on wholesale funding and central bank loans this year, analysts at China Minsheng Banking Corp.’s research institute wrote,“major banks don’t have much extra funds, as is shown by the excess reserve data,”

 

As The Wall Street Journal previously reported, 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’.

END

Caterpillar/China/Asia

The huge liquidity provided by the Chinese government has finally caused CAT’s retail sales to rise. We wonder how long will this last especially if the China stops its funding.

(courtesy zerohedge)

4. EUROPEAN AFFAIRS

The former CEO of Barclay’s charged criminally over the handling of funds in a Qatar fundraising in 2008

(courtesy zero hedge)

Barclays, Former CEO Criminally Charged Over Qatar Fundraising

Two familiar names are in the news this morning, after the UK’s Serious Fraud Office filed criminal charges against Barclays Plc and four former executives, including former CEO John Varley, for conspiracy to commit fraud regarding the bank’s 2008 capital raising from Qatar. The SFO said Tuesday that former Chief Executive Officer John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-deputy head of investment banking Richard Boath and ex-wealth chief Thomas Kalaris face charges along with the bank.

The SFO allegations focus on how Barclays arranged two capital injections from Qatari investors during the 2008 financial meltdown, when the bank raised £11.8 billion ($15 billion) to prop it up and avoid a state bailout unlike peers RBC and Lloyds. Barclays said it paid £322 million in “advisory services” to Qatari investors, which wasn’t initially disclosed after the capital was raised. The SFO charged the individuals and the bank with conspiracy to commit fraud. Two individuals, including its former Chief Executive John Varley, were also charged with the provision of unlawful financial assistance. Additionally, the SFO’s charges also relate to a $3 billion loan facility Barclays made to the State of Qatar acting through the ministry of economy and finance in November 2008, just after its second capital raise.

The WSJ adds that the case marks the first time that top executives at a U.K. bank face criminal charges for their actions during the financial crisis. If Barclays is found guilty it faces a fine but wouldn’t lose its banking license. Barclays said in a statement it is “considering its position in relation to these developments.”

More from the WSJ:

The SFO’s case involves a cadre of Barclays top executives who steered the bank at the time. Mr. Varley, who was the bank’s chief executive until 2011 and Roger Jenkins, a former top investment bank executive who played a key role in orchestrating the capital raises, were charged with conspiracy to commit fraud and unlawful financial assistance. Thomas Kalaris, who used to run the bank’s wealth division, and Richard Boath, who headed the bank’s European financial institutions group, were charged with conspiracy to commit fraud.

 

The Barclays case is a major test for the SFO, which has in recent years failed to successfully prosecute a number of high profile bribery and corruption cases. U.K. Prime Minister Theresa May recently pledged to fold the SFO into another crime fighting agency.

More headaches for Barclays may emerge on the other side of the ocean too: the DOJ and SEC are both investigating the payments made to Middle Eastern officials. Separately PCP Capital Partners, a private-equity group, is suing Barclays for $1 billion alleging it made “sham payments” to the Middle Eastern investors. PCP, which helped organize Abu Dhabi’s investment in Barclays in 2008, also alleges that Barclays lent Qatar investors $3 billion to invest back into the bank. Barclays has previously denied this.

While not implicated personally, the case is another distraction for Barclays’s current CEO, former JPM banker Jes Staley, as he attempts to clean up the bank. Staley himself is currently under investigation by U.K. regulators for trying to identify a whistleblower at the bank.

The market’s reaction to the news has been sanguine with Barclays stock barely ticking lower.

end
GERMANY/BREMER LANDESBANK
We have been bringing to your attention for over a year on the plight of Germany’s Bremer Landesbank out of Hamburg.  These guys are primarily in the shipping business loaning money for shipping of goods out of the port of Hamburg. They had considerable non performing loans.  Today they decided to skip interest payments and thus a self imposed bail in.  The market was caught totally off guard and thus a great reason for gold to fall!
(courtesy zero hedge)

In Historic “Self Bail-In” A German Bank Just Canceled Interest Payments On Two Bonds

One year ago, when Deutsche Bank was sliding on concerns about its bad loan book, Germany’s Bremer Landesbank which at the time had €29 billion in assets, saw its bonds plunge overnight when concerns emerged about an imminent failure by the German lender.

Back then the worry was that the bank’s extensive portfolio of nonperforming shipping loans would require either a bailout by a bank, with the name of majority owner NordLB cited, or a state rescue. It was a report by Germany’s Handelsblatt that unleashed the selling, and fear of another European bank failure, after it said that a bailout may not come: “shipping loans have brought Bremer LB into distress and the bank can not survive without government help, but a direct capital injection from Lower Saxony now looks unlikey.” Eventually, the crisis passed after NordLB took full control of Bremer LB last September, with concerns about its viability swept under the rug.

Fast forward to today, when moments ago in a historic development, the German bank again made headlines again after it said it would “strip”, or cancel the interest payment, on its most subordinated debt, impacting two Euro AT1 notes, the first such move by a German bank which effectively amounted to a partial “self-bail in.”

In a statement, the bank said “The Management Board of Bremer Landesbank decided to cancel, at the next Interest Payment Date, all payment of interest on the AT1 Notes forming part of the own funds”

With respect to the notes issued by Bremer Landesbank Kreditanstalt Oldenburg -Girozentrale- (“BLB”) as “EUR 50,200,000 Perpetual Non-cumulative Fixed to Reset Rate Additional Tier 1 Notes of 2015” (ISIN: DE000BRL00A4, WKN: BRL 00A) and as “EUR 100,000,000 Perpetual Non-cumulative Fixed to Reset Rate Additional Tier 1 Notes of 2015” (ISIN: DE000BRL00B2, WKN: BRL 00B) (together the “AT1 Notes”) forming part of BLB’s own funds the Management Board (Vorstand) of BLB decided today, by exercising its sole discretion pursuant to § 3 (8) (a) of the relevant terms and conditions of the AT1 Notes, to cancel all payment of interest on the AT1 Notes for the current Interest Period at the next Interest Payment Date on 29 June 2017.

Specifically, the bonds affected are the bank’s perpetual €50.2MM 8.5% and €100m 9.5% AT1 notes which will no longer pay a cash coupon starting June 29 payment.

In kneejerk response, the bank’s 9.5% junior bond fell 10% to trade at just over 80 cents on the euro on Tuesday. The 8.5% bond tumbed to 78 cents on the euro.

