June 29/TOMORROW MORNING, THE RAIDS OF GOLD AND SILVER END PROBABLY AT 10 OR 11 AM/FINAL FIRST QUARTER GDP AT AN ANEMIC 1.4%/AETNA INSURANCE LEAVING HARTFORD CT FOR NY: THIS SHOULD PUT BOTH CT AND HARTFORD INTO BANKRUPTCY/CBO SETS THE FINAL DAYS FOR DEBT CEILING LIMIT AT THE FIRST TWO WEEKS OF OCTOBER/

GOLD: $1244.20  DOWN $3.30

Silver: $16.59  DOWN 16  cent(s)

Closing access prices:

Gold $1245.50

silver: $16.65

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: $1261.24 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1253.05

PREMIUM FIRST FIX:  $8.23

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1261.25

NY GOLD PRICE AT THE EXACT SAME TIME: $1252.95

Premium of Shanghai 2nd fix/NY:$8.30

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1246.60

NY PRICING AT THE EXACT SAME TIME: $1247.25  

LONDON SECOND GOLD FIX  10 AM: $1243.50

NY PRICING AT THE EXACT SAME TIME. $1242.75 ???  

For comex gold:

JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  82 NOTICE(S) FOR 8200  OZ.

TOTAL NOTICES SO FAR: 2950 FOR 295,000 OZ    (9,1757 TONNES)

For silver:

JUNE

 1 NOTICES FILED TODAY FOR

5000  OZ/

Total number of notices filed so far this month: 994 for 4,920,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

By tomorrow morning all options expiry will be finished.  The expiry is generally around 10- 11 am our time or around the 2nd London fix.

London options expiry: Friday June 30

first day notice  Friday June 30

end

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY FELL BY ONLY 1858 contract(s) DOWN to 202,779 DESPITE THE THE SLIGHT RISE IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (UP 6 CENT(S). BUT MORE IMPORTANT WE HAVE NOT WITNESSED ANY OBLITERATION OF OPEN INTEREST AS WE ARE ABOUT TO ENTER FIRST DAY NOTICE IN THE ACTIVE SILVER COMEX MONTH OF JULY. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0140 BILLION TO BE EXACT or 145% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000  OZ OF SILVER

In gold, the total comex gold  FELL BY 658 CONTRACTS DESPITE THE  RISE IN THE PRICE OF GOLD   ($1.60 with YESTERDAY’S TRADING). The total gold OI stands at 452,486 contracts.

we had 82 notice(s) filed upon for 8200 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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: 853.66 tonnes

.

SLV

Today: no change  in silver inventory at the SLV:

THE SLV Inventory rests at: 339.226 million oz

end

.

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

1. Today, we had the open interest in silver FELL BY ONLY  1858 contracts  DOWN TO 202,779 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), DESPITE THE TINY RISE IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  (UP 6 CENTS).We LOST A FEW AS MOST EVERYBODY remains firm and determined. WE NORMALLY LOSE ABOUT 7,000 CONTACTS PER DAY ON THE LAST 3 DAYS AS WE ENTER FIRST DAY NOTICE OF AN ACTIVE MONTH WHETHER GOLD OR SILVER.

(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 WEDNESDAY night/THURSDAY morning: Shanghai closed UP 14.86 POINTS OR 0.47%   / /Hang Sang CLOSED UP 281.92 POINTS OR 1.10% The Nikkei closed UP 89.89 POINTS OR 0.45%/Australia’s all ordinaires CLOSED UP 1.03%/Chinese yuan (ONSHORE) closed UP at 6.7810/Oil UP to 45.08 dollars per barrel for WTI and 47.69 for Brent. Stocks in Europe OPENED MOSTLY IN THE RED,,   Offshore yuan trades  6.7895 yuan to the dollar vs 6.7810 for onshore yuan. NOW THE OFFSHORE IS STILL WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS  STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

USA sanctions Chinese entities with ties to North Korea

( zerohedge)

4. EUROPEAN AFFAIRS

i)The Euro surpasses 1.14 to the dollar:

( zero hedge)

ii)Merkel lashes out at the protectionist USA ahead of next week’s G20 meeting which will probably go down as the worst harmonious gathering of world leaders:

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKET

9.   PHYSICAL MARKETS

i)A great commentary where Craig Hemke describes how HFT’s follows the USA/Yen cross to the T and that is what propels markets forward and thus a deterrent to the gold price rising

( Craig Hemke/TFMetals Report)

ii)Bullion star’s show gold demand from around the globe

( Bullion Star/GATA)

10. USA Stories

 i)We now have the final revised first quarter GDP and it is 1.4% a rise from 1.2% still quite anemic.  The rise was due to spike in consumer spending but corporate profits tumble( zero hedge)

ii)What a terrific commentary from Mish Shedlock who describes “progress” on two fronts:
  1. at the national level
  2.  the precarious state of affairs with respect to Illinois

enjoy..

( Mish Shedlock/Mishtalk)

iii)Aetna is leaving Hartford and that should seal the bankruptcy for both the city of Hartford and the State of Connecticut

( zero hedge)

iv)Rebellion at the New York Times over pay cuts.  Advertising revenue is collapsing due to the fact that just about everyone gets their news through the internet

( zero hedge)

v)The CBO sets the ultimate date that the Treasury will run out of cash and will have no extraordinary means to replenish funds to use to pay bills

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest  FELL BY 658 CONTRACTS UP to an OI level of 452.486 DESPITE THE  RISE IN THE PRICE OF GOLD ($1.60 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 22 contract(s)FALLING TO  82.  We had 18 notices filed yesterday so we LOST 4  contract(s) or an additional 400 oz will NOT stand for delivery in this very active delivery month of June AND  4 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 (JUST UNDER 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 99 contracts to stand at 350 contracts. The next big active month is August and here the OI LOST 2,891 contracts DOWN to 298,105, as the bankers trying to keep this month down to manageable size.

We had 82 notice(s) filed upon today for 8200 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI FELL BY ONLY  1858 contracts FROM 204,637 DOWN TO 202,779 DESPITE YESTERDAY’S TINY 6 CENT GAIN. 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. THE BIG NEWS IS THE FACT THAT WE ARE ENTERING FIRST DAY NOTICE AND AS OF YET HARDLY ANY OBLITERATION OF OPEN INTEREST.
We are in the NON active delivery month is JUNE  Here the open interest GAINED 1 contract(s) RISING TO 1 contracts. We had 0 notices served upon yesterday so we GAINED 1 CONTRACT(S) OR AN ADDITIONAL  5,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE AND 0 EFP CONTRACTS WERE ISSUED.  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. ALSO SO FAR WE HAVE HAD NO OBLITERATION OF SILVER CONTRACTS AS WE ARE NOW GETTING CLOSE TO FIRST DAY NOTICE  (ON FRIDAY)

The next big active month will be July and here the OI LOST 13,706 contracts DOWN to 11,691 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. We have 1 trading day left before first day notice

The month of August, a non active month picked up 82 contracts to stand at 410.  The next big active delivery month for silver will be September and here the OI already jumped by another 10,636 contracts up to 145,200.

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

  June 29.2016:  13,791 contracts were still outstanding vs 11.691 contracts June 29.2017.WITH THE EXACT SAME NUMBER OF TRADING DAYS BEFORE FIRST DAY NOTICE 

At the conclusion of June/2016, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (4,920,000 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 1 notice(s) filed for 5,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 150,231 contracts which is poor

Yesterday’s confirmed volume was 202,482 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

FINAL standings for JUNE
 June 29/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
NIL
OZ
Deposits to the Dealer Inventory in oz NIL  oz
Deposits to the Customer Inventory, in oz 
2,800.0000 oz
exact weight??
No of oz served (contracts) today
 
82 notice(s)
8,200 OZ
No of oz to be served (notices)
0 contracts
NIL oz
Total monthly oz gold served (contracts) so far this month
2950 notices
295,000 oz
9.1757 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   369,940.9 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 1  customer deposit(s):
Into Delaware:  2800.000 oz
exact weight and not kilobars!!!
total customer deposits; 2800.000  oz
We had 0 customer withdrawal(s)
total customer withdrawal: nil  oz
 we had 1 adjustment(s):
 i Out of the Delaware vault:  300.735 oz was adjusted out of the customer and this landed into the dealer account of Delaware
 
For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 12 notices were issued from their client or customer account. The total of all issuance by all participants equates to 82  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 38 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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 (2950) x 100 oz or 295,000 oz, to which we add the difference between the open interest for the front month of JUNE (82 contracts) minus the number of notices served upon today (82) x 100 oz per contract equals 295,000  oz, the number of ounces standing in this active month of JUNE.
 