To be sure, one of the purposes behind such Additional Tier 1 (AT1) bonds under Europe’s EBRD resolution mechanism is to take losses at times of distress, such as what happened today in Germany. The only problem is that nobody saw it was coming. After all, Europe is said to be “doing better” than the US these days.

Investor concerns about such self-imposed “bail-ins” have been especially acute in recent weeks, following the collapse and bail-in of Spain’s sixth largest, at the time, bank Banco Popular which suffered a major bank run on concerns about its viability, prompting the government and ECB to put it into resolution and to be acquired by Santander for €1.

In some ways today’s move is more troubling as in the Banco Popular “bail in” losses were not imposed through a coupon cancellation prior to the bond write-down, suggesting that the facade of some of Europe’s more “stable” bank hide far more substantial balance sheet impairments than the market anticipates. With European stocks closed for the day, there has been no follow through yet to Bremer LB peers or other continental assets.

end

Belgium

Oh NO! not another one:  Belgian military neutralize the terrorist wearing an explosive belt at the Brussels train station

(courtesy zero hedge)

Suspect With “Explosive Belt” Shot By Belgian Military After Explosion In Brussels, Shouted “Allahu Akbar”

Update: The suspect in Brussels train station blast shouted “Allahu Akbar,” according to a witness quoted by AFP.

A soldier cordons off an area outside Gare Central in Brussels after an explosion rocked the train station in Belgium pic.twitter.com/dNnxCU8UjQ

Suspect in Brussels train station blast shouted “Allahu Akbar,” according to a witness

* * *

Another day, another (attempted) terrorist attack, this time in Brussels where moments ago gun shots and an explosion were reported at the Central Station, which was promptly evacuated.

BREAKING: Brussels Central Station evacuated after reports of an explosion

BREAKING |

Police & military cordon is expanding outside central station in after the explosion

Reuters and ABC add that a suspect who was wearing an explosive belt, was “neutralized” by the the military…

DEVELOPING: Explosion has occurred at Brussels Central Station; suspect shot by military, senior Belgian law enforcement official tells @ABC

  • BELGIAN MEDIA SAY POLICE “NEUTRALISED” PERSON WEARING EXPLOSIVE BELT AT BRUSSELS CENTRAL STATION

And the situation is now under control:

  • BELGIAN POLICE ON TWITTER SAY INCIDENT WITH PERSON IN BRUSSELS CENTRAL STATION UNDER CONTROL

Peter De Waele of the federal police said “According to initial findings, there is not much damage, but more details are missing for now,” and added that the incident was still under investigation. There have been no confirmed reports of casualties by authorities.

 END

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Australia/Syria/Russia
Australia suspends its military flights over Syria citing potential threats from Russia
(courtesy zero hedge)

Australia Suspends Military Flights Over Syria, Citing “Potential Threats” From Russia

Russia’s Monday decision to suspend a memorandum of cooperation with the US-led coalition in retaliation after a US jet shot down a Syrian Army plane has rattled some US allies, who fear escalating tensions between Russia and the coalition. In what it called a “precautionary measure,” Australia became the first coalition member to suspend flights in Syria, claiming it’s too dangerous for its planes to fly without the agreement, according to BBC.

“As a precautionary measure, Australian Defense Force (ADF) strike operations into Syria have temporarily ceased,” Australia’s Department of Defense said in a statement, adding its operations in Iraq would continue as part of the coalition.”

 

“ADF personnel are closely monitoring the air situation in Syria and a decision on the resumption of ADF air operations in Syria will be made in due course.”

 

“Australian Defense Force protection is regularly reviewed in response to a range of potential threats,” the Department of Defense said.

Australia has deployed about 780 military personnel as part of the US-led coalition fighting the Islamic State in Iraq and Syria

The BBC notes that Australia has a small but highly capable contingent of six F/A-18 strike aircraft; a tanker; and an E-7A Wedgetail early warning aircraft, all based at Al Minhad in the United Arab Emirates. Most of the Australian strikes have been in Iraq, though its aircraft do also operate over Syria. Australian commanders will reassess the situation in due course. The more fundamental question is what the Russian threat actually amounts to. Is it just rhetoric or does Moscow want to deny certain areas of Syrian airspace to US-led coalition aircraft?

Australian aircraft will continue to fly missions in Iraq.

As reported yesterday, Russia suspended cooperation under the “Memorandum on the Prevention of Incidents and Ensuring Air Safety in Syria” on Monday after the US shot down a Syrian Army fighter jet.

The Russian Defense ministry called the attack “an act of aggression,” on the part of the US-led coalition. The US military neglected to use a communication line with Russia concerning this attack, despite the fact that Russian warplanes were also on a mission in Syrian airspace at the time, the Russian Defense Ministry alleged, conflicting with the Pentagon’s explanation of events.

The bilateral memorandum of understanding was signed between the United States and Russia signed in October 2015 to ensure the safety of flights during combat missions over Syria. In retaliation for the US attack, the ministry warned that Russian missile defense would intercept any aircraft in the area of operations of the Russian Aerospace Forces in Syria.

“In areas where Russian aviation is conducting combat missions in the Syrian skies, any flying objects, including jets and unmanned aerial vehicles of the international coalition discovered west of the Euphrates River will be followed by Russian air and ground defenses as air targets,” the Russian Defense Ministry announced, quoted by Sputnik.

Contrary to the earlier statement by the US, according to which it “contacted its Russian counterparts by telephone via an established “de-confliction line” to de-escalate the situation and stop the firing”, Russia claims the US-led coalition command didn’t use the deconfliction channel with Russia to avoid an incident during an operation in Raqqa:

“Russian Aerospace Forces’ jets were conducting operations in Syrian airspace that time. However, the command of the coalition forces didn’t use the existing channel between the air command of the Qatari airbase al Udeid and the [Russian] Hmeymim airbase to avoid incidents over Syria.”

We now wait to see which other US allies – Germany, Denmark, the Netherlands, France, Jordan and the UK also are contributing men and arms to the task of “liberating” Syria  – will announce that they’re temporarily pulling out of the conflict until tensions once again de-escalate.

end

Russia/USA

Russian jet comes within 5 feet of a USA reconnaissance plane

(courtesy zero hedge)

(courtesy zero hedge)

 

(courtesy zero hedge)

Russia Credit Risk Spikes To 3-Month Highs After US Expands Sanctions

The US added 38 people (two Russian officials and three dozen other individuals and companies) to a sanctions list prompted by Russia’s incursion in Ukraine, the US Treasury Department announced Tuesday, just before US President Trump was due to meet Ukrainian President Petro Poroshenko. Sovereign bond yields and CDS have spiked following the news

Russia credit risk spike to its highest since March following the news…

And bond prices are tumbling…

As DPA reports, the move targets Ukrainian separatists and their supporters in eastern Ukraine, as well as individuals and companies involved in Russia’s annexation of Crimea. It also taps several Russian officials and companies for evading existing sanctions.