Thus the FINAL standings for gold for the JUNE contract month:
No of notices served so far (2950) x 100 oz  or ounces + {(82)OI for the front month  minus the number of  notices served upon today (82) x 100 oz which equals 295,000 oz standing in this  active delivery month of JUNE  (9.1757 tonnes)
.
WE LOST 4 CONTRACTS OR AN ADDITIONAL 400 OZ WILL NOT STAND AT THE COMEX AND 4 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 
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 851,284.858 or 26.470 tonnes 
Total gold inventory (dealer and customer) = 8,616,722.334 or 268.01 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 268.01 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 FINAL standings
 June 29 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 
629.762.500 oz
 Scotia
No of oz served today (contracts)
 1 CONTRACT(S)
(5,000 OZ)
No of oz to be served (notices)
0 contracts
( NIL oz)
Total monthly oz silver served (contracts) 984 contracts (4,920,000 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 6,932,572.9 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 Scotia:  629,762.500 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: 951.129.640 oz
 
 we had 2 adjustment(s)
i) out of  CNT:  10,104.330 oz was adjusted out of the dealer and this landed into the customer account of CNT
ii) Out of Delaware:  25,377.152 oz was adjusted out of the dealer and this landed into the customer account of Delaware
The total number of notices filed today for the JUNE. contract month is represented by 1 contract(s) for 5,000 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 984 x 5,000 oz  = 4,920,000 oz to which we add the difference between the open interest for the front month of JUNE (1) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the FINAL standings for silver for the JUNE contract month:  984 (notices served so far)x 5000 oz  + OI for front month of JUNE.(1 ) -number of notices served upon today (1)x 5000 oz  equals  4,920,000 oz  of silver standing for the JUNE contract month.
 
We LOST 0 contract(s) or an additional NIL oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS ON TUESDAY FINALLY SUCCUMBED TO A FIAT BONUS:  . THIS ENDED THE STREAK AT 18TH CONSECUTIVE TRADING DAY THAT WE EITHER GAINED OR DID WE LOSE ANY SILVER CONTRACTS THROUGH THE EFP ROUTE.
 
 
Volumes: for silver comex
Today the estimated volume was 55,571 which is EXCELLENT
Yesterday’s  confirmed volume was 129,092 contracts which is THROUGH THE MOON
YESTERDAY’S CONFIRMED VOLUME OF 129,092CONTRACTS EQUATES TO 645 MILLION OZ OF SILVER OR 92% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.
 
Total dealer silver:  35.432 million (close to record low inventory  
Total number of dealer and customer silver:   208.516 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.4 percent to NAV usa funds and Negative 7.5% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.0%
Percentage of fund in silver:37.9%
cash .+0.1%( June 29/2017) 
 
2. Sprott silver fund (PSLV): STOCK   NAV  falls TO -.09% (june 29/2017) 
3. Sprott gold fund (PHYS): premium to NAV falls TO -0.73% to NAV  (June 29/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.09 /Sprott physical gold trust is back into NEGATIVE/ territory at -0.73%/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 29/no change in inventory at the GLD/inventory rests at 853.66 tonnes

June 28/no change in inventory at the GLD/Inventory rests at 853.66 tonnes

June 27.2017/a deposit of 2.64 tonnes into the GLD/inventory rests at 853.66 tonnes

June 26/a withdrawal of 2.66 tonnes from the GLD and this gold no doubt was part of the raid/Inventory rests at 851.02

June 23/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 22/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 21/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
June 29 /2017/ Inventory rests tonight at 853.66 tonnes
*IN LAST 183 TRADING DAYS: 93.47 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 124 TRADING DAYS: A NET  33.96 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  47.30 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 29/no change in silver inventory at the SLV/Inventory rests at 339.226 million oz/

June 28/ a small withdrawal of 662,000 oz form the SLV/Inventory rests at 339.226 million oz/

June 27/no change in the silver inventory at the SLV/Inventory rests at 339.888 million oz/

June 26/no change in the silver inventory at the SLV/Inventory rests at 339.888 million oz/

June 23/no change in silver inventory at the SLV/Inventory rests at 339.888 million oz

June 22/ a big change; a huge deposit of 2.175 million oz into the SLV/Inventory rests at 339.888 million oz

June 21/no change in silver inventory at the SLV/inventory rests at 337.713 million oz

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/

June 29.2017:
 Inventory 339.226  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.20%
  • 12 Month MM GOFO
    + 1.43%
  • 30 day trend

end

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess

– London property bubble bursting? UK in unchartered territory on Brexit and election mess
– Evidence of downturn in London housing market

– Over 75% of London homes now selling below asking price
– Prime north London property down 6 per cent annually
– House prices have not fallen for three consecutive months since the 2009 crisis
– Bank of England report expresses worry over UK property market
– ‘Adverse shock’ to UK economy may amplify negative feedback loop

– Increased political and economic uncertainty has weakened fragile London buyer sentiment
– Bank of England Financial Stability Report: “Mortgages are the largest loan exposure for UK lenders”
– BOE FSR refers to a “self-reinforcing feedback loop” that, if triggered, would cause another 2008-style crisis in the UK


Is the London property market heading for tough times? The most recent housing figures and a new Bank of England report suggest it may well be.

Recent figures show that 77% of London houses sold in May went at below asking price, up from 72% in April. London as the capital of UK reflects international market but international investors have major concerns over uncertainties namely Brexit and the current state of the government. As a result London house prices are rising at their weakest rate in five years (if they are rising at all).

In prime estate London things are particularly bad, with prices in prime north and north west London falling by 6% in the last year.

Across the country, price drops in May signalled the third consecutive monthly drop, something which has not been seen since the 2009 crisis. Banks are well aware of what this could mean for them and as a result are now offering mortgages that scream ‘bubble bursting!’

Rates for 90% loans have tumbled to as low as 1.9% for two-year deals and just 2.55% for five-year fixes.

Yet, cheap mortgages are not enough. Buyers are getting worried whilst homeowners increase their desire to sell their properties, CityAM reports:

‘prospective buyers registering with estate agents fell from 381 people per branch in April to 350 in May, although that was up from 304 at the same time last year. The number of homes available rose 11 per cent to 40 per branch, up from 37 per branch in May last year.’

Danger for mortgage holders

Of course one of the major threats to the property market is not only the affordability of housing but the cost of borrowing.

The BoE’s Financial Stability Report draws attention to just how sensitive the country is to interest rate rises. Not only was ‘80% of new mortgage lending in 2016 either on a fixed rate for a period of less than five years or on a floating rate’ but ‘”mortgages are the largest loan exposure for UK lenders.’

This means that the next rate decision by the MPC in August will not only be taking into account concerns over the growing rates of real inflation but also the impact of a potential rate rise on millions of UK homeowners.

Should a rate rise occur then we will likely see a downward spiral which will leak into the rest of the economy. As homeowners struggle to keep up their unaffordable mortgage payments they will delay defaulting on their homes and instead avoid paying other debts such as credit cards and car loans.

Of course, a rate rise is not the only concern right now. Just the simple matter of having an economy with jobs so homeowners can actually pay their mortgages is a pretty key thing to try and manage. One of the more concerning charts in the BoE’s report is the representation of what would happen if UK unemployment increased from just below 5% as it is currently, to 8%.

This small move in unemployment would result in twice the number of households who have high debt service ratios — the most fragile mortgages out there. The estimate is represented by the yellow diamond in the chart above.

Adverse Shock? Which one to pick?

In the FSR from the BoE, an ‘adverse shock’ is referred to. It is this which will impact jobs, push up rates and ultimate lead to a negative feedback loop that will ‘amplify a downturn’.

The bank states, a ‘feedback loop between house prices and credit also arises in a downturn. An economic slowdown can reduce house prices. Due to the role of housing as collateral, lower house prices reduce the demand for, and supply of, credit. Expectations of further price reductions, which can result in sales of houses at heavily discounted prices (fire sales’), can further amplify house price falls, reinforcing the adverse feedback loop. The resulting deterioration in borrowers’  and lenders’ resilience will intensify a downturn.’

Brexit is the most obvious adverse shock for the UK economy at present but this does not mean that homeowners should take comfort from Mrs May’s positive negotiations. The truth is, we have no idea what the final Brexit package will look like or (more importantly) how it will really affect the UK economy.

The UK and its homeowners are at a real risk of being blinkered by Brexit. The FSR is clearly trying to present the divorce from the EU as an ‘adverse shock’ (they have a special section on Brexit) but readers must remember this is not the only threat to the bubble. As we explained in yesterday’s comment on shrinkflation in relation to price inflation, the issues in the housing market have been there for many years.

Brexit is the latest scapegoat for the struggling housing market. One headline in a local London rag reads, ‘Brexit to blame: prime north London property down 6 per cent annually.’

Yes, Brexit may well be the final trigger, but the pieces were all lined up for the gun to fire.

News and Commentary

Gold steady as dollar hovers near ten-month lows (Reuters)

Financial stocks lead Asian market gains (Marketwatch)

Central Banks Roil Markets as Stocks, Euro Jump (Bloomberg)

Wall St. higher as banks rise; ECB comment reassessed (Reuters)

Mortgage applications drop 6% as wealthy buyers ‘step back’ (CNBC)

Source: Thomson Reuters via Mises.org

Gold Retains “Buying Power” As “Real Money”  – Bonner (Bonner & Partners)

The Super Bubble Is In Trouble (Mises)

Jim Grant Explains The Gold Standard (Zerohedge)

Bank Of England Orders Banks To Boost Capital To “Protect From Rising Risks” (Zerohedge)

Pending Home Sales Tumble in May for Third Straight Month (Forbes)

Interview with Goldcore at Mining Investment Europe (YouTube.com)

Gold Prices (LBMA AM)

29 Jun: USD 1,246.60, GBP 959.88 & EUR 1,093.14 per ounce
28 Jun: USD 1,251.60, GBP 976.25 & EUR 1,101.91 per ounce
27 Jun: USD 1,250.40, GBP 980.31 & EUR 1,111.36 per ounce
26 Jun: USD 1,240.85, GBP 975.56 & EUR 1,109.32 per ounce
23 Jun: USD 1,256.30, GBP 987.70 & EUR 1,125.27 per ounce
22 Jun: USD 1,251.40, GBP 988.36 & EUR 1,120.13 per ounce
21 Jun: USD 1,247.05, GBP 989.04 & EUR 1,118.98 per ounce

Silver Prices (LBMA)

29 Jun: USD 16.83, GBP 12.98 & EUR 14.76 per ounce
28 Jun: USD 16.78, GBP 13.08 & EUR 14.78 per ounce
27 Jun: USD 16.66, GBP 13.07 & EUR 14.79 per ounce
26 Jun: USD 16.53, GBP 12.98 & EUR 14.79 per ounce
23 Jun: USD 16.71, GBP 13.12 & EUR 14.97 per ounce
22 Jun: USD 16.58, GBP 13.09 & EUR 14.85 per ounce
21 Jun: USD 16.51, GBP 13.03 & EUR 14.81 per ounce


Recent Market Updates

– Shrinkflation – Real Inflation Much Higher Than Reported
– Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash
– Worst Crash In Our Lifetime Coming – Jim Rogers
– Go for Gold – Win a beautiful Gold Sovereign coin
– Only Gold Lasts Forever
– Your Future Wealth Depends on what You Decide to Keep and Invest in Now
– Inflation is no longer in stealth mode
– James Rickards: Gold Will Start Heading Higher On “Dwindling” Supply
– Billionaires Invest In Gold
– Brexit and UK election impact UK housing
– In Gold we Trust: Must See Gold Charts and Research
– Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”
– 4 Charts Show Gold May Be Heading Much Highe

end

A great commentary where Craig Hemke describes how HFT’s follows the USA/Yen cross to the T and that is what propels markets forward and thus a deterrent to the gold price rising

(courtesy Craig Hemke/TFMetals Report)

TF Metals Report explains why gold isn’t rising despite dollar index’s fall

 Section: 

11:19a 5:18p ET Friday, June 23, 2017

Dear Friend of GATA and Gold:

With the dollar index falling, why isn’t the gold price rising? The TF Metals Report explains the complications today in commentary headlined “POSX Continues to S(t)ink,” which can be found here:

https://www.tfmetalsreport.com/blog/8418/posx-continues-stink

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

END

Bullion star’s show gold demand from around the globe

(courtesy Bullion Star/GATA)

Bullion Star’s gold demand charts for June

 Section: 

11:47p ET Wednesday, June 28, 2017

Dear Friend of GATA and Gold:

Bullion Star’s gold demand charts for June, posted today, suggest that people outside North America remain eager to get the monetary metal:

https://www.bullionstar.com/blogs/gold-market-charts/gold-market-charts-…

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

END


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

 
 

1 Chinese yuan vs USA dollar/yuan  STRONGER 6.7810(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES  A LITTLE WEAKER TO ONSHORE AT   6.7895/ Shanghai bourse CLOSED UP 14.86 POINTS OR 0.47%  / HANG SANG CLOSED UP 281.92 POINTS OR 1.10% 

2. Nikkei closed UP 89.89 POINTS OR 0.45%   /USA: YEN RISES TO 112.56

3. Europe stocks OPENED MOSTLY IN THE RED       ( /USA dollar index FALLS TO  95.88/Euro UP to 1.1404

3b Japan 10 year bond yield: FALLS TO   +.063%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  45.09 and Brent: 47.69

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.426%/Italian 10 yr bond yield UP  to 2.08%    

3j Greek 10 year bond yield FALLS to  : 5.43???  

3k Gold at $1244.75  silver at:16.77 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 29/100 in  roubles/dollar) 58.97-

3m oil into the 44 dollar handle for WTI and 47 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 REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.56 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  0.9590 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0930 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 RISING to  +0.426%

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 2.2507% early this morning. Thirty year rate  at 2.8044% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Euro Surges, Yields And Stocks Rise As Central Banks Deliver Coordinated Message

The euro soared to the highest level in over a year while bond yields and global shares also climbed, as an ongoing barrage of coordinated hawkish comments from central banks signaled the era of easy money might be coming to an end for more than just the United States. S&P futures were fractionally in the green following the best day for US equities in two months, as banks climbed after passing the Fed’s stress tests and announcing bigger than expected shareholder payouts.

Asian stocks posted broad gains and European shares were little changed while oil climbed for the sixth consecutive day, with WTI trading above $45. The euro rose for a third day against the dollar as hawkish comments from Mario Draghi this week boosted bets the ECB is preparing to unwind stimulus, while the ECB’s attempt to walk back Draghi’s hawkishness was roundly ignored. EUR/USD rose as much as 0.4% to 1.1425, highest since June 2016.

“It will take more than anonymous ECB sources to cool the desire to bet on the euro and dump the dollar,” says Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “Many investors are tantalized by the prospect of key quarterly meetings in September producing no move from the Fed but a plan to wind down quantitative easing at the ECB.”  The residual sentiment from Draghi’s statement meant yields across developed markets continued their upward move, with Bunds back to 0.40%, nearly doubling in the past three days.

In keeping with the overall hawkish sentiment, BOE’s chief economist Andrew Haldane echoed Mark Carney’s comments from yesterday, when he said that the BOE should seriously look at rising rates, although he added that he is happy with where rates are now. His comment sent the pound briefly above 1.30, back to levels last seen last September, before paring some gains.

The Bank of Canada went further, with two top policymakers suggesting they might tighten as early as July.

“This is simply the central banks getting together and trying to arrest deflation,” said Nomura’s head of G10 currency trading Peter Gorra. “They are trying to be as smart as they can and agreeing that they have to act in unison. I don’t think this is necessarily a dollar move and I don’t think the dollar’s rally is over. They are just trying to add some two-way risk to the market.”

As the Euro surged, the dollar tumbled, touching its lowest since October – before Trump was elected U.S. president – against its broad index, as investors shifted to the view that the U.S. Federal Reserve might not be the only game in town when it comes to higher interest rates.

For those who may have missed the fireworks over the past few days, here is a concise and accurate summary from SocGen’s Kit Juckes:

Apparently, ECB President Mario Draghi’s comments about reflationary forces replacing deflationary ones were mis-interpreted by markets and were intended to be more balanced. A case of ham-fisted communication that argues for less forward guidance by policy-makers? Maybe, though I think the strategy on both sides of the Atlantic, which is to only change policy settings after ensuring markets won’t be surprised, has merit. And more importantly, will continue. What I don’t think, is that you can ‘unsay’ things by expressing surprise at the market reactions, any more than the king’s soldiers could put Humpty-Dumpty back together again.

The ECB isn’t going to hike rates soon. And how fast they move to reduce the pace of bond purchases probably does depend on how much the euro rallies. But the turn in the economy is pretty plain for us all to see. This week it has been the IFO survey and money supply data that show a continued acceleration in underlying loan growth. So of course the lifespan of extraordinarily easy policy settings (particularly asset purchases) is shortening. The lack of inflation, which is going to be highlighted today by Germany CPI figures that are likely to be as low as the Italian ones yesterday, ought to anchor bond yields and affect expectations about what removing extraordinary accommodation means, but they don’t change the fact that policy, like the economy, has reached a turn in the road. And that turn is positive for the euro, if only because it has been kept at a very low valuation by the combination of negative rates and bondbuying, despite a large current account surplus.

The ECB can’t normalise monetary policy without sacrificing the extreme cheapness of the currency, but maybe the ECB President thinks he can avoid a disorderly currency  correction if he managers to guide market expectations. From here, we still think we’re a heading, erratically, towards EUR/USD 1.20 and above EUR/JPY 130.

Helping market sentiment this morning was the result from the latest Stress Test, which saw all banks pass, and which would see banks return the most capital on record. JPMorgan, Citigroup and Bank of America Corp. led U.S. firms in unveiling plans to boost dividends and stock buybacks more than analysts had projected, after every lender passed annual stress tests for the first time since the Fed began the reviews in the wake of the 2008 financial crisis. Bank shares rallied in late trading.

Boosted by the US stress test, banks led gains in Europe and Asia, after the S&P 500 Index rebounded from the biggest selloff in six weeks. European equity markets opened higher with initial strength in the banking sector after U.S. lenders’ share buyback announcement, only to give way to declines led by utilities after UBS cuts the sector.

The S&P rose 0.9 percent on Wednesday, bouncing back from a loss of 0.8 percent. It’s on pace for a seventh straight quarterly advance. The Nasdaq Composite Index jumped 1.4 percent on Wednesday. Technology shares climbed while miners jumped with commodity prices. The biggest banks climbed after clearing stress tests and then announcing shareholder payouts. JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. added 2 percent or more in premarket trading.

Bund futures dipped after German regional CPI releases, all coming in strong, sliding to session lows. The Saxony CPI, which has a strong correlation to headline German inflation; rose +1.7% y/y compared with prior +1.6%; Bloomberg estimates show the headline German print is forecast to fall from 1.5% to 1.4% y/y, creating some upside risk. German 10y yields rose as much as 5bps at 0.42%, wider by over 3bps vs Treasuries.