The Treasury Department said it was designating the individuals and companies to prevent circumvention of sanctions and to keep US actions in line with other countries.

“These designations will maintain pressure on Russia to work toward a diplomatic solution,” Treasury Secretary Steven Mnuchin said in a statement.

 

“This administration is committed to a diplomatic process that guarantees Ukrainian sovereignty, and there should be no sanctions relief until Russia meets its obligations under the Minsk agreements.”

Designations of Ukrainian Separatists (E.O. 13660)
Today’s action targets 21 Ukrainian separatists, entities, and their supporters pursuant to E.O. 13660 for being responsible for or complicit in, or having engaged in, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; for acting for or on behalf of, being owned or controlled by, or providing material or other support to previously designated groups; or for asserting governmental authority over a part or region of Ukraine without the authorization of the Government of Ukraine.  This action is part of an ongoing effort to hold those responsible for violations of Ukraine’s sovereignty and territorial integrity accountable for their actions.
 
Vadim Bulgakov is the head of the Federal Penitentiary Service of the so-called “Republic of Crimea” and Sevastopol.  Bulgakov is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine.
 
Igor Kornet is the “Minister of Internal Affairs” of the so-called “Luhansk People’s Republic (LPR).”  He previously announced that the Ministry of Interior of the LPR would launch a large-scale issuance of LPR passports to residents.  Kornet is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the LPR.
Leonid Pasechnik is the “Minister of State Security” of the so-called  “LPR.”  He has been involved in a number of corruption schemes related to the smuggling of contraband between the LPR and Russia, to include arms, coal, fuel, and other related material.  Pasechnik is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the LPR.
Natalya Khorsheva is “Acting Minister” of the “Council of Ministers” of the so-called “LPR.”  She previously announced that the LPR Council of Ministers adopted a resolution that would establish the Russian Ruble as the principal currency of the LPR.  Khorsheva is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the LPR.
Petr Jarosh is the head of the Russian Federal Migration Service in the so-called “Republic of Crimea” and was sanctioned by the EU for supporting actions and policies which undermine the territorial integrity and independence of Ukraine.  Jarosh is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine.
Aleksey Kostrubitsky is the “Civil Defense and Emergency Situations Minister” of the so-called “Donetsk People’s Republic (DPR).”  Kostrubitsky is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the DPR.
Aleksey Dikiy is the “Minister of Interior” of the so-called “DPR.”  Dikiy is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the DPR.
Irina Nikitina is “Chairwoman” of the “Central National Bank” of the so-called “DPR.”  She previously announced the test launch of a system designed to allow money transfers between individuals from the DPR and LPR.  Nikitina is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the DPR.
Andrei Melnikov is the “Minister of Economic Development” of the so-called “Republic of Crimea.”  Melnikov is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine.
Oleg Kamshilov is the “Prosecutor” of the so-called “Republic of Crimea.”  Kamshilov is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine.
 
Aleksey Muratov is an official representative of the so-called “DPR” in Russia.  He was involved in raising funds in Russia for relief aid for Donetsk and Luhansk, but it is alleged that only a small portion of the funds reached the intended recipients.  Muratov is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and acting or purporting to act for or on behalf of, directly or indirectly, the DPR.
PMC Wagner is a private military company that has recruited and sent soldiers to fight alongside separatists in eastern Ukraine.  PMC Wagner is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine.
 
Dmitriy Utkin is the founder and leader of PMC Wagner.  Utkin is being designated for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, stability, sovereignty, or territorial integrity of Ukraine; and for acting or purporting to act for or on behalf of, directly or indirectly, PMC Wagner.
 
Central Republic Bank is the central bank of the so-called “DPR” and is directed and coordinated by the Council of Ministers of the DPR.  The bank operates throughout the territory of the self-proclaimed DPR and conducts the regular payment of pensions and benefits to residents of the territory.  Central Republic Bank is being designated for acting or purporting to act for or on behalf of, directly or indirectly, or being owned or controlled by, the DPR.
State Bank Luhansk People’s Republic is the central bank of the so-called “LPR” and was established by the Council of Ministers of the LPR.  The bank operates more than 110 branches within the territory of the so-called LPR.  State Bank is being designated for acting or purporting to act for or on behalf of, directly or indirectly, or being owned or controlled by, the LPR.
 
TSMRBANK, OOO is a Russian bank that services clients in the so-called “DPR” and “LPR.”  The bank maintains close ties with the leadership of the DPR.  TSMRBANK, OOO is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the LPR and the DPR.
Sergey Nazarov is being designated for materially assisting, sponsoring, or providing financial, material, or technological support for, or goods and services in support of, the DPR and LPR.  He is the chairman of the Interagency Commission for Humanitarian Assistance in the Donbass Republics (the “Interagency Commission”), which is nominally dedicated to providing humanitarian assistance to the Donetsk and Luhansk regions but in actuality also oversees projects in the transportation, trade, energy, tax, and financial sectors.  The Russian government, through Nazarov and the Interagency Commission, has exercised economic control in the Donetsk and Luhansk regions.  In addition to his activities in Donetsk and Luhansk, Nazarov has also worked to encourage international investment in Crimea.  Nazarov, the Deputy Minister of Economic Development of the Russian Federation, is also being designated pursuant to E.O. 13661 as an official of the Government of the Russian Federation.
Wolf Holding of Security Structures is an organization owned by the previously-designated Night Wolves motorcycle club.  The company provides martial arts and tactical military courses to foreign military, law enforcement, and Russian-speaking compatriots from European and Asian States. Wolf Holding of Security Structures is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Night Wolves.
Gennadii Anatolievich Nikulov is the President of Wolf Holding of Security Structures.  Gennadii Nikulov is being designated for acting for or on behalf of Wolf Holding of Security Structures.
Denis Yuryevich Ryauzov is the Combat Trainer Leader for Wolf Holding of Security Structures.  Denis Ryauzov is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, and for acting or purporting to act for or on behalf of, directly or indirectly, Wolf Holding of Security Structures.
Bike Center, a business located in Moscow, is being designated for being owned or controlled by the previously-designated leader of the Night Wolves, Aleksandr Zaldostanov.
Designations Related to Russia’s Purported Annexation of Crimea
OFAC also designated 11 individuals and entities pursuant to E.O. 13685.  E.O. 13685 authorizes sanctions on any person determined to be operating in the Crimea region of Ukraine, to be a leader of an entity operating in the Crimea region of Ukraine, or to be owned or controlled by, or to have provided material support for, any person designated under this E.O.
IFD Kapital (IFDK) is a diversified holding company with investments in several sectors of the Russian economy, and owns a hotel complex in Crimea called the Riviera Sunrise Resort & Spa, which is also being designated today.  IFDK claimed control of the hotel complex after its previous managers halted operations in the Crimea region due to U.S. sanctions.  IFDK is being designated for operating in the Crimea region of Ukraine.
 
Riviera Sunrise Resort & Spa is a hotel complex operating in Alushta, Crimea.  Riviera Sunrise Resort & Spa is being designated for operating in the Crimea region of Ukraine, and for being owned or controlled by IFDK.
 
Olga Plaksina is the Chairperson of IFDK and is responsible for certain aspects of Crimean development.  Plaksina is being designated for being the leader of and acting or purporting to act for or on behalf of, directly or indirectly, IFDK.
 
KPSK, OOO is an insurance carrier located in Simferopol, Crimea.  The company, one of Russia’s top corporate property insurers, is the insurer of the bridge being constructed across the Kerch Strait connecting Crimea to Russia.  KPSK, OOO is being designated for operating in the Crimea region of Ukraine.
Oboronlogistika, OOO is the Russian Defense Ministry’s sole executor for the procurement of goods, works, and services for maritime transport of military troops and freight on the territory of the so-called Republic of Crimea.  Oboronlogistika, OOO owns maritime vessels operating in and around the Kerch ferry and the Baltic Sea.  Oboronlogistika, OOO is being designated for operating in the Crimea region of Ukraine.  
OFAC also designated the following six banks for operating in Crimea: Taatta, AO; Joint Stock Company Black Sea Bank of Development and Reconstruction; Joint Stock Commercial Bank Rublev; Joint Stock Company Commercial Bank North Credit; IS Bank, AO; and VVB, PAO.
Designations Related to Officials of the Russian Government and Sanctions Evasion
Today’s action also targets six individuals and entities pursuant to E.O. 13661, which authorizes sanctions on, among others, any individual or entity that is owned or controlled by, or that has provided material or other support to, persons operating in the arms or related materiel sector in the Russian Federation, and officials of the Government of the Russian Federation.
Molot-Oruzhie, OOO manufactures ordnance and accessories and is located in the Russian Federation.  In 2016, previously-designated Kalashnikov Concern advised a foreign company to use Molot-Oruzhie, OOO to falsify invoices in order to circumvent U.S. and EU sanctions.  Molot-Oruzhie is being designated for operating in the arms or related material sector of the Russian Federation and for acting or purporting to act for on behalf of, directly or indirectly, Kalashnikov Concern.
Limited Liability Company Concord Management and Consulting and Concord Catering are being designated for being owned or controlled by Yevgeniy Prigozhin, who OFAC designated in December 2016.
Alexander Babakov is the Russian Federation’s Special Presidential Representative for Cooperation with Organizations representing Russians Living Abroad.  Babakov was sanctioned in 2014 by the EU, which noted that he voted “yes” on a Russian bill for the annexation of Crimea. Alexander Babakov is being designated as an official of the Government of the Russian Federation.
Aleksandr Vorobev is Alexander Babakov’s Chief of Staff.  Aleksandr Vorobev is being designated for acting or purporting to act for or on behalf of, directly or indirectly, Alexander Babakov.
Mikhail Plisyuk is a staffer to Alexander Babakov.  Mikhail Plisyuk is being designated for acting or purporting to act for or on behalf of, directly or indirectly, Alexander Babakov.

* * *

Any assets they have in the U.S. are now blocked. Americans are prohibited from doing business with them.

Finally, Senator John McCain will be happy after complaining earlier that…

“We all know that the Russians tried to interfere in our elections. Here we are six months later and we’ve done nothing.”

 

 

end

 

ISIS cleric killed by USA coalition forces

(courtesy zero hedge)

ISIS Chief Cleric Killed By Coalition Forces In Syrian Air Strike

US-led coalition forces said they have killed Turki al-Bin’ali, the Islamic State’ self-proclaimed “Grand Mufti” or chief cleric, in an air strike in Syria on May 31. Bin’ali was one of Islamic State’s most visible preachers and appeared regularly in its propaganda videos. He was placed under U.S. sanctions for helping Islamic State recruit foreign fighters, according to the U.S. Treasury according to Reuters.

In a statement released on Tuesday, CENTCOM said that Al-Bin’ali had a central role in recruiting foreign terrorist fighters and provoking terrorist attacks around the world. As chief cleric to ISIS since 2014, he provided propaganda to incite murder and other atrocities, attempted to legitimize the creation of the “caliphate,” and was a close confidant of Abu Bakr al-Baghdadi.

Full CENTCOM statement:

Coalition forces killed Turki-al-Bin’ ali

 

Coalition forces killed Turki al-Bin’ali, the self-proclaimed “Grand Mufti,” or chief cleric, of ISIS, in an airstrike May 31 in Mayadin, Syria.

 

Al-Bin’ali had a central role in recruiting foreign terrorist fighters and provoking terrorist attacks around the world. As chief cleric to ISIS since 2014, he provided propaganda to incite murder and other atrocities, attempted to legitimize the creation of the “caliphate,” and was a close confidant of Abu Bakr al-Baghdadi.

 

Leveraging his self-proclaimed religious role, his propaganda writings included the call for terrorists to pledge allegiance to al-Baghdadi as “caliph.” His recruiting efforts for the terror group also included multiple recorded lectures attempting to justify and encouraging the slaughter of innocents.

 

More information about Al-Bin’ali can be found at:

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Page…
https://www.un.org/sc/suborg/en/sanctions/1267/aq_sanctions_list/summari…

With ISIS largely scattered, and on the defense across most areas in Syria and Iraq, it is unclear if Bin’ali had a prominent role in recent months, although his termination will likely lead to further demoralization among ISIS troops, and an even faster defeat of the terrorist state. A question then emerges: once ISIS is defeated and “terrorism” is no longer a concern, what pretext will coalition forces use to continue their ongoing militarized “presence” in Syria and the region?

6 .GLOBAL ISSUES

ARGENTINA

Yesterday Argentina issued a 100 yr bond.  Bill Blain and others are stunned that there are investors willing to buy this crap

(courtesy Bill Blain/Mint Partners/zero hedge)

Bill Blain Flips Out: “Not Much Surprises Me Any More About Markets, But Really? Really!?”