The euro advanced for a third day against the dollar as comments from President Mario Draghi this week bolstered bets the European Central Bank is preparing to unwind stimulus, despite the ECB’s failed attempt on the next day to walk back Draghi’s hawkishness. EUR/USD rises 0.4% to 1.1425, highest since June 2016. Boosting the Euro was Draghi himself, who when speaking in Portugal on Tuesday, said reflation of the euro-area economy creates room to reduce stimulus; he didn’t retract those comments when he spoke again Wednesday, even as unidentified officials say the market reaction was hypersensitive.

In Asia, the Aussie pushed to three-month highs amid rising yields and commodities rebound. Australian 3-year yield rises to highest since early May as red and green bank bills extend sell off. Asian stock indexes closed firmly green with Korea’s Kospi rising to a new record high, Nikkei gains 0.5% while ASX 200 is one percent higher. Yuan rallies to seven-month high against dollar as PBOC strengthens daily fixing to two-week high and official journal flags a stronger bias for rest of the year. The composite was up 0.5%.

As Bloomberg notes, Global stocks are poised for the best first half of a year since 1998, gaining 11% to a record on the back of constant central bank liquidity injections. Investors are putting their faith in the robustness of earnings as the economy continues its recovery, shrugging off a host of worries from oil’s slump into a bear market to political wrangling in Washington. But risks remain: markets swung this week as the debate on normalizing central bank policy intensified after nine years of stimulus.
The euro surged 1.4 percent on Tuesday in the wake of comments from European Central Bank President Mario Draghi that investors took to be hawkish. A tumultuous Wednesday session followed as officials said the market had misjudged his message.

The latest moment of euphoria may not last long, however.

“Central banks will be very cautious in their approach,” said Martin Whetton, a senior rates strategist at ANZ. “But once they start tightening in concert, and their bloated balance sheets start unwinding, it is fair to say that bonds, equities, house prices and other asset markets will face stiffer headwinds than they have for a long time.

In commodities, the big mover was oil which rose for a sixth session, with Brent near $47.50/bbl, WTI ~$45. Benchmarks both rise for 6th consecutive session, longest run of gains since early April. Continued short-covering and a weaker dollar seen as helping push prices higher. “There’s probably still short-covering going on,” says Giovanni Staunovo, commodity analyst at UBS. “A weaker dollar and risk-on environment is helping too”

Also on the topic of oil, there was a quick statement by the UAE energy minister Suhail Mazrouei, who said that there are no talks about deeper OPEC cuts, and added that “we are not worried about the market recovery” and there is “no plan or talks” for further production cuts, Mazrouei tells reporters in Paris. “Of course, additional production coming from several producers is prolonging the recovery, but I think it’s a rather short term, and we hope to see more recovery in the third and fourth quarter. There is a drawdown from the inventories, there has been a correction. Yes, the correction is a bit slower than expected. The second quarter is always a low demand quarter. Third quarter and fourth quarter, we will have a pickup on the demand, and hopefully we will reach a more balanced market.”

Gold fell 0.3 percent to $1,245.82 an ounce despite the weaker dollar. Copper futures jumped 0.8 percent, advancing for a seventh day.

In currencies, the Bloomberg Dollar Spot Index slipped 0.1 percent as of 9:29 a.m. in London, dropping for a third day to the lowest since October. The euro increased 0.4 percent to $1.1424, the highest level since last year’s Brexit vote. The pound climbed 0.5 percent to $1.2984, heading for a seventh straight day of gains, the longest winning streak since April 2015. The Canadian dollar rose 0.1 percent after jumping 1.2 percent on Wednesday as Bank of Canada Governor Stephen Poloz reiterated he’s considering tighter policy.

In rates, the yield on 10-year Treasuries rose two basis points to 2.25 percent, after gaining two basis points on Wednesday and jumping seven basis points in the previous session. The yield on U.K. gilts advanced four basis points to 1.20 percent. French 10-year yields also added four basis points, as did those on 10-year German bunds.

Economic data includes initial jobless claims and 1Q GDP. Constellation Brands, Walgreens, Micron and Nike are among companies
reporting earnings. Bloomberg Dollar Spot Index -0.1%, industrial metals
rise.

Bulletin Headline Summary From RanSquawk

  • GBP/USD extended on gains and EUR/USD rose above 1.1400, as the USD-index languished below 96.00
  • Asian equity markets sustained the momentum from US, where the S&P 500 posted its best day in 2 months
  • Looking ahead, highlights National German CPI, US GDP, BoE’s Carney and Fed’s Bullard

Market Snapshot

  • S&P 500 futures up 0.1% to 2,441.5
  • STOXX Europe 600 down 0.05% to 385.62
  • MXAP up 0.6% to 155.77
  • MXAPJ up 0.9% to 509.52
  • Nikkei up 0.5% to 20,220.30
  • Topix up 0.6% to 1,624.07
  • Hang Seng Index up 1.1% to 25,965.42
  • Shanghai Composite up 0.5% to 3,188.06
  • Sensex up 0.3% to 30,938.89
  • Australia S&P/ASX 200 up 1.1% to 5,818.10
  • Kospi up 0.6% to 2,395.66
  • Gold spot down 0.3% to $1,245.72
  • U.S. Dollar Index down 0.3% to 95.77
  • German 10Y yield rose 4.7 bps to 0.415%
  • Euro up 0.4% to 1.1425 per US$
  • Italian 10Y yield fell 2.8 bps to 1.74%
  • Spanish 10Y yield rose 3.2 bps to 1.461%

Top Overnight News

  • Banks Unleash Surprisingly Big Payouts After Fed’s Stress Tests
  • Merkel Slaps at Trump and Brexit in Combative Speech Before G-20
  • Trump Travel Ban Said to Start Thursday Evening U.S. Time
  • Staples to Be Acquired by Sycamore Partners for $6.9 Billion
  • Siemens, Bombardier Said to Explore Two Rail Joint Ventures
  • Pound on Hot Streak as Carney Hints at Higher Interest Rates
  • Euro-Area Economic Confidence Hits Decade High as ECB Mulls Exit
  • Money Markets Dragged From Slumber as Central Banks Turn Hawkish
  • Activist Crystal Amber Pushes Northgate Executives to Sell
  • Shenhua Said to Mull GD Power Takeover Amid Guodian Merger
  • French Privacy Watchdog Closes Probe Into Microsoft Windows 10
  • Morgan Stanley Hires Barclays’s Mak to Head Malaysia Dealmaking
  • Santander Hires Morgan Stanley for Popular Asset Plan: Vozpopuli
  • Wood Group 1H Weaker Than Anticipated, Cautious on 2017 Outlook
  • BHP’s Nasser Says Activism Rising as Counter to Passive Funds

Asian equity markets sustained the momentum from US, where the S&P 500 posted its best day in 2 months as financials rallied ahead of Fed stress tests results and buyback announcements. This also inspired optimism for financials in ASX 200 (+1.1%) and Nikkei 225 (+0.4%), with the former further bolstered by commodity names after advances in crude and with iron ore prices higher by around 10% this week. Shanghai Comp. (+0.3%) and Hang Seng (+0.7%) adhered to the rising tide, although the mainland somewhat lagged after the PBoC refrained from liquidity operations for a 5th consecutive day citing relatively high liquidity amid month-end fiscal spending. Finally, demand for 10yr JGBs was dampened amid the widespread increased risk-appetite and as the BoJ refrained from a Rinban announcement, while the curve slightly flattened on underperformance in the short-end. PBoC refrained from open market operations for a 5th consecutive day, due to high liquidity levels from month-end fiscal spending.

Top Asian News

  • Inside the Red-Hot HSBC Fund That’s Turning Away New Money
  • Japan Stocks to Watch: Hitachi, Honda, Kusuri no Aoki, Nikon
  • India’s Modi Says Killing in Name of Cow Protection Unacceptable
  • Japan Currency Chief Asakawa Is Said to Stay On for a Third Year
  • ‘You Wouldn’t Do It’: BHP Chair Regrets $20 Billion Shale Spree
  • Macau Hotel With 30 Rolls-Royces And No Guests Seeks Funds
  • Activist Murakami Claims Rare Victory in Japan Shareholder Vote
  • Japan Shares Rally, Led by Banks on Optimism for Global Growth

In Europe, since the open, the initial gains in stocks have somewhat petered out, with Euro Stoxx 50 -0.07%, with the exception of the FTSE 100 amid a 4% rise in index heavyweight HSBC after MS upgrade. Financials have been outperforming after the Federal Reserve cleared buyback and dividend plans from the United States largest banks, including local units of Germany’s Deutsche Bank and Spain’s Santander. Additionally, support has been provided by hawkish signals from central bankers, most notably Carney and Draghi. Bunds have fallen off some 60+ ticks as yields steepening across the curve, post firmer regional CPI data, with the German 10yr benchmark now at a 5-week high (2Y +2.6bps, 5Y +4.5bps, 10Y 6.1bps, 30Y 6.9bps).

Ahead of today’s German all too important, inflation print German Reginal CPIs for June all came in better than expected, suggesting Draghi amy have been right that the drop in inflation may have been transitoory.