On Monday morning, we reported that in a stunning development, chronic defaulter Argentina – which just one year ago emerged from its latest bankruptcy – has found enough willing greater fools to sell 100-year bonds to. One person who especially stunned, was Mint’s Bill Blain, who issued an entire note describing his disgust with what the market has devolved to.

* * *

Argentina 100 Year Bonds: Really? Nobody Believes, But They Will Buy.

“Everyone should learn to Tango before they die.. ”

Markets can be a triumph of hope over reality. The news Argentina is going to launch a 100 year century bond caught my eye today.

Not much surprises me any more about markets, but really? Really!?

This appears to be a classic example of Blain’s Market Mantra No 3 – “The Markets have no memory, and neither do buyers.”

However, I expect to hear the bond will be massively oversubscribed as investors pile in for the high 8.25% coupon. I doubt anyone on the investor call was particularly convinced by the Argentine pitch, but they will love the coupon… In this financial environment, despite the fact too much cheap QE money has created massive financial asset inflation, you simply can’t pass the opportunity to earn 8% plus by playing pass the parcel with these bonds, hoping to profit for them…

And not being the holder when they stop ticking…. Because the ticking will stop. Momentarily. Before the boom.

Founded in 1816, by 1912 Argentina was officially the 10th wealthiest nation on Earth. Yet it has defaulted or restructured its debt 7 or 8 times (it depends how you count them)! From wealthy nation blessed with natural abundance, it circles economic reality in a chronically chaotic orbit of mismanagement, political crisis, inflation and repeated financial crisis.

What makes you believe anything has changed?

But for the grace of the ECB keeping Greece afloat, Argentinas’s $100 billion default in 2001 remains the largest sovereign default ever, and attempts to restructure that default triggered default again in 2014.

When it comes to default, Argentine is in a league of its own. It first managed to default in 1827 being unable to pay back loans on the back of rising UK rates, and again in 1890 after bankrupting the country trying to make Buenos Aires the “Paris of South America”. Interestingly the 1890 default was triggered by contagion following the near collapse of Barings – which was bailed out by other UK banks. (Barings will be a familiar name as the feckless UK institution which is rumoured to have got rich on insider news on the away win at Waterloo in 1815 and subsequently self-immolated in 1995 when rogue trader Nick Leeson bet the whole shop on a series of dodgy derivatives trades in Asia.)

Further Argentina defaults followed in 1956 and again in 1989. You might be spotting a trend…

30-yrs ago Tax avoidance was so deeply rooted in Argentina that less than 1% of the population paid any income tax. Inflation rates since the 1950s have typically been measured in 4-5 digit numbers, and in terms of wheelbarrows, rather than the money in them, being stolen.

Despite every possible natural and immoral advantage possible – including plentiful minerals, rich farmland, perfect beef growing conditions (there was a time when Fray Bentos was Beef!), and quietly replacing the troublesome indigenous native population with Europeans, Argentina has proved as politically stable as a 6 ft high Jenga tower with all the utility of a chocolate tea pot.

Yet the market now wants to lend them 100 year money at 8.25%.

Hmm… stop me… but is that wise? As long as you can keep flipping the bonds ahead of the next crisis.

What has changed that means Argentina has somehow reformed its economy from chronic instability to stability? What makes you think they’ve gone from irregular defaults or debt events ever 25 years or so, to overnight stability?

The FT says the country has been out meeting investors and telling them just how stable the country is under Presidente Mauricio Macri “who has appointed market friendly officials and cut a deal with holdout creditors..”.

Really. well that makes it all tickety-boo then… (US Readers: Massive Sarcasm Alert.)

Just asking…. but I’ve no problem with mass delusional investment moments.

We’ll happily trade them. If anyone wants some Argentina Century bonds, our EM bond team will be making markets in them. Caveat Emptor.

end

 

I am going to be highlighting this for you as it is quite important.  Matt King  (one smart cookie) has been studying global credit impulse and it has turned negative.  He explains what this means to the global economy

(courtesy zero hedge)

Why The (Collapsing) Global Credit Impulse Is All That Matters: Citi Explains

One week ago, we reported that UBS has some “very bad news for the global economy”, when we showed that according to the Swiss bank’s calculations, the global credit impulse showed a historic collapse, one which matched the magnitude of the impulse plunge in the immediate aftermath of the financial crisis.

But why is the credit impulse so critical?

To answer this question Citi’s Matt King has published a slideshow titled, appropriately enough, “Why buying on impulse is soon regretted”, in which he explains why this largely ignored second derivative of global credit growth is really all that matters for the global economy (as well as markets, as we will explain in a follow up post).

King first focuses on the one thing that is “wrong” with this recovery: the pervasive lack of global inflation, so desired by DM central banks.

As he notes in the first slide below, “the inflation shortfall isn’t new” and yet the current “level of credit growth would traditionally have seen inflation >5%”

To be sure central banks always respond to this lack of inflation by injecting massive ammounts of liquidity, i.e., credit, in the system: according to Citi, the credit addiction started in 1982 in the UK, while in 2009 it was in China. However, there was a difference: while in the 1982 episode, it took 3 credit units to grow GDP by 1 unit, by 2009 this rate had grown to 6 to 1. Meanwhile, central bankers “simply stopped worrying about credit.” That also explains the chronic collapse in interest rates starting in 1980 with the “Great Moderation” and their recent record lows: the world simply can not tolerate higher rates.

And while the central bank experiment had limited success in stimulating inflation, there was one obvious consequence: credit fuelled asset bubbles around the world.

This is where the credit impulse comes into play: it allows market participants to track the instantaneous change in central banks’ credit creation, and more importantly,  The change in the flow of credit drives GDP growth.

The impulse is also important as it directs investor behavior as well, due to its correlation with asset prices.

Of note: courtesy of fungible money and equivalent, the effects of a credit impulse in one area promptly diffuse around the globe, as “Credit created in one place often drives prices elsewhere.”

Which, simply said, means that instead of looking at central bank, or credit creation, in isolation, it has to be watched in a global context. And here is the important part: as Citi concludes, “we’ve just had the biggest surge in the post-crisis era”…

… and yet the central bankers’ holy grail – inflation – remains low.