  • German Baden Wurttemburg CPI (Jun) M/M 0.10% (Prey. -0.10%)
  • German Baden Wurttemburg CPI (Jun) Y/Y 1.60% (Prey. 1.50%)
  • German Hesse CPI (Jun) Y/Y 1.90% (Prey. 1.70%)
  • German Hesse CPI (Jun) M/M 0.10% (Prey. 0.00%)
  • German Bavaria CPI (Jun) M/M 0.10% (Prey. -0.10%)
  • German Bavaria CPI (Jun) Y/Y 1.40% (Prey. 1.40%)
  • German Brandenburg CPI (Jun) M/M 0.20% (Prey. -0.10%)
  • German Brandenburg CPI (Jun) Y/Y 1.50% (Prey. 1.40%)

Top European News

  • U.K. May Consumer Credit Surges, Showing Why BOE Took Action
  • Raiffeisen Says ‘Unjustified’ Losses Could Halt Polish IPO
  • Bond Investors’ Love for Russia Dispels Gloom of Crude Rout
  • U.K. Regulator Opens Probe Into PwC Audits of BT’s Books
  • Pound on Best Winning Run Since 2015 as Carney Changes Tune
  • European Miners Jump as Iron Ore Gains for a Fifth Day
  • JD Sports Falls After Bloated Expectations, Margin Pressure Seen

In currencies, the USD index is has more selling pressure through the European morning, but with the caveat that USD/JPY continues higher amid rising US Treasury yields. As such, narrowing differentials with Europe and the UK drive trade at the present time, with the backdrop of this week’s comments from the ECB’s Draghi on reflationary pressures and the BoE Camey’s reported considerations over rate hikes driving trade — a little too aggressively perhaps. A broader continuation of the themes seen over the last few days, as stronger central bank speak from the ECB and BoE continue to push the EUR and GBP higher against the USD, JPY and CHF. Focusing on the spot rates, EUR/USD resistance ahead of 1.1450 has contained the resurgence from midweek, and we should see some consolidation closer to 1.1400 ahead of the US data this afternoon. Core PCE and the last reading of the Q1 GDP stats are due out later today. Cable has continued higher to test the upper level of the 1.2900-1.3000 resistance zone we have been highlighting, pushing just past the figure level by some 6-7 ticks as traders hunt for stops. The highs seen ahead of 1.3050 have been held intact as yet. EUR/GBP is looking resilient to the downside also, and we have some of the familiar month end demand out of Europe filtering through here also.

In commodities, commodity currencies (USDCAD -0.06%, AUDUSD +0.37%, NZDUSD +0.10%) supported by positive crude prices, while a 3% rise in iron ore has also buoyed AUD strength. The fall in the USD index has led to broad based gains seen across the commodity spectrum, but noticeable is the lack of traction in Gold as the risk parameters have counteracted this. The yellow metal is back under USD1250.00, while Silver continues to trade a modest range up and down the USD 16’s, but we have seen a stronger impact on base metals and Oil. Copper is now testing USD 2.70, showing a near 1% gain on the day, only outpaced by Tin which is 1.75% up today. Nickel is also around 1.0% higher today. For WTI, USD 45.00 continues to hinder progress, but with production levels having decreased in the US in the DoE report, upside relief has naturally followed. The spread with Brent has widened out a little, but enough to see USD 48.00 tested here.

Looking at the day ahead, we’ll get the third and final revisions to Q1 GDP (no change from +1.2% qoq expected) and Core PCE. The latest weekly initial jobless claims data rounds out the releases. Away from the data, the BoJ’s Hararda is scheduled to speak shortly after this hits your emails while the Fed’s Bullard is scheduled to speak on monetary policy this evening in London at 6pm BST. The recently elected South Korea President Moon Jae-in is also due to meet with President Trump in Washington today. The other big event for markets today is the House of Commons vote on PM May’s government program. The vote is due this afternoon.

US Event Calendar

  • 8:30am: GDP Annualized QoQ, est. 1.2%, prior 1.2%
    • Personal Consumption, est. 0.6%, prior 0.6%
    • GDP Price Index, est. 2.2%, prior 2.2%
    • Core PCE QoQ, est. 2.1%, prior 2.1%
  • 8:30am: Initial Jobless Claims, est. 240,000, prior 241,000; Continuing Claims, est. 1.94m, prior 1.94m
  • 9:45am: Bloomberg Consumer Comfort, prior 49.4

DB’s Jim Reid concludes the overnight wrap:

This week has been a busy one for central bank speak too with the steady chorus of voices certainly keeping markets on their toes. After rates had been hit for the biggest sell-off in many months on Tuesday following Draghi’s speech, yesterday appeared to be all about damage control at the ECB. The backtrack started as Europe walked into the office yesterday with ECB Vice-President Constancio telling CNBC that persistence in stimulus is fully justified given the slack that is still in the economy. While markets appeared to largely shrug off the comments it did seem to set the table for headlines to then hit the screens a few hours later. Specifically it was the Bloomberg story saying that the market  had “misjudged” Draghi’s speech and that it was instead intended to strike a more balanced tone that put the wheels in motion. A separate Reuters article also quoted ECB “sources” as saying that Draghi had intended to signal tolerance for a period of soft inflation rather than imminent policy tightening. In fairness Draghi’s tone changes on Tuesday were fairly subtle and didn’t suggest that a rate hike was around the corner anyway, rather a steadily improving economy will see policy normalise.

While not to the same extent as Tuesday, markets were quick to re-price however. After 10y Bund yields had edged up another 4bps early the morning, the direction quickly changed after the headlines hit with Bunds rallying as much as 7bps off the highs. That said they did however still finish the day unchanged  at 0.366% which means that they are still some 12.5bps higher in yield over the past two days. The periphery did a better job of stemming some of the previous day losses however with 10y yields in Italy, Spain and Portugal finishing 3.0bps, 6.9bps and 8.8bps lower respectively yesterday. Across the pond 10y Treasury yields touched a one-month high of 2.256% intraday below settling to close at 2.228%, albeit sill over 2bps higher on the day.

The headlines left its mark on the Euro too. The single currency built on Tuesday’s rally early on, only to then crash -0.77% as the headlines hit. That proved short lived however with the currency swiftly recovering all of that move and more, breaking through $1.140 this morning for a new 1y high. On this subject it’s worth highlighting that yesterday DB’s George Saravelos made a big change to his EUR/USD call for the rest of the year. While Draghi’s speech was not the fundamental driver behind the change of view, in George’s mind it aptly marks the culmination of a number of developments that have caused him to alter his forecasts. He now expects the pair to rise to 1.160 or above by the end of the year (previous year end forecast was 1.030). He also highlights that – unless an existential Eurozone crisis returns – conditions have fallen into place for this year’s 1.030 low to mark the bottom in the medium term EUR/USD bear market.

Staying with central banks, it wasn’t just the ECB which stole the limelight yesterday. In contrast to his cautious Mansion House speech, BoE Governor Mark Carney said yesterday in Sintra that “some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly become more conventional”. He added that this will be contingent on the extent to which weaker consumption growth is offset by other demand components and also how the UK economy reacts to tighter financial conditions and Brexit negotiations. Those comments sent Sterling surging up +0.87% to $1.2926 and testing the upper bound of the YTD range again. 10y Gilts also finished 6.4bps higher at 1.152% and are now 14.3bps higher in the past two days.

Not to be outdone, the BoC’s Poloz also said that recent rate cuts “have done their job” and that the Bank is considering options “now that the excess capacity is being used up steadily”. The BoJ’s Kuroda was the probably the only central banker not to hint at a more hawkish tone citing caution still about domestic spending and investment. All of those  central bank comments almost overshadowed what was a fairly positive day for risk. While the Stoxx 600 closed a smidgen lower (-0.06%) it had traded as low as -1.04% at one stage prior to all the comments hitting. Boosted by a big rally for Banks (+1.93%) the S&P 500 returned +0.88% and in doing so completely reversed Wednesday’s sell off. The Nasdaq finished up +1.43% while credit indices saw similar strong performance.

Another decent day for the commodity complex – which is flying under the radar a bit – certainly helped too. WTI Oil (+1.13%) has quietly gone about rising for the last four days and is approaching $45/bbl again. Gold (+0.17%) also edged higher for the fifth time in the last six sessions while Iron Ore (+4.41%) is now up nearly +17% from the June lows.

That rally for Banks yesterday also came prior to what was a fairly upbeat result from the second round of the Fed’s stress tests. The Fed gave the green light to approve capital plans for all 34 firms with Capital One Financial the lone institution to be singled out for conditional approval based on “material weakness” in planning. After the close JP Morgan, Bank of America, American Express, Citi and Morgan Stanley were among those to announce either buybacks or dividend boosts which saw shares prices for those names rise between 1% and 2%. Those moves have helped US equity index futures creep up +0.22% in the early going while the rest of Asia is also off to a decent start. The Nikkei (+0.54%), Hang Seng (+0.88%), Shanghai Comp (+0.32%), Kospi (+0.66%) and ASX (+1.11%) are all higher as we go to print led by Banks.

Moving on. With central banks being the obvious focus the macro data that was released yesterday was again largely reserved as an afterthought. In fairness there wasn’t any huge surprises to come out of the US data. The advance goods trade balance for May revealed a deficit of $65.9bn which more or less matched expectations. Wholesale inventories rose +0.3% mom in May which was a tenth more than expected while pending home sales for May declined -0.8% mom which was the third consecutive monthly decline.

Closer to home the ECB’s money and credit aggregates data revealed that M3 growth pushed up one-tenth to +5.0% in May. The data also revealed that loans to households rose one-tenth to +2.7% yoy and a new cyclical high. Growth in credit to non-financial corporates held steady at +2.2% yoy. Perhaps the most standout data however was out of France where consumer confidence rose 5pts to 108 (vs. 103 expected), matching the highest level since 2007 with the surge this month coming in the first month of Macron taking office. The other data out yesterday included a bigger than expected jump in the UK Nationwide house price index for June (+1.1% mom vs +0.1% expected) and a softer than expected CPI print from Italy for this month (-0.1% mom vs. +0.1% expected).

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where we’ll receive the July consumer confidence print before attention turns over to the UK with the May money and credit aggregates data. Shortly after that we’ll receive June confidence indicators for the Euro area before we then get the flash CPI report out of Germany(0.0% mom headline print expected). In the US this afternoon we’ll get the third and final revisions to Q1 GDP (no change from +1.2% qoq expected) and Core PCE. The latest weekly initial jobless claims data rounds out the releases. Away from the data, the BoJ’s Hararda is scheduled to speak shortly after this hits your emails while the Fed’s Bullard is scheduled to speak on monetary policy this evening in London at 6pm BST. The recently elected South Korea President Moon Jae-in is also due to meet with President Trump in Washington today. The other big event for markets today is the House of Commons vote on PM May’s government program. The vote is due this afternoon.

 END

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 14.86 POINTS OR 0.47%   / /Hang Sang CLOSED UP 281.92 POINTS OR 1.10% The Nikkei closed UP 89.89 POINTS OR 0.45%/Australia’s all ordinaires CLOSED UP 1.03%/Chinese yuan (ONSHORE) closed UP at 6.7810/Oil UP to 45.08 dollars per barrel for WTI and 47.69 for Brent. Stocks in Europe OPENED MOSTLY IN THE RED,,   Offshore yuan trades  6.7895 yuan to the dollar vs 6.7810 for onshore yuan. NOW THE OFFSHORE IS STILL WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS  STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

END

b) REPORT ON JAPAN

c) REPORT ON CHINA

USA sanctions Chinese entities with ties to North Korea

(courtesy zerohedge)

In “Unprecedented Step” US Sanctions Chinese Entities With Ties To North Korea

After allegedly pressuring the Chinese government to act first and adopt sanctions against nearly 10 local entities who the US claims provided North Korea with materials used in its nuclear program, the US has decided to act.  In an unprecedented step, the Treasury Department slapped financial sanctions on two Chinese nationals and a Chinese shipping company over their ties to North Korea stemming from its nuclear program, according to Reuters.

The Trump administration also proposed sanctions against a Chinese bank of helping North Korea launder money and cut the institution off from the US financial system, in a major step that at least on the surface, is aimed at convincing China to put more pressure on Pyongyang to abandon its missile and nuclear programs, according to the Financial Times. The US Treasury designated the bank in question, the Bank of Dandong, as a “foreign bank of primary money laundering concern” and also imposed sanctions on two Chinese individuals and one Chinese company.

The Treasury Department said in a statement it was sanctioning Wei Sun for links to the Foreign Trade Bank of the Democratic People’s Republic of Korea, Hong Ri Li for his links to North Korean banking executive Song-hyok Ri, as well as the Dalian Global Unity Shipping Co Ltd of Dalian, China.

The moves come one week after top US and Chinese officials met for strategic talks in Washington in which the US side tried to persuade China to take more action on North Korea. Steven Mnuchin, Treasury secretary, said the US was “sending an emphatic message across the globe that we will not hesitate to take action against persons, companies, and financial institutions who enable this [North Korean] regime”.

Dennis Wilder, the former top White House adviser to George W Bush, said the moves were a “major decision” that had been under consideration for some time, but had been held off because of sensitivities in China, which is opposed to what the US terms secondary sanctions.

“It should not come as a surprise to Beijing as the Trump administration has repeatedly signaled that if China did not do more to shut down entities violating the UN Security Council resolutions, Washington would have to act unilaterally,” said Mr Wilder. “The question going forward is whether it will spur Beijing to do more to enforce the sanctions or cause Beijing to reduce cooperation on North Korea.”

Evan Medeiros, a former top Asia official in the Obama administration now at the Eurasia Group, said the Trump administration was “crossing an important threshold and signalling to Beijing how serious they are about the North Korea threat”.

The news comes after the Trump administration scored a minor victory when the Chinese government said it agreed on the need for complete dismantling of the North Korean nuclear program, though Trump Trump has repeatedly complained about the ongoing efforts to coax China into doing more to curb the country’s nuclear ambitions.

And now we await China’s response to what the local media will promptly brand a belligerent act by the US. Making things especially awkward, Trump will meet with China’s president XI in just a few days, during next week’s G-20 summit in Germany.

end

4. EUROPEAN AFFAIRS

The Euro surpasses 1.14 to the dollar:

(courtesy zero hedge)

Cranfield: “This Was A Watershed Week For The Euro: Beware Of Getting Steamrolled”

After three days of fireworks for the Euro, when it first surged on Draghi’s hawkish comments, then tumbled on the ECB’s “clarification” to Bloomberg that the market had overreacted to Draghi, then continued to surge after Draghi himself did little to dissuade the market it was wrong, the common currency is now trading at above 1.14, or 1.1425 to be precise…

… the highest level in one year, and on a relentless push higher, as the dollar tumbles, because as Sean Callow, currency strategist at Westpac says, “it will take more than anonymous ECB sources to cool the desire to bet on the euro and dump the dollar,” and adds “many investors are tantalized by the prospect of key quarterly meetings in September producing no move from the Fed but a plan to wind down quantitative easing at the ECB.

But how did we get here so fast, just a few months after virtually every sellside desk expected parity with the USD, and what’s next? Here are some thoughts from the latest “Macro View” by Mark Cranfield, former .FX trader who currently writes for Bloomberg.

Euro Is Dancing the Macron, Draghi Two Step:

This week could be seen as a watershed for the euro, the week when all the stars align to set up a powerful run in the second half of the year.

ECB President Mario Draghi is acknowledging reflationary forces as investors are getting comfortable with improving European economic and political fundamentals.

The tectonic plates are shifting in favor of the euro, even if some ECB members are saying that markets are jumping to the wrong conclusions.

At the beginning of 2017, research notes were being circulated with scary maps of the European electoral earthquakes ahead, starting with the Netherlands in March.

It was going to be a roller-coaster year. The rise of populism had been given a steroid boost after the U.S. presidential election and European nations were poised to follow by electing their own version of Donald Trump. The old order was going to be toppled, even Angela Merkel seemed vulnerable.

Not quite, as it’s turning out. Even the threat of a destabilizing Italian vote seems to be evaporating.

The Trump effect isn’t coming through, and the new order is being led by a staunch European supporter called Emmanuel Macron. European politics is going from zero to hero.

What a contrast with the developments across the Atlantic.

Looking at a long-term picture of euro-dollar, one can see the potential for a major breakout as bullish momentum builds up. The pair has essentially been in a range between 1.05 and 1.15 for the past two and a half years after the huge collapse in 2014-2015. If it does break the top side it probably won’t be quietly.

When the world’s number two reserve currency gets rolling, it’s probably best to get on board or run the risk of being steamrollered.

end

Merkel lashes out at the protectionist USA ahead of next week’s G20 meeting which will probably go down as the worst harmonious gathering of world leaders:

(courtesy zero hedge)

“The Discord Is Obvious” – Merkel Slams Trump Ahead Of G-20

Ahead of next week’s G-20 summit in Hamburg, Germany, chancellor Merkel had some fiery words about her two least favorite topics: Donald Trump and Brexit. In a speech to lawmakers in Germany’s lower house of parliament on Thursday, Merkel said that “the world has become less united” and acknowledged that discussions at the G-20 meeting in Hamburg on July 7-8 “will be very difficult.” Quoted by Bloomberg, Merkel said that “the discord is obvious and it would be dishonest to paper over the conflict.”

The unexpectedly confrontational posture comes as Germany is set to host world leaders including President Donald Trump and Russia’s Vladimir Putin, who are expected to hold their first head-to-head meeting in Hamburg, although the details have not yet been ironed out. Also present will be China’s Xi Jinping and Merkel’s nemesis, Turkey’s president Erdogan, with the meeting taking place “amid a global shake-up that threatens much of the international order on issues established since World War II. On the agenda for the meeting are free trade, climate change and migration.”

If recent G-20 summits are any indication, next week’s meeting is likely to end in confusion and even more fingerpointing, with little in terms of consensus and even shorter communiques.

Aware of the upcoming dissensus, to use a word coined by Deutsche Bank, Merkel took a swipe at Trump’s “America First” rhetoric, saying that nations turning to isolation and protectionism are making a serious mistake and showcased a renewed “spirit of unity” in the European Union after the U.K. decision to exit.

All the same, the G-20 takes place “amid a particular set of challenges,” she said. “I’m convinced that we need the G-20 more urgently than ever before, because we can only move things together,” Merkel said. “Whoever believes that you can solve problems through isolation and protectionism is making a grave error.”

However, as Bloomberg notes, the German leader reserved her most dramatic language for the Paris climate treaty after Trump pulled out of the global accord aimed at confronting climate change, which Merkel called “irreversible and not negotiable.”

“We want to tackle this existential challenge and we can’t and we won’t wait until the last person on earth is convinced of the scientific basis for climate change,” Merkel said slamming Trump’s recent pullout from the Paris accord.