In a follow up post we will show momentarily what, according to Citi, happens when the credit impulse turns negative as it just did.

end

CANADA

I guess we have nothing better to do:

(courtesy Rob Shimshock/Daily Caller)

Canada Passes Law Criminalizing Use Of Wrong Gender Pronouns

Authored by Rob Shimshock via The Daily Caller,

Canada passed a law Thursday making it illegal to use the wrong gender pronouns. Critics say that Canadians who do not subscribe to progressive gender theory could be accused of hate crimes, jailed, fined, and made to take anti-bias training.

Canada’s Senate passed Bill C-16, which puts “gender identity” and “gender expression” into both the country’s Human Rights Code, as well as the hate crime category of its Criminal Code by a vote of 67-11, according to LifeSiteNews. The bill now only needs royal assent from the governor general.

“Great news,” announced Justin Trudeau, Canada’s prime minister. “Bill C-16 has passed the Senate – making it illegal to discriminate based on gender identity or expression. #LoveisLove.”

Great news: Bill C-16 has passed the Senate – making it illegal to discriminate based on gender identity or expression.

Proud that Bill C-16 has passed in the Senate,” said Jody Wilson-Raybould, the country’s attorney general and minister of justice. “All Canadians should feel #FreeToBeMe.”

[There’s an argument] that transgender identity is too subjective a concept to be enshrined in law because it is defined as an individual’s deeply felt internal experience of gender,” said Grant Mitchell, a conservative senator, in November 2016. “Yet we, of course, accept outright that no one can discriminate on the basis of religion, and that too is clearly a very deeply subjective and personal feeling.”

Jordan Peterson, a professor at the University of Toronto, and one of the bill’s fiercest critics, spoke to the Senate before the vote, insisting that it infringed upon citizens’ freedom of speech and institutes what he views as dubious gender ideology into law.

“Compelled speech has come to Canada,” stated Peterson. “We will seriously regret this.”

 

“[Ideologues are] using unsuspecting and sometimes complicit members of the so-called transgender community to push their ideological vanguard forward,” said the professor to the Senate in May.

 

“The very idea that calling someone a term that they didn’t choose causes them such irreparable harm that legal remedies should be sought [is] an indication of just how deeply the culture of victimization has sunk into our society.”

Peterson has previously pledged not to use irregular gender pronouns and students have protested him for his opposition to political correctness.

WATCH:

“This tyrannical bill is nothing but social engineering to the nth degree, all in the name of political correctness,” Jeff Gunnarson, vice president of Campaign Life Toronto, a pro-life political group in Canada, told LifeSiteNews.

The Daily Caller News Foundation reached out to the director of communications for the House of Commons, but received no comment in time for publication.

7. OIL ISSUES

Rising output from Libya and others have finally caused oil to succumb:  WTI broke into the 43 dollar column;

(courtesy zerohedge)

Oil Plunges To November Lows On Sudden Volume Spike

Oil dropped to the lowest in seven months, with both Brent and WTI sliding to prices not seen since November, following a burst of volume just after 6am, amid a revival in output from Libya and rising volumes of fuel held in floating storage, although today’s move was likely yet another hedge fund capitulating and liquidating long positions. As a reminder, Pierre Andurand was down 17.3% through end of May.

Brent hit new year-to-date low at $45.85, after a one-minute burst of volume of a day-high 5,208 lots at 6:04am, taking out a 38.2% Fib support, after a one-minute spike in volume to a day-high 5,208 lots just after 6am. The move could spur a move toward the $44.66 measured support line according to Bloomberg technician Sejul Gokal.

West Texas Intermediate for July delivery, which expires Tuesday, was down 90 cents at $43.30 a barrel, the lowest since Nov. 14, having dropped as low as $43.22. The more-active August contract fell 85 cents to $43.58. Trading volume +61% vs 100-day average. August Brent dropped -87c to $46.04/bbl; sliding as much as $1.06 to $45.85, lowest since Nov. 18. Brent is trading at a premium of $2.45 to August WTI.

There were no headlines to trigger the move, which was driven by early orders from New York if anything. With 47 and 44 being respectively broken in Brent and WTI, it looks like the move may be triggered by stops according to Citi. For WTI, $43.76 was the intraday low ahead of the French election. API inventory data later today will be the next catalyst for oil prices, as the oil supply glut remains in focus. Citi Commodities Sales note, “It feels like were seeing some panic that we could shoot through the YTD lows here as we retest the levels seen last November pre the OPEC meeting, with decent volumes going through the market.”

According to CitiFX technicals, “we are in a clear down trend having made lower lows and lower highs for the past four consecutive weeks and it does not look like have hit a bottom yet. In fact, we actually got a bearish outside day yesterday. Next level to watch is the November low at 42.20, followed by the August 2016 low of 39.19.”

“It’s just ongoing negative market sentiment,” Commerzbank analyst Carsten Fritsch told Bloomberg. “The trend is your friend” unless of course you are a bull. Fritsch added that the market would need “a massive bullish surprise” from inventory data this week for sentiment to reverse

Among the reasons cited for the drop by Bloomberg, none of which are new, is that Libya is pumping the most crude in four years after a deal with Wintershall AG enabled at least two fields to resume production.

Additionally, offshore stores is rising with the amount of oil stored in tankers reached a 2017 high of 111.9 million barrels earlier this month, according to Paris-based tracking company Kpler SAS. With traders again storing more crude at sea amid swelling production in the Atlantic region and a widening contango, this confirms the market is far from rebalancing.

Ahead of tomorrow’s EIA report, consensus is that U.S. inventories probably shrank by 1.2 million barrels last week. Look for an API headfake after today’s close. Crude stockpiles remain more than 100 million barrels above the five-year average, according to data from the EIA. American production has climbed to 9.33 million barrels a day through June 9, near the highest since August 2015.

All the latest oil news courtesy of Bloomberg:

  • Libya is pumping about 900,000 barrels a day, according to a person with direct knowledge of the matter, who asked not to be identified for lack of authority to speak to the media.
  • Oil stored in tankers reached a 2017 high of 111.9 million barrels earlier this month, according to Paris-based tracking company Kpler SAS.
  • There were 5,946 drilled-but-uncompleted wells in U.S. oilfields at the end of May, the most in at least three years, according to EIA estimates.
  • Pierre Andurand’s oil hedge fund lost 17.3 percent in the year through May as one of the world’s most prominent energy bulls suffered in the wake of last month’s OPEC meeting, according to a document outlining the fund’s performance

end

8 factors why WTI plunged today to 7 month lows

(courtesy zero hedge)

WTI Plunges To 7-Month Lows – Enters Bear Market As HY Bonds Crater

WTI Crude has entered a bear market (down over 20% from its highs) amid concerns OPEC-led output cuts won’t succeed in rebalancing the market (and not helped by the fact that Libya is pumping the most crude in 4 years).

For the first time since Nov 2016, WTI front-month traded with a $42 handle…

Here are eight factors that are behind the current fall in oil prices according to Arab News:

1. High exports from OPEC: Despite the reduction in production from oil producers, the level of exports is still high as many tanker-tracking data showed. Morgan Stanley in a report on June 8 said that tanker-tracking data showed that waterborne exports increased strongly in May across the world, up by 2.2 million bpd from April and 3.3 million bpd from May 2016.

 

2. High global oil inventories: Saudi Energy Minister Khalid Al-Falih told Arab News’ sister publication Asharq Al-Awsat in an interview on June 19 that oil inventories globally are down following the deal. The Organization for Economic Co-operation and Development’s (OECD) oil stocks went down by 65 million barrels from their peak in July 2016. However, Al-Falih acknowledged that US stocks are falling less than expected. As for the market, the fall in inventories is too slow to trigger a price response. The International Energy Agency (IEA) estimates that oil stocks in the OECD are still at 292 million barrels above their five-year average. Energy researcher Bernstein estimates that US stocks must go down by 4 million barrels every week for it to go back to normal levels.

 

3. Concerns on gasoline demand: The outlook for US gasoline consumption this summer is a concern. Gasoline stocks rose 2.1 million barrels and gasoline inventories currently sit at 242.4 million barrels, or 9 percent, above the five-year average of 223 million barrels, according to the US Energy Information Administration (EIA) data.

 

 

4. Increase in the number of rigs: The number of US oil rigs is continuing to rise. Drillers added more oil rigs for a 22nd straight week, marking the biggest streak in at least three decades, according to weekly data from Baker Hughes released on June 16.

 

5. Worries about supply in 2018: The IEA said in its report on June 14 that supply from non-OPEC producers next year may offset cuts from OPEC and its allies. Oil demand is set to grow by 1.4 million bpd in 2018 but supplies outside OPEC will grow even faster, by almost 1.5 million bpd.

 

6. Oil prices in contango: Brent and West Texas Intermediate (WTI) crudes, down almost 15 percent since late May, are both trading in contango, with forward prices higher all the way into the next decade. Contango is a structure that normally denotes weak demand for spot cargoes as it means oil prices in the future are higher than today’s, thus it makes producers store crude for future sale.

 

7. Return of oil output from Libya, Nigeria: Libyan oil production this week is up by 200,000 to 300,000 bpd from early May. Nigeria is also pushing for an additional output of 200,000 bpd this month. The market is concerned that this will add to oversupply, but Al-Falih said on June 19 that the increase is within agreed limits set by the original deal last year.

 

8. Speculation: Al-Falih blamed volatility in oil prices on speculative trading as many are trading on headlines and on forecasts of supply growth from resources “that may not happen.”

HY Bonds are getting hit led by a spike in HY Energy risk…

“People are getting a little fatigued waiting for the production cuts to have effect,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass., says by phone.

 

“Between the U.S. shale activity and Libya and Nigeria seeing their production go up some, that’s making people very nervous about the near-term prospects”

Tonight’s API inventory data may provide further impetus for this mov

WTI and gasoline hold despite another buildup of inventories and increased production
(courtesy zerohedge)

WTI/RBOB Unch After API Signals Another Week Of Product Builds

With WTI/RBOB prices tumbling to 7-month lows intraday (not helped by Libya production), oil bulls hope for a bounce after API is not coming true despite a bigger than expected crude draw, both gasoline and distillates saw notable builds and oil prices could not make their mind up.

 

API

  • Crude -2.72mm (-1.2mm exp)
  • Cushing -1.269mm
  • Gasoline +346k (+500k exp)
  • Distillates+1.837mm

At a time when Gasoline demand should be rising and inventories dropping – neither happened the last two weeks and once again, according to API, gasoline built (as did distillates)…

Libya pumps most oil since 2013 as Wintershall fields resume (and Nigeria production rising) did not help…but the machines could not make their minds up after the API data…

“Obviously, the sentiment in the market right now is negative and bearish,” Michael Loewen, a commodities strategist at Scotiabank in Toronto, said by telephone.

“OPEC has all of these barrels off the market right now, but what happens in 2Q when OPEC is expected to either lift or extend supply caps – There’s lots of concern around that”

8. EMERGING MARKET

 

Reform of the labour reform has been rejected and this caused the Brazilian real to tumble:

(courtesy zerohedge)

 

Brazilian Real Tumbles After Senate Rejects Landmark Labor Reform Bill

Brazil’s landmark labor reform bill, intended to relax the country’s restrictive labor laws and a main plank of embattled President Michel Temer’s efforts to bolster investment and pull the economy out of its worst recession ever and widely seen as the country’s second most important reform agenda after the Pension bill, was unexpectedly rejected by a special committee in Brazil’s senate, with 10 votes against it, 9 in favor and 1 abstention. 

Prior to the vote, local newspaper O Globo reported that the government believed text of the labor reform will be approved in Senate’s Social Affairs Committee in a tight vote of about 11 in favor vs 8 against, setting market expectations.

In immediate kneejerk reaction, stocks dropped as much as 1.4%, while the BRL is leading declines among major currencies, down 1.6%, from drop of ~0.8% before vote. The committee was 2nd of the 3 bill had to clear before going to Senate floor vote. The failure to pass, strikes a major blow to Temer’s reform policy and puts into question whether Brazil will be able to “sell” its economic improvement to potential investors.

According to Citi, the rejection could result in the reform effort being delayed. However Committees have no terminating character, Senate general secretary Luiz Fernanddo Bandeira de Mello noted. The bill will now go to the Senate Constitution and Justice Committee and then the Senate floor’s assessment.  Nevertheless the rejection is likely to be a further blow to the government, amid other political noise embroiling President Temer.

The labor bill is fiercely opposed by unions because it would abolish mandatory payment of union dues by Brazilian workers.

In April, Brazil’s lower house approved the labor bill, seen as a barometer of support for Temer, two days before a national strike and demonstrations called by labor unions and leftist parties to protest Temer’s reform program that they say undermines workers’ rights to the benefit of business interests. Backers of the labor bill say it will modernize employment rules that date from the 1950s and encourage investment by lowering labor costs for businesses.

If it had been passed by the Senate, the measure would relax restrictions on temporary workers, introduce guarantees for outsourced work and let collective bargaining agreements between unions and employers override some rules of the labor code. Now that it has failed to gain passage, Temer’s entire economic agenda is suddenly in limbo.

 

end

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

Euro/USA   1.1149 UP .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 AGAIN/EUROPE BOURSES MOSTLY IN THE GREEN 

USA/JAPAN YEN 111.58 DOWN 0.114(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 1.2664 DOWN .0066 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3263 up .0037 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 6 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1164; 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 4.36 POINTS OR 0.14%     / Hang Sang  CLOSED DOWN 81.51 POINTS OR 0.31% /AUSTRALIA  CLOSED DOWN 0.74% / EUROPEAN BOURSES OPENED MOSTLY IN THE GREEN 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED UP 162.66 POINTS OR 0.81%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 81.51 POINTS OR 0.31%  / SHANGHAI CLOSED DOWN 4.36 POINTS OR 0.14%   /Australia BOURSE CLOSED DOWN 0.74% /Nikkei (Japan)CLOSED UP 1162.66 POINTS OR 0.81%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1245.50

silver:$16.55

Early TUESDAY morning USA 10 year bond yield: 2.180% !!! DOWN 0 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.774, DOWN 1  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 97.60 UP 5  CENT(S) from FRIDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 2.874%  DOWN 0 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.057%  UP 2/10  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.385%  DOWN 6 IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.909 DOWN 5   POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 47 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.262% DOWN 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1120 DOWN .0024 (Euro DOWN 24 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.45 DOWN  0.249 (Yen UP 25 basis points/ 

Great Britain/USA 1.2620 DOWN 0.01105 ( POUND DOWN 110 basis points) 

USA/Canada 1.3270 UP .0044 (Canadian dollar DOWN 44 basis points AS OIL FELL TO $43.00

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 24 basis points to trade at 1.1120

The Yen ROSE to 111.45 for a GAIN of 25  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 110  basis points, trading at 1.2620/ 

The Canadian dollar FELL by 44 basis points to 1.3270,  WITH WTI OIL FALLING TO :  $43.00

The USA/Yuan closed at 6.8292/
the 10 yr Japanese bond yield closed at +.057% UP 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 3 IN basis points from MONDAY at 2.153% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.739  DOWN 5  in basis points on the day /

Your closing USA dollar index, 97.86  UP 26 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 51.10 POINTS OR 0.68%
German Dax :CLOSED DOWN 74.16 POINTS OR 0.58%
Paris Cac  CLOSED DOWN 17.07 POINTS OR 0.32% 
Spain IBEX CLOSED DOWN  102.80 POINTS OR 0.95%

Italian MIB: CLOSED  DOWN 204.23 POINTS/OR 0.97%

The Dow closed DOWN 61.85 OR 0.29%

NASDAQ WAS closed DOWN 50.98 POINTS OR 0.82%  4.00 PM EST
WTI Oil price;  43.00 at 1:00 pm; 

Brent Oil: 45.83 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.59 DOWN 1 AND  12/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS T0  +0.262%  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:$43.34

BRENT: $45.77

USA 10 YR BOND YIELD: 2.156%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.738%

EURO/USA DOLLAR CROSS:  1.1133 DOWN .0012

USA/JAPANESE YEN:111.45  DOWN 0.248

USA DOLLAR INDEX: 97.76  UP 21  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2624 : DOWN 107 POINTS FROM last NIGHT  

Canadian dollar: 1.3264 DOWN 38  BASIS pts 

German 10 yr bond yield at 5 pm: +0.262%

END

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

TRADING IN GRAPH FORM FOR THE DAY

“Not Off The Lows” – Oilmageddon Sinks Stocks As Treasury Curve Crashes To 10-Year Lows

Tough day for some…

 

A bloodbath in the oil patch as WTI entered a bear market, hit a $42 handle and tumbled to the lowest levels since Nov 2016…

 

The pain of oilmageddon is beginning to strike credit markets once again

 

That weighed on Trannies the most but selling pressure was abundant… and the absence of dip-buyers was clear (as central bank balance sheet shrank modestly)

Small Caps and Trannies are red from Friday now. Trannies biggest drop in a month

And energy stocks more broadly…

 

VIX dared to rise above 11, as Nasdaq erased yesterday’s opening panic bid ramp

 

But once again FANG stocks opened higher and drifted lower, unable to break above the 50% retracement level…

 

While oil was making the headlines,  the yield curve was collapsing even more historically…

 

2s10s continues to tick flatter…

 

5s30s are now at its flattest since 2007…

The same flatness when the last two recessions started…

So now we have:

  • KAPLAN: SHAPE OF THE YIELD CURVE IS SOMETHING THAT WORRIES ME

But…

  • NY FED’S DUDLEY: FLATTENING YIELD CURVE IS NOT A BAD SIGN FOR THE ECONOMY

At least get your story straight!!

The Dollar Index rallied once again – erasing the losses post-Payrolls…

 

WTI hit a $42 handle, below the May lows…

 

And gold futures held below their 200-day moving average…

 

Finally, as Citi notes, buy the dips when central banks are adding liquidity. Don’t buy them when they’re pulling back – as at present 

 

end

Protesters interrupt the final play of the “Julius Caesar/Donald Trump play in New York

(courtesy zero hedge)

Protesters Interrupt Final Play Of Trump Assassination – “The Blood Of Steve Scalise Is On Your Hands”

Despite the recent mass shooting in Alexandria, Va that nearly claimed the life a Majority Whip Steve Scalise, a shooting that looks to be attributable to a severe case of Trump Derangement Syndrome brought on by mass media hysteria over Trump’s presidency, “Shakespeare in the Park” carried on with their rendition of Julius Caesar which includes the assassination of President Trump.

 

But, courtesy of some conservative protesters, the last couple of assassinations of the season didn’t go as smoothly as planned.  Here is video of the first interruption as a protester storms the stage yelling “Goebbels would be proud!” and “Liberal Hate Kills!”

 

As the New York Daily News reported last week, both Delta and Bank of America dropped their sponsorship of New York’s Public Theater after public outrage erupted over the theatrical assassination of a sitting president.  That said, and to our complete shock, Gateway Pundit points out that both CNN and the New York Times decided to maintain their funding of the controversial “art.”

And here is footage of Sunday’s final showing which included interruptions from Rebel Media’s Laura Loomer and author Jack Posobiec to shouts of “Stop Leftist Violence!”

 

Of course, we can only imagine the liberal outrage if a southern theater company decided to perform a similar play centered around the assassination of Obama.

 

We will see you WEDNESDAY night

have a great weekend

Harvey.

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