Merkel also accentuated the recent geopolitical pivot, in which Germany has distanced itself from its formerly staunchest allies the US and UK, and toward France:

In response to Trump’s inward shift, Merkel played up new French President Emmanuel Macron as an ally, saying the German-France axis will drive forward European unity, “regardless of Brexit.” She is hosting Macron in Berlin on Thursday along with European leaders including the U.K.’s Theresa May and Paolo Gentiloni of Italy to align their position ahead of the G-20.

“It’s clear to both of us that German and French interests are extremely closely linked when it comes to Europe’s future,” she said.

And while the G-20 meeting will likely end up a flop, one wildcard remains: China. While Merkel has reached out to Beijing as a partner on climate change and free trade, she’s also warning Chinese investors that they may face restrictions in Europe.

Germany’s government is “thinking about defining industrial sectors of strategic importance for Europe,” Merkel said in an interview with business weekly WirtschaftsWoche published Thursday. “For instance, we decided to resume major investments in microchips. If countries like China want to buy up what was just built up with a lot of subsidies, we have to react.”

Ironically, in the “new new world order”, China has emerged, at least in its own eyes, as the grand champion of free trade hoping to fill the void left by the “protectionist” US, in the process growing it regional and global influence. Which is ironic because China still remains among the world’s most trade protectionist regimes, and if Merkel is hoping to pivot toward China as the next great source of trade, she is set for a major disappointment.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

end

6 .GLOBAL ISSUES

7. OIL ISSUES

end

8. EMERGING MARKET

end

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

Euro/USA   1.1404 UP .0027/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/EUROPE BOURSES MOSTLY IN THE RED (EXCEPT LONDON) 

USA/JAPAN YEN 112.56 UP 0.217(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2979 UP .0041 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.3012 DOWN .0026 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro ROSE by 27 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1404; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 14.86 POINTS OR 0.47%     / Hang Sang  CLOSED UP 281.92 POINTS OR 1.10% /AUSTRALIA  CLOSED UP 1.03% / EUROPEAN BOURSES OPENED MOSTLY  IN THE RED (EXCEPT LONDON)

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 THURSDAY morning CLOSED UP 89.89 POINTS OR 0.45%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 281.92 POINTS OR 1.10%  / SHANGHAI CLOSED UP 14.86 POINTS OR 0.47%   /Australia BOURSE CLOSED UP 1.03% /Nikkei (Japan)CLOSED UP 89.89 POINTS OR 0.45%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1245.55

silver:$16.80

Early THURSDAY morning USA 10 year bond yield: 2.2507% !!! UP 1 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.8044, UP 1  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 95.88 DOWN 14  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.034%  UP 5 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.063%  DOWN 1/10  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.533% UP 11  IN basis point yield from WEDNESDAY 

ITALIAN 10 YR BOND YIELD: 2.0152 UP 13 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 48 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.452% UP 9 IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.1427 UP .0046 (Euro UP 49 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.19 DOWN  0.161 (Yen UP 16 basis points/ 

Great Britain/USA 1.2987 UP 0.0019( POUND UP 19 basis points) 

USA/Canada 1.3020 DOWN .0019 (Canadian dollar UP 19 basis points AS OIL ROSE TO $45.00

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP  by 49 basis points to trade at 1.1427

The Yen ROSE to 112.19 for a GAIN of 16  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 47  basis points, trading at 1.2987/ 

The Canadian dollar ROSE by 19 basis points to 1.3020,  WITH WTI OIL RISING TO :  $45.00

The USA/Yuan closed at 6.7870/
the 10 yr Japanese bond yield closed at +.063% DOWN 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 5 IN basis points from WEDNESDAY at 2.263% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.814  UP 5 in basis points on the day /

Your closing USA dollar index, 95.71  DOWN 30 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 THURSDAY: 1:00 PM EST

London:  CLOSED DOWN 37.48 POINTS OR 0.51%
German Dax :CLOSED DOWN 231.08 POINTS OR 1.83%
Paris Cac  CLOSED DOWN 98.55 POINTS OR 1.88% 
Spain IBEX CLOSED DOWN 171.60 POINTS OR 1.60%

Italian MIB: CLOSED  DOWN 343.15 POINTS/OR 1.63%

The Dow closed DOWN 167.58 OR 0.78%

NASDAQ WAS closed DOWN 90.06 POINTS OR 1.44%  4.00 PM EST
WTI Oil price;  45.00 at 1:00 pm; 

Brent Oil: 47.32 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.48 UP 22/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 22 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.458%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 5:00 PM:$44.88

BRENT: $47.33

USA 10 YR BOND YIELD: 2.264%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.812%

EURO/USA DOLLAR CROSS:  1.1440 up .0062

USA/JAPANESE YEN:112.10  DOWN 0.246

USA DOLLAR INDEX: 95.56  down 45  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.3005 : UP 66 POINTS FROM last NIGHT  

Canadian dollar: 1.3000 UP 38 BASIS pts 

German 10 yr bond yield at 5 pm: +0.4580%

END

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

TRADING IN GRAPH FORM FOR THE DAY

off today

Early trading NY:  bond yields rise:

Treasury Yields Spike Amid A Burst In Early Volume

Following the previously noted ongoing rise in yields around the globe on the back of this week’s unexpected and coordinated central bank hawkish jawboning which sent 10Y Bunds as high as 0.43%, double where they were earlier in the week…

… the fixed income sell-off continued in early NY orders with US yields leading the squeeze higher amid burst in volume which saw some 150k contracts push the 10Y yield higher. According to Citi, “there’s little to stop the move, with nothing overnight discouraging this trend – we haven’t seen any obvious headlines to trigger the latest move.”

As such the whole US treasury curve is higher, with 10y yields testing 2.29% and 5y yields reaching for 1.88%. With US yields showing signs of stabilizing and potentially turning higher from here driven by the belly of the curve, Citi adds that we may see a resumption of the bear steepening move.

Consequently USDJPY continues to squeeze higher amid some modest dollar strength, and we are now trading around 112.70 just ahead of the trend line resistance at 112.75.

end

We now have the final revised first quarter GDP and it is 1.4% a rise from 1.2% still quite anemic.  The rise was due to spike in consumer spending but corporate profits tumble

(courtesy zero hedge)

After 164 Years, Aetna Is Leaving Connecticut For New York

While the public’s attention is keenly focused on whether Illinois will reach a budget deal in the next 2 days ahead of the next fiscal year which begins on July 1, avoiding the first ever downgrade to junk for a US state as the state piles up some $15 billion in unpaid bills and now oews more than $800 million in interest on the unpaid balances alone, the financial peril facing Connecticut is just as dire.

We laid out the big picture one month ago in “Connecticut State Capital Prepares For Bankruptcy Amid Collapse In Hedge Fund Revenue.” And now, as the state rushes to iron out its own budget deal ahead of the June 30 deadline, another major hit for the fiscally challenged state has emerged because one of the state’s most reliable sources of corporate tax revenue, Aetna, is leaving Hartford and moving to New York.

According to the NYT, Aetna, the insurance giant founded in Hartford, where it has been for the past 164 years, announced Thursday that it would move its headquarters to New York City despite intensive lobbying efforts by Connecticut officials. The move is a blow to the company’s hometown, which is facing severe financial problems, and a potential boon for Aetna, which stands to receive $24 million in tax breaks over the next decade, among other benefits, for its new headquarters in the Chelsea neighborhood of Manhattan.

The relocation, which involves 250 current and new executive and digital jobs, bolsters New York City’s vision of itself as an emerging digital powerhouse, but also continues the erosion in Connecticut of an industry that has long been an economic engine there. The number of workers employed in the insurance industry in Hartford and the surrounding area has plunged to 37,000 this year from over 60,000 in 1990, according to federal statistics.

According to Empire State Development, New York State’s economic development agency, Aetna will invest $89 million to transform 145,000 square feet in a building on Ninth Avenue into its new home.

The decision to move from CT was likely not easy, although in the end NY provided enough incentives to management to make the switch: efforts to lure the company were highly competitive — Aetna considered numerous cities for its new home, but in the end New York offered one of the most attractive deals. Besides the state tax credits, which are based on the number of new jobs Aetna creates, the New York City Economic Development Corporation will provide nearly $10 million worth of incentives through a combination of property and sales tax credits, among other benefits.

The move is a coup for Mayor Bill de Blasio who said that “New York City is where talent and technology come together” adding that “we’ve never been stronger.’’

The decision comes as a double blow to Hartford, which had agreed to match the package after news broke this year about Aetna’s plan to move, according to the administration of Connecticut’s governor, Dannel P. Malloy. But it was not meant to be: “the company places greater emphasis on creating digital tools for people to manage their health care, being in New York City, with its large reservoir of talent, seemed vital to the company’s future” said Mark T. Bertolini, Aetna’s chairman and CEO.

New York provides “the ecosystem of having people in the knowledge economy, working in a town they want to be living in, and we want to attract those folks, and we want to have them on our team,” Mr. Bertolini said in an interview. “It’s very hard to recruit people like that to Hartford.”

“It is a difficult decision,” Mr. Bertolini added. “We have continued to work with the governor and mayor of Hartford to try and improve the quality of life in the Hartford area, but that is too slow in coming.”

While Aetna is moving its headquarters out of the state, about 5,000 employees will remain in Connecticut, although it is unlikely they will remain in their seats for long.

Meanwhile, realizing just how precarious the situation is for the troubled state, a spokeswoman for Gov. Malloy quickly came to Hartford’s defense.

“While Hartford may not be New York City, we are proud of the city’s revitalization,’’ the spokeswoman, Meg Green, said. “Hartford provides a strong foundation for any company in the insurance sector, large or small. From a very deep bench of top insurance talent, to incredible school systems and a high quality of life for employees, Connecticut remains the insurance capital of the world for good reason.”

For Hartford, losing Aetna, a company with a history closely linked to the city (a son of the founder served as the city’s mayor), is not just a crushing blow in terms of revenue, but leaves it with just one major insurance company.

That company, the Hartford Financial Services Group, which has been in Hartford for more than 200 years, isn’t going anywhere, according to its chairman and chief executive, Christopher J. Swift, unless of course some Chinese conglomerate comes in and swoops it up once the moratorium on outbound M&A ends.

The good news, at least for now, is that Hartford remains “bullish on the city”, where recent real estate developments could help reverse its economic slide. “We are encouraged by the early signs of revitalization in the city and the more honest assessment and discussion of priorities in light of fiscal realities at the city and state level.” Mr. Swift said. “We are committed to the city, and the state of Connecticut.”

He may change his mind soon, especially if – as some have speculated – a bankruptcy for Connecticut is imminent.

end

Rebellion at the New York Times over paycuts.  Advertising revenue is collapsing due to the fact that just about everyone gets their news through the internet

(courtesy zero hedge)

Rebellion At The NYTimes: Newsroom To Walk Out After “Decrying Direction Of Paper”

Exhausted and demoralized after repeated buyouts and cutbacks in the newsroom, it seems the downtrodden journalists at the New York Times have finally had enough: In a pair of letters delivered to executive editor Dean Baquet and managing editor Joseph Kahn, the News Guild of New York said the New York Times editorial staff will leave the newsroom on Thursday as a demonstration of solidarity as management threatens jobs, according to MarketWatch.

Unlike the employee rebellion at the Wall Street Journal last year, when staffers confronted management about unequal pay practices and a paucity of female reporters and editors in leadership roles, the uproar at the times is centered around the repeated paycuts and cutbacks, which have left the newsroom feeling “demoralized.” One letter was sent by the organization’s copy editors, who are facing dramatic staffing cuts, while the second letter was sent by reporters in an expression of solidarity with the editing staff. Both detailed frustrations with the repeated rounds of buyouts, and the lack of transparency surrounding management’s decisionmaking.

“In the copy editors’ letter to Baquet and Kahn, they say they feel betrayed and disrespected in the newsroom, and ask that management reconsider staffing cuts that are expected as the paper plans to restructure.

“Cutting us down to 50 to 55 editors from more than 100, and expecting the same level of quality in the report, is dumbfoundingly unrealistic,” the letter reads. “You often speak about the importance of engaging readers, of valuing, investing and giving a voice to readers. Dean and Joe: We are your readers, and you have turned your backs on us.”

“Editors — and yes, that especially means copy editors — save reporters and the Times every day from countless errors, large and small,” they say in the letter. “Requiring them to dance for their supper sends a clear message to them, and to us, that the respect we have shown the Times will not be reciprocated.”

The editorial staff is accusing Times management of being too opaque in its efforts to restructure the news operation, which includes consolidating two separate groups of editors into one group and asking copy editors to resubmit applications for roles in the newsroom.

Indeed, morale is so low at the NYT that its reporters and editors said they actually feel more respected by readers than by management. The letters referenced an internal report in which the copy editors were compared to dogs urinating on fire hydrants.

That’s quite the claim  – considering President Donald Trump’s relentless bashing of the “failing” news organization has turned public sentiment squarely against it.

“And that is why it feels like such a profound waste that morale is low throughout the newsroom, and that many of us, from editors to reporters to photo editors to support staff, are angry, embittered and scared of losing our jobs,” the letter reads.

The rebellion comes at a time when advertising revenues for print – formerly a powerhouse of the media industry that has been precipitously eroded by the rise of free news on the internet – continue to shrink, and gains in digital advertising are failing to make up the difference.

In the first quarter, print ads declined by 18% while digital ad revenue increased by nearly 19% and accounted for more than 38% of the company’s total ad revenue. Still, the paper’s stock remains buoyant; shares have risen more than 35% year-to-date, compared with a 9% gain in the S&P 500.

end

Fascinating: Bullard states that the Fed has lost control of the market. Bullard is probably one of the better fed chiefs. I believe he is signalling QE 4 is around the corner

(courtesy zero hedge)

Bullard Confirms Fed May Have Lost Control Of The Market

Three months ago, in the aftermath of the Fed’s March rate hike we reported on what we thought at the time was a shocking development: instead of tightening, financial conditions eased. Dramatically. So much so, in fact, that Goldman chief economist Jan Hatzius wrote about it, saying that the “the Fed’s 0.25% rate hike had the same effect as a 0.25% race cut!” and adding that “this was not the reaction the Fed wanted.”

In short, Hatzius said that the Fed appeared to have lost control of the market.

Two months later, as financial conditions continued to get looser, Goldman doubled down, and asked – again – if Yellen has lost control of the market, and warned that only a “policy shock” may be left to normalize the market’s “reaction function”to what the Fed was saying… and doing.

Now, moments ago, St. Louis Fed President James Bullard effectively confirmed that Goldman was right, and admitted that the may have indeed lost control of the market when he said that:

FED’S BULLARD SAYS FINANCIAL MARKET REACTION TO MARCH TIGHTENING HAS NOT BEEN GOOD, WOULD HAVE EXPECTED YIELDS TO RISE WITH POLICY RATE

* * *

The yield curve has collapsed since The Fed started hiking rates…

And as Bullard spoke the markets started to break down…

With VIX up nearly 4 points today.

But don’t worry: should things go south fast, Bullard has a solution for that too:

  • FED’S BULLARD SAYS NEED TO CREATE POLICY SPACE IN GOOD TIMES IN CASE NEED MORE QE IN FUTURE

Translation: time to start trading on QE4

end

The CBO sets the ultimate date that the Treasury will run out of cash and will have no extraordinary means to replenish funds to use to pay bills

(courtesy zero hedge)

Treasury Will Run Out Of Cash In Mid-October, CBO Warns

With Trump tax reform far on the backburner, as the administration is focused on at least getting Obamacare repeal past the Senate, the CBO reminded that in just 4 months a more material threat is facing the US: according to the latest CBO calculations, the Treasury will “most likely” run out of cash in early to mid-October, unless the most polarized Congress in history raises the debt ceiling.

This is what the CBO just said in its latest report on the “Federal Debt and the Statutory Limit”, released moments ago.

If the debt limit is not increased above the amount that was established on March 16, 2017, the Treasury will not be authorized to issue additional debt that increases the amount outstanding. (It will be able to issue additional debt only in the amount of maturing debt or the amounts cleared by taking extraordinary measures.) That restriction would ultimately lead to delays of payments for government programs and activities, a default on the government’s debt obligations, or both. CBO estimates that without an increase in the debt limit, the Treasury, by using all available extraordinary measures, would most likely be able to continue borrowing and have sufficient cash to make its usual payments  until early to mid-October of this year.

In recent weeks, Treasury Secretary Mnuchin has urged Congress to lift the debt limit before its August recess (with others calling to abolish it altogether) although he also conceded that the nation can likely pay its bills if action waited until September, which is all lawmakers needed to know they don’t have to rush until the very last minute.

He has also warned that the closer the U.S. gets to breaching the debt ceiling in mid-October, the more likely financial markets are to react unfavorably, although that warning appears to have been negated by his first one. On Thursday following the release of the CBO report, he again urged Congress to take action.

“For the benefit of everybody, the sooner that they do this the better,” he said at a White House briefing, although he once again diluted his case by adding that “we have contingency plans” if Congress doesn’t raise debt ceiling by a certain date, so the market “shouldn’t be concerned.” Which is all the market needed to know to keep rising until some time in early October, when it freaks out again.

Of course, the Treasury breached its debt limit on March 16, when the debt ceiling was reset to $19.8 trillion, however, so far there has been no new borrowing authority to surpass it. Since then the Treasury has been using so-called “extraordinary measures,” to pay bills without technically adding to the debt amount, while draining various Treasury emergency funds. As shown in the Citi chat below, those measures are expected to be exhausted in October, although Citi acknowledged the risk of an earlier date (in September) if monthly deficits worsen, and/or if the Treasury refuses to draw down its cash balance to compliment use of “extraordinary measures.”

As the next chart shows, the Treasury traditionally accumulates larger cash balances ahead of debt ceiling showdowns.It is when the cash balance hits zero and the the Treasury taps all extraordinary measures without the authority to borrow more, that things can spiral out of control.

“That would ultimately lead to delays of payments for government programs and activities, a default on the government’s debt obligations, or both,” the CBO report noted.

The last time the US infamously shut down due to passing its debt ceiling was in August 2011, when S&P downgraded the US, formerly at a AAA rating, for the first time ever prompting a furious response from then-Treasury secretary Tim Geithner.

As The Hill notes, Republicans are wary of increasing the debt limit without tying it to some set of spending or regulatory reforms, a tactic they pursued under President Barack Obama. Furthermore, Republicans will need Democratic support in the Senate to increase the debt ceiling, but Democrats have demanded that Republicans keep the measure free of “poison pill” riders or other policies.

end

by tomorrow morning, gold and silver should rise as the options expiry criminal activity ends and will return in full blast during the last week of July.

We will see you FRIDAY night

Have a great evening

Harvey.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: